GREAT SOUTHERN BANCORP INC - 10-K Annual Report

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1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
(Mark One)
/X/ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934
For the fiscal year ended June 30, 1997, or

/ / TRANSACTION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from ________ to ________

Commission File Number 0-18082

Great Southern Bancorp, Inc.
(Exact name of registrant as specified in its charter)

Delaware
(State of jurisdiction of incorporation or organization)

43-1524856
(IRS Employer Identification Number)

1451 E. Battlefield
Springfield, Missouri
(Address of principal executive offices)

65804
(Zip Code)

(417) 887-4400
(Registrant's telephone number, including area code)

Securities registered pursuant to Section 12(b) of the Act: None

Securities registered pursuant to Section 12(g) of the Act:
Common Stock, Par Value $.01

Indicate by check mark whether the Registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the
Securities Exchange Act of 1934 during the preceding 12 months (or
for such shorter period that the Registrant was required to file
such reports), and (2) has been subject to such filing requirements
for the past 90 days. Yes /X/ No / /

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and
will not be contained, to the best of the Registrant's knowledge,
in definitive proxy or information statements incorporated by
reference in Part III of this Form 10-K or any amendment to this
Form 10-K. / /
The aggregate market value of the voting stock of the Registrant
held by non-affiliates of the Registrant on September 8, 1997,
computed by reference to the closing price of such shares, was
$142,419,465. At September 8, 1997, 8,080,537 shares of Common
Stock, par value $.01 per share, were outstanding.

Index to Exhibits is page 71.

2

DOCUMENTS INCORPORATED BY REFERENCE
Portions of the Registrant's Annual Report to Security Holders
for the fiscal year ended June 30, 1997 (the "Annual Report"),
which was electronically filed on September 19, 1997, are
incorporated by reference into Parts I, II and IV. With the
exception of the information explicitly incorporated by reference
in this Form 10-K, the 1997 Annual Report to Security Holders is
not to be deemed filed as part of this Form 10-K.
Portions of the Registrant's Definitive Proxy Statement prepared
in connection with the 1997 annual meeting of stockholders (the
"Definitive Proxy Statement"), which was electronically filed on
September 18, 1997, are incorporated by reference into Part III.

TABLE OF CONTENTS
Item Page
Part I
1. Business . . . . . . . . . . . . . . . . . . . . . . 3
2. Properties . . . . . . . . . . . . . . . . . . . . . 60
3. Legal Proceedings . . . . . . . . . . . . . . . . . . 61
4. Submission of Matters to a Vote of Security Holders . 61
Part II
5. Market for Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . 63
6. Selected Financial Data . . . . . . . . . . . . . . . 64
7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . 65
8. Financial Statements and Supplementary Data . . . . . 65
9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures . . . . . . . 66
Part III
10. Directors and Executive Officers of the Registrant. . 66
11. Executive Compensation . . . . . . . . . . . . . . . 66
12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . 66
13. Certain Relationship and Related Transactions . . . . 66
Part IV
14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . 67
Signatures . . . . . . . . . . . . . . . . . . . . . . . 70
Index to Exhibits . . . . . . . . . . . . . . . . . . . . 71
3

PART I
ITEM 1. BUSINESS.

Great Southern Bancorp, Inc.

Great Southern Bancorp, Inc. (the "Holding Company", "Bancorp" or
"Company") was incorporated under the laws of the State of Delaware
in July 1989, by authorization of the Board of Directors of Great
Southern Bank FSB ("Great Southern" or the "Bank"), for the purpose
of becoming a holding company that would own all of the outstanding
stock of Great Southern issued upon the conversion (the
"Conversion") of Great Southern from a mutual savings and loan to a
stock savings and loan. After receiving the approval of the Office
of Thrift Supervision, Department of the Treasury (the "OTS"), the
Holding Company acquired all of the common stock of Great Southern
issued in connection with the completion of the Conversion in
December 1989.

As a Delaware corporation, the Holding Company is authorized to
engage in any activity that is permitted by the Delaware General
Corporation Law and is not prohibited by law or regulatory policy.
The Holding Company currently conducts its business as a savings
and loan holding company. Through the holding company structure,
it is possible to expand the size and scope of the financial
services offered by the Holding Company beyond those offered by the
Bank prior to the Conversion. The holding company structure
provides the Holding Company with greater flexibility than the Bank
would have to diversify its business activities, through existing
or newly formed subsidiaries, or through acquisitions or mergers of
both mutual and stock thrift institutions as well as other
companies. The assets of the Holding Company consist of the stock
of Great Southern, the stock of other financial services companies
(less than 5% of each), the stock of other 100% owned subsidiaries,
interest in housing related partnerships and cash. Through
subsidiaries, the Holding Company offers insurance, appraisal,
travel, discount brokerage and related services, which are
discussed further below. The activities of the Holding Company
have been funded by retained proceeds of the Conversion and through
dividends from Great Southern and borrowings from third parties.
See "Item 5. Market for the Registrant's Common Stock and Related
Stockholder Matters" and "Regulation - Holding Company Regulation"
and "Federal and State Taxation." Activities of the Holding
Company may also be funded through sales of additional securities
or through income generated by other activities of the Holding
Company. At this time, there are no plans regarding such
activities.

The executive offices of the Holding Company are located at 1451
East Battlefield, Springfield, Missouri 65804, and its telephone
number at that address is (417) 887-4400.

4

Great Southern Bank

Great Southern was incorporated as a Missouri-chartered mutual
savings and loan association in 1923 and in 1989 was converted to a
Missouri-chartered stock savings and loan association. In 1994,
Great Southern changed to a new charter as a federal savings bank.
Headquartered in Springfield, Missouri, Great Southern offers a
broad range of banking services through its 25 branches located in
southwestern and central Missouri. At June 30, 1997, the Bank had
total assets of $701 million, deposits of $460 million and
stockholders' equity of $54 million, or 7.7% of total assets. Its
deposits are insured by the Savings Association Insurance Fund
("SAIF") to the maximum levels permitted by the Federal Deposit
Insurance Corporation ("FDIC").

Great Southern is principally engaged in the business of attracting
deposits from the general public and using such deposits, together
with borrowings and other funds, to originate residential and
commercial real estate loans and commercial business and consumer
loans. Great Southern originates a variety of conventional,
residential real estate mortgage loans, principally in compliance
with Federal Home Loan Mortgage Corporation ("FHLMC") and Federal
National Mortgage Association ("FNMA") standards for resale in the
secondary market. Great Southern promptly sells most of the fixed-
rate residential mortgage loans that it originates. Prior to
fiscal 1996, the ongoing servicing of these loans was primarily
retained by Great Southern. Beginning in fiscal 1996, the
servicing of these loans was primarily released to the purchaser of
the loan. Great Southern retains substantially all of the
adjustable-rate mortgage loans in its portfolio.

Great Southern also originates commercial real estate and
construction loans, primarily on properties located in its
southwestern and central Missouri market area, or, in the case of
loans secured by properties outside of its market area, primarily
to borrowers residing or doing business in southwestern and central
Missouri. Great Southern originates commercial business loans and
is also an issuer of letters of credit. See "-- Commercial
Business Lending," "- Classified Assets," and "- Loan Delinquencies
and Defaults" below and Note 12 of Notes to Consolidated Financial
Statements in the Annual Report to Stockholders, which portions are
incorporated herein by reference. Letters of credit are contingent
obligations and are not included in the Bank's loan portfolio.

For many years, Great Southern has followed a strategy of
emphasizing quality loan origination through residential,
commercial and consumer lending activities in its local market
area. The goal of this strategy has been to maintain its position
as one of the leading providers of financial services in its market
area, while simultaneously diversifying assets and reducing
interest rate risk by originating and holding adjustable-rate loans
in its portfolio and selling fixed-rate loans in the secondary
market. The Bank continues to place primary emphasis on
residential mortgage and other real estate lending.

The main office of the Bank is located at 1451 East Battlefield,
Springfield, Missouri 65804 and its telephone number at that
address is (417) 887-4400.
5

Market Area

Great Southern's primary market area encompasses 15 counties in
southwestern and central Missouri. The Bank's branches and ATMs
support deposit and lending activities throughout the region,
serving such diversified markets as Springfield, Joplin, the resort
areas of Branson Lakes and Lake of the Ozarks, and various smaller
communities in the Bank's market area. The management of the Bank
believes that its share of the savings and lending markets in its
market area is less than 10% and their affiliates an even smaller
percent, with the exception of the travel agency, which may have a
larger percent.

Great Southern's largest concentration of loans and deposits is in
the Greater Springfield area. With a population of approximately
295,000, the Greater Springfield area is the third largest
metropolitan area in Missouri. Employment in this area is
diversified, including small and medium-sized manufacturing
concerns, service industries, especially in the resort and leisure
activities sectors, agriculture, the federal government, and a
major state university. Springfield is also a regional health care
center. The unemployment rate in this area is, and has
consistently been, below the national average.

The next largest concentration of loans is in the Branson Lakes
area which is located approximately 35 miles south of Springfield
and is one of the fastest growing areas in Missouri. The region is
a vacation and entertainment center attracting an estimated 6
million tourists annually to its theme parks, resorts, country
music shows and other recreational facilities. As a result of the
rapid growth of the Branson Lakes area, property values increased
at unusually high rates in recent years. This has also provided
for increased loan demand and a more volatile lending market than
has previously been present in the Branson Lakes area. Property
values have experienced downward pressure during the past couple of
years, partly as a result of this rapid increase.

