Landmark Bancshares, Inc.


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CONTENTS
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Message to our Stockholders ...........................................    1


Corporate Profile and Stock Price Information .........................    3


Five-Year Financial Summary ...........................................    4


Management's Discussion and Analysis ..................................    6


Report of Independent Accountants .....................................   F-1


Consolidated Financial Statements .....................................   F-2


Notes to Consolidated Financial Statements ............................   F-7


Corporate Information .................................................   19

<PAGE>





MESSAGE TO OUR STOCKHOLDERS:

I am pleased to present to you our fourth annual report with great  appreciation
for the  confidence and support that you, our  stockholders,  have shown through
the investment you have made in Landmark Bancshares, Inc. (the "Company").

Landmark  Federal Savings Bank, (the "Bank") is a community  oriented  financial
institution,  serving  Southwest  and  Central  Kansas  with a complete  menu of
deposit  and  loan  products.  The  Bank  specializes  in one- to  four-  family
residential  mortgage loans and consumer  lending,  increasing  loans receivable
over  $29.7  million  the past  year,  a 23.2%  increase.  We are  committed  to
maintaining  our current  operating  strategy in meeting the savings and housing
needs of the people we serve. 

In July, the Bank  established a commercial  loan  department with the hiring of
two  seasoned  loan  specialists  who are well  known in the Dodge City and Ford
County area.  We believe that this  department  will become an excellent  profit
center for the Bank in the future.


We continue to be pleased with the quality of assets of the  Company,  as losses
experienced  during  the past year were  negligible.  Non-performing  loans were
0.27% of net loans, and 0.19% of total assets at fiscal year end, far lower than
the  industry  average.  Our  directors,  officers and staff are  determined  to
maintain high quality  assets. 

Net income for the fiscal year ending September 30, 1997 was $2,514,437 or $1.37
per share, fully diluted, compared to $1,404,226 or $0.72 per share for the year
ended  September 30, 1996.  Without the one-time SAIF  assessment,  earnings per
share would have been $1.02 at fiscal year end 1996.

Since the initial  public  offering  on March 28,  1994,  at $10 per share,  the
common  stock  reached a high of $27.63  per share and a low of $9.75 per share,
closing on September 30, 1997, at $25.25 per share, a 152.5% increase during the
42-month  period.  In  addition,  based on earnings  and  capital,  the Board of
Directors has declared regular quarterly dividends since June 1994.

In April 1997, our board of directors authorized the Company to repurchase up to
15% of the Company's outstanding shares. The current repurchase program of stock
continues,  and as of September  30,  1997,  total stock  repurchased  since the
initial  offering  totaled 592,671 shares,  or 25.97% of the original  2,281,312
shares issued.

Fiscal year 1998 poses a  challenging  year for our  management  and staff as we
will be opening a new branch office in Dodge City with four  drive-thru  service
lanes,  in addition to a drive-up  ATM.  Since this will be our first  automated
teller  machine,  ATM cards and debit cards will be 

                                      -1-
<PAGE>

distributed to our customer base in early calendar year 1998.  Plans are already
underway to add ATMs in our Great Bend and Garden City locations. Furthermore, a
decision was recently made to open a loan origination  office in the Kansas City
area.  One of our most  experienced  loan officers will manage this office which
will open in January 1998. We have  maintained a presence in Kansas City for the
past ten  years  through  purchasing  loans and  servicing  loans  from  several
correspondents,  and look forward to increasing our business in thriving Johnson
County.

We are proud of our results over the past years as a public company, and believe
our ability to take  advantage of market  opportunities  has  contributed to our
success.  Realistically,  we know that the favorable  interest rate  environment
will not last  indefinitely and that competition and other pressures will mount.
We are ever mindful of our responsibilities to our stockholders and fully intend
to be good stewards of your investment.

All of us at Landmark  Federal  Savings Bank  recognize that to be successful in
the  marketplace  as we  approach  the new  millennium,  we  must  differentiate
ourselves  with high quality,  value added  products and quick  response to ever
changing  market  conditions.  By achieving  this, and by focusing on profitable
long-term growth, we expect to continue to add to shareholder value.

Again,  we thank our  stockholders  for their  confidence  and our employees for
their efforts over the past year.

                                       Respectfully submitted,


                                       /s/Larry Schugart
                                       Larry Schugart
                                       President and Chief Executive Officer




                                      -2-
<PAGE>
================================================================================


Corporate Profile and Related Information

Landmark  Bancshares,  Inc. (the  "Company") is the parent  company for Landmark
Federal  Savings  Bank  (the  "Bank").  The  Company  was  formed  as  a  Kansas
corporation in November 1993 at the direction of the Bank in connection with the
Bank's  conversion from a mutual to stock form of ownership (the  "Conversion").
The  Company  acquired  all of the  capital  stock that the Bank issued upon its
conversion.  On March 28, 1994,  the Bank completed its conversion in connection
with a $22.8 million initial public  offering.  The Company is a unitary savings
and loan holding company which, under existing laws, generally is not restricted
in the types of business  activities  in which it may engage  provided  that the
Bank retains a specified amount of its assets in housing-related investments. At
the present time,  since the Company does not conduct any active  business,  the
Company does not intend to employ any persons  other than  officers but utilizes
the support staff and facilities of the Bank from time to time.

Landmark  Federal  Savings  Bank is a federally  chartered  stock  savings  bank
headquartered in Dodge City, Kansas. The Bank was founded in 1920 with a charter
from Kansas  under the name of "Dodge City Savings and Loan  Association"  which
later became a federal  association under the name of "First Federal Savings and
Loan of Dodge City." First  Federal  Savings and Loan of Dodge City became known
as "Landmark  Federal  Savings  Association" in 1983 when it changed its name at
the time it merged with Peoples Savings and Loan of Sterling, Kansas. The Bank's
deposits have been federally insured since 1943 and are currently insured by the
Federal Deposit Insurance Corporation (the "FDIC") under the Savings Association
Insurance Fund (the "SAIF"). The Bank conducts its business from its main office
in Dodge City, Kansas and four branch offices located in Barton, Finney and Rush
Counties in Kansas.

Stock Price Information

There were 1,688,641  shares (net of treasury stock) of common stock of Landmark
Bancshares,  Inc.  outstanding on September 30, 1997, held by approximately  270
stockholders of record (not including the number of persons or entities  holding
the stock in nominee or street name through various brokerage firms).  Since its
issuance in March 1994, the Company's common stock has been traded on the Nasdaq
National  Market.  The daily stock  quotation for Landmark  Bancshares,  Inc. is
listed in the  Nasdaq  National  Market  section  published  in The Wall  Street
Journal and other leading  newspapers  under the trading  symbol of "LARK".  The
following table reflects stock price  information based on sales as published by
the Nasdaq National Market  statistical report for each quarter for fiscal years
1997 and 1996.

                                       Year Ended September 30,
                          -----------------------------------------------------

                                         1997                        1996
                          -------------------------  --------------------------

                            HIGH           LOW          HIGH           LOW
                          -----------  ------------  ------------  ------------

         First Quarter     18 3/4          16           14 3/4        13 1/2
         Second Quarter    20              18           15 1/4        13 1/2
         Third Quarter     20 1/8          18 3/4       16            14 1/2
         Fourth Quarter    27 5/8          20 1/4       16 1/2        15 1/4

The following  table sets forth,  for each quarter the dividends paid or payable
on the common stock for the  indicated  fiscal years  ending  September  30. The
Company's ability to pay dividends to shareholders is largely dependent upon the
dividends  it  receives  from  the  Bank.  The  Bank is  subject  to  regulatory
limitations on the amount of cash dividends it may pay.

                                         Year Ended September 30,
                                ---------------------------------------------

        Dividends per share               1997                1996
        -------------------           -------------       -------------

         First Quarter                   $ 0.10              $ 0.10
         Second Quarter                    0.10                0.10
         Third Quarter                     0.10                0.10
         Fourth Quarter                    0.10                0.10

On October 15,  1997 the Board of  Directors  declared a  quarterly  dividend of
$0.10 per share to shareholders of record on November 3, 1997.

                                      -3-
<PAGE>
================================================================================
FIVE-YEAR FINANCIAL SUMMARY

Selected Financial Condition Data (Dollars in Thousands)
<TABLE>
<CAPTION>
============================================================================================================================
At September 30,                                     1997            1996            1995            1994            1993
----------------------------------------------------------------------------------------------------------------------------

<S>                                               <C>             <C>             <C>             <C>             <C>      
Total assets                                      $ 227,850       $ 213,734       $ 208,632       $ 188,727       $ 164,694
Loans receivable, net (1)                           158,163         129,903          98,934          71,253          62,620
Investments held-to-maturity                         18,838          29,399          34,825          39,922          24,579
Investments available-for-sale                        7,123           4,138           1,693           1,743               -
Mortgaged-backed securities
   held-to-maturity                                  36,690          45,877          68,207          70,470          69,986
Cash and cash equivalents                             2,741             474             462           1,061           2,432
Deposits                                            144,735         143,815         144,957         136,858         147,428
FHLB borrowings                                      46,200          33,467          25,533          13,580               -
Stockholders' equity                                 32,245          32,389          34,667          36,606          15,144
</TABLE>


Summary of Operations (Dollars in Thousands)
<TABLE>
<CAPTION>
----------------------------------------------------------------------------------------------------------------------------
Year Ended September 30,                             1997            1996            1995            1994            1993
----------------------------------------------------------------------------------------------------------------------------
<S>                                           <C>             <C>             <C>             <C>             <C>     
Interest income                               $      16,695   $      14,575   $    $ 13,652  $       10,671   $      10,964
Interest expense                                      9,768           8,678           8,224           5,917           6,424
                                              --------------  --------------  -------------- --------------- ---------------
  Net interest income                                 6,927           5,897           5,428           4,754           4,540
Provision for loan losses                               308             135               9             (85)            184
Provision for losses on corporate
  securities and municipal obligations                    -               -               -            (128)             42
                                              --------------  --------------  -------------- --------------- ---------------
  Net interest income after provision
   for losses on loans and investments                6,619           5,762           5,419           4,967           4,314
Non-interest income                                   1,026             745             684             450             896
Non-interest expense (2)                              3,581           4,323           3,315           2,907           2,651
                                              --------------  --------------  -------------- --------------- ---------------
Income before income taxes and
  cumulative effect of change
  in accounting principle                             4,064           2,184           2,788           2,510           2,559
Provision for income taxes                            1,550             780           1,025             926             944
                                              --------------  --------------  -------------- --------------- ---------------
Income before cumulative effect of
  change in accounting principle                      2,514           1,404           1,763           1,584           1,615
Cumulative effect of October 31, 1992                                    
  change in accounting for income taxes                   -               -               -               -             117
                                              --------------  --------------  -------------- --------------- ---------------
Net income                                    $     $ 2,514   $       1,404   $       1,763  $        1,584  $        1,732
                                              ==============  ==============  ============== =============== ===============
Primary earnings per share (3)                $        1.40   $        0.72   $        0.82  $         0.38  $            -
                                              ==============  ==============  ============== =============== ===============
Fully diluted earnings per share (3)          $        1.37   $        0.72   $        0.81  $         0.38  $            -
                                              ==============  ==============  ============== =============== ===============
Dividends per share (3)                       $        0.40   $        0.40   $        0.75  $         0.05  $            -
                                              ==============  ==============  ============== =============== ===============
Book value per common share
   outstanding at September 30                $       19.10   $       17.48   $       16.62  $        16.05  $            -
                                              ==============  ==============  ============== =============== ===============
</TABLE>

(*)  Data  presented  prior to March 28, 1994,  the date of  conversion,  is for
     Landmark Federal Savings Bank only.
(1)  Includes loans held for sale totaling $490,  $1,890,  $317, $611 and $6,547
     at September 30, 1997, 1996, 1995, 1994 and 1993, respectively.

(2)  Includes  one-time  SAIF  special  assessment  of $973 for the  year  ended
     September 30, 1996.
(3)  For  periods  following  conversion  from mutual to stock on March 28, 1994
     (1994 - March 28 through September 30).

                                      -4-
<PAGE>

================================================================================
FIVE-YEAR FINANCIAL SUMMARY

Selected Ratios and Other Data (*)
<TABLE>
<CAPTION>
==================================================================================================================================
At or For the Year Ended September 30,                       1997           1996            1995           1994            1993
----------------------------------------------------------------------------------------------------------------------------------

<S>                                                      <C>            <C>             <C>            <C>             <C> 
Return on average assets                                      1.1%           0.7%            0.8%           0.9%            1.0%
Return on average equity                                     7.79           4.14            4.92           6.06           12.14
Average equity to average assets                            14.44          17.00           17.88          14.93            8.89
Equity to assets at period end                              14.15          15.15           16.62          19.40            9.20
Net interest spread                                          2.41           2.11            1.88           2.18            2.51
Net yield on average interest-earning assets                 3.16           3.01            2.76           2.77            2.89
Non-performing assets to total assets                        0.30           0.15            0.22           0.22            0.36
Non-performing loans to net loans                            0.27           0.24            0.39           0.29            0.38
Allowance for loan losses to total loans                     0.61           0.57            0.65           0.87            1.14
Dividend payout                                             26.95          53.58           90.93          13.02               -
Number of:
  Loans outstanding                                         6,210          5,439           4,561          3,859           3,624
  Deposit accounts                                         12,888         13,443          13,731         12,582          13,074
  Full service offices                                          5              5               5              5               5

</TABLE>

                               [GRAPHICS OMITTED]

Net Income                                    Non-Performing Assets/Total Assets



Total Assets                                  Loans Receivable

(*)  Data  presented  prior to March 28, 1994,  the date of  conversion,  is for
     Landmark Federal Savings Bank only.

                                      -5-
<PAGE>
================================================================================

Management's Discussion and Analysis
of Financial Condition and Results of Operations

Landmark Bancshares, Inc.

The  following  is a  discussion  of the  financial  condition  and  results  of
operations of the Company and its subsidiary, Landmark Federal Savings Bank (the
"Bank"),  and should be read in conjunction with the  accompanying  Consolidated
Financial Statements.


General

The Bank is primarily  engaged in the business of  attracting  deposits from the
general public and using those deposits, together with other funds, to originate
mortgage  loans for the  purchase  and  refinancing  of  residential  properties
located in central and southwestern  Kansas.  In addition,  the Bank also offers
and purchases loans through correspondent lending relationships in Kansas and in
other  states.  The Bank also makes  commercial,  automobile,  second  mortgage,
equity and deposit loans. The Bank's market has historically  provided an excess
of savings  deposits over loan demand.  Accordingly,  in addition to originating
loans in its  market  the Bank also  purchases  mortgage-backed  securities  and
investment securities.

The Company's  operations,  as with those of the entire  banking  industry,  are
significantly affected by prevailing economic conditions,  competition,  and the
monetary and fiscal policies of governmental  agencies.  Lending  activities are
influenced by the demand for loans,  competition  among lenders,  the prevailing
market  rates  of  interest,   primarily  on  competing   investments,   account
maturities, and the levels of personal income and savings in the market area.

The Company's  strategy for growth emphasizes both internal and external growth.
Operations focus on increasing  deposits,  making loans and providing  customers
with a high  level  of  customer  service.  As part of the  Bank's  emphasis  on
external  growth,  the Bank intends to expand its  operations  within its market
areas.  During  fiscal 1998,  the Bank will be opening a branch  office in Dodge
City and also plans to open a loan  origination  office in the Kansas City area.
As part of the Bank's strategy for internal growth,  during fiscal 1997 the bank
established a commercial loan department and plans to focus on increasing  their
commercial market.


Financial Condition

Consolidated  total assets  increased  6.60% from  $213,733,690 at September 30,
1996 to $227,850,154 at September 30, 1997. The principal factor contributing to
the growth in assets was the increase in the loans  receivable  portfolio during
the year,  which more than offset a decrease in investment  and  mortgage-backed
securities.

Net loans receivable held for investment  increased  $29,659,375 or 23.17%, from
$128,013,228  at September 30, 1996 to  $157,672,603 at September 30, 1997. This
growth in the loan portfolio is attributed to increased  lending  throughout the
year and the purchase of  $30,958,686  in mortgage loan  packages  during fiscal
year 1997. The Bank has increased its investment in purchased  loans in order to
enhance yield on investable funds during periods when such amounts exceeded loan
demand in the Bank's primary lending area. This continued increase in the Bank's
loan portfolio has resulted in a 152.58% increase in total loans during the last
five years. The Bank experienced the majority of this

                                      -6-
<PAGE>

growth during the year in first  mortgage  loans secured by one- to four- family
residences which increased $22,435,835,  or 22.53% and in automobile loans which
increased $3,526,266, or 36.04%.

The Bank had impaired  loans of $371,769  and $127,131 at September  30, 1997 or
1996, respectively. A loan is impaired when, based on management's evaluation of
current and historical  information and events,  it is probable that all amounts
due  according  to the  contractual  terms  of the  loan  agreement  will not be
collected.  Loans which are  classified  as impaired  are  typically  collateral
dependent;  therefore,  impairment is measured  based upon the fair value of the
collateral less estimated costs to sell.  Impairment is recognized by creating a
valuation allowance with a corresponding charge to provision for loss on loans.

Management,  as part of the monitoring and evaluation of  non-performing  loans,
classifies loans and repossessed assets in accordance with regulatory provisions
as loss,  doubtful or substandard.  Total assets  classified as of September 30,
1997 and 1996, amounted to $1,328,000 and $1,101,000,  respectively. Those loans
classified  which  are not  recognized  as  impaired  include  loans  which  are
currently  past due 90 days or more or have a past history of  delinquency.  The
level of classified loans has continued to remain  consistently low primarily as
a result of improving  economic  conditions and real estate values. At September
30, 1997 the Bank's  ratio of total  non-performing  assets to total  assets was
0.30%,  far lower than the industry  average.  The Bank will  continue  with its
aggressive  collection policies to keep non-performing  assets to a minimum, but
no assurance can be given that  negotiations  with borrowers will continue to be
successful.   Classified  loans  have  been  considered  by  management  in  the
evaluation of the adequacy of the allowance for loan loss. Management is unaware
of any  trends  which  it  reasonably  expects  will  materially  impact  future
operating results, liquidity, or capital resources.