During the past few years, a significant portion of the Bank's loan
originations has been secured by properties in the Branson Lakes
area. Approximately $123 million, or 20%, of the total loan
portfolio at June 30, 1997 was secured by properties in this area.
Of this amount, $57 million are loans secured by commercial real
estate, commercial construction and other residential properties
and $66 million are loans secured by one- to four-family
residential and one- to four-family construction properties. In
addition, the Bank`s commercial business and consumer loan
portfolio includes approximately $3.3 million of loans to customers
in the Branson Lakes area. See "- Commercial Real Estate and
Construction Lending", "- Commercial Business Lending", "-
Classified Assets" and "- Loan Delinquencies and Defaults".

6
Lending Activities-General

The principal lending activity of Great Southern is the origination
of fixed and adjustable-rate conventional residential real estate
loans to enable borrowers to purchase or refinance owner-occupied
homes. In addition, the Bank makes commercial real estate loans,
commercial business loans (i.e., commercial loans not secured by
real estate), consumer loans and residential and commercial
construction loans. Although Great Southern is permitted under
applicable regulations to originate or purchase loans and loan
participations secured by real estate located in any part of the
United States, the Bank has concentrated its lending efforts in
Missouri, with the largest concentration of its lending activity
being in southwestern and central Missouri.

Great Southern has a policy of obtaining collateral for
substantially all real estate loans. The percentage of collateral
value Great Southern will loan on real estate and other property
varies based on factors including, but not limited to, the type of
property and its location and the borrower's credit history. As a
general rule, Great Southern will loan up to 80% of the appraised
value on one- to four-family residential property and will loan up
to an additional 15% with private mortgage insurance for the loan
amount above the 80% level. For commercial real estate and other
residential real property loans, Great Southern generally loans up
to a maximum of 75% of the appraised value. The origination of
loans secured by other property are considered and determined on an
individual basis by management with the assistance of any industry
guides and other information which may be available.

From its beginnings in 1923 through the early 1980s, Great Southern
primarily made long-term, fixed-rate real estate loans that it
retained in its loan portfolio. Substantially all of the fixed-
rate loans in Great Southern's current portfolio were originated by
Great Southern prior to 1980. Beginning in the early 1980's, Great
Southern increased its efforts to originate short-term and
adjustable-rate loans. Substantially all of the adjustable-rate
mortgage loans originated by Great Southern are held for its own
portfolio. As a result, adjustable-rate real estate loans as a
percentage of Great Southern's total loan portfolio increased from
71% at June 30, 1992, to 83% at June 30, 1997. See the discussion
on interest rate sensitivity in Management's Discussion and
Analysis of Financial Condition and Results of Operations in the
Annual Report to Stockholders, which portions are incorporated
herein by reference.

7

During the fiscal years 1993 and 1994, Great Southern experienced
increased levels of adjustable-rate residential loans refinancing
into fixed-rate residential loans, as well as stronger competition
in the residential lending market. As a result of the shift in
loan demand to fixed-rate residential loans, which the Bank does
not retain in its portfolio, Great Southern increased its
originations of commercial real estate loans to help maintain the
desired size of the loan portfolio as well as the overall Company
size and profit levels. During the last half of fiscal 1994,
during fiscal 1995 and during fiscal 1997, Great Southern
experienced an increase in levels of adjustable-rate residential
lending and a decrease in levels of fixed-rate residential lending
as a result of increasing interest rates. In fiscal 1996, Great
Southern experienced an increase in levels of fixed-rate
residential lending and a decrease in levels of adjustable-rate
residential lending as a result of leveling or slightly declining
interest rates. Great Southern will continue to place strong
emphasis on the origination of one- to four-family residential
loans subject to market conditions.

Loan applications are approved at various levels of authority,
depending on the type, amount and loan-to-value ratio of the loan.
Loan commitments of more than $100,000 ($203,450 in the case of
fixed-rate one-to four-family residential loans for resale) must be
approved by Great Southern's loan committee. The loan committee is
comprised of the CEO of the Bank, as chairman of the committee, and
other senior officers of the Bank involved in lending activities.

8

Loan Portfolio Composition

The following table sets forth information concerning the
composition of the Bank's loan portfolio in dollar amounts and in
percentages (before deductions for loans in process, deferred fees
and discounts and allowance for loan losses) as of the dates
indicated. The table is based on information prepared in
accordance with generally accepted accounting principles and is
qualified by reference to financial statements and the notes
thereto.

June 30,
-----------------------------------------------------------------------------------
1997 1996 1995 1994 1993
--------------- --------------- --------------- --------------- ---------------
Amount % Amount % Amount % Amount % Amount %
-------- ------ -------- ------ -------- ------ -------- ------ -------- ------
(Dollars in thousands)

Real Estate Loans:
Residential
One- to four- family $244,767 39.5% $249,348 42.5% $243,771 43.5% $203,157 40.9% $205,980 43.5%
Other Residential 95,886 15.4 81,191 13.8 77,744 13.9 65,906 13.2 45,413 9.6
Commercial 191,556 30.8 172,478 29.4 133,244 23.8 105,977 21.3 93,318 19.7
Residential Construction:
One- to four-family 9,529 1.5 13,455 2.3 13,319 2.4 18,338 3.7 17,433 3.7
Other residential 4,243 .7 13,533 2.3 23,804 4.2 37,588 7.6 38,675 8.2
Commercial construction 21,932 3.5 16,518 2.8 27,273 4.9 30,894 6.2 41,798 8.8
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total real estate loans 567,913 91.4 546,523 93.1 519,155 92.7 461,860 92.9 442,617 93.5
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Other Loans:
Consumer loans:
Guaranteed student loans 11,592 1.9 11,256 1.9 11,822 2.1 9,445 1.9 6,692 1.4
Automobile 6,006 .9 6,062 1.1 5,651 1.0 4,814 1.0 2,777 0.6
Home equity and improvement 4,183 .7 3,688 0.6 3,518 0.6 2,618 0.5 3,192 0.7
Other 5,885 .9 5,921 1.0 5,272 1.0 4,513 0.9 3,681 0.8
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total Consumer loans 27,666 4.4 26,927 4.6 26,263 4.7 21,390 4.3 16,342 3.5
Commercial business loans 25,959 4.2 13,737 2.3 14,515 2.6 13,907 2.8 14,162 3.0
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total other loans 53,625 8.6 40,664 6.9 40,778 7.3 35,297 7.1 30,504 6.5
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total loans 621,538 100.0% 587,187 100.0% 559,933 100.0% 497,157 100.0% 473,121 100.0%
===== ===== ===== ===== =====
Less:
Loans in process 18,812 22,383 22,316 35,739 38,879
Deferred fees and discounts 3,493 3,689 3,761 4,032 4,125
Allowance for loan losses 15,524 14,356 14,601 13,636 10,590
------- ------- ------- ------- -------
Total loans receivable, net $583,709 $546,759 $519,255 $443,750 $419,527
======= ======= ======= ======= =======

9

The following table shows the fixed- and adjustable-rate composition
of the Bank's loan portfolio at the dates indicated. The table is
based on information prepared in accordance with generally accepted
accounting principles.

June 30,
-----------------------------------------------------------------------------------
1997 1996 1995 1994 1993
--------------- --------------- --------------- --------------- ---------------
Amount % Amount % Amount % Amount % Amount %
-------- ------ -------- ------ -------- ------ -------- ------ -------- ------
(Dollars in thousands)

Fixed-Rate Loans:
Real Estate Loans
Residential
One- to four- family $ 12,305 2.0% $ 13,212 2.2% $ 14,260 2.5% $ 15,488 3.1% $ 25,231 5.3%
Other Residential 34,467 5.6 34,413 5.9 32,515 5.8 30,250 6.1 21,233 4.5
Commercial 5,865 .9 25,374 4.3 12,774 2.3 14,438 2.9 25,314 5.4
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total real estate loans 52,637 8.5 72,999 12.4 59,549 10.6 60,176 12.1 71,778 15.2
Consumer loans 10,769 1.7 12,844 2.2 11,706 2.1 9,282 1.8 6,260 1.3
Commercial business loans 502 .1 415 0.1 994 0.2 864 0.2 522 0.1
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total fixed-rate loans 63,908 10.3 86,258 14.7 72,249 12.9 70,322 14.1 78,560 16.6
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Adjustable-Rate Loans:
Real Estate Loans
Residential
One- to four- family 232,462 37.4 236,136 40.2 229,510 41.0 187,670 37.7 180,749 38.2
Other Residential 61,419 9.9 46,778 8.0 45,228 8.1 37,675 7.6 24,180 5.1
Commercial 185,691 29.9 147,104 25.0 120,470 21.5 91,689 18.4 68,004 14.4
Residential construction:
One- to four-family 9,529 1.5 13,455 2.3 13,319 2.4 18,338 3.7 17,433 3.7
Other residential 4,243 .7 13,533 2.3 23,804 4.2 35,568 7.2 38,675 8.2
Commercial construction 21,932 3.5 16,518 2.8 27,273 4.9 30,744 6.2 41,798 8.8
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total real estate loans 515,276 82.9 473,524 80.6 459,604 82.1 401,684 80.8 370,839 78.4
Consumer loans 16,897 2.7 14,083 2.4 14,559 2.6 12,108 2.5 10,082 2.1
Commercial business loans 25,457 4.1 13,322 2.3 13,521 2.4 13,043 2.6 13,640 2.9
------ ----- ------- ----- ------- ----- ------- ----- ------- -----
Total adjustable-rate loans 557,630 89.7 500,929 85.3 487,684 87.1 426,835 85.9 394,561 83.4
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total loans 621,538 100.0% 587,187 100.0% 559,933 100.0% 497,157 100.0% 473,121 100.0%
===== ===== ===== ===== =====
Less:
Loans in process 18,812 22,383 22,316 35,739 38,879
Deferred fees and discounts 3,493 3,689 3,761 4,032 4,125
Allowance for loan losses 15,524 14,356 14,601 13,636 10,590
------- ------- ------- ------- -------
Total loans receivable, net $583,709 $546,759 $519,255 $443,750 $419,527
======= ======= ======= ======= =======

10

The following schedule illustrates the contractual maturities of the
Bank's loan portfolio at June 30, 1997. Loans which have adjustable
interest rates are shown as maturing in the period during which the
loan is contractually due. This schedule does not reflect the effects
of possible prepayments or enforcement of due-on-sale clauses. The
table is based on information prepared in accordance with generally
accepted accounting principles.