Investment securities held-to-maturity decreased $10,560,578 from $29,398,520 at
September  30, 1996 to  $18,837,942  at September  30, 1997.  This  decrease was
directly  related to the  increase in the loan  portfolio  discussed  above,  as
securities  matured or were  called,  excess  funds were used to  originate  and
purchase loans.  Investment securities  available-for-sale at September 30, 1997
experienced an increase of $2,985,148  from  $4,137,637 at September 30, 1996 to
$7,122,785  at September  30, 1997 as a result of continued  purchases of equity
securities by the Company.

Mortgage-backed  securities  decreased $9,187,569 or 20.03%, from $45,877,120 at
September 30, 1996 to  $36,689,551  at September  30, 1997.  The Company did not
have any mortgage-backed securities  available-for-sale at September 30, 1997 or
1996.  Mortgage-backed  securities  also  decreased  due to  excess  funds  from
repayments  on  mortgage-backed  securities  being used to fund the  increase in
loans receivable.

At September 30, 1997, the Company had net unrealized  gains on both  investment
and   mortgage-backed   securities   held-to-maturity,   not  reflected  on  the
consolidated financial statements, of $69,443 and $244,224,  respectively.  This
was a favorable  improvement  from the Company's net  unrealized  losses on both
investment and mortgage-backed securities held-to-maturity, not reflected on the
consolidated  financial  statements,  of $285,153 and $351,113,  respectively at
September 30, 1996. The overall decline in fair market value below the amortized
cost of these securities held-to-maturity at September 30, 1996 was deemed to be
due to temporary  changes in the  interest  rate  environment,  and as noted the
Company has experienced a more favorable  interest rate  environment  during the
year ended September 30, 1997.

The balance in  foreclosed  assets  ("REO") at  September  30, 1997 and 1996 was
$251,950 and $0,  respectively.  The September 30, 1997 balance in REO consisted
of four single-family residences. This REO balance continues to be substantially
lower than that experienced by the Bank in prior years.

                                      -7-
<PAGE>

Deposits   increased  slightly  from  $143,814,910  at  September  30,  1996  to
$144,734,739  at September  30, 1997.  This  resulted in a 0.64%  increase.  The
modest increase was attributable to normal changes in outstanding deposits.  The
Bank continues to offer rates  competitive with other financial  institutions in
the area.  The average  cost on demand  deposits  increased 66 basis points from
2.56% at fiscal year 1996 to 3.22% for fiscal year 1997. This increase  resulted
from a steady increase in rates offered on NOW accounts throughout the year. The
average cost on savings and  certificates  of deposit  decreased 17 basis points
from 5.49% at fiscal  year 1996 to 5.32% for fiscal year 1997.  The  decrease in
the cost of savings and  certificates  of deposit is the result of a decrease in
the volume of both savings and certificate of deposit  accounts in addition to a
decline in rates. The rate/volume analysis table reflects a decrease of $313,000
due to the changes in volume of savings and certificate of deposit accounts.

Of the $117,214,858 in certificates of deposit held by the Bank at September 30,
1997,  $84,320,014 of these deposits will mature during the year ended September
30, 1998. The majority of the Bank's time deposits  consist of regular  deposits
from consumers within the Bank's surrounding community rather than institutional
or  brokered  deposit  accounts.  As a result,  most of these  accounts of local
customers are expected to be renewed.

The Bank has  continued  to utilize  advances  from the  Federal  Home Loan Bank
("FHLB")  as a source  of  funds.  Fixed  term  advances  from the FHLB  totaled
$36,200,000  and $14,466,668 at September 30, 1997 and 1996,  respectively.  The
Bank  also has a line of  credit  with  the  FHLB.  The Bank had an  outstanding
balance  of  $10,000,000  and  $19,000,000  at  September  30,  1997  and  1996,
respectively.  This resulted in a $12,733,332 or 38.05% increase in advances and
other  borrowings  from the FHLB from  September 30, 1996 to September 30, 1997.
The funds  provided by these  borrowings  were used  primarily  to fund  lending
activity throughout the year. The weighted average cost of these borrowings from
the  FHLB was  6.16%  as of  September  30,  1997.  Of the  advances  and  other
borrowings outstanding at September 30, 1997, $28,000,000 mature during the year
ended September 30, 1998.

Stockholders' equity decreased $143,845,  from $32,389,175 at September 30, 1996
to $32,245,330 at September 30, 1997. The Company was granted  approval from the
OTS to purchase up to 15% of the Company's  outstanding shares. At September 30,
1997  the  Company  has  repurchased  592,671  shares  of its  common  stock  to
significantly  enhance  stockholder  value.  The book  value  per  common  share
outstanding  at September  30, 1997 was $19.10,  up from $17.48 at September 30,
1996 and $16.62 at September 30, 1995.  As noted in the Stock Price  Information
section of this report the Company has also been  consistently  paying quarterly
dividends to  stockholders.  In relation to this increase in stockholder  value,
the Company's  stock price has also increased from $16.375 at September 30, 1996
to $25.25 at September 30, 1997, an increase of $8.875 or 54.20%.


Implementation of New Accounting Pronouncements

During fiscal year 1997,  the Company  adopted the  provisions of two accounting
pronouncements:   Statement  No.  123  entitled   "Accounting   for  Stock-Based
Compensation"  and  Statement  No. 125 entitled  "Accounting  for  Transfers and
Servicing of Financial Assets and  Extinguishements  of Liabilities." See Note 1
to  the  Consolidated  Financial  Statements  for  a  discussion  of  these  new
accounting pronouncements and their effect on the Company.


Liquidity and Capital Resources

Liquidity is measured by a financial institutions ability to raise funds through
deposits,  borrowed funds,  capital or the sale of highly marketable assets such
as  available-for-sale  securities.  Additional sources of

                                      -8-

<PAGE>

liquidity,  including  cash flows from both  repayment  of loans and maturity of
investment  securities,  are also included in determining  whether  liquidity is
satisfactory.

During the years ended  September 30, 1997 and 1996,  cash and cash  equivalents
have  increased by $2,267,342 and $11,689,  respectively.  During the year ended
September 30, 1995 cash and cash equivalents decreased by $598,518.

As  reflected  in the  Consolidated  Statement  of Cash  Flows,  net cash  flows
provided by  operating  activities  for fiscal year 1997,  1996 and 1995 totaled
$9,687,358,  $1,460,520 and  $3,399,891,  respectively.  Amounts  fluctuate from
period to period  primarily as a result of the purchase and origination of loans
held-for-sale  and the  subsequent  sale  of  such  loans.  The  sale  of  loans
held-for-sale was $12,956,185,  $9,679,305 and $6,294,625 for fiscal years 1997,
1996 and 1995,  respectively.  This is offset by the origination and purchase of
loans  held-for-sale of $6,309,686,  $10,344,957 and $5,886,469 for fiscal years
1997, 1996 and 1995, respectively.

Net cash flows used by investing activities totaled $17,172,688,  $4,294,278 and
$20,143,954 for fiscal year 1997, 1996 and 1995, respectively. Amounts fluctuate
from period to period primarily as a result of (i) principal repayments on loans
and  mortgage-backed  securities,  (ii) the purchase and  origination  of loans,
mortgage-backed  securities  and  investment  securities and (iii) proceeds from
maturities and sales of investment  securities.  Loans  originated and purchased
for  investment,   net  of  principal   payments  on  loans,  were  $35,303,920,
$30,405,369 and $27,900,224 for fiscal years 1997, 1996 and 1995, respectively.

Net cash flows provided by financing  activities totaled $9,752,672,  $2,845,447
and $16,145,545,  respectively,  for fiscal years 1997, 1996 and 1995.  Advances
from the FHLB have been the  primary  source to balance  the  Company's  funding
needs during each of the fiscal years  presented.  As of September 30, 1997, the
Bank had an existing line of credit with the FHLB of  $30,000,000  against which
the Bank  had an  outstanding  balance  of  $10,00,000  that  could  serve as an
additional  source of liquidity.  Offsetting the cash provided by borrowings has
been the  continued  repurchase  of  treasury  stock  amounting  to  $3,222,729,
$3,526,306 and $2,500,900  for years ending  September 30, 1997,  1996 and 1995,
respectively. The repurchase of treasury stock during this three year period has
resulted in enhanced stockholder value.

The Bank is required under applicable federal  regulations to maintain specified
levels of "liquid" investments in qualifying types of U.S.  Government,  federal
agency and other investments  having  maturities of five years or less.  Current
OTS  regulations  require that a savings bank maintain liquid assets of not less
than 5% of its average daily balance of net  withdrawable  deposit  accounts and
borrowings  payable in one year or less, of which short-term  liquid assets must
consist of not less than 1%. At September  30, 1997,  the Bank met its liquidity
requirement and expects to meet this requirement in the future. The Bank adjusts
liquidity as appropriate to meet its asset/liability objectives.

OTS has also set minimum capital requirements for institutions such as the Bank.
The capital standards require the maintenance of regulatory  capital  sufficient
to  meet a  tangible  capital  requirement,  a core  capital  requirement  and a
risk-based capital  requirement.  At September 30, 1997 the Bank exceeded all of
the minimum capital requirements as currently required.  Please refer to Note 12
of  the  accompanying  Notes  to  Consolidated  Financial  Statements  for  more
information  regarding the Bank's  regulatory  capital position at September 30,
1997.

                                      -9-
<PAGE>




Impact of Inflation and Changing Prices

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


Asset/Liability Management

The Bank has established an  Asset/Liability  Management  Committee ("ALCO") for
the purpose of monitoring  and managing  interest rate risk. The Bank is subject
to the  risk of  interest  rate  fluctuations  to the  extent  that  there  is a
difference,  or  mismatch,  between  the amount of the  Bank's  interest-earning
assets and  interest-bearing  liabilities  which  mature or reprice in specified
periods.  Consequently,  when interest  rates  change,  to the extent the Bank's
interest-earning  assets have longer  maturities or effective  repricing periods
than its  interest-bearing  liabilities,  the  interest  income  realized on the
Bank's interest-earning assets will adjust more slowly than the interest expense
on its interest-bearing  liabilities. This mismatch in the maturity and interest
rate sensitivity of assets and liabilities is commonly referred to as the "gap."
A gap is considered  positive when the amount of interest rate sensitive  assets
maturing or repricing  during a specified  period exceeds the amount of interest
rate  sensitive  liabilities  maturing or repricing  during such period,  and is
considered  negative  when the amount of  interest  rate  sensitive  liabilities
maturing or repricing  during a specified  period exceeds the amount of interest
rate assets maturing or repricing during such period. Generally, during a period
of rising  interest  rates, a negative gap would  adversely  affect net interest
income while a positive gap would result in an increase in net interest  income,
and during a period of declining  interest rates, a negative gap would result in
an increase in net interest income while a positive gap would  adversely  affect
net interest  income.  The Bank  utilizes  internally  generated gap reports and
externally prepared interest rate sensitivity of the net portfolio value reports
to monitor and manage its interest rate risk.

The Company has  historically  invested in  interest-earning  assets that have a
longer duration than its interest-bearing  liabilities. The mismatch in duration
of the  interest-sensitive  liabilities  indicates  that the Bank is  exposed to
interest  rate risk. In a rising rate  environment,  in addition to reducing the
market  value of long-term  interest-earning  assets,  liabilities  will reprice
faster than assets; therefore,  decreasing net interest income. To mitigate this
risk, the Bank has placed a greater  emphasis on  shorter-term  higher  yielding
assets that reprice more frequently in reaction to interest rate  movements.  In
addition,  the Bank has continued to include in total assets a concentration  of
adjustable-rate   assets  to  benefit  the  one-year   cumulative  gap  as  such
adjustable-rate  assets  reprice and are more  responsive to the  sensitivity of
more frequently repricing interest-bearing liabilities.

Quarterly, the OTS prepares a report on the interest rate sensitivity of the net
portfolio  value ("NPV") from  information  provided by Bank.  The OTS adopted a
rule in August 1993  incorporating an interest rate risk ("IRR")  component into
the risk-based capital rules.  Implementation of the rule has been delayed until
the OTS has tested the process under which  institutions may appeal such capital
deductions.  The IRR  component  is a dollar  amount that will be deducted  from
total capital for the purpose of calculating an institution's risk-based capital
requirement and is measured in terms of the sensitivity of its NPV to changes in
interest  rates.  The  NPV is  the  difference  between  incoming  and  outgoing
discounted cash flows from assets, liabilities, and off-balance sheet contracts.
An  institution's  IRR is  measured  as the change to its NPV as the result of a
hypothetical 200 basis point change in market interest rates.  A

                                      -10-
<PAGE>

resulting  change in NPV of more than 2% of the  estimated  market  value of its
assets  will  require  the  institution  to deduct  from its capital 50% of that
excess  change.  The rule provides that the OTS will calculate the IRR component
quarterly for each institution.

The  following  tables  present  the  Bank's  NPV as  well as  other  data as of
September 30, 1997, as calculated by the OTS, based on  information  provided to
the OTS by the Bank.
<TABLE>
<CAPTION>
 Change in Interest
 Rates in Basis
 Points (Rate Shock)                      Net Portfolio Value                      NPV as % of Present Value of Assets
---------------------   -----------------------------------------------------      -----------------------------------------

                           $ Amount           $ Change          % Change                NPV Ratio                Change
                        --------------    -----------------    --------------      --------------------    -----------------

                                           (Dollars in Thousands)

<S>   <C>                    <C>                 <C>                 <C>               <C>                   <C>       
     +400 bp                 $ 15,702            $ (16,629)          (51)  %              7.57%                 (658)   bp
     +300 bp                 $ 20,244              (12,087)          (37)  %              9.50%                 (464)   bp
     +200 bp (1)             $ 24,700               (7,632)          (24)  %             11.29%                 (285)   bp
     +100 bp                 $ 28,847               (3,484)          (11)  %             12.88%                 (126)   bp
        0 bp                 $ 32,332                                                    14.14%
     -100 bp                 $ 34,699                2,367             7   %             14.95%                   80    bp
     -200 bp                 $ 35,704                3,372            10   %             15.23%                  109    bp
     -300 bp                 $ 37,001                4,670            14   %             15.62%                  148    bp
     -400 bp                 $ 38,574                6,242            19   %             16.09%                  195    bp
</TABLE>

    (1) Denotes rate shock used to compute interest rate risk capital component.
<TABLE>
<CAPTION>
                                                                                        September 30, 1997
                                                                                        ------------------
<S>                                                                                         <C>   
Risk  Measures (200 Basis Point Rate Shock):

       Pre-Shock NPV Ratio:  NPV as % of Present Value of Assets                               14.14%
       Exposure Measure:  Post-Shock NPV Ratio                                                 11.29%
       Sensitivity Measure:  Change in NPV Ratio                                             (285) bp

Calculation of Capital Component:

       Change in NPV as % of Present Value of Assets                                          (3.34)%
</TABLE>

Utilizing  the data above,  the Bank,  at September  30,  1997,  would have been
considered by the OTS to have been subject to "above normal"  interest rate risk
and a deduction from risk-based capital would have been required.

Set forth below is a breakout,  by basis points of the Banks NPV as of September
30, 1997 by assets, liabilities, and off balance sheet items.
<TABLE>
<CAPTION>
                                                                        No
Net Portfolio Value    -400 bp   -300 bp    -200 bp     -100 bp       Change        +100 bp      +200 bp      +300 bp      +400 bp
------------------- ------------ --------- ----------- ---------- ------------- ------------ ------------ ------------- ------------

<S>                   <C>        <C>       <C>         <C>         <C>          <C>          <C>          <C>           <C>      
Assets                $ 239,676  $ 236,877 $  234,364  $ 232,157   $   228,619  $   223,995  $   218,721  $    213,156      207,519
-Liabilities            201,446    200,126    198,830    197,556       196,306      195,085      193,879       192,696      191,531
+Off Balance Sheet          344        250        170         98            19          (63)        (142)         (216)        (286)
                    ------------ --------- ----------- ---------- ------------- ------------ ------------ ------------- ------------
Net Portfolio Value   $  38,574  $  37,001 $   35,704  $  34,699  $     32,332  $    28,847  $    24,700  $     20,244  $    15,702
                    ============ ========= =========== ========== ============= ============ ============ ============= ============
</TABLE>

Certain  assumptions  utilized by the OTS in assessing the interest rate risk of
savings  associations  were  employed in  preparing  the previous  table.  These
assumptions  related to interest  rates,  loan prepayment 


                                      -11-
<PAGE>

rates,  deposit  decay rates and the market  values of certain  assets under the
various interest rate scenarios. It was also assumed that delinquency rates will
not change as a result of changes in  interest  rates  although  there can be no
assurance  that this  will be the case.  Even if  interest  rates  change in the
designated  amounts,  there  can be no  assurance  that the  Bank's  assets  and
liabilities would perform as set forth above.

Certain  shortcomings  are inherent in the preceding NPV tables because the data
reflect  hypothetical  changes in NPV based upon  assumptions used by the OTS to
evaluate the Bank as well as other  institutions.  However,  net interest income
should decline with instantaneous increases in interest rates while net interest
income should increase with instantaneous declines in interest rates.


Year 2000 Issue

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

The most  significant  data  processing  applications  of the Bank that could be
affected by this problem are provided by a third party service bureau.  The Bank
is currently  in the process of  evaluating  its  situation as it relates to the
year 2000 issue and the Bank's  service  center,  but  currently  management  is
uncertain  of the effect  the year 2000  issue will have on the Bank's  computer
system.  If there is a problem with the service center relating to the year 2000
issue the Bank would  likely  experience  significant  data  processing  delays,
mistakes  or  failures.   These  delays,  mistakes  or  failures  could  have  a
significant  adverse impact on the financial  condition and results of operation
of the Bank.


Results of Operations

Net income  increased  $1,110,211 or 79.06% from  $1,404,226  for the year ended
September  30, 1996 to  $2,514,437  for the year ended  September  30, 1997.  As
discussed  in the  following  paragraphs  the  net  income  for the  year  ended
September  30, 1996  included a special  one-time  SAIF  assessment  of $937,073
which, net of tax effect,  resulted in decreasing fiscal year 1996 net income by
approximately  $600,000.  Exclusive of the effect of the assessment on 1996, net
income for fiscal  1997  increased  over 1996 by  approximately  $530,000.  This
increase is primarily attributable to an increase in net interest income.