Other Residential
One- to Four-Family and Other Commercial and
Residential Real Residential Commercial One- to Four-Family
Estate Loans Construction Construction Construction
-------------------- ------------------- ------------------ --------------------
Due During Weighted Weighted Weighted Weighted
Years Ended Average Average Average Average
June 30, Amount Rate Amount Rate Amount Rate Amount Rate
(Dollars in thousands)

1998(1) $ 5,771 9.55% $ 21,560 8.88% $ 57,353 9.59% $ 9,529 9.59%
1999 1,224 9.20 11,706 8.66 19,267 9.57 -- 0.00
2000 729 8.24 4,989 8.74 34,946 9.62 -- 0.00
2001 and 2002 2,628 8.52 16,464 8.98 61,876 9.62 -- 0.00
2003 to 2007 10,003 8.30 9,872 9.39 19,542 9.67 -- 0.00
2008 to 2012 26,818 8.06 23,170 9.09 11,315 9.46 -- 0.00
2013 to 2023 26,568 8.02 9,578 8.79 9,189 9.64 -- 0.00
2024 and following 171,026 8.07 2,790 9.06 -- 0.00 -- 0.00
------- ------- ------- ------
$244,767 $100,129 $213,488 $ 9,529
======= ======= ======= ======

Commercial
Consumer Business Total (2)
-------------------- ---------------------- --------------------
Due During Weighted Weighted Weighted
Years Ended Average Average Average
June 30, Amount Rate Amount Rate Amount Rate
(Dollars in thousands)

1998 (1) $ 2,889 8.85% $ 16,609 9.55% $113,711 9.43%
1999 1,722 11.19 756 9.55 34,675 9.32
2000 2,578 10.17 2,459 9.52 45,701 9.53
2001 and 2002 15,590 8.07 3,234 9.58 99,792 9.24
2003 to 2007 4,813 10.05 2,901 9.58 47,131 9.35
2008 to 2012 70 10.26 -- 0.00 61,373 8.71
2013 to 2023 -- 0.00 -- 0.00 45,335 8.51
2024 and following 4 6.80 -- 0.00 173,820 8.09
------ ------ -------
$27,666 $25,959 $621,538
====== ====== =======

_____________________________
(1) Includes demand loans, loans having no stated maturity and
overdraft loans.
(2) Of the $508 million of loans due after June 30, 1998, $55
million, or 11%, have fixed rates of interest and $453 million, or
89%, have adjustable rates of interest.

11
Lending Activities - Environmental Issues

Loans secured with real property, whether commercial, residential
or other, may have a material, negative effect on the financial
position and results of operation of the lender if the collateral
is environmentally contaminated. The result can be, but is not
necessarily limited to, liability for the cost of cleaning up the
contamination imposed on the lender by certain federal and state
laws, a reduction in the borrower's ability to pay because of the
liability imposed upon it for any clean up costs, a reduction in
the value of the collateral because of the presence of
contamination or a subordination of security interests in the
collateral to a super priority lien securing the clean up costs by
certain state laws.

Management of the Bank is aware of the risk that the Bank may be
negatively affected by environmentally contaminated collateral and
attempts to control such risk through commercially reasonable
methods, consistent with guidelines arising from applicable
government or regulatory rules and regulations, and to a more
limited extent publications of the lending industry. Management
currently is unaware (without, in many circumstances specific
inquiry or investigation of existing collateral, some of which was
accepted as collateral before risk controlling measures were
implemented) of any environmental contamination of real property
securing loans in the Bank's portfolio that would subject the Bank
to any material risk. No assurance can be made, however, that the
Bank will not be adversely affected by environmental contamination.

Lending Activities - Residential Real Estate Lending

At June 30, 1997 and 1996, loans secured by residential real estate
totaled $341 million and $331 million, respectively, and
represented approximately 55% and 56%, respectively, of the Bank's
total loan portfolio. In fiscal 1997 and 1996, Great Southern
originated $60 million and $84 million, respectively, of
adjustable-rate residential mortgages. Fixed-rate single-family
residential mortgages are originated at interest rates and on terms
agreed to by investors in the secondary market (generally the FHLMC
guidelines.) The loans are promptly sold, primarily with servicing
released (primarily with servicing retained prior to fiscal 1996)
and without recourse, in order to generate fee income and reduce
the Bank's exposure to changes in interest rates. In fiscal year
1997 and 1996, Great Southern originated $31 million and $35
million, respectively, of fixed-rate loans and sold $27 million and
$37 million, respectively, into the secondary market.

The Bank currently is originating adjustable-rate residential
mortgage loans primarily with one-year adjustment periods. Rate
adjustments are based upon changes in prevailing rates for one-year
U.S. Treasury securities, and are generally limited to 2% maximum
annual adjustments as well as a maximum aggregate adjustment over
the life of the loan. Accordingly, the interest rates on these
loans typically may not be as rate sensitive as is the Bank's cost
of funds. Generally, the Bank's adjustable-rate mortgage loans are
not convertible into fixed-rate loans, do not permit negative
amortization of principal and carry no prepayment penalty.

12

The Bank's portfolio of adjustable-rate mortgage loans also
includes a number of loans with different adjustment periods,
without limitations on periodic rate increases and rate increases
over the life of the loans or which are tied to other short-term
market indices. These loans were originated prior to the industry
standardization of adjustable-rate loans. Since adjustable-rate
mortgage loans have not been subject to an interest rate
environment which causes them to adjust to the maximum, such loans
entail unquantifiable risks resulting from potential increased
payment obligations on the borrower as a result of upward
repricing. Further, the adjustable-rate mortgages offered by Great
Southern, as well as by many other financial institutions,
sometimes provide for initial rates of interest below the rates
which would prevail were the index used for pricing applied
initially. Compared to fixed-rate mortgage loans, these loans are
subject to increased risk of delinquency or default as the higher,
fully-indexed rate of interest subsequently comes into effect in
replacement of the lower initial rate. The Bank has not
experienced an increase in delinquencies in adjustable-rate
mortgage loans due to a relatively low interest rate environment in
recent years.

In underwriting one- to four-family residential real estate loans,
Great Southern evaluates both the borrower's ability to make
monthly payments and the value of the property securing the loan.
It is Great Southern's policy that all loans in excess of 80% of
the appraised value of the property be insured by a private
mortgage insurance company approved by Great Southern for the
amount of the loan in excess of 80% of the appraised value. In
addition, Great Southern requires borrowers to obtain title and
fire and casualty insurance in an amount not less than the amount
of the loan. Real estate loans originated by the Bank generally
contain a "due on sale" clause allowing the Bank to declare the
unpaid principal balance due and payable upon the sale of the
property securing the loan. In the case of fixed-rate loans, the
Bank generally enforces these due on sale clauses to the extent
permitted by law.

Lending Activities-Commercial Real Estate and Construction Lending

Commercial real estate lending has traditionally been a part of
Great Southern's business activities. Beginning in fiscal 1986,
Great Southern expanded its commercial real estate lending in order
to increase the yield on, and the proportion of interest rate
sensitive loans in, its portfolio. Starting early in fiscal 1988,
Great Southern reduced its originations of commercial real estate
loans due to the lower spreads available and the Bank's increased
levels of problem loans in this area. In addition, the Financial
Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA") further limited the Bank's commercial real estate
lending, due to limits imposed on the amounts and types of loans
the Bank would be permitted to originate. See "Regulation".
Starting in fiscal 1992, Great Southern increased its origination
of commercial real estate and commercial business loans.

13

Great Southern expects to continue to maintain the current
percentage of commercial real estate and commercial business loans
in its total loan portfolio by originating loans secured by
commercial real estate and other commercial business assets,
subject to commercial real estate and other market conditions and
to applicable regulatory restrictions. See "Regulation" and "-
Qualified Thrift Lender Test" below.

At June 30, 1997 and 1996, loans secured by commercial real estate
totaled $192 million and $172 million, respectively, or
approximately 30.8% and 29.4%, respectively, of the Bank's total
loan portfolio. At June 30, 1997 and 1996, construction loans
secured by projects under construction and the land on which the
projects are located aggregated $36 million and $44 million,
respectively, or 5.7% and 7.4%, respectively, of the Bank's total
loan portfolio. Substantially all of the Bank's commercial real
estate loans have been originated with adjustable rates of
interest, the majority of which are tied to the Bank's prime rate.
At the date of origination, the amounts of the loan commitments
with respect to substantially all of these loans did not exceed 75%
of the appraised value of the properties securing the loans.

The Bank's construction loans generally have terms of one year or
less. The construction loan agreements for one- to four-family and
other residential projects generally provide that principal
payments are required as individual condominium units or single-
family houses are built and sold to a third party. This insures
the remaining loan balance as a proportion to the value of the
remaining security does not increase. Loan proceeds are disbursed
in increments as construction progresses. Generally, the amount of
each disbursement is based on the construction cost estimate of an
independent architect, engineer or qualified fee inspector who
inspects the project in connection with each disbursement request.
Normally, Great Southern's construction loans are made either as
the initial stage of a combination loan (i.e., with a commitment
from the Bank to provide permanent financing upon completion of the
project) or with a commitment from a third party to provide
permanent financing.