Net income  decreased  $358,279 or 20.33%,  from  $1,762,523  for the year ended
September 30, 1995 to  $1,404,226  for the year ended  September 30, 1996.  This
decrease relates primarily to the special one-time SAIF assessment of $937,073.

On September 30, 1996,  President  Clinton  signed into law a bill that provided
for a special  assessment of SAIF insured  institutions  amounting to 65.7 basis
points  applied to the Bank's  deposit base  measured as of March 31, 1995.  The
total amount of the special  assessment for the Bank was accrued as of September
30, 1996 and  included in expense for the year ended  September  30,  1996.  The
after tax effect of the  assessment  was to reduce  net income by  approximately
$600,000  for the year  ended  September  30,  1996.  Without  the effect of the
assessment  net income  would have been  approximately  $2,000,000  for the year
ended  September  30,  1996.  Earnings  per  share  without  the  effect  of the
assessment would have been approximately  $1.02 for the year ended September 30,
1996.

                                      -12-
<PAGE>

Beginning January 1, 1997,  deposit insurance  assessments for SAIF members were
reduced to approximately 6.4 basis points of deposits on an annual basis and are
expected to remain at that rate through the end of 1999,  down from the previous
level of 23 basis points, a reduction in the rate of deposit insurance  assessed
the Bank of  approximately  70%.  Through  1999 BIF members  are  expected to be
assessed at approximately 1.3 basis points on deposits. Thereafter,  assessments
for BIF and SAIF members  should be the same and SAIF and BIF may be merged.  It
is expected that these continuing assessments for both SAIF and BIF members will
be used to repay outstanding Financing Corporation bond obligations.

The  operating  results  of the  Company  depend  to a great  degree  on its net
interest   income,   which  is  the  difference   between   interest  income  on
interest-earning  assets,  primarily  loans,   mortgage-backed   securities  and
investment  securities,  and interest expense on  interest-bearing  liabilities,
primarily deposits and borrowings.  The Company's net income is also affected by
the  level of its  provision  for  losses  on  loans,  non-interest  income  and
non-interest expense.

                                      -13-
<PAGE>
Net Interest Income


The  following  table sets forth certain  information  relating to the Company's
average  balance sheet and reflects the average yield on assets and average cost
of liabilities for the periods indicated and the average yields earned and rates
paid.  Such yields and costs are  derived by  dividing  income or expense by the
average  balance  of  assets  or  liabilities,  respectively,  for  the  periods
presented. Average balances are derived from month-end balances. Management does
not believe that the use of month-end balances instead of daily average balances
has caused any material difference in the information presented.
<TABLE>
<CAPTION>
                                                                      For Year Ended September 30,    
                          At       -------------------------------------------------------------------------------------------------
                      September 30,
                         1997                       1997                           1996                             1995
                      -------------- ------------------------------- ---------------------------------------------------------------
                                     Average                Average      Average            Average      Average            Average
                      Yield/Cost     Balance     Interest Yield/Cost     Balance  Interest  Yield/Cost  Balance Interest  Yield/Cost
                      -------------- --------   ---------  ---------  -------------------- ---------- ----------- -------- ---------
                      (Dollars in Thousands)
<S>                        <C>     <C>           <C>        <C>         <C>       <C>         <C>       <C>       <C>        <C> 
Interest-earning 
assets:
  Loans receivable         8.18%   $ 145,395     $ 11,833     8.14%     $ 110,084 $ 9,077      8.25%    $ 81,236  $ 6,449     7.94%
  Mortgage-backed 
    securities             6.46%      41,747        2,707     6.48%        54,647   3,557      6.51%      70,947    4,359     6.14%
  Investment 
    securities             6.02%      30,956        2,079     6.72%        29,936   1,863      6.22%      42,936    2,744     6.39%
  Other interest-
    earning assets         5.37%       1,252           76     6.07%         1,085      78      7.19%       1,216      100     8.22%
                       ----------- ---------- ------------ --------   ----------- -------- ---------- ----------- --------  -------
     Total interest-
       earning assets      7.62%   $ 219,350     $ 16,695     7.61%     $ 195,752 $14,575      7.45%    $196,335  $13,652     6.95%
                       =========== ========== ============ ========   =========== ======== ========== =========== ========  =======
Non-interest 
  earning assets:                      4,310                                3,764                          3,903
                                  ----------                         -----------                      ----------
     Total assets                  $ 223,660                            $ 199,516                      $ 200,238
                                   ==========                         ===========                      ==========
Interest-bearing 
liabilities:
  Demand deposits          3.17%    $ 21,536        $ 693     3.22%      $ 14,249   $ 365      2.56%    $ 12,279    $ 267     2.17%
  Savings deposits 
    and certificates
    of deposit             5.36%     123,206        6,556     5.32%       128,899   7,077      5.49%     129,319    6,633     5.13%
  Other liabilities        6.16%      42,951        2,520     5.87%        19,429   1,237      6.37%      20,473    1,324     6.47%
                       ----------- ---------- ------------ --------   ----------- -------- ---------- ----------- --------  -------
     Total interest-
       bearing 
       liabilities         5.30%   $ 187,693      $ 9,769     5.20%     $ 162,577 $ 8,679      5.34%   $ 162,071  $ 8,224     5.07%
                       =========== ========== ============ ========   =========== ======== ========== =========== ========  =======
Non-interest 
  bearing liabilities                  3,696                                3,015                          2,371
                                   ----------                         -----------                      ----------
     Total liabilities             $ 191,389                            $ 165,592                      $ 164,442
                                   ==========                         ===========                      ==========
Stockholder's equity                  32,271                               33,924                         35,796
                                   ----------                         -----------                      ----------
     Total liabilities
       and stockholders'
       equity                      $ 223,660                            $ 199,516                      $ 200,238
                                   ==========                         ===========                      ==========
Net interest income                               $ 6,926                         $ 5,896                         $ 5,428
                                              ============                       =========                        ========
Interest rate spread       2.32%                              2.41%                            2.11%                          1.88%
                       ===========                         ========                        ============                     =======
Net yield on 
  interest-earning 
  assets                                                      3.16%                            3.01%                          2.76%
                                                           ========                        ============                     =======
Ratio of 
  interest-earning 
  assets to
  interest-
  bearing liabilities                                       116.87%                          120.41%                        121.14%
                                                           ========                        ============                     =======
</TABLE>
<PAGE>


The following  Rate/Volume  Analysis table presents,  for the periods indicated,
information  regarding  changes in  interest  income and  interest  expense  (in
thousands)  of the Company.  For each  category of  interest-earning  assets and
interest-bearing   liabilities,   information   is   provided   on  the  changes
attributable  to (i) changes in volume (changes in average daily balances of the
portfolio  multiplied by the prior year rate),  (ii) changes in rate (changes in
rate multiplied by prior year volume), and (iii) changes in rate/volume (changes
in rate multiplied by the change in average volume).
<TABLE>
<CAPTION>
                                                                    Years Ended September 30,
                                        ----------------------------------------------------------------------------------------
                                                   1997 vs. 1996                                1996 vs. 1995
                                        ------------------------------------------ ---------------------------------------------
                                             Increase (Decrease) Due to                  Increase (Decrease) Due to
                                        ------------------------------------------ ---------------------------------------------
                                                               Rate/                                         Rate/
                                          Volume      Rate     Volume        Net      Volume      Rate       Volume       Net
                                        ---------- ---------  --------  ---------- ----------- ----------  ---------  ----------
                                                                               (In Thousands)
<S>                                        <C>        <C>       <C>         <C>          <C>         <C>      <C>      <C>
Interest income:
   Loans receivable                       $ 2,913    $  (121)   $   (36)   $ 2,756    $ 2,291    $   252    $    85    $ 2,628
   Mortgage-backed securities                (840)       (16)         6       (850)    (1,000)       263        (65)      (802)
   Investment securities                       63        150          3        216       (832)       (73)        24       (881)
   Other interest-earning assets               13        (11)        (4)        (2)       (11)       (13)         2        (22)
                                          -------    -------    -------    -------    -------    -------    -------    -------

     Total interest-earning assets        $ 2,149    $     2    $   (31)   $ 2,120    $   448    $   429    $    46    $   923
                                          =======    =======    =======    =======    =======    =======    =======    =======

Interest expense:
   Demand deposits                        $   187    $    94    $    47    $   328    $    43    $    48    $     7    $    98
   Savings deposits and
     certificates of deposits                (313)      (219)        11       (521)       (22)       466       --          444
   Other liabilities                        1,498        (97)      (118)     1,283        (68)        (2)       (17)       (87)
                                          -------    -------    -------    -------    -------    -------    -------    -------

     Total interest-bearing liabilities   $ 1,372   $  (222)   $   (60)   $ 1,090    $   (47)   $   512    $   (10)   $   455
                                          =======    =======    =======    =======    =======    =======    =======    =======

Net change in interest income             $   777    $   224    $    29    $ 1,030    $   495    $   (83)   $    56    $   468
                                          =======    =======    =======    =======    =======    =======    =======    =======
</TABLE>

Interest  income was  $16,694,848 for the year ended September 30, 1997 compared
to $14,574,868  for the year ended September 30, 1996, an increase of $2,119,980
or 14.55%.  This increase  resulted  from the average yield on  interest-earning
assets  increasing  to 7.61% for the year ended  September  30, 1997 compared to
7.45% for the year ended September 30, 1996. This increase was the result of the
increase in the loan portfolio, the rate/volume analysis reflects this increase.
The  change in  interest  income due to the  volume of loans  receivable  was an
increase of  $2,913,000  during  fiscal year 1997 from fiscal year 1996.  Income
resulting from the increase in loan volume was partially  offset by decreases in
the volume of mortgage-backed securities.

Interest expense for the year ended September 30, 1997 increased $1,089,924,  or
12.56%,  to $9,768,292  from $8,678,368 at September 30, 1996. This increase was
due to the increase in borrowed funds throughout the fiscal year.  Approximately
$1,498,000  of the  increase in  interest  expense was due to an increase in the
volume of other liabilities, which consists of advances and other borrowing from
the FHLB. The average cost for interest-bearing  liabilities  decreased slightly
from 5.34% for the year  ended  September  30,  1996 to 5.20% for the year ended
September 30, 1997.

                                      -15-
<PAGE>

As a result of the above, net interest income increased  $1,030,056,  or 17.47%,
from $5,896,500 for the year ended September 30, 1996 to $6,926,556 for the year
ended  September 30, 1997.  The net interest  spread of the Bank  increased from
2.11%  for the  year  ended  September  30,  1996 to 2.41%  for the  year  ended
September  30,  1997,  an  increase  of  30  basis  points.  Interest  costs  on
liabilities  increase or  decrease  faster than  interest  yields on assets,  as
shorter term liabilities reprice or adjust for changes in interest rates quicker
than longer  maturity  assets.  This increase in interest  spread related to the
significant increase in origination and purchases of mortgage loans at yields in
excess of yields on maturing investments and mortgage-backed securities.

Total interest income increased $922,628,  or 6.76%, to $14,574,868 for the year
ended  September 30, 1996,  from  $13,652,240  for the year ended  September 30,
1995. As discussed  above for fiscal year 1997,  this increase is also primarily
the result of an increase in loans  receivable  during the year ended  September
30, 1996, this is reflected in the Bank's  rate/volume  analysis as the increase
in interest income resulting from the volume of loans receivable was $2,291,000.

Interest  expense for the year ended September 30, 1996 increased  $454,579,  or
5.53%,  to $8,678,368  from  $8,223,789 at September 30, 1995.  This increase is
primarily due to an increase in market  interest  rates paid on deposits and the
relatively rapid repricing of the deposit base. The Bank's rate/volume  analysis
reflects  approximately  $512,000 of the increase in interest expense  resulting
from  interest  rate  changes.  Although this results in an increase in interest
expense,  there was a $47,000  reduction in interest  expense  resulting  from a
decrease in the volume of interest-bearing liabilities, including $68,000 due to
a reduction in the average balance outstanding of FHLB borrowings.

As a result of the above, net interest income increased $468,049, or 8.62%, from
$5,428,451  for the year ended  September  30, 1995 to  $5,896,500  for the year
ended September 30, 1996. The increase in net interest income is attributable to
a shift in the  composition  of  interest-earning  assets from  generally  lower
yielding  mortgage-backed  and investment  securities to loans,  resulting in an
increase in net interest  income  attributable  to volume of  $495,000.  The net
interest  spread of the Bank increased  from 1.88% for the year ended  September
30, 1995 to 2.11% for the year ended September 30, 1996, an increase of 23 basis
points. The change in interest rate spread for the year ended September 30, 1996
in  comparison  to the year ended  September  30, 1995 relates to the  continued
overall  increase in interest rates. As rates have continued to rise, the slower
repricing  interest-earning  assets have began to catch up with the more rapidly
increasing  interest rates on  liabilities;  therefore,  increasing the interest
rate spread during the year ended September 30, 1996.


Provision for Losses on Loans

The Bank maintains, and the Board of Directors monitors, allowances for possible
losses on loans.  These  allowances  are  established  based  upon  management's
periodic evaluation of known and inherent risks in the loan portfolio, review of
significant  individual loans and collateral,  review of delinquent  loans, past
loss experience,  adverse  situations that may affect the borrowers'  ability to
repay,  current and expected  market  conditions,  and other factors  management
deems important.  Determining the appropriate  level of reserves involves a high
degree of management  judgment and is based upon historical and projected losses
in the  loan  portfolio  and the  collateral  value of  specifically  identified
problem loans.  Additionally,  allowance  strategies and policies are subject to
periodic  review and revision in response to current market  conditions,  actual
loss experience and management's expectations.

                                      -16-
<PAGE>

The  allowance  for loan losses was $968,623 and $740,346 at September  30, 1997
and 1996, respectively. The provision for losses on loans is the method by which
the allowance for losses is adjusted during the period. The provision for losses
on loans was $307,979 for the year ended September 30, 1997 and $134,743 for the
year ended  September 30, 1996. The increase in the allowance for the year ended
September  30, 1997 was based on  management's  evaluation  of the  allowance in
relation to the increase in the Bank's loan  portfolio,  including  increases in
non-mortgage   lending,  and  the  slight  increase  in  non-performing   loans.
Historical non-performing loan ratios are presented with the five-year financial
summary information. While management maintains its allowance for loan losses at
levels which it considers adequate to provide for potential losses, there can be
no assurance  that  additions  will not be made to the allowance in future years
and that such losses will not exceed the estimated amounts.

The allowance for loan losses was $643,547 at September 30, 1995.  The provision
for losses on loans  increased from $9,124 for the year ended September 30, 1995
to $134,743 for the year ended September 30, 1996. The $125,619  increase in the
provision  for the year  ended  September  30,  1996 was  based on  management's
evaluation  of the  allowance  in  relation  to the  increase in the Bank's loan
portfolio,  including a 57.44% increase in loans other than first mortgage loans
during the year.  Non-performing  loans were  $317,000 and $386,000 at September
30, 1996 and 1995, respectively.


Non-Interest Income

Non-interest  income  increased  $280,661 or 37.65%,  from $745,360 for the year
ended  September 30, 1996 to $1,026,021  for the year ended  September 30, 1997.
The main reason for this increase was due to the net gain on sale of investments
of $220,154,  consisting of sales of corporate  equity  securities,  which was a
$193,047  increase  from  the net  gain on the sale of  investments  of  $27,107
realized during the year ended September 30, 1996. Additionally, gain on sale of
loans  increased  by 188.63% due to an increase in the volume of loan sales from
fiscal  year  1997 to  fiscal  year  1996.  Sale  of  loans  held-for-sale  were
$12,956,185 for the year ended September 30, 1997 compared to $9,679,305 for the
year ended September 30, 1996.

Non-interest  income  increased  $61,896,  or 9.06%,  from $683,464 for the year
ended September 30, 1995 to $745,360 for the year ended September 30, 1996. This
was  primarily  due to the net gain on the sale of  mortgage-backed  securities,
after they were  reclassified from  held-to-maturity  to  available-for-sale  in
accordance with the FASB Guide to Implementation of Statement 115.

On  November  15,  1995,   the  FASB  adopted  a  special  report  "A  Guide  to
Implementation  of Statement 115 on Accounting  for Certain  Investments in Debt
and Equity  Securities".  The guide  included,  along with other  implementation
guidance,  a  transition  provision  that  allowed  for a  reassessment  of  the
appropriateness of the  classifications of all securities and allowed a one-time
reclassification  of securities  which will not call into question the intent of
an  enterprise to hold other debt  securities  to maturity in the future.  Those
reclassifications  were to be made after the adoption date of November 15, 1995.
In  accordance   with  the  guide,   management   reclassified   $11,355,417  of
mortgage-backed  securities  from  held-to-maturity  to  available-for-sale  and
subsequently sold all of these securities for a net realized gain of $135,208.

Net gains on sales of investment  securities and loans  decreased  during fiscal
year   1996  in   comparison   to  1995  due  to   reduced   sales   volume   of
available-for-sale  investment securities and lower levels of gain recognized on
sales of loans  held-for-sale.  Service and late charges  increased from 1995 to
1996 primarily due to increases in charges on demand accounts.

                                      -17-
<PAGE>

Non-Interest Expense

Non-interest  expense decreased  $743,222 or 17.19% from $4,323,299 for the year
ended  September 30, 1996 to $3,580,077  for the year ended  September 30, 1997.
This  decrease  related  primarily  to the one time SAIF special  assessment  of
$937,073 recorded during fiscal 1996. If this special  assessment were excluded,
total  non-interest  expense would have increased  $193,851 or 5.72% from fiscal
1996 to 1997.  Compensation  and related expenses  increased  $349,144 or 18.44%
during  the year ended  September  30,  1997.  This  increase  was the result of
overall increases in compensation,  an increase in the Employees Stock Ownership
Plan (the  "ESOP")  expense as a result of higher  market  values for  allocated
shares and  additional  compensation  expense  relating to the issuance of stock
options,  which were recorded in accordance  with SFAS 123  Accounting for Stock
Based  Compensation,  see  Note  15 of  the  financial  statements  for  further
discussion.  The  increase  in  compensation  was offset by a $191,250 or 49.04%
decrease in federal  insurance  premium expense from $389,986 during fiscal year
1996 to $198,736  during fiscal year 1997. The decrease in regulatory  insurance
and assessments was  substantially  due to the revised rate structure on insured
deposits adopted by the FDIC after the  recapitalization of the SAIF. The Bank's
annual deposit insurance rate in effect prior to this recapitalization was 0.23%
of insured  deposits,  declining  to 0.18% of insured  deposits  for the quarter
ended  December 31, 1996,  and reduced to 0.064% of insured  deposits  effective
January 1, 1997.