The Bank's commercial real estate and construction loans generally
involve larger principal balances than do its residential loans.
At June 30, 1997, 95 of the Bank's commercial real estate and
construction loans had net principal balances in excess of $1.0
million, with the largest being $6 million. The aggregate net
principal balance of all such loans having net principal balances
in excess of $1.0 million was $185 million at that date. Current
law subjects savings associations to the same loans-to-one borrower
restrictions that are applicable to national banks with limited
provisions for exceptions. In general, the national bank standard
restricts loans to a single borrower to no more than 15% of a
bank's unimpaired capital and unimpaired surplus, plus an
additional 10% if the loan is collateralized by certain readily
marketable collateral. (Real estate is not included in the
definition of "readily marketable collateral.") As computed on the
basis of the Bank's unimpaired capital and surplus at June 30,
1997, this limit was approximately $10.4 million. See
"Regulation". At June 30, 1997 the Bank was in compliance with the
loans to one borrower limit.
14

The table below sets forth, by type of security property, the
number and amount of Great Southern's commercial real estate and
construction loans at June 30, 1997. The amounts shown do not
reflect allowances for losses. See "- Classified Assets" and "-
Loan Delinquencies and Defaults" for a discussion of the Bank's
largest non-performing assets and items of concern. The table is
based on information prepared in accordance with generally accepted
accounting principles.

Number Original Outstanding Amount
of Loan Principal Undisbursed Non-
Loans Commitment Balance Amount Performing
----- ---------- ----------- ------------ ----------
(Dollars in thousands)

Commercial Real Estate Loans
Hotels/Motels 58 $ 58,897 $ 48,823 $ 29 $ --
Medical and long term care 22 18,787 21,268 4 --
Golf courses and recreational 33 22,451 19,843 37 --
Shopping centers 61 28,158 24,447 446 --
Commercial land development 114 42,993 19,606 538 --
Office buildings 53 23,962 22,306 3 --
Industrial real estate 45 13,170 11,061 124 --
Restaurants 42 17,663 15,804 100 121
Other 52 10,525 8,398 2,135 --
--- ------- ------- ----- -----
Total commercial real estate loans 480 236,606 191,556 3,416 121
--- ------- ------- ----- -----
Construction Loans
One- to four-family residential 98 9,529 5,908 3,449 655
Other residential 8 4,243 2,437 1,806 --
Commercial real estate:
Hotels/Motels 4 8,610 6,983 1,627 --
Commercial land development 11 3,418 2,316 1,102 195
Restaurants 2 2,141 737 1,404 --
Golf courses and recreational 2 3,025 170 2,855 --
Medical and long term care 1 3,166 57 3,110 --
Other 5 1,743 1,699 43 --
--- ------- ------- ------ -----
Total construction loans 131 35,875 20,307 15,396 850
--- ------- ------- ------ -----
Total 611 $272,481 $211,863 $18,812 $ 971
=== ======= ======= ====== =====

15

Commercial real estate and construction lending generally affords
the Bank an opportunity to receive interest at rates higher than
those obtainable from residential lending and to receive higher
origination and other loan fees. In addition, commercial real
estate and construction loans are generally made with adjustable
rates of interest or, if made on a fixed-rate basis, for relatively
short terms. Nevertheless, commercial real estate lending entails
significant additional risks as compared with residential mortgage
lending. Commercial real estate loans typically involve large loan
balances to single borrowers or groups of related borrowers but
generally involve lower loan-to-value ratios. In addition, the
payment experience on loans secured by commercial properties is
typically dependent on the successful operation of the related real
estate project and thus may be subject, to a greater extent, to
adverse conditions in the real estate market or in the economy
generally.

Construction loans also involve additional risks attributable to
the fact that loan funds are advanced upon the security of the
project under construction, which is of uncertain value prior to
the completion of construction. Moreover, because of the
uncertainties inherent in estimating construction costs, delays
arising from labor problems, material shortages, and other
unpredictable contingencies, it is relatively difficult to evaluate
accurately the total loan funds required to complete a project, and
the related loan-to-value ratios. See also the discussion under
the headings "- Classified Assets" and "- Loan Delinquencies and
Defaults" below.

Lending Activities - Commercial Business Lending

Great Southern is authorized to make secured or unsecured loans for
commercial, corporate, business and agricultural purposes and to
engage in commercial leasing activities up to a maximum of 10% of
the institution's assets. At June 30, 1997 and 1996, respectively,
Great Southern had $26.0 million and $13.7 million in commercial
business loans outstanding, or 4.2% and 2.3%, respectively, of the
Bank's total loan portfolio. The largest amount of commercial
business loans outstanding to any one borrower or group of
affiliated borrowers at June 30, 1997, had a principal balance of
$3.9 million. Great Southern's commercial business lending
activities encompass loans with a variety of purposes and security,
including loans to finance accounts receivable, inventory and
equipment.

16

The following table sets forth information regarding the number and
amount of the Bank's commercial business loans as of June 30, 1997.
The amounts shown do not reflect allowances for losses. See "-
Classified Assets" and "- Loan Delinquencies and Defaults" for a
discussion of the Bank's largest non-performing assets and related
items. The table is based on information prepared in accordance
with generally accepted accounting principles.

Outstanding Amount
Number Principal Non-
of Loans Balance Performing
-------- ----------- ----------
(Dollars in thousands)

Secured Loans:
Accounts receivable, floor plans,
inventory and equipment 118 $18,673 $ --
Stocks and bonds 26 3,280 --
Deposit accounts and
promissory notes 41 1,235 --
Other 13 1,044 600
--- ------ ---
Total secured loans 198 24,232 600
Unsecured Loans 39 1,727 --
--- ------ ---
Total Commercial Business Loans 237 $25,959 $600
=== ====== ===

Unlike residential mortgage loans, which generally are made on the
basis of the borrower's ability to make repayment from his or her
employment and other income and which are secured by real property
whose value tends to be more easily ascertainable, commercial
business loans are of higher risk and typically are made on the
basis of the borrower's ability to make repayment from the cash
flow of the borrower's business. Commercial business loans are
generally secured by business assets, such as accounts receivable,
equipment and inventory. As a result, the availability of funds
for the repayment of commercial business loans may be substantially
dependent on the success of the business itself. Further, the
collateral securing the loans may depreciate over time, may be
difficult to appraise and may fluctuate in value based on the
success of the business.

17

The Bank's management recognizes the generally increased risks
associated with commercial business lending. Great Southern's
commercial business lending policy emphasizes complete credit file
documentation and analysis of the borrower's character, capacity to
repay the loan, the adequacy of the borrower's capital and
collateral as well as an evaluation of the industry conditions
affecting the borrower. Analysis of the borrower's past, present
and future cash flows is also an important aspect of Great
Southern's credit analysis. The majority of Great Southern's
commercial business loans have been to borrowers in southwestern
and central Missouri. Great Southern intends to continue its
commercial business lending in this geographic area.

As part of its commercial business lending activities, Great
Southern issues letters of credit and receives fees averaging
approximately 1% of the amount of the letter of credit per year.
At June 30, 1997, Great Southern had 49 letters of credit
outstanding in the aggregate amount of $9.2 million. Approximately
98% of the aggregate amount of these letters of credit were
secured, including one $8.2 million letter of credit, secured by
real estate, which was issued to enhance the issuance of housing
revenue refunding bonds.

Lending Activities - Consumer Lending

Great Southern management views consumer lending as an important
component of its business strategy. Specifically, consumer loans
generally have short terms to maturity, adjustable rates or both,
thus reducing Great Southern's exposure to changes in interest
rates, and carry higher rates of interest than do residential
mortgage loans. In addition, Great Southern believes that the
offering of consumer loan products helps to expand and create
stronger ties to its existing customer base.

Great Southern offers a variety of secured consumer loans,
including automobile loans, home equity loans and loans secured by
savings deposits. In addition, Great Southern also offers home
improvement loans, guaranteed student loans and unsecured consumer
loans. Consumer loans totaled $27.7 million and $26.9 million at
June 30, 1997 and 1996, respectively, or 4.4% and 4.6%,
respectively, of the Bank's total loan portfolio.

The underwriting standards employed by the Bank for consumer loans
include a determination of the applicant's payment history on other
debts and an assessment of ability to meet existing obligations and
payments on the proposed loan. Although creditworthiness of the
applicant is of primary consideration, the underwriting process
also includes a comparison of the value of the security, if any, in
relation to the proposed loan amount.

Beginning in fiscal 1998, the Bank implemented indirect lending
relationships primarily with automobile dealerships. Through these
dealer relationships, the dealer completes the application with the
consumer and then submits it to the Bank for credit approval.
While automobile dealers will be the Bank's initial concentrated
effort, the program is available for use with most tangible
products where financing of the product is provided through the
seller.
18

Student loans are underwritten in compliance with the regulations
of the US Department of Education for the Federal Family Education
Loan Programs (FFELP). The FFELP loans are administered and
guaranteed by the Missouri Coordinating Board for Higher Education
as long as the Bank complies with the regulations. The Bank has
contracted with the Missouri Higher Education Loan Authority (the
"MOHELA") to originate and service these loans and to purchase
these loans during the grace period immediately prior to the loans
beginning their repayment period. This repayment period is
generally at the time the student graduates or does not maintain
the required hours of enrollment.