Non-interest  expense  increased  $1,008,266,  or 30.41% from $3,315,033 for the
year ended  September  30, 1995 to $4,323,299  for the year ended  September 30,
1996. This increase relates primarily to the one-time SAIF special assessment of
$937,073 discussed earlier.


Income Taxes

The Company's income tax expense increased $770,492 or 98.83%, from $779,592 for
the year ended September 30, 1996 to $1,550,084 for the year ended September 30,
1997. The principal reason for the increase was the increase in pre-tax income.

Income tax expense decreased  $245,643,  or 23.96%, from $1,025,235 for the year
ended September 30, 1995 to $779,592 for the year ended September 30, 1996. This
decrease  in income tax  resulted  from a decrease  in  pre-tax  income  largely
attributable  to the  accrual  of  the  special  SAIF  assessment.  Tax  benefit
attributable to the SAIF assessment was approximately $355,000.


                                      -18-
<PAGE>
                                                                      MEMBERS OF
                                                       THE AMERICAN INSTITUTE OF
                                                    CERTIFIED PUBLIC ACCOUNTANTS
                                                      THE DIVISION FOR CPA FIRMS

Regier Carr & Monroe,L.L.P.
--------------------------------------------------------------------------------
CERTIFIED PUBLIC ACCOUNTANTS

                          INDEPENDENT AUDITOR'S REPORT




To the Board of Directors and Stockholders of
Landmark Bancshares, Inc.
Dodge City, Kansas


We have audited the accompanying  consolidated statements of financial condition
of Landmark  Bancshares,  Inc. and subsidiary as of September 30, 1997 and 1996,
and the related consolidated statements of operations,  changes in stockholders'
equity and cash flows for each of the three years in the period ended  September
30, 1997.  These financial  statements are the  responsibility  of the Company's
management.  Our  responsibility  is to express  an  opinion on these  financial
statements based on our audits.

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

In our opinion, the consolidated  financial statements referred to above present
fairly, in all material respects, the financial position of Landmark Bancshares,
Inc. and  subsidiary as of September 30, 1997 and 1996, and the results of their
operations  and cash  flows  for each of the  three  years in the  period  ended
September 30, 1997 in conformity with generally accepted accounting principles.





                                         /s/Regier Carr & Monroe,L.L.P.
                                         Regier Carr & Monroe, L.L.P.

October 29, 1997
Wichita, Kansas

            300 WEST DOUGLAS SUITE 100 - WICHITA, KANSAS 67202-2994
                         316 264-2335 - FAX 316 264-1489
                            WICHATA - TUCON - TULSA
                                     F - 1


<PAGE>
                            Landmark Bancshares, Inc.

                 Consolidated Statements of Financial Condition
                           September 30, 1997 and 1996
<TABLE>
<CAPTION>
ASSETS                                                                       1997                     1996
                                                                     ----------------------   ---------------------
<S>                                                                  <C>                      <C>      
Cash and due from banks:
       Non-interest bearing                                          $             678,173    $            470,647
       Interest bearing                                                          2,062,879                   3,063
                                                                     ----------------------   ---------------------
       Total cash and due from banks                                             2,741,052                 473,710
Time deposits in other financial institutions                                      110,580                 479,949
Investment securities held-to-maturity (estimated market
       value of $18,907,385 and $29,113,367 at September 30,
       1997 and 1996, respectively)                                             18,837,942              29,398,520
Investment securities available-for-sale                                         7,122,785               4,137,637
Mortgage-backed securities held-to-maturity (estimated
       market value of $36,933,775 and $45,526,007 at
       September 30, 1997 and 1996, respectively)                               36,689,551              45,877,120
Loans receivable, net                                                          157,672,603             128,013,228
Loans held-for-sale                                                                490,234               1,890,007
Accrued income receivable                                                        1,446,605               1,518,640
Foreclosed real estate, net                                                        251,950
Office properties and equipment, at cost
  less accumulated depreciation                                                  1,188,250                 949,786
Prepaid expenses and other assets                                                1,233,038                 973,383
Deferred income taxes                                                                                       21,710
Income taxes receivable, current                                                    65,564
                                                                     ----------------------   ---------------------
            Total assets                                             $         227,850,154    $        213,733,690
                                                                     ======================   =====================

LIABILITIES AND STOCKHOLDERS' EQUITY
Liabilities:
       Deposits                                                      $         144,734,739    $        143,814,910
       Outstanding checks in excess of bank balance                                                        143,808
       Borrowings from Federal Home Loan Bank                                   46,200,000              33,466,668
       Advances from borrowers for taxes and insurance                           1,673,057               1,673,142
       Accrued expenses and other liabilities                                    2,304,593               2,193,296
       Income taxes payable, current                                                                        52,691
       Deferred income taxes                                                       692,435
                                                                     ----------------------   ---------------------
            Total liabilities                                                  195,604,824             181,344,515
                                                                     ----------------------   ---------------------
Commitments and contingencies

Stockholders' equity:
       Preferred stock, no par value; 5,000,000 shares
         authorized; no shares outstanding
       Common stock, $0.10 par value; 10,000,000 shares
         authorized; 2,281,312 shares issued and outstanding                       228,131                 228,131
       Additional paid-in capital                                               22,173,827              21,944,175
       Retained income, substantially restricted                                19,305,087              17,468,325
       Unrealized gain on available-for-sale securities,
         net of deferred taxes                                                     922,384                 253,057
       Unamortized stock acquired by Employee Stock
         Ownership Plan                                                           (844,597)               (994,695)
       Unamortized compensation related to Management
         Stock Bonus Plan                                                         (289,567)               (482,612)
       Treasury stock, at cost, 592,671 and 428,316 shares at
         September 30, 1997 and 1996, respectively                              (9,249,935)             (6,027,206)
                                                                     ----------------------   ---------------------
            Total stockholders' equity                                          32,245,330              32,389,175
                                                                     ----------------------   ---------------------
            Total liabilities and stockholders' equity               $         227,850,154    $        213,733,690
                                                                     ======================   =====================
</TABLE>

The Notes to  Consolidated  Financial  Statements  are an integral part of these
statements.

                                      F - 2
<PAGE>
                            Landmark Bancshares, Inc.

                      Consolidated Statements of Operations
              For the Years Ended September 30, 1997, 1996 and 1995
<TABLE>
<CAPTION>
                                                                 1997                  1996                 1995
                                                          -------------------    ------------------   ------------------
<S>                                                       <C>                    <C>                  <C>              
Interest income:
    Interest on loans                                     $       11,832,611     $       9,076,880    $       6,448,797
    Interest and dividends on investment securities                2,154,856             1,940,908            2,844,191
    Interest on mortgage-backed securities                         2,707,381             3,557,080            4,359,252
                                                          -------------------    ------------------   ------------------
         Total interest income                                    16,694,848            14,574,868           13,652,240
                                                          -------------------    ------------------   ------------------
Interest expense:
    Deposits                                                       7,248,750             7,441,797            6,899,764
    Borrowed funds                                                 2,519,542             1,236,571            1,324,025
                                                          -------------------    ------------------   ------------------
         Total interest expense                                    9,768,292             8,678,368            8,223,789
                                                          -------------------    ------------------   ------------------
         Net interest income                                       6,926,556             5,896,500            5,428,451

Provision for losses on loans                                        307,979               134,743                9,124
                                                          -------------------    ------------------   ------------------
    Net interest income after provision for losses                 6,618,577             5,761,757            5,419,327
                                                          -------------------    ------------------   ------------------
Non-interest income:
    Service charges and late charges                                 270,622               217,317              192,213
    Net gain on sale of investments                                  220,154                27,107              122,900
    Net gain on sale of loans                                        237,281                82,208              114,246
    Net gain on sale of mortgage-backed securities                                         135,208
    Service fees on loans sold                                       161,304               161,329              173,020
    Other                                                            136,660               122,191               81,085
                                                          -------------------    ------------------   ------------------
         Total non-interest income                                 1,026,021               745,360              683,464
                                                          -------------------    ------------------   ------------------
Non-interest expense:
    Compensation and related expenses                              2,242,602             1,893,458            1,911,205
    Occupancy expense                                                173,452               169,780              146,162
    Advertising                                                       67,101                63,371               68,876
    Federal insurance premium                                        198,736               389,986              379,086
    SAIF special assessment                                                                937,073
    Loss from real estate operations                                   6,000                 4,289                3,425
    Data processing                                                  181,321               187,237              175,602
    Other expense                                                    710,865               678,105              630,677
                                                          -------------------    ------------------   ------------------
         Total non-interest expense                                3,580,077             4,323,299            3,315,033
                                                          -------------------    ------------------   ------------------
         Income before income taxes                                4,064,521             2,183,818            2,787,758
                                                          -------------------    ------------------   ------------------
Income taxes:
    Currently payable                                              1,261,177             1,085,774              872,163
    Deferred tax expense (benefit)                                   288,907              (306,182)             153,072
                                                          -------------------    ------------------   ------------------
                                                                   1,550,084               779,592            1,025,235
                                                          -------------------    ------------------   ------------------
         Net income                                       $        2,514,437     $       1,404,226    $       1,762,523
                                                          ===================    ==================   ==================
Income per common share
Primary:
    Earnings per share                                    $             1.40     $             0.72   $            0.82
                                                          ===================    ==================   ==================
    Weighted average common and common
      shares outstanding                                           1,800,585             1,937,820            2,141,214
                                                          ===================    ==================   ==================
Fully diluted:
    Earnings per share                                    $             1.37     $             0.72   $            0.81
                                                          ===================    ==================   ==================

    Weighted average common and common
      shares outstanding                                           1,832,882             1,953,774            2,175,546
                                                          ===================    ==================   ==================
</TABLE>
The Notes to Consolidated  Financial  Statements are an integral
part of these statements.

                                      F - 3
<PAGE>

                                                                         

                           Landmark Bancshares, Inc.

           Consolidated Statements of Changes in Stockholders' Equity
                  Years Ended September 30, 1997, 1996 and 1995
<TABLE>
<CAPTION>
                                                                            Unamortized
                                                             Unrealized       Common       Unamortized
                                   Additional                  Gain on         Stock      Compensation                      Total
                         Common      Paid-In     Retained   Available-for-  Acquired by    Related to     Treasury   Stockholders'
                         Stock       Capital      Income    Sale Securities    ESOP           MSBP         Stock        Equity
                        --------- ------------  -----------  ------------- -------------  ------------- ------------ --------------
<S>                     <C>        <C>          <C>           <C>           <C>            <C>           <C>          <C>          
Balance, 
  September 30, 1994    $ 228,131  $21,883,578  $16,656,579   $          -  $ (1,293,541)  $   (868,702) $         -  $  36,606,045
Cumulative effect of
  October 1, 1994 
  change in 
  accounting for 
  certain investment 
  securities                                                        15,569                                                   15,569
Allocation of 
   shares by
   Employees' Stock
   Ownership Plan                        9,921                                   161,968                                    171,889
Amortization of 
  compensation
  related to
  Management 
  Stock Bonus Plan                                                                              193,045                     193,045
Net income for the 
  year ended
  September 30, 1995                              1,762,523                                                               1,762,523
Cash dividend paid 
  ($0.75 per share)                              (1,602,610)                                                             (1,602,610)
Net change in 
  unrealized  gain
  on available-
  for-sale
  investment securities                                            21,885                                                   21,885
Purchase of 195,980 
  treasury shares                                                                                        (2,500,900)    (2,500,900)
                        --------- ------------  -----------  ------------- -------------  ------------- ------------ --------------
Balance,
  September 30, 1995     228,131   21,893,499   16,816,492         37,454    (1,131,573)      (675,657)  (2,500,900)    34,667,446
Allocation of shares
  by Employees' Stock
  Ownership Plan                       50,676                                   136,878                                    187,554
Amortization of 
  compensation 
  related to
  Management 
  Stock Bonus Plan                                                                             193,045                     193,045
Net income 
  for the year 
  ended 
  September 30, 1996                             1,404,226                                                               1,404,226
Cash dividend paid 
  ($0.40 per share)                               (752,393)                                                               (752,393)
Net change in 
  unrealized gain
  available-for-sale
  investment securities                                           215,603                                                  215,603
Purchase of 232,336 
  treasury shares                                                                                        (3,526,306)    (3,526,306)
                        --------- ------------  -----------  ------------- -------------  ------------- ------------ --------------
Balance, 
  September 30, 1996     228,131   21,944,175   17,468,325        253,057      (994,695)      (482,612)  (6,027,206)    32,389,175
Allocation of shares 
  by Employees' Stock
  Ownership Plan                      121,277                                   150,098                                    271,375
Amortization of 
  compensation 
  related to
  Management 
  Stock Bonus Plan                     56,928                                                  193,045                     249,973
Compensation 
  related to 
  stock options 
  granted                              51,447                                                                               51,447
Net income for 
  the year ended
  September 30, 1997                             2,514,437                                                               2,514,437
Cash dividend paid 
  ($0.40 per share)                               (677,675)                                                               (677,675)
Net change in 
  unrealized gain on
  available-for-sale
  investment
  securities                                                      669,327                                                  669,327
Purchase of 164,355 
   treasury shares                                                                                       (3,222,729)    (3,222,729)
                       --------- ------------  -----------  -------------  ------------  ------------- ------------ --------------
Balance, 
  September 30, 1997    $228,131  $22,173,827  $19,305,087   $    922,384  $   (844,597)  $   (289,567) $(9,249,935) $  32,245,330
                        ======== ============  ===========  =============  ============  ============= ============ ==============
</TABLE>
The Notes to  Consolidated  Financial  Statements  are an integral part of these
statements.

                                      F - 4
<PAGE>


                                                                      
                                                                   
                           Landmark Bancshares, Inc.

                      Consolidated Statements of Cash Flows
              For the Years Ended September 30, 1997, 1996 and 1995
<TABLE>
<CAPTION>
                                                                        1997                1996               1995
                                                                  -----------------   -----------------  -----------------
<S>                                                                    <C>                 <C>                <C>        
CASH FLOWS FROM OPERATING ACTIVITIES
     Net income                                                        $ 2,514,437         $ 1,404,226        $ 1,762,523
     Adjustments to reconcile net income to net cash
        provided by operating activities:
            Depreciation                                                   113,881             116,278            109,413
            Gain on sale of investment securities
              available-for-sale                                          (220,154)            (27,107)          (122,900)
            Decrease (increase) in accrued interest receivable              72,035             152,435           (325,534)
            Increase (decrease) in outstanding checks
              in excess of bank balance                                   (143,808)           (907,008)         1,050,816
            Increase (decrease) in accrued and deferred
              income taxes                                                 170,652            (239,364)           168,159
            Increase in accounts payable and
              accrued expenses                                             111,297           1,257,765            395,949
            Amortization of premiums and discounts
              on investments and loans                                     (54,424)           (171,438)          (261,601)
            Amortization of mortgage servicing rights                       15,329               2,202              3,627
            Provision for losses on loans                                  307,979             134,743              9,124
            Sale of loans held-for-sale                                 12,956,185           9,679,305          6,294,625
            Gain on sale of mortgage-backed securities
             available-for-sale                                                               (135,208)
            Gain on sale of loans held-for-sale                           (237,281)            (82,208)          (114,246)
            Origination of loans held-for-sale                          (5,896,736)         (9,643,647)        (5,886,469)
            Purchase of loans held-for-sale                               (412,950)           (701,310)
            Amortization related to MSBP and ESOP                          343,143             329,923            355,013
            Other non-cash items, net                                       47,773             290,933            (38,608)
                                                                  -----------------   -----------------  -----------------
Net cash provided by operating activities                                9,687,358           1,460,520          3,399,891
                                                                  -----------------   -----------------  -----------------

CASH FLOWS FROM INVESTING ACTIVITIES
     Loan originations and principal payments
       on loans held-for-investment                                     (4,345,234)        (14,007,163)       (13,940,760)
     Loans purchased for investment                                    (30,958,686)        (16,398,206)       (13,959,464)
     Principal repayments on mortgage-backed securities                  9,134,312          12,396,168          8,046,547
     Proceeds from sale of mortgage-backed securities
       available-for-sale                                                                   11,490,625
     Acquisition of mortgage-backed securities
       held-to-maturity                                                                     (1,482,865)        (5,875,830)
     Acquisition of investment securities held-to-maturity              (4,300,000)        (16,295,500)        (6,451,406)
     Acquisition of investment securities available-for-sale            (2,413,418)         (2,373,880)          (748,625)
     Proceeds from sale of investment securities
       available-for-sale                                                  742,989             308,479            733,382
     Proceeds from maturities or calls of investment
       securities held-to-maturity                                      14,890,000          21,862,135         11,830,000
     Net decrease in time deposits                                         369,369              99,051            285,000
     Proceeds from sale of foreclosed real estate                          110,614             130,923            125,554
     Acquisition of fixed assets                                          (352,345)            (60,156)          (188,533)
     Other investing activity, net                                         (50,289)             36,111                181
                                                                  -----------------   -----------------  -----------------
Net cash used in investing activities                                  (17,172,688)         (4,294,278)       (20,143,954)
                                                                  -----------------   -----------------  -----------------
</TABLE>
The Notes to  Consolidated  Financial  Statements  are an integral part of these
statements.

                                     F - 5
<PAGE>


                            Landmark Bancshares, Inc.

                Consolidated Statements of Cash Flows (Continued)
              For the Years Ended September 30, 1997, 1996 and 1995
<TABLE>
<CAPTION>
                                                                        1997               1996               1995
                                                                  ------------------  ----------------  ------------------
<S>                                                               <C>                 <C>               <C>              
CASH FLOWS FROM FINANCING ACTIVITIES
   Net increase (decrease) in deposits                            $         919,829   $    (1,142,174)  $       8,098,871
   Net increase (decrease) in escrow accounts                                   (85)          332,986             196,850
   Proceeds from FHLB advances and other borrowings                     126,600,000        53,600,000          62,500,000
   Repayment of FHLB advances and other borrowings                     (113,866,668)      (45,666,666)        (50,546,666)
   Purchase of treasury stock                                            (3,222,729)       (3,526,306)         (2,500,900)
   Dividends paid                                                          (677,675)         (752,393)         (1,602,610)
                                                                  ------------------  ----------------  ------------------

Net cash provided by financing activities                                 9,752,672         2,845,447          16,145,545
                                                                  ------------------  ----------------  ------------------

Net increase (decrease) in cash and cash equivalents                      2,267,342            11,689            (598,518)

Cash and cash equivalents at beginning of year                              473,710           462,021           1,060,539
                                                                  ------------------  ----------------  ------------------
Cash and cash equivalents at end of year                                $ 2,741,052         $ 473,710           $ 462,021
                                                                  ==================  ================  ==================

SUPPLEMENTAL DISCLOSURES
   Cash paid during the year for:
      Interest on deposits, advances and other
        borrowings                                                      $ 9,895,246       $ 8,519,955         $ 7,718,438

      Income taxes                                                          954,195         1,018,956             857,076

   Transfers from loans to foreclosed real estate                           489,475            27,411              42,658

   Loans to facilitate the sale of foreclosed real estate                   122,000            25,954                   -

   Transfer of held-to-maturity mortgage-backed
     securities to available-for-sale                                             -        11,355,417                   -

   Transfer of loans held for investment to held-for-sale                 5,155,392                 -                   -

</TABLE>


The Notes to  Consolidated  Financial  Statements  are an integral part of these
statements.

                                     F - 6
<PAGE>



                            Landmark Bancshares, Inc.

                   Notes to Consolidated Financial Statements
                        September 30, 1997, 1996 and 1995


1.      Summary of Significant Accounting Policies

        Nature of operations:
        Landmark  Bancshares,  Inc. (the Company) is a Kansas corporation and is
        the parent  company of its  wholly-owned  subsidiary,  Landmark  Federal
        Savings  Bank (the Bank).  At the  present  time,  the Company  does not
        conduct any active business other than the Bank.

        Landmark  Federal  Savings  Bank  is  primarily  engaged  in  attracting
        deposits from the general public and using those deposits, together with
        other  funds,  to  originate  real estate  loans on one- to four- family
        residences and, to a lesser extent,  consumer and commercial  loans. The
        Bank  conducts its business  from its main office in Dodge City and also
        has four branch  offices  located in Barton,  Finney and Rush  Counties,
        Kansas. In addition, the Bank invests in mortgage-backed  securities and
        investment  securities.  The Bank  offers its  customers  fixed rate and
        adjustable  rate  mortgage  loans,  as well as consumer and other loans,
        including auto, commercial, home equity and savings account loans.

        Principles of consolidation:
        The accompanying  consolidated financial statements include the accounts
        of Landmark Bancshares,  Inc. and its wholly-owned subsidiary,  Landmark
        Federal Savings Bank. Significant intercompany transactions and balances
        have been eliminated.

        Use of estimates:
        The  preparation  of financial  statements in conformity  with generally
        accepted accounting principles requires management to make estimates and
        assumptions  that affect the reported  amounts of assets and liabilities
        and disclosure of contingent  assets and  liabilities at the date of the
        financial  statements and the reported  amounts of revenues and expenses
        during the reporting period.  Actual results could differ  significantly
        from those estimates.

        Material  estimates  that are  particularly  susceptible  to significant
        change in the near-term relate to the determination of the allowance for
        loan losses and the  valuation  of assets  acquired in  connection  with
        foreclosures  or in  satisfaction  of  loans.  In  connection  with  the
        determination  of the  allowances  for loan losses and the  valuation of
        assets  acquired  by   foreclosure,   management   obtains   independent
        appraisals for significant properties.

        Management  believes  that  the  allowances  for  losses  on  loans  and
        valuations  of  assets   acquired  by   foreclosure   are  adequate  and
        appropriate.  While  management uses available  information to recognize
        losses on loans and assets acquired by  foreclosure,  future loss may be
        accruable based on changes in economic conditions. In addition,  various
        regulatory  agencies,  as an integral part of their examination process,
        periodically  review  the  Bank's  allowances  for  losses  on loans and
        valuations of assets acquired by foreclosure.  Such agencies may require
        the Bank to  recognize  additional  losses  based on their  judgment  of
        information available to them at the time of their examination.

                                      F-7
<PAGE>



1.      Summary of Significant Accounting Policies (Continued)

        Cash and cash equivalents:
        Cash and cash  equivalents  include  unrestricted  cash on hand,  demand
        deposits  maintained  in  depository   institutions  and  other  readily
        convertible investments with original maturities when purchased of three
        months or less. All time deposits in other  depository  institutions are
        treated as non-cash equivalents.

        Investment and mortgage-backed securities:
        Regulations  require the Bank to maintain  liquidity  for  maturities of
        deposits and other  short-term  borrowings in cash, U.S.  Government and
        other approved securities.

        In May,  1993,  the  Financial  Accounting  Standards  Board issued SFAS
        Statement No. 115, Accounting for Certain Investments in Debt and Equity
        Securities.  This standard  establishes three categories of investments,
        including  mortgage-backed  securities;  held-to-maturity,  trading, and
        available-for-sale.  Under SFAS No. 115, held-to-maturity securities are
        reported at  amortized  cost.  Trading  securities  are reported at fair
        value, with unrealized changes in value reported in the Company's income
        statement as part of its  earnings.  Available-for-sale  securities  are
        also  reported  at  fair  value,  but  any  unrealized  appreciation  or
        depreciation, net of tax effects are reported as a separate component of
        equity. The Company adopted SFAS No. 115 with an effective adoption date
        of October 1, 1994.

        In accordance with the provisions of the Financial  Accounting Standards
        Board A Guide to  Implementation  of  Statement  115 on  Accounting  for
        Certain  Investments  in Debt and Equity  Securities  (the  Guide),  the
        management of the Company in December of 1995 transferred $11,355,417 of
        mortgage-backed  securities  from  held-to-maturity   classification  to
        available-for-sale classification. These securities were sold subsequent
        to the transfer. The transfer was a one-time transaction as provided for
        in the Guide in an effort to restructure and enhance the yield and  rate
        sensitivity of the Company's portfolio of held-to-maturity securities.

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

        Gains  and  losses  on  the  sale  of  investment  and   mortgage-backed
        securities are determined using the specific-identification  method. All
        sales are made without recourse.

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

        The  allowance  for loan  losses is  increased  by charges to income and
        decreased by  charge-offs  (net of  recoveries).  Management's  periodic
        evaluation  of the adequacy of the allowance is based on the Bank's past
        loan loss experience, known and inherent risks in the portfolio, adverse
        situations  that  may  affect  the  borrower's  ability  to  repay,  the
        estimated  value of any  underlying  collateral,  the  current  level of
        non-performing assets and current economic conditions.

        Premiums and  discounts on purchased  residential  real estate loans are
        amortized  to  income  using  the  interest  method  over the  estimated
        remaining period to maturity.

                                     F - 8
<PAGE>

1.      Summary of Significant Accounting Policies (Continued)

        Loan  origination  fees and certain  direct  costs are  capitalized  and
        recognized as an adjustment of the yield of the related loan.

        The  accrual of  interest  on  impaired  loans is  discontinued  when in
        management's  opinion,  the borrower  may be unable to meet  payments as
        they become  due.  When  interest  accrual is  discontinued,  all unpaid
        accrued interest is reversed. Interest income is subsequently recognized
        only to the extent cash payments are received.

        Loans held-for-sale:
        Mortgage loans  originated and intended for sale in the secondary market
        are  carried  at the  lower  of cost or  estimated  market  value in the
        aggregate.  Net  unrealized  losses are  recognized  through a valuation
        allowance by charges to income.

        Foreclosed real estate:
        Real estate properties  acquired through, or in lieu of, foreclosure are
        to be sold  and are  initially  recorded  at fair  value  at the date of
        foreclosure  establishing a new cost basis.  Valuations are periodically
        performed by management, and an allowance for losses is established by a
        charge to  operations  if the carrying  value of a property  exceeds the
        fair value less  estimated  costs to sell.  Revenue  and  expenses  from
        operations  and changes in the valuation  allowance are included in gain
        or loss on foreclosed real estate. The historical average holding period
        for such property is approximately one year.

        Loan servicing:

        In June 1996,  the  Financial  Accounting  Standard  Board  issued  SFAS
        Statement No. 125,  Accounting  for Transfers and Servicing of Financial
        Assets and  Extinguishments  of  Liabilities.  FASB  Statement  No. 127,
        Deferral of the Effective  Date of Certain  Provisions of FASB Statement
        No. 125,  was issued in December  1996 to defer  certain  provisions  of
        Statement 125. The provisions of SFAS No. 125 for servicing of financial
        assets have been applied effective January 1, 1997.

        The cost of mortgage servicing rights is amortized in proportion to, and
        over the period of,  estimated  net  servicing  revenues.  Impairment of
        mortgage  servicing  rights is assessed based on the fair value of those
        rights. Fair values are estimated using discounted cash flows based on a
        current market interest rate. For purposes of measuring impairment,  the
        rights are stratified based on homogenous  interest rate and the life of
        the loan  (15,  20 and 30  years)  at the date of sale.  The  amount  of
        impairment  recognized is the amount by which the  capitalized  mortgage
        servicing rights for a stratum exceed their fair value.

        When participating  interests in loans sold have an average  contractual
        interest rate, adjusted for normal servicing fees, that differs from the
        agreed yield to the purchases,  gains or loses are  recognized  equal to
        the present value of such differential over the estimated remaining life
        of such loans. The resulting "excess servicing  receivable" or "deferred
        servicing  receivable"  is  amortized  over the  estimated  life using a
        method approximating the interest method.

        Quoted  market  prices  are  not  available  for  the  excess  servicing
        receivables. Thus, the excess servicing receivables and the amortization
        thereon are  periodically  evaluated  in relation  to  estimated  future
        servicing revenues, taking into consideration changes in interest rates,
        current  prepayment  rates,  and  expected  future cash flows.  The Bank
        evaluates  the  carrying  value of the excess  servicing  receivable  by
        estimating  the  future   servicing   income  of  the  excess  servicing
        receivable  based on management's  best estimate of remaining loan lives
        and discounted at the original  discount rate. The excess servicing fees
        receivable  is  included  in prepaid  expenses  and other  assets on the
        consolidated statements of financial condition. At the

                                     F - 9
<PAGE>

     1. Summary of Significant Accounting Policies (Continued)

        date of  implementation  of SFAS 125,  the Bank did not have any  excess
        servicing fees receivable.

        Prior the  implementation  of SFAS 125, excess servicing fees receivable
        was amortized  over the estimated  life using the interest  method.  The
        excess  servicing  fees  receivable  and the  amortization  thereon  was
        periodically  evaluated  in relation to estimated  future net  servicing
        revenues,  taking into consideration  changes in interest rates, current
        prepayment  rates and expected future cash flows. The Bank evaluated the
        carrying  value of the excess  servicing  receivables  by estimating the
        future net servicing income of the excess servicing  receivable based on
        management's best estimate of remaining loan lives.

        Financial instruments:
        All derivative  financial  instruments  previously held or issued by the
        Company were held or issued for purposes other than trading. The Company
        did not hold or issue any derivative  financial  instruments  during the
        years ended September 30, 1997, 1996 and 1995.

        Off-balance sheet instruments:
        In the ordinary course of business the Bank has entered into off-balance
        sheet financial instruments  consisting of commitments to extend credit,
        commitments  under  credit  card  arrangements,  commercial  letters  of
        credit,  and standby letters of credit.  Such financial  instruments are
        recorded  in the  financial  statements  when they are funded or related
        fees are incurred or received.

        Office properties and equipment:
        Office  properties  and  equipment  are stated at cost less  accumulated
        deprecation.  Depreciation  is  computed  on a  straight-line  basis  or
        accelerated  methods  over the  estimated  useful lives of five to fifty
        years for  buildings  and  improvements  and  three to twenty  years for
        furniture, fixtures, equipment and automobiles.

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

        Stock-based compensation:
        In  October  1995,  the  FASB  issued  SFAS  No.  123,   Accounting  for
        Stock-Based Compensation.  This Statement establishes a fair-value-based
        method of accounting  for stock  compensation  plans with  employees and
        others.  It applies to all  arrangements  under which employees  receive
        shares of stock or other  equity  instruments  of the  employer,  or the
        employer  incurs  liabilities to employees in amounts based on the price
        of the employer's  stock.  The Company has adopted the  recognition  and
        measurement  provisions  of SFAS No. 123  effective  for the fiscal year
        beginning  October 1, 1996.  SFAS No. 123  effects the  Company's  stock
        options granted after October 1, 1996.  These options are recognized and
        measured in accordance with the fair-value-based method of accounting.

        Impact of new accounting standards:
        In February 1997, the FASB issued SFAS No. 128, Earnings per Share. This
        Statement  changes the manner in which  earning per share (EPS)  amounts
        are  calculated  and   presented.   SFAS  128  greatly   simplifies  the
        computations and conforms the determination and presentation of EPS data
        with the

                                     F - 10
<PAGE>

1.      Summary of Significant Accounting Policies (Continued)

        standards  of many other  countries  and with  international  accounting
        standards.  Under the new rules two EPS amounts are required:  (1) basic
        EPS; and (2) diluted EPS.  Basic EPS is simply the per share  allocation
        of income  available to common  stockholders  based only on the weighted
        average number of common shares actually  outstanding during the period.
        Diluted EPS represents the per share  allocation of income  attributable
        to common  stockholders  based on the weighted  average number of common
        shares actually  outstanding  plus all dilutive  potential common shares
        outstanding  during the period.  Statement  128 is effective  for fiscal
        years  ending  after  December  15,  1997.  Earlier  application  is not
        permitted.  Upon adoption of SFAS 128, EPS data for all prior periods in
        income statements,  earnings summaries,  and selected financial data are
        required to be restated. SFAS No. 128 is not expected to have a material
        effect on the Company's financial statements.

        In  February  1997,  the  FASB  issued  SFAS  No.  129,   Disclosure  of
        Information   about  Capital   Structure.   This   Statement   basically
        consolidates  disclosure requirements found in other previously existing
        accounting  literature  regarding capital  structure.  This statement is
        effective for fiscal years ending after  December 15, 1997, and since it
        contains no changes in the disclosure  requirements,  such adoption will
        not have a material effect on the Company's  current  capital  structure
        disclosures.

        In June 1997,  the FASB  issued SFAS No.  130,  Reporting  Comprehensive
        Income.  SFAS 130  establishes  standards of  disclosure  and  financial
        statement  display  for  reporting  total  comprehensive  income and the
        individual  components  thereof.  This Statement requires that all items
        that  are  required  to be  recognized  under  accounting  standards  as
        components of comprehensive  income be reported in a financial statement
        that  is  displayed  with  the  same   prominence  as  other   financial
        statements.  This  Statement  requires that an  enterprise  (a) classify
        items of other  comprehensive  income  by their  nature  in a  financial
        statement and (b) display the accumulated balance of other comprehensive
        income separately from retained earnings and additional  paid-in capital
        in the  equity  section  of a  statement  of  financial  position.  This
        Statement is effective  for fiscal years  beginning  after  December 15,
        1997.  Reclassification  of  financial  statements  for earlier  periods
        provided for comparative  purposes is required.  SFAS No. 130 provisions
        are only of a disclosure  nature and will not have a material  effect on
        the Company's financial statements.

        FASB  issued  Statement  No.  131,  Disclosures  about  Segments  of  an
        Enterprise and Related  Information,  in June 1997. SFAS 131 establishes
        new standards for  determining a reportable  segment and for  disclosing
        information  regarding each such segment. This Statement requires that a
        public business enterprise report financial and descriptive  information
        about  its  reportable   operating  segments.   Operating  segments  are
        components of an enterprise about which separate  financial  information
        is available that is evaluated regularly by the chief operating decision
        maker  in  deciding   how  to  allocate   resources   and  in  assessing
        performance.  This Statement requires that a public business  enterprise
        report a measure of segment profit or loss, certain specific revenue and
        expense  items,  and segment  assets.  However,  this Statement does not
        require an  enterprise  to report  information  that is not prepared for
        internal use if reporting it would be  impracticable.  Statement  131 is
        effective for financial  statements for periods beginning after December
        15, 1997. In the initial year of  application,  comparative  information
        for earlier years is to be restated. SFAS No. 131 provisions are only of
        a  disclosure  nature  and  would  not  have a  material  effect  on the
        Company's financial statements.

        Earnings per share:
        Primary  earnings  per  common  and  common  equivalent  share and fully
        diluted  earnings  per common and common  equivalent  share are computed
        using the weighted  average  number of shares  outstanding  adjusted for
        unallocated   ESOP  shares  and  for   incremental   shares  related  to
        outstanding options to purchase common stock.

                                     F - 11
<PAGE>

1.      Summary of Significant Accounting Policies (Continued)

        Financial statement presentation:
        Certain items in prior year financial  statements have been reclassified
        to conform to the 1997 presentation.


2.      Investment Securities

        Effective October 1, 1994, the Company adopted the Financial  Accounting
        Standards  Board   Statement  SFAS  No.  115,   Accounting  for  Certain
        Investments  in Debt and  Equity  Securities.  In  conjunction  with the
        adoption of SFAS No. 115,  investment  securities  as of October 1, 1994
        were  designated  as   held-to-maturity   or   available-for-sale.   The
        cumulative effect of classifying  securities previously accounted for at
        the lower of cost or market in the aggregate as  available-for-sale  was
        to reflect an  unrealized  gain,  net of tax effect,  as a component  of
        retained income of $15,569 as of October 1, 1994.