Consumer loans may entail greater risk than do residential mortgage
loans, particularly in the case of consumer loans that are
unsecured or secured by rapidly depreciable assets such as
automobiles. In such cases, any repossessed collateral for a
defaulted consumer loan may not provide an adequate source of
repayment of the outstanding loan balance as a result of the
greater likelihood of damage, loss or depreciation. The remaining
deficiency often does not warrant further substantial collection
efforts against the borrower. In addition, consumer loan
collections are dependent on the borrower's continuing financial
strength, and thus are more likely to be adversely affected by job
loss, divorce, illness or personal bankruptcy. Furthermore, the
application of various federal and state laws, including federal
and state consumer bankruptcy and insolvency laws, may limit the
amount which can be recovered on such loans. Such loans may also
give rise to claims and defenses by a consumer loan borrower
against an assignee of such loan such as the Bank, and a borrower
may be able to assert against such assignee claims and defenses
which it has against the seller of the underlying collateral.

Applicable laws and regulations permit institutions to make secured
and unsecured consumer loans (which, together with any commercial
paper or corporate debt securities held by the Bank as permitted by
the OTS, may not exceed a maximum of 35% of the institution's
assets). Loans in excess of 30% of the assets may be invested only
in loans which are made by the institution directly to the original
obligor and with respect to which the institution does not pay any
finder, referral or other fee, directly or indirectly, to any third
party.

Originations, Purchases, Sales and Servicing of Loans

The Bank originates loans through internal loan production
personnel located in the Bank's main bank and branch offices.
Walk-in customers and referrals from real estate brokers and
builders are also important sources of loan originations. The
table below shows the dollar volume of loan originations for the
periods indicated. For the fiscal years ended June 30, 1997, 1996
and 1995, the table reflects approximately $13.2 million, $31.5
million, and $7.5 million of loans refinanced which were previously
included in the loan portfolio or were loans owned by investors and
serviced by the Bank. Due to the high level of adjustable-rate
loans refinanced into fixed-rate loans and the higher fixed-rate

19

loans refinanced into lower fixed-rates, management has included
the refinanced amounts in the origination table to more accurately
reflect the amount of originations and sales during all fiscal
years.

During the fiscal year ended June 30, 1997 the Bank originated $190
million adjustable-rate loans and $57 million fixed-rate loans
compared to $193 million adjustable-rate loans and $52 million
fixed-rate loans during the fiscal year ended June 30, 1996.
Management does not expect the high growth of originations
experienced during the past five years to continue. However, as
long as the lower interest rate environment continues, there is a
higher level of financing and refinancing expected than would exist
in a higher rate environment.

Great Southern also purchases whole real estate loans and
participation interests in real estate loans from the FHLMC as well
as private investors, such as other thrift institutions, banks and
life insurance companies. Great Southern may limit its ability to
control its credit risk when it purchases participations in such
loans. The terms of participation agreements vary; however,
generally Great Southern may not have direct access to the borrower
or information about the borrower, and the institution
administering the loan may have some discretion in the
administration of performing loans and the collection of non-
performing loans.

Beginning in fiscal 1998, Great Southern intends to increase the
number and amount of commercial real estate and commercial business
loan participations. Due to changes in the financial institutions
market locally, there have been several experienced bank executives
start up new banks. These banks do not have the capital to handle
larger commercial credits. Great Southern subjects these loans to
the normal underwriting standards used for originated loans and
rejects any credits that do not meet those guidelines. The
originating bank will retain the servicing of these loans.

In fiscal 1997, 1996, 1995 and 1994, there were no loan whole
purchases by the Bank. In fiscal 1993, the Bank purchased 2 whole
loans from another financial institution, totaling $2.4 million in
total principal balance, secured by commercial real estate. At
June 30, 1997 and 1996, approximately $11.6 million, or 1.9% and
$12.5 million, or 2.1%, respectively, of the Bank's total loan
portfolio consisted of purchased whole loans.

Great Southern also sells whole real estate loans and participation
interests in real estate loans to the FHLMC as well as private
investors, such as other thrifts, banks and life insurance
companies. These loans and loan participations are generally sold
without recourse and for cash in amounts equal to the unpaid
principal amount of the loans or loan participations determined
using present value yields to the buyer. The sale amounts
generally produce gains to the Bank and allow a margin for
servicing income on loans where the servicing is retained by the
Bank. Loan participations are generally sold with Great Southern
retaining control of the servicing of the loan.

20

The Bank sold whole real estate loans and loan participations in
aggregate amounts of $26.6 million, $36.6 million and $8.7 million
during the years ended June 30, 1997, 1996 and 1995, respectively.
Sales of whole real estate loans and participations in real estate
loans generally can be beneficial to the Bank since these sales
generally generate income at the time of sale, produce future
servicing income on loans where servicing is retained, provide
funds for additional lending and other investments, and increase
liquidity.

Great Southern also sells guaranteed student loans to the MOHELA at
the time the borrower is scheduled to begin making repayments on
the loans. Prior to July 1995, these loans were generally sold
with limited recourse and for cash in amounts equal to the unpaid
principal amount of the loans. Beginning in July 1995, Great
Southern re-negotiated its agreement with the MOHELA and these
loans will generally be sold with limited recourse and for cash in
amounts equal to the unpaid principal amount of the loans and a
transfer fee based on average borrower indebtedness. The fee is
based on a sliding scale with a higher fee paid for a larger
average borrower indebtedness and a lower fee paid for a smaller
average borrower indebtedness. The Bank sold guaranteed student
loans in aggregate amounts of $7.7 million, $8.6 million and $5.0
million during the years ended June 30, 1997, 1996 and 1995,
respectively. Sales of guaranteed student loans generally can be
beneficial to the Bank since these sales remove the burdensome
servicing requirements of these types of loans once the borrower
begins repayment.

Gains, losses and transfer fees on sales of loans and loan
participations are recognized at the time of the sale. When real
estate loans and loan participations sold have an average
contractual interest rate that differs from the agreed upon yield
to the purchaser (less the agreed upon servicing fee), resulting
gains or losses are recognized in an amount equal to the present
value of the differential over the estimated remaining life of the
loans. Any resulting discount or premium is accreted or amortized
over the same estimated life using a method approximating the level
yield interest method. When real estate loans and loan
participations are sold with servicing released, as the Bank did
beginning in fiscal 1996, an additional fee is received for the
servicing rights. Net gains and transfer fees on sales of loans
for the years ended June 30, 1997, 1996 and 1995 were $520,000
$540,000 and $91,000, respectively.

Prior to fiscal 1996, when whole real estate loans were sold, the
Bank typically retained the responsibility for servicing the loans.
The Bank receives a servicing fee for performing these services.
The Bank had the servicing rights for approximately $70 million,
$80 million and $88 million at June 30, 1997, 1996 and 1995,
respectively, of loans owned by others. The servicing of these
loans generated net servicing fees to the Bank for the years ended
June 30, 1997, 1996 and 1995 of $272,000, $316,000 and $347,000,
respectively. When guaranteed student loans are sold, the Bank
typically releases the responsibility for servicing the loans to
the MOHELA.

21

In addition to interest earned on loans and loan origination fees,
the Bank receives fees for loan commitments, letters of credit,
prepayments, modifications, late payments, transfers of loans due
to changes of property ownership and other miscellaneous services.
The fees vary from time to time, generally depending on the supply
of funds and other competitive conditions in the market. Fees from
prepayments, commitments, letters of credit and late payments
totaled $916,000, $487,000 and $470,000 for the years ended June
30, 1997, 1996 and 1995, respectively. Loan origination fees, net
of related costs, are accounted for in accordance with Statement of
Financial Accounting Standards No. 91 "Accounting for Nonrefundable
Fees and Costs Associated With Originating or Acquiring Loans and
Initial Direct Costs of Leases." Loan fees and certain direct loan
origination costs are deferred, and the net fee or cost is
recognized in interest income using the level-yield method over
the contractual life of the loan. For further discussion of this
issue see Note 1 of Notes to Consolidated Financial Statements in
the Annual Report to Stockholders, which portions are incorporated
herein by reference.

The table on the following page shows the loan origination,
purchase, sale and repayment activities of the Bank for the periods
indicated. The table is based on information prepared in
accordance with generally accepted accounting principles.

22

Year Ended June 30,
---------------------------------------------------------
1997 1996 1995 1994 1993
--------- --------- --------- --------- ---------
(Dollars in thousands)

Loans Originated:
Adjustable-Rate Loans:
Real Estate:
One- to four-family residential $ 46,586 $ 54,699 $ 76,753 $ 53,077 $ 51,912
Other Residential 13,171 28,977 27,324 38,315 47,597
Commercial 73,551 70,812 49,473 38,141 68,677
Construction 14,736 20,237 21,253 28,524 22,645
Non-real Estate:
Consumer loans 8,668 8,383 7,848 8,519 6,744
Commercial business loans 33,602 9,742 12,741 6,044 7,228
------- ------- ------- ------ ------
Total adjustable-rate 190,314 192,850 195,392 155,582 204,803
------- ------- ------- ------ ------
Fixed-Rate Loans:
Real Estate:
One- to four-family residential 31,447 34,855 8,927 49,288 44,554
Other Residential 10,355 5,499 0 7,044 3,692
Commercial 6,299 1,787 2,031 3,787 3,595
Non-real Estate:
Consumer loans 8,234 9,863 10,112 8,944 3,923
Commercial business loans 1,140 92 9,039 2,295 199
------- ------- ------- ------- ------
Total fixed-rate 57,475 52,096 30,109 71,358 55,963
------- ------- ------- ------- ------
Total loans originated 247,789 244,946 225,501 243,978 260,766

Loans Purchased:
Real Estate loans (1) 0 0 0 0 2,395
------- ------- ------- ------- ------
Total additions 247,789 244,946 225,501 243,978 263,161
------- ------- ------- ------- ------
Loans Sold:
Real Estate loans (2) 26,611 36,643 8,686 53,544 40,487
Consumer loans (3) 7,684 8,566 5,036 3,887 2,289
------- ------- ------- ------- -------
Total sales 34,295 45,209 13,722 57,431 42,776
Principal repayments 164,369 169,658 143,020 160,206 113,156
Decrease (increase) other items, net 14,774 2,825 5,983 2,306 (1,393)
------- ------- ------- ------- ------
Total reductions 213,438 217,692 162,725 219,943 154,539
------- ------- ------- ------- ------
Net increase $ 34,351 $ 27,254 $ 62,776 $ 24,035 $108,622
======= ======= ======= ======= ======
- -------------------------------------

(1) Substantially all of the loans for June 30, 1993 are commercial real estate loans.
(2) Substantially all of these loans are fixed-rate, one- to four-family residential loans.
(3) Substantially all of these loans are guaranteed student loans where the borrowers graduated and the loans
were sold prior to the beginning of repayment.