        The amortized cost and estimated market values of investment  securities
        at September 30 are summarized as follows:
<TABLE>
<CAPTION>
                                                                    September 30, 1997
                                           ------------------------------------------------------------------------
                                                                   Gross            Gross           Estimated
                                               Amortized        Unrealized       Unrealized           Market
                                                 Cost              Gains           Losses             Value
                                           ------------------ ---------------- ---------------- -------------------
<S>                                        <C>                <C>              <C>              <C>               
   Held-to-maturity:
      Government Agency Securities         $      17,297,942  $        85,039  $        42,512  $       17,340,469
      Municipal Obligations                        1,540,000           28,908            1,992           1,566,916
                                           ------------------ ---------------- ---------------- -------------------
                                           $      18,837,942  $       113,947  $        44,504  $       18,907,385
                                           ================== ================ ================ ===================
   Available-for-sale:
      Common Stock                         $       2,578,390  $     1,508,395  $             -  $        4,086,785
      Stock in Federal Home Loan
        Bank, at cost                              2,976,000                                             2,976,000
      Corporate Bonds                                 50,000                                                50,000
      Other, at cost                                  10,000                                                10,000
                                           ------------------ ---------------- ---------------- -------------------
                                           $       5,614,390  $     1,508,395  $             -  $        7,122,785
                                           ================== ================ ================ ===================
</TABLE>

<TABLE>
<CAPTION>
                                                                   Gross            Gross           Estimated
                                               Amortized        Unrealized       Unrealized           Market
                                                 Cost              Gains           Losses             Value
                                           ------------------ ---------------- ---------------- -------------------
<S>                                        <C>                <C>              <C>              <C>               
   Held-to-maturity:
      Government Agency Securities         $      27,168,520  $        53,398  $       363,467  $       26,858,451
      Municipal Obligations                        2,230,000           30,291            5,375           2,254,916
                                           ------------------ ---------------- ---------------- -------------------

                                           $      29,398,520  $        83,689  $       368,842  $       29,113,367
                                           ================== ================ ================ ===================
   Available-for-sale:
      Common Stock                         $       1,982,407  $       420,600  $         6,770  $        2,396,237
      Stock in Federal Home Loan
        Bank, at cost                              1,731,400                                             1,731,400
      Other, at cost                                  10,000                                                10,000
                                           ------------------ ---------------- ---------------- -------------------
                                           $       3,723,807  $       420,600  $         6,770  $        4,137,637
                                           ================== ================ ================ ===================
</TABLE>
                                     F - 12
<PAGE>

2.      Investment Securities (Continued)

        Government  agency  securities  above  include bonds and notes issued by
        various  government  agencies.  Those  agencies  include the  following:
        Federal Farm Credit,  Fannie Mae,  Freddie Mac, Sallie Mae, Federal Home
        Loan  Bank,  Resolution  Trust  Corporation,  and the  Tennessee  Valley
        Authority.

        Federal Home Loan Bank members are required to maintain an investment in
        stock at an amount equal to a percentage of outstanding  home loans. For
        disclosure  purposes such stock, which is carried at cost, is assumed to
        have a market value which is equal to cost.

        The  amortized  cost and  estimated  market value of debt  securities by
        contractual  maturity are shown below.  Expected  maturities will differ
        from contractual maturities because borrowers may have the right to call
        or prepay obligations with or without call or prepayment penalties.  The
        equity  securities  have been  excluded  from the  maturity  table below
        because they do not have  contractual  maturities  associated  with debt
        securities.
<TABLE>
<CAPTION>
                                                   Held-to-Maturity                      Available-for-Sale
                                         -------------------------------------  -------------------------------------
                                            Amortized           Estimated          Amortized           Estimated
                                               Cost            Market Value           Cost            Market Value
                                         -----------------  ------------------  -----------------   -----------------
<S>                                      <C>                <C>                 <C>                 <C>             
Due in one year or less                  $      $ 250,000   $         251,539   $              -    $              -
Due after one year through five years           4,340,000           4,346,799
Due after five years through ten years         10,747,942          10,828,687             50,000              50,000
Due after ten years                             3,500,000           3,480,360
                                         -----------------  ------------------  -----------------   -----------------

                                         $     18,837,942   $      18,907,385   $         50,000    $         50,000
                                         =================  ==================  =================   =================
</TABLE>

        Gross  realized  gains and  (losses) on sales of  investment  securities
        during the years ended September 30 are as follows:
<TABLE>
<CAPTION>
                                                   1997               1996                1995
                                              ----------------   ----------------    ---------------
<S>                                           <C>                <C>                 <C>           
Available-for-sale securities:
     Realized gains                           $       220,154    $        27,107     $      122,900
     Realized losses                                        -                  -                  -
                                              ----------------   ----------------    ---------------
                                              $       220,154    $        27,107     $      122,900
                                              ================   ================    ===============
</TABLE>

        Proceeds  from sales of  available-for-sale  securities  were  $742,989,
        $308,479 and $733,382 for the years ended  September 30, 1997,  1996 and
        1995, respectively.  During the years ended September 30, 1997, 1996 and
        1995,   sales   consisted  of  common   stock  of  unrelated   financial
        corporations.

        There were no proceeds from sales of debt securities for the years ended
        September 30, 1997, 1996 and 1995.

        Investment  securities with a carrying amount of $2,000,000 and $0 as of
        September  30, 1997 and 1996,  respectively,  were pledged as collateral
        for public funds as discussed in Note 9.

                                     F - 13
<PAGE>

3.      Mortgage-Backed Securities

        Mortgage-backed   securities,   all  of   which   were   classified   as
held-to-maturity at September 30, 1997 and 1996, consist of the following:
<TABLE>
<CAPTION>
                                                             September 30, 1997
                                 ---------------------------------------------------------------------------
                                                          Gross             Gross              Estimated
                                    Amortized          Unrealized         Unrealized            Market
                                       Cost               Gains             Losses               Value
                                 -----------------  -----------------  -----------------   -----------------
<S>                              <C>                        <C>        <C>                 <C>             
GNMA - fixed rate                $        373,311           $ 13,200   $              -    $        386,511
FNMA - ARMs                            13,157,644            190,254             25,145          13,322,753
FHLMC - ARMs                            4,768,042            114,215              2,003           4,880,254
FHLMC - fixed rate                        245,443              6,035                740             250,738
FNMA - fixed rate                         589,777             24,017                                613,794
Collateralized mortgage
  obligations-government
  agency issue                         13,310,277             38,128             70,443          13,277,962
Collateralized mortgage
  obligations-private issues            4,245,057              6,425             49,719           4,201,763
                                 -----------------  -----------------  -----------------   -----------------
                                 $     36,689,551   $        392,274   $        148,050    $     36,933,775
                                 =================  =================  =================   =================
</TABLE>

<TABLE>
<CAPTION>
                                                             September 30, 1996
                                 ---------------------------------------------------------------------------
                                                          Gross             Gross              Estimated
                                    Amortized          Unrealized         Unrealized            Market
                                       Cost               Gains             Losses               Value
                                 -----------------  -----------------  -----------------   -----------------
<S>                              <C>                <C>                <C>                 <C>               
GNMA - fixed rate                $        552,879   $         11,524   $              -    $        564,403  
FNMA - ARMs                            15,516,459            147,235            137,645          15,526,049
FHLMC - ARMs                            6,257,007             77,661             12,704           6,321,964
FHLMC - fixed rate                        401,275             10,550              2,561             409,264
FNMA - fixed rate                         812,750             66,092                                878,842
Collateralized mortgage
  obligations-government
  agency issue                         16,681,922             14,183            402,707          16,293,398
Collateralized mortgage
  obligations-private issues            5,654,828              4,899            127,640           5,532,087
                                 -----------------  -----------------  -----------------   -----------------
                                 $     45,877,120   $        332,144   $        683,257    $     45,526,007
                                 =================  =================  =================   =================
</TABLE>

        Collateralized  mortgage  obligations consist of floating rate and fixed
        rate notes with varying contractual principal  maturities.  The Bank has
        no principal only,  interest only, or residual  collateralized  mortgage
        obligations.

        Proceeds  from sales of  mortgage-backed  securities  available-for-sale
        were $0, $11,490,625 and $0 for years ended September 30, 1997, 1996 and
        1995,  respectively.  Sales  for  the  year  ended  September  30,  1996
        consisted  of  mortgage-backed  securities  that were  transferred  from
        held-to-maturity   to   available-for-sale   in  December  1995.   These
        securities were transferred in accordance with the one-time  transaction
        allowed  under the FASB  Implementation  Guide,  see Note 1 for  further
        discussion.

                                     F - 14
<PAGE>

3.      Mortgage-Backed Securities (Continued)

        Gross realized gains and (losses) on sales of mortgage-backed securities
        during the years ended September 30 are as follows:
<TABLE>
<CAPTION>
                                                     1997               1996                1995
                                                ----------------   ----------------    ---------------
<S>                                             <C>                <C>                 <C>           
Realized gains                                  $             -    $       144,885     $            -
Realized losses                                                             (9,677)
                                                ----------------   ----------------    ---------------
                                                $             -    $       135,208     $            -
                                                ================   ================    ===============
</TABLE>
        Mortgage-backed  securities with a  carrying  amount  of $9,067,094  and
        $7,001,787 at September 30, 1997 and 1996,  respectively,  were  pledged
        as collateral for public funds as discussed in Note 9.

4.      Loans Receivable

        Loans receivable at September 30, are summarized as follows:
<TABLE>
<CAPTION>

                                                                                   September 30,
                                                              -------------------------------------------------------
                                                                        1997                         1996
                                                              -------------------------    --------------------------
<S>                                                           <C>                          <C>                      
First mortgage loans:
  Secured by one to four family residences                    $            122,015,418     $              99,579,583
  Secured by other properties                                                3,452,789                     3,726,333
  Construction loans                                                         1,936,517                     1,129,915
  Other                                                                      2,666,395                     1,852,243
                                                              -------------------------    --------------------------
                                                                           130,071,119                   106,288,074

  Less:  Unamortized premium on loans purchased                                 29,460                        46,617
            Unearned discounts and loan fees                                  (348,405)                     (304,237)
            Undisbursed loan proceeds                                           (1,724)
            Allowance for loan losses                                         (615,049)                     (531,749)
                                                              -------------------------    --------------------------
  Total first mortgage loans                                               129,135,401                   105,498,705
                                                              -------------------------    --------------------------
Consumer and other loans:
  Automobile                                                                13,309,943                     9,783,677
  Commercial                                                                 4,049,950                     3,600,888
  Loans on deposits                                                            573,654                       554,550
  Home equity and second mortgage                                            9,986,176                     8,139,668
  Mobile homes                                                                  46,900                        27,791
  Other                                                                        924,153                       616,546
                                                              -------------------------    --------------------------
                                                                            28,890,776                    22,723,120
  Less:  Allowance for loan losses                                            (353,574)                     (208,597)
                                                              -------------------------    --------------------------
  Total consumer and other loans                                            28,537,202                    22,514,523
                                                              -------------------------    --------------------------

                                                              $            157,672,603     $             128,013,228
                                                              =========================    ==========================
</TABLE>

        The  following is an analysis of the change in the allowance for loss on
        loans:
<TABLE>
<CAPTION>
                                                 1997                 1996                 1995
                                           -----------------    -----------------    -----------------
<S>                                        <C>                  <C>                         <C>      
Balance, beginning                         $        740,346     $        643,547            $ 619,218
Provision charged to operations                     307,979              134,743                9,124
Loans charged off                                   (92,243)             (38,631)              (2,200)
Recoveries                                           12,541                  687               17,405
                                           -----------------    -----------------    -----------------
Balance, ending                            $        968,623     $        740,346            $ 643,547
                                           =================    =================    =================
</TABLE>

                                     F - 15
<PAGE>

4.      Loans Receivable (Continued)

        Impairment of loans having recorded investments of $371,769 at September
        30, 1997 and  $127,131 at  September  30, 1996 have been  recognized  in
        conformity with FASB Statement No. 114, as amended by FASB Statement No.
        118. The average recorded  investment in impaired loans during the years
        ended   September   30,  1997  and  1996  was  $249,450  and   $185,359,
        respectively.  Allowances  for loss on these  loans are  included in the
        above analysis of the overall allowance for loss on loans.  There are no
        specific loss provisions  associated with impaired loans as of September
        30,  1997 and 1996.  Interest  income on  impaired  loans of $25,662 and
        $8,460 was  recognized  for cash  payments  received  for the year ended
        September 30, 1997 and 1996, respectively.

        It is Bank policy not to modify  interest  rates below the then  current
        market rate on loans  associated with troubled debt  restructuring.  The
        Bank is not  committed to lend  additional  funds to debtors whose loans
        have been modified.

        See Note 18 for disclosure of loans to related parties.

5.      Loan Servicing

        Mortgage loans serviced for others are not included in the  accompanying
        statements  of financial  condition.  The unpaid  principal  balances of
        these loans at September 30 are summarized as follows:
<TABLE>
<CAPTION>
                                     1997                  1996                  1995
                              -------------------   -------------------   -------------------
<S>                           <C>                   <C>                   <C>               
FHLMC                         $       54,658,716    $       52,343,707    $       54,326,611
Other investors                        1,108,734             1,396,481             1,721,703
                              -------------------   -------------------   -------------------

                              $       55,767,450    $       53,740,188    $       56,048,314
                              ===================   ===================   ===================
</TABLE>

        Custodial  escrow  balances  maintained in connection with the foregoing
        loan  servicing  and  included in demand  deposits,  were  approximately
        $150,840 and $118,871 at September 30, 1997 and 1996.

        The following is an analysis of the changes in mortgage servicing rights
        during the year ended September 30, 1997:


Balance, September 30, 1996                         $              -
Additions                                                    111,528
Amortization                                                 (15,329)
                                                    -----------------

Balance, September 30, 1997                         $         96,199
                                                    =================

        There were no mortgage  servicing rights capitalized or amortized during
        the year ended  September 30, 1996. No valuation  allowance was recorded
        against  mortgage  servicing  rights at September 30, 1997 and 1996. For
        the years  ended  September  30,  1996 and 1995  amortization  of excess
        servicing fees retained were $2,202 and $3,627, respectively.


                                     F - 16
<PAGE>


6.      Accrued Income Receivable

        Accrued interest receivable at September 30 is summarized as follows:

                                             1997                 1996
                                       -----------------    -----------------
Mortgage-backed securities             $        233,811     $        290,900
Loans receivable                                957,036              762,588
Investments                                     255,758              465,152
                                       -----------------    -----------------
                                       $      1,446,605     $      1,518,640
                                       =================    =================

7.      Foreclosed Real Estate

        Real estate owned or in judgment and other repossessed assets consist of
        the following:

                                                      September 
                                        --------------------------------------
                                              1997                 1996
                                        -----------------    -----------------
Real estate acquired by foreclosure     $        232,851     $              -
Real estate loans in judgment
  and subject to redemption                       19,099
                                        -----------------    -----------------
                                        $        251,950     $              -
                                        =================    =================

        There was no activity in the allowance for loss account  for  the  years
        ended  September 30, 1997, 1996 and 1995.

8.      Office Properties and Equipment

        Office  properties  and  equipment  are stated at cost less  accumulated
        depreciation as follows:

                                                     September 30,
                                          -------------------------------------

                                               1997                1996
                                          ----------------   ------------------
Land                                      $       298,366    $         298,366
Office building and improvements                1,503,037            1,272,632
Furniture, fixtures and equipment                 927,977              835,874
Automobiles                                         9,642                9,642
                                          ----------------   ------------------
                                                2,739,022            2,416,514
Less accumulated depreciation                   1,550,772            1,466,728
                                          ----------------   ------------------
                                          $     1,188,250    $         949,786
                                          ================   ==================
Depreciation expense ($109,413 for 1995)  $       113,881    $         116,278
                                          ================   ==================

        The Bank is in the  process  of  constructing  a branch  office in Dodge
        City,  $234,430  of office  building  and  improvements  and  $34,590 of
        furniture,  fixtures  and  equipment  relate to the new  branch  office.
        Outstanding  commitments to fund  construction and equipment  related to
        the new branch amounted to $453,000 as of September 30, 1997.

                                     F - 17
<PAGE>

9.      Deposits

        Deposits at September 30 are summarized as follows:

Demand  accounts:
     Interest-bearing                $      18,549,636      $      15,273,551
     Non-interest bearing                    3,254,991              3,233,958
                                     ------------------     ------------------
         Total demand accounts              21,804,627             18,507,509
Savings deposits                             5,715,254              5,797,182
Certificates of deposit                    117,214,858            119,510,219
                                     ------------------     ------------------
                                     $     144,734,739      $     143,814,910
                                     ==================     ==================

        The  aggregate  amount of jumbo  certificates  of deposit with a minimum
        denomination  of  $100,000  as  of  September  30,  1997  and  1996  was
        approximately $11,174,463 and $7,032,053,  respectively.  Demand and NOW
        accounts as of September 30, 1997 included  public funds of  $4,243,893.
        Public  funds  were   collateralized   by  investment   securities   and
        mortgage-backed securities as discussed in Notes 2 and 3.

        At September 30, 1997,  scheduled  maturities of certificates of deposit
        are as follows:

      Year Ending September 30,
---------------------------------------

                 1998                      $        84,320,014
                 1999                               23,686,475
                 2000                                7,461,166
                 2001                                1,387,225
                 2002                                  356,596
              Thereafter                                 3,382
                                           --------------------

                                           $       117,214,858
                                           ====================

10.     Advances and other Borrowings from Federal Home Loan Bank

        Advances  and  other  borrowings  from the  Federal  Home  Loan  Bank at
        September 30 are summarized as follows:

                                               1997                 1996
                                         ----------------    ----------------

Advances                                 $    36,200,000     $    14,466,668
Line of credit                                10,000,000          19,000,000
                                         ----------------    ----------------

                                         $    46,200,000     $    33,466,668
                                         ================    ================

                                     F - 18
<PAGE>


10.     Advances and other Borrowings from Federal Home Loan Bank (Continued)

        Advances  and  other  borrowings  from the  Federal  Home  Loan  Bank at
        September 30 consist of the following:
<TABLE>
<CAPTION>
                                     1997                                   1996
   Fical          ----------------------------------------  ---------------------------------------
    Year                                   Weighted                                Weighted
  Maturity             Amount            Average Rate            Amount           Average Rate
-------------    --------------------  ------------------  -------------------  ------------------

<S>              <C>                   <C>                 <C>                  <C>              
    1997         $                 -                  -  % $       28,166,668                 6.06%
    1998                  28,000,000                 6.30           5,000,000                 6.74
    1999                  14,200,000                 5.91             300,000                 7.18
    2000                   4,000,000                 6.09
                 --------------------  ------------------  -------------------  ------------------
                 $        46,200,000                 6.16% $       33,466,668                 6.17%
                 ====================  =================== ===================  =====================
</TABLE>

        At September 30, 1997 the Company had  $10,000,000  outstanding  under a
        $30,000,000  line of credit with the Federal Home Loan Bank. All amounts
        outstanding under the line of credit are payable on February 5, 1998 and
        bear interest at the line of credit rate established by the Federal Home
        Loan  Bank.  This rate is  adjusted  from  time to time,  the rate as of
        September  30,  1997 was 6.65%.  At  September  30, 1996 the Company had
        $19,000,000 outstanding under a $24,000,000 line of credit, due February
        5, 1997.

        The advances and line of credit are  collateralized  as of September 30,
        1997 and 1996 by a  blanket  pledge  agreement,  including  all stock in
        Federal  Home  Loan  Bank,  qualifying  first  mortgage  loans,  certain
        mortgage-related securities and other investment securities.

                                                          
11.     Income Taxes

        The Company and subsidiary file consolidated federal income tax returns.
        The Company's effective income tax rate was different than the statutory
        federal income tax rate for the following reasons:

                                           1997       1996       1995
                                        ---------  ---------   ---------

Statuatory federal income tax              34.0%      34.0%      34.0%
Increase (reductions) resulting from:
     Kansas Privilege Tax                   3.9        4.3        5.8
     Other                                  0.2       (2.6)      (3.0)

                                        ---------  ---------   ---------

                                           38.1%      35.7       36.8%
                                        =========  =========   =========

        Deferred taxes are included in the accompanying  Statements of Financial
        Condition at September  30, 1997 and 1996 for the  estimated  future tax
        effects of  differences  between  the  financial  statement  and federal
        income  tax basis of assets  and  liabilities  given the  provisions  of
        currently enacted tax laws.

                                     F - 19
<PAGE>

11.     Income Taxes (Continued)

        The net deferred tax asset  (liability)  at September  30, 1997 and 1996
        were comprised of the following:
<TABLE>
<CAPTION>
                                                                  1997                1996
                                                            -----------------   ------------------
<S>                                                         <C>                 <C>              
Deferred tax assets:
     Deferred loan fees and costs                           $         37,087    $          53,143
     Allowance for loan losses                                       369,723              282,590
     FDIC special assessment                                                              357,681
     Deferred compensation and accrued salaries                      126,777              105,913
     Capital loss carryover                                                                12,976
                                                            -----------------   ------------------
                                                                     533,587              812,303
                                                            -----------------   ------------------
Deferred tax liabilities:
     Accumulated depreciation                                         (4,545)              (6,063)
     Special bad debt deduction                                     (298,034)            (347,550)
     FHLB stock dividends                                           (337,432)            (276,207)
     Unrealized gain on available-for-sale securities               (586,011)            (160,773)
                                                            -----------------   ------------------
                                                                  (1,226,022)            (790,593)
                                                            -----------------   ------------------
                                                            $       (692,435)   $          21,710
                                                            =================   ==================
</TABLE>

        No  valuation  allowance  was  recorded  against  deferred tax assets at
        September 30, 1997 or 1996.

        Prior to the year  ended  September  30,  1997,  the Bank was  allowed a
        special bad debt deduction  based on a percentage of taxable income (8%)
        or on  specified  experience  formulas,  subject to certain  limitations
        based upon aggregate loan balances at the end of the year. The Bank used
        the percentage of taxable income method in 1996 and 1995.

        Effective  with the tax year  beginning  October 1, 1996, the Bank is no
        longer able to use the  percentage of taxable income method and began to
        recapture tax bad debt reserves of $936,968 over a six year period.  The
        Bank recaptured  $156,161 in tax bad debt reserves during the year ended
        September 30, 1997.  The reserves to be  recaptured  consist of bad debt
        deductions  after  December 31, 1987. If the amounts  deducted  prior to
        December 31, 1987 are used for purposes other than for loan losses, such
        as in a distribution in liquidation or otherwise,  the amounts  deducted
        would be subject to federal income tax at the then current corporate tax
        rate.  The Bank  had  recorded  a  deferred  tax  asset  related  to the
        allowance for loan losses reported for financial  reporting purposes and
        a deferred tax liability for special bad debt deductions  after December
        31, 1987. The Bank, in accordance  with SFAS No. 109, has not recorded a
        deferred  tax   liability  of   approximately   $1,900,000   related  to
        approximately $5,585,000 of cumulative special bad debt deductions prior
        to December 31, 1987.

12.     Regulatory Matters

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

                                     F - 20
<PAGE>

12.     Regulatory Matters (Continued)

        Quantitative  measures  established  by  regulation  to  ensure  capital
        adequacy  require the Bank to maintain  minimum  amounts and ratios (set
        forth in the table  below) of core and  tangible  capital (as defined in
        the  regulations)  to assets (as defined) and core and total  capital to
        risk weight assets (as defined).  Management  believes,  as of September
        30, 1997, that the Bank meets all capital adequacy requirements to which
        it is subject.

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

        The Bank's actual  capital  amounts (in  thousands)  and ratios are also
        presented in the following table:
<TABLE>
<CAPTION>
                                                                                              To Be Well
                                                                                           Capitalized Under
                                                                      For Capital          Prompt Corrective
                                               Actual              Adequacy Purposes:     Action Provisions:
                                     ------------------------  ---------------------  ----------------------
                                         Amount      Ratio       Amount      Ratio      Amount       Ratio
                                     -------------  ---------  ------------  -------  ------------  --------
<S>                                  <C>               <C>      <C>            <C>     <C>            <C>
As of September 30, 1997:
Tangible Capital (to Assets)         $     26,895      12.0%    $ 3,349        1.5%    $      N/A      
Total (Risk-Based) Capital                                                             
    (to Risk Weighted Assets)              27,864      25.8%      8,627        8.0%        10,784      10.0%
Core (Tier I) Capital                                                                  
    (to Risk Weighted Assets)              26,895      24.9%        N/A                     6,470       6.0%
Core (Tier I) Capital - leverage                                                       
    (to Assets)                            26,895      12.0%      6,698        3.0%        11,168       5.0%
                                                                                       
As of September 30, 1996:                                                              
Tangible Capital (to Assets)               28,112      13.3%      3,167        1.5%           N/A
Total (Risk-Based) Capital                                                             
    (to Risk Weighted Assets)              28,852      31.1%      7,433        8.0%         9,292      10.0%
Core (Tier I) Capital                                                                  
    (to Risk Weighted Assets)              28,112      30.3%        N/A                     5,575       6.0%
Core (Tier I) Capital - leveraged                                                      
    (to Assets)                            28,112      13.3%      6,335        3.0%        10,558       5.0%
                                                                                       
</TABLE>                                                      

                                     F - 21

<PAGE>

12.     Regulatory Matters (Continued)

        The  following  is a  reconciliation  of net worth to regulatory capital
        as reported  in the  September 30,  1997 and 1996  reports to the Offic
        of Thrift Supervision:
<TABLE>
<CAPTION>
                                                                September 30,
                                                   ---------------------------------------
                                                         1997                  1996
                                                   ------------------    -----------------
<S>                                                <C>                   <C>             
Bank net worth per report
  to Office of Thrift Supervision                  $      26,991,000     $     28,112,000
Rounding                                                        (126)                  45
                                                   ------------------    -----------------
Net worth as reported in accompanying
  financial statements (bank only)                        26,990,874           28,112,045
Adjustments to arrive at Core (Tier I)
  and Tangible Capital:
Disallowed servicing assets                                  (96,000)                   -
                                                   ------------------    -----------------
Core (Tier I) and Tangible Capital                        26,894,874           28,112,045
Adjustments to arrive at Total Capital:
           Allowable portion of general
                allowance for loan losses                    969,000              740,000
                                                   ------------------    -----------------
Total Risk-Based Capital                           $      27,863,874     $     28,852,045
                                                   ==================    =================
Risk weight assets                                 $     107,838,000     $     92,918,000
                                                   ==================    =================
</TABLE>


13.     Contingencies

        The Company is at times a defendant in certain  claims and legal actions
        arising  in  the  ordinary  course  of  business.   In  the  opinion  of
        management,   after  consultation  with  legal  counsel,   the  ultimate
        disposition  of such matters is not expected to have a material  adverse
        effect on the consolidated financial condition of the Company.

14.     Employee Benefit Plans

        Employee Retirement Plan:
        The Bank  has  adopted  a  401(k)  defined  contribution  savings  plan.
        Substantially  all employees are covered  under the  contributory  plan.
        Pension costs  attributable  to the years ended September 30, 1997, 1996
        and 1995 were $27,274, $26,218 and $24,296, respectively,  including all
        current service costs.

        Deferred Compensation Agreements:
        The Bank has entered into deferred compensation  agreements with certain
        key  employees  which  provide for cash  payments to be made after their
        retirement.  The liabilities  under the agreements have been recorded at
        the present  values of accrued  benefits  using a 7% interest  rate. The
        balance of  estimated  accrued  benefits  was  $165,636  and $128,306 at
        September  30,  1997 and  1996,  respectively.  In  connection  with the
        deferred compensation agreements,  the Bank has purchased life insurance
        policies on covered  employees in which the Bank is the  beneficiary  to
        assist in funding  benefits.  At September  30, 1997 and 1996,  the cash
        surrender   values  on  the  policies   were   $501,638  and   $379,857,
        respectively.

        Employee Stock Ownership Plan:
        Upon  conversion  from mutual to stock  form,  the Bank  established  an
        employee  stock  ownership  plan  (ESOP).  The original  acquisition  of
        136,878  shares of  Company  stock by the plan was funded by a loan from
        the Company to the ESOP, in the amount of $1,368,780. The loan, together
        with  interest,  is to be repaid over a ten year period  through  annual
        contributions by the Bank.

                                     F - 22
<PAGE>

14.     Employee Benefit Plans (Continued)

        The Bank makes annual contributions to the ESOP equal to the ESOP's debt
        service less dividends  received by the ESOP. All dividends  received by
        the ESOP are used to pay debt service.  The ESOP shares  initially  were
        pledged as collateral  for its debt.  As the debt is repaid,  shares are
        released from the collateral and will be allocated to active  employees,
        based on the  proportion  of debt  service  paid in the  year.  The Bank
        accounts for its ESOP shares in  accordance  with  Statement of Position
        No. 93-6.  Accordingly,  the debt of the ESOP is recorded as debt of the
        Bank and the shares  pledged as collateral are reported as unearned ESOP
        shares in the  Statement of  Financial  Condition.  As of September  30,
        l997,  the  balance of  indebtedness  from the ESOP to the  Company  was
        $844,597, which is shown as a deduction from stockholders' equity on the
        consolidated  balance  sheet.  The  debt,  which is  accounted  for as a
        liability  of the  Bank  and a  receivable  for the  Company,  has  been
        eliminated in consolidation. As shares are released from collateral, the
        Company reports  compensation  expense equal to the current market price
        of the shares,  and the shares become outstanding for earnings per share
        (EPS) computations. Dividends on allocated ESOP shares are recorded as a
        reduction of retained earnings, dividends on unallocated ESOP shares are
        recorded as compensation expense. ESOP compensation expense was $257,375
        and  $179,080  for  the  years  ended   September  30,  1997  and  1996,
        respectively.  As of September 30, 1997, of the 134,469 shares  acquired
        by the ESOP,  50,009  shares  were  allocated  and  84,460  shares  were
        unallocated. The 84,460 unallocated shares had an estimated market value
        of $2,132,615 at September 30, 1997.

        Management Stock Bonus Plan:
        In  connection  with  the  stock  conversion,  the  Bank  adopted  three
        Management Stock Bonus Plans  (collectively  the MSBP), the objective of
        which is to  enable  the Bank to  retain  personnel  of  experience  and
        ability in key  positions of  responsibility.  All employees of the Bank
        are eligible to receive benefits under the MSBP. Benefits may be granted
        at  the  sole  discretion  of a  committee  appointed  by the  Board  of
        Directors.  The  MSBP  is  managed  by  trustees  who  are  non-employee
        directors  and  who  have  the   responsibility   to  invest  all  funds
        contributed by the Bank to the trusts created for the MSBP.

        The  MSBP  has  purchased  91,252  shares  of the  Company's  stock  for
        $965,224.  These  shares were  granted in the form of  restricted  stock
        payable over a five-year  period at the rate of one-fifth of such shares
        per year following the date of grant of the award. Compensation expense,
        in the amount of the fair market  value of the common  stock at the date
        of the grant to the employee,  will be recognized pro rata over the five
        years  during  which  the  shares  are  payable.  A  recipient  of  such
        restricted  stock will be entitled  to all voting and other  stockholder
        rights,  except  that the  shares,  while  restricted,  may not be sold,
        pledged or otherwise  disposed of and are required to be held in escrow.
        If a holder of such restricted stock  terminates  employment for reasons
        other than death,  disability or retirement,  the employee  forfeits all
        rights to the allocated shares under  restriction.  If the participant's
        service  terminates  as a result of death,  disability,  retirement or a
        change in control of the Bank,  all  restrictions  expire and all shares
        allocated become unrestricted.  The Board of Directors can terminate the
        MSBP at any time,  and if it does so,  any  shares  not  allocated  will
        revert to the Company.


15.     Stock Option Plan

        In connection with the stock  conversion,  the Bank's Board of Directors
        adopted the 1994 Stock  Option Plan (the Option  Plan).  Pursuant to the
        Option Plan, 228,131 shares of common stock are reserved for issuance by
        the  Company  upon  exercise  of  stock  options  granted  to  officers,
        directors  and  employees of the Bank from time to time under the Option
        Plan. The purpose of the Option Plan is to provide additional  incentive
        to certain officers,  directors and key employees by facilitating  their
        purchase of a stock interest

                                     F - 23
<PAGE>

15.     Stock Option Plan (Continued)

        in the Company.  The Option Plan  provides for the granting of incentive
        and  non-incentive  stock  options  with a duration of ten years,  after
        which no awards may be made,  unless earlier  terminated by the Board of
        Directors  pursuant to the Option  Plan.  Stock to be offered  under the
        Plan may be authorized  but unissued  common stock or previously  issued
        shares  which have been  reacquired  by the Company and held as Treasury
        shares.

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

        As of the date of  conversion,  the  Option  Committee  granted  228,131
        shares  of  common  stock,  at an  exercise  price  of  $10  per  share,
        contingent  upon  stockholder  approval  of the  Option  Plan  which was
        ratified June 22, 1994. An additional  18,479 shares of common stock, at
        an exercise  price of $16.50 per share,  were  awarded on  November  20,
        1996. All such options are exercisable immediately following stockholder
        ratification.  As of September 30, 1997, no options have been  exercised
        and all options granted remain outstanding.

        The Company  accounts for the fair value of its grants  issued under the
        plan  subsequent  to October 1, 1996 in accordance  with FASB  Statement
        123. The compensation  cost that has been charged against income for the
        plan was $51,447 for the year ended September 30, 1997.

        In accordance  with SFAS No. 123, the fair value of each option grant is
        estimated  on the date of grant using the  Black-Scholes  option-pricing
        model with the following  weighted  average  assumptions used for grants
        during  the  year  ended  September  30,  1997:  dividend  yield of 2.42
        percent,  expected volatility of 26.83 percent,  risk-free interest rate
        of 5.5 percent and  expected  life of two years.  Common  stock  options
        granted  during the year ended  September 30, 1997 had an exercise price
        of $16.50 per share and an estimated fair value of $2.78 per share.

        Certain information  for  the  years  ended  September 30, 1997 and 1996
        relative to stock options are comprised of the following:
<TABLE>
<CAPTION>
                                                                          September 30,
                                                     -----------------------------------------------------
                                                                   1997                         1996
                                                     ------------------------------------   --------------
                                                                         Weighted-Average
Fixed Options                                            Shares          Exercise Price         Shares
-------------                                        --------------     -----------------   --------------
<S>                                                  <C>                <C>                  <C>    
Outstanding at beginning of year                           228,131      $           10.00         228,131
   Granted                                                  18,479                  16.50
   Canceled
   Exercised
                                                     --------------     -----------------   --------------
Outstanding at end of year                                 246,610      $           10.59         228,131
                                                     ==============     =================   ==============
Exercisable at end of year                                 246,610                                228,131
                                                     ==============                         ==============
Number of shares available for future grant:
   Beginning of year                                             0                                      0
                                                     ==============                         ==============
   End of year                                                   0                                      0
                                                     ==============                         ==============

</TABLE>

                                     F - 24
<PAGE>

16.     Financial Instruments

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

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

        At September 30, 1997 and 1996, the Bank had outstanding  commitments to
        fund real estate loans of $1,906,694 and  $2,054,583,  respectively.  Of
        the commitments  outstanding at September 30, 1997,  $1,761,435 were for
        fixed rate loans with rates of 7.25% to 12.0%.  There was one commitment
        to fund an  adjustable  rate loan of  $145,259  with an initial  rate of
        7.875%. Of the commitments  outstanding at September 30, 1996,  $898,573
        were for fixed rate loans at rates of 7.625% to 9.50%.  Commitments  for
        adjustable rate loans amounted to $1,156,010 with initial rates of 6.50%
        to 8.75% at September 30, 1996.

        Loan  commitments  are agreements to lend to a customer as long as there
        is  no  violation  of  any  condition   established   in  the  contract.
        Commitments  generally have fixed expiration dates or other  termination
        clauses and may require  payment of a fee. Since many of the commitments
        are expected to expire  without being drawn upon,  the total  commitment
        amounts do not necessarily represent future cash requirements.  The Bank
        evaluates each customer's  creditworthiness on a case-by-case basis. The
        amount  of  collateral  obtained  if deemed  necessary  by the Bank upon
        extension of credit is based on  management's  credit  evaluation of the
        counter-party. Collateral held is primarily residential real estate, but
        may include autos, accounts receivable,  inventory,  property, plant and
        equipment.