23

Allowance for Losses on Loans and Foreclosed Assets

Management periodically reviews Great Southern's allowance for loan
losses, considering numerous factors, including, but not
necessarily limited to, general economic conditions, loan portfolio
composition, prior loss experience, and independent appraisals.
Further allowances are established when management determines that
the value of the collateral is less than the amount of the unpaid
principal of the related loan plus estimated costs of the
acquisition and sale or when management determines a borrower of an
unsecured loan will be unable to make full repayment. Allowances
for estimated losses on foreclosed assets (real estate and other
assets acquired through foreclosure) are charged to expense, when
in the opinion of management, any significant and permanent decline
in the market value of the underlying collateral reduces the market
value to less than the carrying value of the asset.

The Bank has increased its lending in the Branson Lakes area during
recent years primarily due to the substantial growth in the area.
While management believes the loans it has funded have been
originated pursuant to sound underwriting standards, and
individually have no unusual credit risk, the short period of time
in which the Branson Lakes area has grown and the lower than
expected increase in tourists visiting the area during recent years
causes some concern as to the credit risk associated with the
Branson Lakes area as a whole. Due to this concern and the overall
growth of the commercial real estate and other residential real
estate loan portfolios, management provided increased levels of
loan loss allowances over the past five years.

The allowances for losses on loans and foreclosed assets are
maintained at an amount management considers adequate to provide
for potential losses. Although management believes that it uses
the best information available to make such determinations, future
adjustments to the allowances for losses on loans and foreclosed
assets may be necessary, and net income could be significantly
affected, if circumstances differ substantially from the
assumptions used in making the initial determinations.

At June 30, 1997 and 1996, Great Southern had an allowance for
losses on loans and foreclosed assets of $15.8 million and $15.4
million, respectively, of which $3.4 million and $1.6 million,
respectively, had been allocated as an allowance for specific
loans, $319,000 and $1.1 million, respectively, had been allocated
for foreclosed assets and $1.6 million and $832,000, respectively,
had been allocated for impaired loans. The allowances are
discussed further in Notes 3 and 4 of the Notes to Consolidated
Financial Statements and Management's Discussion and Analysis of
Financial Condition and Results of Operations in the Annual Report
to Stockholders, which portions are incorporated herein by
reference.

24

The following table sets forth an analysis of the Bank's allowance
for losses on loans showing the details of the allowance by types
of loans and the allowance balance by loan type. The table is
based on information prepared in accordance with generally accepted
accounting principles.

Year Ended June 30,
-----------------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
(Dollars in thousands)

Balance at beginning of period $14,356 $14,601 $13,636 $10,590 $ 6,029
------ ------ ------ ------ ------
Charge-offs:
One- to four-family residential 185 189 13 85 189
Other residential 34 1,072 474 101 25
Commercial real estate 364 509 227 33 70
Construction 14 0 0 0 0
Consumer 70 198 48 33 28
Commercial business 9 25 120 32 106
------ ------ ------ ------ ------
Total charge-offs 676 1,993 882 284 418
------ ------ ------ ------ ------
Recoveries:
One- to four-family residential 0 33 0 8 0
Other residential 11 0 0 0 0
Commercial real estate 88 136 442 181 183
Consumer 9 48 22 59 53
Commercial business 30 80 64 57 66
------ ------ ------ ------ ------
Total recoveries 138 297 528 307 302
------ ------ ------ ------ ------
Net charge-offs (recoveries) 538 1,696 354 (23) 116
Provision for losses on loans
(charged to expense) 1,706 1,451 1,319 3,023 4,677
------ ------ ------ ------ ------
Balance at end of period $15,524 $14,356 $14,601 $13,636 $10,590
====== ====== ====== ====== ======
Ratio of net charge-offs to
average loans outstanding 0.09% 0.32% 0.07% (0.01%) 0.03%
==== ==== ==== ==== ====

25

The allowance for losses on loans at the date indicated is summarized as follows. The table is based on
information prepared in accordance with generally accepted accounting principles.

June 30,
-----------------------------------------------------------------------------------------
1997 1996 1995 1994 1993
---------------- ---------------- ---------------- ----------------- ----------------
% of % of % of % of % of
Loans to Loans to Loans to Loans to Loans to
Total Total Total Total Total
Amount Loans Amount Loans Amount Loans Amount Loans Amount Loans
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(Dollars in thousands)

One- to four-family
residential and
construction $ 1,039 41.0% $ 757 44.8% $ 670 45.9% $ 363 44.6% $ 320 47.2%
Other residential
and construction 35 16.1 503 16.1 480 8.1 668 20.8 557 17.8
Commercial real estate
and construction
and commercial
business 9,699 38.5 7,875 34.5 7,596 31.3 7,394 30.3 3,995 31.5
Consumer 502 4.4 488 4.6 546 4.7 414 4.3 359 3.5
Unallocated 4,249 0.0 4,733 0.0 5,309 0.0 4,797 0.0 5,359 0.0
------ ----- ------ ----- ------ ----- ----- ----- ----- -----
Total $15,524 100.0% $14,356 100.0% $14,601 100.0% $13,636 100.0% $10,590 100.0%
====== ===== ====== ===== ====== ===== ===== ===== ===== =====

Loan Delinquencies and Defaults

When a borrower fails to make a required payment on a loan, the
Bank attempts to cause the delinquency to be cured by contacting
the borrower. In the case of loans secured by residential real
estate, a late notice is sent 15 days after the due date. If the
delinquency is not cured by the 30th day, a delinquent notice is
sent to the borrower. Additional written contacts are made with
the borrower 45 and 60 days after the due date. If the delinquency
continues for a period of 65 days, the Bank usually institutes
appropriate action to foreclose on the collateral. The actual time
it takes to foreclose on the collateral varies depending on the
particular circumstances and the applicable governing law. If
foreclosed, the property is sold at public auction and may be
purchased by the Bank. Delinquent consumer loans are handled in a
generally similar manner, except that initial contacts are made
when the payment is five days past due and appropriate action may
be taken to collect any loan payment that is delinquent for more
than 15 days. The Bank's procedures for repossession and sale of
consumer collateral are subject to various requirements under the
applicable consumer protection laws as well as other applicable
laws and the determination by the Bank that it would be beneficial
from a cost basis.

26

Delinquent commercial business loans and loans secured by
commercial real estate are initially handled by the loan officer in
charge of the loan, who is responsible for contacting the borrower.
The Senior Vice President in charge of commercial lending also
works with the commercial loan officers to see that necessary steps
are taken to collect such delinquent loans. In addition, the Bank
has a Problem Loan Committee which meets at least monthly and
reviews all commercial loans 30 days or more delinquent as well as
other loans not 30 days delinquent which management feels may
present possible collection problems. If an acceptable work out of
a delinquent commercial loan cannot be agreed upon, the Bank may
initiate foreclosure on any collateral securing the loan. However,
in all cases, whether a commercial or other loan, the prevailing
circumstances may be such that management may determine it is in
the best interest of the Bank not to foreclose on the collateral.

Delinquent loans at June 30, 1997 were $14.5 million compared to
$12.1 million at June 30, 1996. This increase is mainly
attributable to an increase in the 30-59 day and 90 days and over
delinquent categories offset by a decrease in the 60-89 day
category. The increase in total delinquencies mainly occurred in
the other residential real estate and construction categories. For
loans that Great Southern is servicing, the owners generally
prescribe the collection procedures. Great Southern may act on the
owners behalf in the collection process.

The table on the following page sets forth information concerning
delinquent mortgage and other loans held in the Bank's portfolio at
June 30, 1997, as well as comparative information for June 30,
1996, in dollar amount and as a percentage of the Bank's total loan
portfolio. The amounts presented represent the total outstanding
principal balances of the related loans rather than the actual
payment amounts which are overdue. For related information, see
the discussion under the heading "- Allowance for Losses on Loans
and Foreclosed Assets" above. The table is based on information
prepared in accordance with generally accepted accounting
principles.