        The Bank had outstanding  commitments  from mortgage banking concerns to
        purchase $0 and $234,792 of loans yet to be  originated at September 30,
        1997 and 1996,  respectively.  The Bank has  outstanding  commitments to
        originate  or  has   applications   pending  approval  at  approximately
        equivalent interest rates.

        The Bank had no  commitments to purchase  mortgage-backed  securities or
        investments at September 30, 1997 and 1996.

        At September 30, 1997 and 1996,  loans with a carrying value of $490,234
        and  $1,890,007,  respectively,  have been  classified  by management as
        held-for-sale. The carrying value of these loans is at the lower of cost
        or market value as of September 30, 1997 and 1996.

17.     Significant Concentrations of Credit Risk

        The Bank grants  mortgage,  consumer  and  business  loans  primarily to
        customers  within the state.  Although the Bank has a  diversified  loan
        portfolio,  a  substantial  portion of its  customers'  ability to honor
        their contracts is dependent upon the agribusiness and energy sectors of
        the  economy.  The  Bank's  net  investment  in  loans is  subject  to a
        significant  concentration  of credit risk given that the  investment is
        primarily within a specific geographic area.

                                     F - 25
<PAGE>

17.     Significant Concentrations of Credit Risk (Continued)

        As of September 30, 1997 the Bank had a net  investment of  $158,162,837
        in loans  receivable.  These loans possess an inherent credit risk given
        the  uncertainty  regarding the borrower's  compliance with the terms of
        the loan  agreement.  To reduce  credit  risk,  the loans are secured by
        varying forms of collateral,  including  first mortgages on real estate,
        liens on personal property,  savings accounts, etc. It is generally Bank
        policy to file liens on titled  property  taken as  collateral on loans,
        such as real  estate  and  autos.  In the event of  default,  the Bank's
        policy is to  foreclose or  repossess  collateral  on which it has filed
        liens.

        In the event  that any  borrower  completely  failed to comply  with the
        terms of the loan agreement and the related collateral proved worthless,
        the Bank would incur a loss equal to the loan balance.

18.     Related Party Transactions

        Directors and primary officers of the Company were customers of, and had
        transactions  with, the Bank in the ordinary  course of business  during
        the  two  years  ended   September  30,  1997  and  1996,   and  similar
        transactions  are  expected  in the future.  All loans  included in such
        transactions  were  made on  substantially  the  same  terms,  including
        interest  rates  and  collateral,  as those  prevailing  at the time for
        comparable transactions with other persons and did not involve more than
        normal risk of loss or present other unfavorable features.

        The following analysis is of loans made to principal officers, directors
        and principal holders of equity securities which  individually  exceeded
        $60,000 in aggregate during the year ended September 30, 1997:

                  Balance, September 30, 1996       $     2,062,180
                  
                  New loans                               2,345,597
                  Repayments                              1,261,881
                  
                                                    =================
                  Balance, September 30, 1997       $     3,145,896
                                                    =================

19.     Disclosures about Fair Value of Financial Instruments

        The  following  methods and  assumptions  were used to estimate the fair
        value of each class of financial instruments for which it is practicable
        to estimate that value:

        Cash:
        For those  short-term  instruments,  the carrying amount is a reasonable
        estimate of fair value.

        Time  deposits  in  financial  institutions:  The  fair  value  of fixed
        maturity certificate of deposits are estimated using the rates currently
        offered for deposits of similar remaining maturities.

        Investment securities and mortgage-backed securities:
        For marketable  equity  securities  held for investment  purposes,  fair
        values are based on quoted  market  prices or dealer  quotes.  For other
        securities held as  investments,  fair value equals quoted market price,
        if available.  If a quoted market price is not available,  fair value is
        estimated using quoted market prices for similar securities.

                                     F - 26
<PAGE>

19.     Disclosures about Fair Value of Financial Instruments (Continued)

        Loans receivable:
        The fair value of loans is  estimated  by  discounting  the future  cash
        flows using the current  rates at which  similar  loans would be made to
        borrowers  with  similar  credit  ratings  and  for the  same  remaining
        maturities.

        Deposit liabilities:
        The fair value of demand deposits,  savings accounts,  and certain money
        market  deposits is the amount payable on demand at the reporting  date.
        The fair value of  fixed-maturity  certificates of deposit are estimated
        using the rates  currently  offered for  deposits  of similar  remaining
        maturities.

        Advances and other  borrowings  from  Federal  Home Loan Bank:  The fair
        value of advances  from the Federal Home Loan Bank are  estimated  using
        the rates offered for similar borrowings.

        Commitments to extend credit:
        The fair value of  commitments  is  estimated  using the fees  currently
        charged  to enter into  similar  agreements,  taking  into  account  the
        remaining  terms of the agreements and the present  creditworthiness  of
        the  counterparties.  For fixed rate loan  commitments,  fair value also
        considers the  difference  between  current levels of interest rates and
        the committed rates.

        The estimated  fair values of the Bank's  financial  instruments  are as
        follows:
<TABLE>
<CAPTION>
                                                               September 30, 1997      September 30, 1996
                                                       ---------------------------------------------------------------------
                                                        Carrying         Fair         Carrying         Fair
                                                         Amount         Value          Amount          Value
                                                       ------------  -------------   ------------   ------------
                                                                            (In Thousands)
<S>                                                    <C>           <C>             <C>            <C>        
Cash and cash equivalents:
     Interest-bearing                                  $     2,063   $      2,063    $         3    $         3
     Non-interest bearing                                      678            678            471            471
Time deposits in other financial institutions                  111            111            480            480
Investment securities held-to-maturity                      18,838         18,907         29,399         29,113
Investment securities available-for-sale                     7,123          7,123          4,138          4,138
Mortgage-backed securities held-to-maturity                 36,690         36,934         45,877         45,526
Loans receivable                                           157,673        157,985        128,013        126,244
Loans held-for-sale                                            490            499          1,890          1,890

Financial liabilities:
Deposits                                                   144,735        144,342        143,815        143,548
Advances and other borrowings from
     the Federal Home Loan Bank                             46,200         46,058         33,467         33,377
</TABLE>

<TABLE>
<CAPTION>
                                                           Par           Fair            Par            Fair
                                                          Value          Value          Value          Value
                                                       ------------  -------------   ------------   ------------
<S>                                                    <C>           <C>             <C>            <C>        
Unrecognized financial instruments:
     Commitments to extend credit                      $     1,907   $      1,938    $     2,055    $     2,040

</TABLE>
                                     F - 27
<PAGE>

20.     Stock Conversion / Restrictions on Retained Earnings

        On August 24, 1993, the Board of Directors of the Bank adopted a Plan of
        Conversion to convert from a federally chartered mutual savings and loan
        association  to a  federally  chartered  stock  savings  bank  with  the
        concurrent  formation of Landmark  Bancshares,  Inc. to act as a holding
        company of the Bank (the "Conversion").

        At the date of  conversion,  March 28, 1994,  the Company  completed the
        sale of  2,281,312  shares of common  stock,  $0.10 par  value,  through
        concurrent  subscription  and  community  offerings at $10.00 per share.
        Included in the total shares  outstanding  are 91,252  shares which were
        purchased by the Bank's MSBP at an average price of $10.58 per share and
        136,878  shares  which were  purchased  by the Bank's ESOP at $10.00 per
        share. Net proceeds from the conversion,  after  recognizing  conversion
        expenses and underwriting costs of $701,411, were $22,111,709.  From the
        net  proceeds,  the Company  used  $11,055,855  to  purchase  all of the
        capital  stock of the  Bank,  $965,224  to fund the  purchase  of 91,252
        shares of the Company stock by the MSBP (Note 14) and $1,368,780 to fund
        the  purchase of 136,878  shares of the Company  stock by the ESOP (Note
        14).

        The Bank may not  declare or pay a cash  dividend  to the Company if the
        effect would cause the net worth of the Bank to be reduced  below either
        the  amount  required  for the  "liquidation  account"  or the net worth
        requirement imposed by the OTS. If all capital requirements  continue to
        be met, the Bank may not declare or pay a cash  dividend in an amount in
        excess of the  Bank's  net  earnings  for the  fiscal  year in which the
        dividend is  declared  plus  one-half  of the  surplus  over the capital
        requirements, without prior approval of the OTS.

        Office of Thrift  Supervision  regulations  require that upon conversion
        from  mutual  to stock  form of  ownership,  a  liquidation  account  be
        established  by  restricting  a portion of net worth for the  benefit of
        eligible  savings  account  holders who maintain their savings  accounts
        with the Bank after  conversion.  In the event of  complete  liquidation
        (and only in such event) each savings  account  holder who  continues to
        maintain   their  savings   account  shall  be  entitled  to  receive  a
        distribution from the liquidation account after payment to all creditors
        but before any  liquidation  distribution  with respect to common stock.
        The initial  liquidation  account was established at  $15,489,000.  This
        account may be proportionately  reduced for any subsequent  reduction in
        the eligible holder's savings accounts.

                                     F - 28
<PAGE>


21.     Parent Company Financial Information

        Condensed  financial  statements of Landmark  Bancshares,  Inc.  (Parent
        Company)  are  shown  below.  The  Parent  Company  has  no  significant
        operating activities.

                   Condensed Statements of Financial Condition
                        As of September 30, 1997 and 1996
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                                       1997                 1996
                                                                                 -----------------    -----------------
<S>                                                                              <C>                  <C>             
ASSETS
     Cash and cash equivalents                                                   $            524     $            666
     Time deposits in other financial institutions                                            111                   95
     Investment securities available-for-sale                                               4,137                2,396
     Investment in subsidiary                                                              11,039               12,217
     Loans receivable                                                                         996                1,236
     Other assets                                                                              76                   54
                                                                                 -----------------    -----------------
        Total assets                                                             $       $ 16,883     $         16,664
                                                                                 =================    =================
LIABILITIES AND STOCKHOLDERS' EQUITY
     Liabilities                                                                 $            589     $            169
                                                                                 -----------------    -----------------
     Stockholders' equity:
        Common stock                                                                          228                  228
        Additional paid-in capital                                                         22,117               21,944
        Retained income                                                                     3,410                1,574
        Net unrealized gain on available-for-sale securities                                  923                  253
        Unamortized amounts related to ESOP and MSBP                                       (1,134)              (1,477)
                                                                                 -----------------    -----------------
                                                                                           25,544               22,522
        Treasury stock, at cost                                                            (9,250)              (6,027)
                                                                                 -----------------    -----------------
        Total stockholders' equity                                                         16,294               16,495
                                                                                 -----------------    -----------------
        Total liabilities and stockholders' equity                               $         16,883     $         16,664
                                                                                 =================    =================
</TABLE>

                       Condensed Statements of Operations
              For the Years Ended September 30, 1997, 1996 and 1995
<TABLE>
<CAPTION>
                                                                  1997                 1996                 1995
                                                            ------------------   -----------------    -----------------
<S>                                                         <C>                  <C>                  <C>             
     Equity earnings of subsidiary                          $           2,393    $          1,331     $          1,587
     Interest and dividend income                                         176                 221                  343
     Net gain on sale of investments                                      220                  27                  123
     Other                                                                  1                   3                    3
                                                            ------------------   -----------------    -----------------
        Total income                                                    2,790               1,582                2,056
                                                            ------------------   -----------------    -----------------
     Operating expenses                                                   218                 129                  190
                                                            ------------------   -----------------    -----------------
        Income before income taxes                                      2,572               1,453                1,866
     Income tax expense                                                    58                  49                  103
                                                            ------------------   -----------------    -----------------
        Net income                                          $           2,514    $          1,404     $          1,763
                                                            ==================   =================    =================
</TABLE>
                                     F - 29
<PAGE>

21.     Parent Company Financial Information (Continued)

                       Condensed Statements of Cash Flows
              For the Years Ended September 30, 1997, 1996 and 1995
                                 (In Thousands)
<TABLE>
<CAPTION>
                                                                        1997               1996              1995
                                                                  -----------------    --------------    --------------
<S>                                                               <C>                  <C>               <C>          
Cash Flows from Operating Activities
     Net income                                                   $          2,514     $       1,404     $       1,763
     Adjustments to reconcile net income to net cash
       provided by operating activities:
        Equity in net income of subsidiary                                  (2,393)           (1,331)           (1,587)
        Gain on sale of investments                                           (220)              (27)             (123)
        (Increase) decrease in other assets                                    (47)              449                32
        Increase in other liabilities                                           19                71                28
        Other                                                                   87              (137)              (24)
                                                                  -----------------    --------------    --------------
        Net cash provided (used) by operating activities                       (40)              429                89
                                                                  -----------------    --------------    --------------
Cash Flows from Investing Activities
     Dividends from subsidiary                                               4,000                               1,140
     Acquisition of investment securities available-for-sale,
       including deposits                                                   (1,190)           (2,214)             (748)
     Proceeds from sale of investment securities
       available-for-sale                                                      749               308               733
     Decrease in loans to subsidiary and ESOP, net                             150             5,837             3,463
     Other loans, net                                                           90                33              (275)
                                                                  -----------------    --------------    --------------
        Net cash provided by investing activities                            3,799             3,964             4,313
                                                                  -----------------    --------------    --------------
Cash Flows from Financing Activities
     Purchase of treasury stock                                             (3,223)           (3,526)           (2,501)
     Cash dividends paid                                                      (678)             (752)           (1,603)
                                                                  -----------------    --------------    --------------
        Net cash used by financing activities                               (3,901)           (4,278)           (4,104)
                                                                  -----------------    --------------    --------------

        Increase (decrease) in cash and cash equivalents                      (142)              115               298

        Cash and cash equivalents at beginning of year                         666               551               253
                                                                  -----------------    --------------    --------------
        Cash and cash equivalents at end of year                  $            524     $         666     $         551
                                                                  =================    ==============    ==============
</TABLE>

22.     Subsequent Event

        On October 15, 1997,  the Board of Directors  declared a $0.10 per share
        quarterly  dividend  payable to stockholders of record as of November 3,
        1997.

23.     Deposit Insurance

        Deposits  of the Bank are  insured  by the SAIF as  administered  by the
        FDIC. As a member of the SAIF, the Bank paid an insurance premium to the
        FDIC  equal to a minimum of 0.23% of its total  deposits.  The FDIC also
        maintains another  insurance fund, the Bank Insurance Fund (BIF),  which
        primarily insures

                                     F - 30
<PAGE>

23.     Deposit Insurance (Continued)

        commercial bank deposits. Effective September 30, 1995, the FDIC lowered
        the insurance  premium of BIF insured deposits to range of between 0.04%
        and 0.31% of deposits,  with the result that most commercial banks would
        pay the lower  rate of 0.04%.  Effective  January  1,  1996,  the annual
        insurance  premium for most BIF  members  was  lowered to $2,000.  These
        reductions in insurance  premiums for BIF members placed SAIF members at
        a competitive disadvantage to BIF members.

        Effective  September  30,  1996,  federal  law was  revised to mandate a
        one-time  special  assessment  of  SAIF  members  such  as the  Bank  of
        approximately  0.657%  of  deposits  held on March  31,  1995.  The Bank
        reflected a $937,073  pre-tax  expense for this  assessment for the year
        ended September 30, 1996.  Beginning January 1, 1997,  deposit insurance
        assessments  for SAIF members were  reduced to  approximately  0.064% of
        deposits  on an  annual  basis and are  expected  to remain at that rate
        through  the end of 1999.  During  this same  period,  BIF  members  are
        expected to be assessed  approximately  0.013% of deposits.  Thereafter,
        assessments for BIF and SAIF members should be the same and SAIF and BIF
        may be merged.  It is expected that theses  continuing  assessments  for
        both SAIF and BIF members  will be used to repay  outstanding  Financing
        Corporation bond obligations. Based on this reduction, beginning January
        1, 1997,  the rate of deposit  insurance  assessed the Bank  declined by
        approximately 70%.


                                     F - 31
<PAGE>

Corporate Information
---------------------
<TABLE>
<CAPTION>


<S>                                              <C>
Landmark Bancshares, Inc.                        Form 10-KSB

                                                 A copy of the Companys annual report on Form 10-KSB
Central and Spruce                               for fiscal year ended  September  30, 1997,  including  Dodge
City,  Kansas  67801                             financial  statements  schedules,  as filed with the (316)
227-8111                                         Securities and Exchange Commission, will be finished
                                                 without charge to stockholders, as of the record date
Board of Directors                               upon written request to:  Corporate Secretary,
                                                 Landmark Bancshares, Inc., Central and Spruce,
C. Duane Ross                                    Dodge City, Kansas  67801.
Chairman of the Board
President, High Plains Publishers, Inc.
                                                 Annual Meeting
Larry Schugart                                   The annual meeting of Landmark Bancshares, Inc.
President and Executive Officer                  will be held on January 21, 1997 at 1:30 p.m. at
                                                 the Dodge City Country Club, North Avenue C,
David H. Snapp                                   Dodge City, Kansas  67801.
Partner, Waite, Snapp & Doll, Attorneys at Law

Richard Ball                                     Independent Accountants
CPA/Shareholder, Adams, Brown,                   Regier Carr & Monroe, L.L.P.
     Beran & Ball, Chtd.                         300 West Douglas, Suite 100
                                                 Wichita, Kansas  67202
Jim W. Lewis
Owner, Auto Dealerships
                                                 Special Counsel
Executive Officers                               Malizia, Spidi, Sloane and Fisch, P.C.
                                                 1301 K Street, N.W., Suite 700 East
Larry Schugart                                   Washington, D.C.  20005
President and Chief Executive Officer

James F. Strovas                                 Stock Transfer Agent
Treasurer and Chief Financial Officer            American Securities Transfer & Trust, Inc.
                                                 1825 Lawrence Street, Suite 444
Gary L. Watkins                                  Denver, Colorado  80201
Secretary and Chief Operating Officer
</TABLE>

                                      -19-