27

Loans Delinquent for
---------------------------------------
90 Days Total
30-59 60-89 and Delinquent
Days Days Over Loans
------- ------- ------- ----------
(Dollars in thousands)

One- to four-family
residential real estate:
Number of loans 29 8 33 70
Amount $1,711 $ 615 $2,708 $ 5,034
Percent 0.28% 0.10% 0.44% 0.81%
Other residential:
Number of loans 1 1 1 3
Amount $1,104 $ 156 $ 4,254 $ 5,514
Percent 0.18% 0.03% 0.68% 0.89%
Commercial real estate:
Number of loans 9 5 2 16
Amount $1,741 $ 606 $ 316 $ 2,663
Percent 0.28% 0.10% 0.05% 0.43%
Construction:
Number of loans 2 1 0 3
Amount $ 198 $ 95 $ 0 $ 293
Percent 0.03% 0.02% 0.00% 0.05%
Consumer:
Number of loans 44 24 62 130
Amount $ 120 $ 48 $ 184 $ 352
Percent 0.02% 0.01% 0.03% 0.06%
Commercial business:
Number of loans 5 1 1 7
Amount $ 64 $ 1 $ 600 $ 665
Percent 0.01% 0.00% 0.10% 0.11%
Total June 30, 1997:
Number of loans 90 40 99 229
Amount $4,938 $1,521 $8,062 $14,521
Percent 0.79% 0.24% 1.30% 2.34%

Total June 30, 1996:
Number of loans 102 56 88 246
Amount $2,930 $3,667 $5,454 $12,051
Percent 0.50% 0.62% 0.93% 2.05%

28

Classified Assets

Federal regulations provide for the classification of loans and
other assets such as debt and equity securities considered to be of
lesser quality as "substandard," "doubtful" or "loss" assets. The
regulations require insured institutions to classify their own
assets and to establish prudent general allowances for losses from
assets classified "substandard" or "doubtful." For the portion of
assets classified as "loss," an institution is required to either
establish specific allowances of 100% of the amount classified or
charge such amount off its books. Assets that do not currently
expose the insured institution to sufficient risk to warrant
classification in one of the aforementioned categories but possess
potential weaknesses, are required to be designated "special
mention" by management. In addition, the OTS may require the
establishment of a general allowance for losses based on assets
classified as "substandard" and "doubtful" or based on the general
quality of the asset portfolio of an institution. Following are
the total classified assets per the Bank's internal asset
classification list. There were no significant off-balance sheet
items classified at June 30, 1997. The Bank's significant
classified assets are discussed individually below.

Total Allowance
Asset Category Substandard Doubtful Loss Classified for Losses
----------------------- ----------- -------- ---- ---------- ----------
(Dollars in thousands)

Loans and off-balance
sheet risks $14,331 $ 0 $175 $14,506 $15,524
Foreclosed assets 5,575 0 0 5,575 319
------ ----- --- ------ ------
Total $19,906 $ 0 $175 $20,081 $15,843
====== ===== === ====== ======

The table below sets forth the amounts and categories of non-
performing assets (classified loans which are not performing under
regulatory guidelines and all foreclosed assets, including assets
acquired in settlement of loans) in the Bank's loan portfolio at
the times indicated. Loans are placed on non-accrual status when
the loan becomes 90 days delinquent or when the collection of
principal, interest, or both, otherwise becomes doubtful. For all
years presented, the Bank has not had any (i) accruing loans
delinquent more than 90 days or (ii) troubled debt restructurings,
which involve forgiving a portion of interest or principal on any
loans or making loans at a rate materially less than that of market
rates. It has been the Bank's practice to sell its foreclosed
assets to new borrowers and originate loans with higher loan-to-
value ratios than those generally required for the Bank's one- to
four-family residential loans. Starting in fiscal 1993, the Bank
adopted a policy of presenting such loans in the non-performing
assets category until sufficient payments of principal and interest
are received or the loan has a 90% loan-to-value ratio.
Substantially all of the loans presented in this category are
performing and the Bank is accounting for the interest on these
loans on the accrual method.
29

June 30,
-------------------------------------------------------
1997 1996 1995 1994 1993
------- ------- ------- ------- -------
(Dollars in thousands)

Non-accruing loans:
One- to four-family residential $ 2,018 $ 1,195 $ 149 $ 341 $ 739
Other residential 3,826 934 -- 200 198
Commercial real estate 316 1,407 2,004 4,500 766
One- to four-family construction 655 121 -- -- 99
Consumer 219 202 260 195 52
Commercial business 600 744 652 786 64
Commercial construction -- 851 -- -- --
------ ------ ------ ------ ------
Total non-accruing loans 7,634 5,454 3,065 6,022 1,918
Loans in connection with sales of
foreclosed assets 246 453 775 1,321 2,541
------ ------ ------ ------ ------
Total non-performing loans 7,880 5,907 3,840 7,343 4,459
------ ------ ------ ------ ------
Foreclosed assets:
One- to four-family residential 544 517 695 1,440 650
Other residential 1,150 7,121 3,359 1,709 198
Commercial real estate 4,276 3,309 4,878 6,180 9,451
------ ------ ------ ------ ------
Total foreclosed assets 5,970 10,947 8,932 7,620 10,101
------ ------ ------ ------ ------
Total non-performing assets $13,850 $16,854 $12,772 $14,963 $14,560
====== ====== ====== ====== ======
Total non-performing assets as a
percentage of average total assets 2.07% 2.45% 2.18% 2.83% 3.04%
==== ==== ==== ==== ====

Impaired loans totaled $10,163,000 and $5,455,000 at June 30, 1997
and 1996, respectively.

Interest of $487,000 and $923,000 was recognized on average
impaired loans of $9,362,000 and $9,210,000 for 1997 and 1996.
Interest recognized on impaired loans on a cash basis during 1997
and 1996 was not materially different.

The level of non-performing assets are primarily attributable to
the Bank's commercial real estate, other residential, construction
and commercial business lending activities. These activities
generally involve significantly greater credit risks than single-
family residential lending. The level of non-performing assets
increased at a rate greater than that of the Bank's commercial
lending portfolio in fiscal 1996, and at a rate less than that of
the Bank's commercial lending portfolio in fiscal 1993, 1994, 1995
and 1997. For a discussion of the risks associated with these
activities, see the discussions under the heading "- Commercial
Real Estate and Construction Lending" and "- Commercial Business
Lending" above.

The Bank encounters certain environmental risks in its lending and
related activities. Under federal and state environmental laws,
lenders may become liable for the costs of cleaning up hazardous
materials found on property held as collateral as well as property
acquired at foreclosure on defaulted loans. This issue is
discussed in more detail under the heading "Lending Activities-
Environmental Issues" above.

30

Investment Activities

Federally-chartered thrift institutions have authority to invest in
various types of liquid assets, including U. S. Treasury
obligations and securities of various federal agencies,
certificates of deposit at insured institutions, obligations issued
by a State (with a 10% limit on obligations of a single issuer)
that qualify as liquid assets (see "Liquidity") and certain other
assets. The Bank's authority to invest in commercial paper and
corporate debt securities is subject to its overall 35% consumer
loan limit. See "Lending Activities -- Consumer Lending" above.
Great Southern must maintain minimum levels of investments that are
liquid assets as specified by the OTS as discussed under the
heading "Regulation-Liquidity" below. Liquidity may increase or
decrease depending upon the availability of funds and comparative
yields on investments in relation to the return on loans.
Historically, the Bank has maintained its liquid assets above the
minimum requirements imposed by the regulations and at a level
believed adequate to meet requirements of normal daily activities,
repayment of maturing debt and potential deposit outflows. Cash
flow projections are regularly reviewed and updated to assure that
adequate liquidity is maintained. For further discussion, see the
discussion under the heading "Regulation-Liquidity" below and Note
1 of Notes to Consolidated Financial Statements included in the
Annual Report to Stockholders, which portions are incorporated
herein by reference.

The Bank's investment securities portfolio at June 30, 1997 and
1996 contained no securities (tax exempt or of any issuer) with an
aggregate book value in excess of 10% of the Bank's retained
earnings, excluding those issued by the United States Government,
or its agencies.

On August 15, 1995, the OTS adopted its final rule on regulatory
capital-stockholders' equity. This rule requires debt and equity
securities to be segregated into the following three categories:
trading, held-to-maturity and available-for-sale. Trading
securities are purchased and held principally for the purpose of
reselling them within a short period of time. The unrealized gains
and losses are included in earnings.

Investments classified as held-to-maturity are accounted for at
amortized cost, but an institution must have both positive intent
and the ability to hold those securities to maturity. There are
very limited circumstances under which securities held-to-maturity
can be sold without jeopardizing the cost basis accounting for the
remainder of the securities in this category. These circumstances
include a significant deterioration of the issuer's
creditworthiness; changes in the tax law that reduce the tax-exempt
status of interest on the debt securities; major business
combinations that require a significant disposition of assets to
maintain the institutions' existing interest rate risk or credit
risk policy; and certain changes in statutory or regulatory
investment authority or capital requirements. Any security that
might be sold in response to changes in the market interest rates,
changes in the security's prepayment risk, increases in loan demand
or general liquidity needs or similar factors would not be
classified as held-to-maturity.
31

Securities not classified as either trading or held-to-maturity are
considered available-for-sale. Unrealized gains and losses on the
available-for-sale securities are excluded from earnings and
reported as a net amount in a separate component of stockholders'
equity until realized.

As of June 30, 1997 and 1996, the Bank held approximately $49.8
million and $49.2 million, respectively, in principal amount of
investment securities which the Bank intends to hold until
maturity. As of such dates, these securities had a market value of
approximately $49.9 million and $49.3 million, respectively. In
addition, as of June 30, 1997 and 1996, the Company held
approximately $7.4 million and $4.7 million, respectively, in
principal amount of investment securities which the Company
classified as available-for-sale. The implementation of the OTS
policy statement has not had a material impact on the Bank's
financial condition or results of operations since management has
historically purchased securities with the intent of holding until
maturity. This issue is discussed further under the heading
"Regulation-Accounting" below and in Notes 1 and 2 of Notes to
Consolidated Financial Statements in the Annual Report to
Stockholders, which portions are incorporated herein by reference.

The amortized cost and approximate fair values of, and gross
unrealized gains and losses on, investment securities at the dates
indicated are summarized as follows. The table is based on
information prepared in accordance with generally accepted
accounting principles.

June 30, 1997
--------------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -----------
(Dollars in thousands)

AVAILABLE-FOR-SALE SECURITIES:
Equity securities $5,175 $2,233 $ 0 $7,408
===== ===== === =====
HELD-TO-MATURITY SECURITIES:
U.S. Treasury $ 7,057 $ 8 $ 4 $ 7,061
U.S. government agencies 42,700 110 12 42,798
------ --- --- ------
Total held-to-maturity securities $49,757 $ 118 $ 16 $49,859
====== === === ======

June 30, 1996
--------------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -----------
(Dollars in thousands)

AVAILABLE-FOR-SALE SECURITIES:
Equity securities $4,498 $259 $102 $4,656
===== === === =====
HELD-TO-MATURITY SECURITIES:
U.S. Treasury $ 6,902 $ 7 $ 22 $ 6,887
U.S. government agencies 41,831 159 35 41,955
States and political subdivisions 449 0 0 449
------ --- --- ------
Total held-to-maturity securities $49,182 $166 $ 57 $49,291
====== === === ======
32
June 30, 1995
--------------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -----------
(Dollars in thousands)

AVAILABLE-FOR-SALE SECURITIES:
Equity securities $2,498 $593 $ 0 $3,091
===== === === =====
HELD-TO-MATURITY SECURITIES:
U.S. Treasury $ 1,267 $ 20 $ 0 $ 1,287
U.S. government agencies 45,247 334 59 45,522
States and political subdivisions 456 0 0 456
------ --- --- ------
Total held-to-maturity securities $46,970 $354 $ 59 $47,265
====== === === ======
- ------------------------------------

(1) See "Regulation-Federal Home Loan Bank System" and Note 2 of
Notes to Consolidated Financial Statements in the Annual Report to
Stockholders, which portions are incorporated herein by reference.

The following table presents the contractual maturities and
weighted average yields of held-to-maturity securities at June 30,
1997. The table is based on information prepared in accordance
with generally accepted accounting principles.

Amortized Approximate
Cost Yield Fair Value
------- --------- -----------
(Dollars in thousands)
In one year or less $18,047 5.85% $18,073
After one through five years 31,710 6.11% 31,786
------ ------
Total $49,757 $49,859
====== ======

Sources of Funds

General. Deposit accounts have traditionally been the principal
source of the Bank's funds for use in lending and for other general
business purposes. In addition to deposits, the Bank obtains funds
through advances from the Federal Home Loan Bank of Des Moines,
Iowa ("FHLBank"), collateralized short-term borrowings under
repurchase agreements, loan repayments, loan sales, and cash flows
generated from operations. Scheduled loan payments are a
relatively stable source of funds, while deposit inflows and
outflows and the related costs of such funds have varied widely.
Borrowings such as FHLBank advances may be used on a short-term
basis to compensate for seasonal reductions in deposits or deposit
inflows at less than projected levels and may be used on a longer
term basis to support expanded lending activities. The
availability of funds from loan sales is influenced by general
interest rates as well as the volume of originations.

33

Deposits. The Bank attracts both short-term and long-term deposits
from the general public by offering a wide variety of accounts and
rates. In recent years, the Bank has been required by market
conditions to rely increasingly on short-term accounts and other
deposit alternatives that are more responsive to market interest
rates than the passbook accounts and regulated fixed-interest-rate,
fixed-term certificates that were the Bank's primary source of
deposits prior to 1978. The Bank offers regular passbook accounts,
checking accounts, various money market accounts, fixed-interest-
rate certificates with varying maturities, certificates of deposit
in minimum amounts of $100,000 ("Jumbo" accounts), brokered
certificates and individual retirement accounts. The composition
of the Company's deposits at the end of recent periods is set forth
in Note 6 of Notes to Consolidated Financial Statements included in
the Annual Report to Stockholders, which portions are incorporated
herein by reference.

The following table sets forth the dollar amount of deposits, by
interest rate range, in the various types of deposit programs
offered by the Company at the dates indicated. The table is based
on information prepared in accordance with generally accepted
accounting principles.

June 30,
-----------------------------------------------------------------
1997 1996 1995
------------------ ------------------- ------------------
Percent Percent Percent
Amount of Total Amount of Total Amount of Total
-------- -------- --------- -------- -------- --------
(Dollars in thousands)

Time deposits:
0.00% - 3.99% $ 724 .16 $ 2,376 0.60 $ 3,746 0.97%
4.00% - 4.99% 14,166 3.08 14,472 3.65 30,873 8.03
5.00% - 5.99% 212,238 46.22 169,905 42.79 84,499 21.99
6.00% - 6.99% 51,540 11.22 32,596 8.21 89,817 23.37
7.00% - 7.99% 12,326 2.69 17,123 4.31 20,105 5.23
8.00% - 10.25% 507 .11 646 0.16 3,801 0.99
------- ------ ------- ------ ------- ------
Total Time deposits 291,501 63.48 237,118 59.72 232,841 60.58
Non-interest-bearing demand deposits 14,572 3.17 8,886 2.24 8,182 2.13
Savings deposits (2.51%-2.50%-2.52%) 35,065 7.64 37,010 9.32 38,285 9.96
Interest-bearing demand
deposits (2.36%-2.41%-2.51%) 115,232 25.09 112,224 28.26 103,335 26.89
Accrued Interest 2,866 .62 1,817 .46 1,684 0.44
------- ------ ------- ------ ------- ------
Total Deposits $459,236 100.00 $397,055 100.00% $384,327 100.00%
======= ====== ======= ====== ======= ======

34

The following table sets forth the deposit flows of the Company
during the periods indicated. Net increase refers to the amount of
deposits during a period less the amount of withdrawals during the
period. The net increase in deposits during the year ended June
30, 1997 and June 30, 1995 was primarily in time deposits while
during the year ended June 30, 1996 the net increase was in
interest-bearing deposits. Deposit flows at savings institutions
may also be influenced by external factors such as competitors'
pricing, governmental credit policies and, particularly in recent
periods, depositors' perceptions of the adequacy of federal
insurance of accounts. The table is based on information prepared
in accordance with generally accepted accounting principles.

Year Ended June 30,
----------------------------------------
1997 1996 1995
---------- ---------- ----------
(Dollars in thousands)

Opening balance $ 397,055 $ 384,327 $ 358,987
Deposits 2,143,074 1,731,347 1,652,386
Withdrawals 2,092,700 1,730,268 1,636,288
Interest credited 11,807 11,649 9,242
--------- --------- ---------
Ending Balance $ 459,236 $ 397,055 $ 384,327
========= ========= =========
Net increase $62,181 $12,728 $25,340
====== ====== ======
Percent increase 15.66% 3.31% 7.06%
==== ==== ====

The variety of deposit accounts offered by the Bank has allowed it
to be competitive in obtaining funds and has allowed it to respond
with flexibility to changes in consumer demand. The Bank has
become more susceptible to short-term fluctuations in deposit
flows, as customers have become more interest rate conscious. The
Bank manages the pricing of its deposits in keeping with its
asset/liability management and profitability objectives. Based on
its experience, management believes that its passbook and
certificate accounts are relatively stable sources of deposits,
while its checking accounts have proven to be more volatile.
However, the ability of the Bank to attract and maintain deposits,
and the rates paid on these deposits, has been and will continue to
be significantly affected by money market conditions.

35

The following table sets forth the time remaining until maturity of the Bank's time deposits as of June 30,
1997. The table is based on information prepared in accordance with generally accepted accounting principles.

Maturity
---------------------------------------------------------
Over Over Over
3 Months 3 to 6 6 to 12 12
or Less Months Months Months Total
-------- ------- ------- ------- --------
(Dollars in thousands)

Time deposits:
Less than $100,000 $ 53,048 $33,606 $48,642 $32,677 $167,973
$100,000 or more 15,573 6,429 10,109 12,378 44,489
Brokered 66,809 1,085 890 8,603 77,387
Public funds (1) 1,309 343 -- -- 1,652
------ ------ ------ ------ -------
Total $136,739 $41,463 $59,641 $53,658 $291,501
====== ====== ====== ====== =======

(1) Deposits from governmental and other public entities.

The following table shows rate and maturity information for the Bank's time deposits as of June 30, 1997. The
table is based on information prepared in accordance with generally accepted accounting principles.

0.00- 4.00- 5.00- 6.00- 7.00- 8.00- % of
3.99% 4.99% 5.99% 6.99% 7.99% 10.25% Total Total
------ ------- ------- ------- ------- ------ -------- -------
(Dollars in thousands)

Time deposits maturing
in quarter ending:
September 30, 1997 $ 659 $13,839 $116,834 $ 5,168 $ 9 $230 $136,739 46.91%
December 31, 1997 -- 26 37,122 3,954 331 30 41,463 14.22
March 31, 1998 16 140 19,483 4,598 528 -- 24,765 8.50
June 30, 1998 -- 108 19,768 7,318 7,681 1 34,876 11.96
September 30, 1998 -- 32 4,182 9,210 -- 2 13,426 4.61
December 31, 1998 -- 12 3,698 3,496 -- 20 7,226 2.48
March 31, 1999 1 -- 3,520 3,989 183 20 7,713 2.65
June 30, 1999 2 -- 2,882 4,982 99 1 7,966 2.73
September 30, 1999 -- -- 305 767 -- -- 1,072 0.37
December 31, 1999 -- 8 465 374 296 -- 1,143 0.39
March 31, 2000 -- -- 653 1,526 373 -- 2,552 0.88
June 30, 2000 -- -- 697 863 82 -- 1,642 0.56
September 30, 2000 -- 1 128 1,179 -- -- 1,308 0.45
December 31, 2000 -- -- 150 138 2 -- 290 0.10
March 31, 2001 -- -- 647 123 -- -- 770 0.26
June 30, 2001 -- -- 190 456 61 -- 707 0.24
Thereafter 46 -- 1,514 3,399 2,681 203 7,843 2.69
---- ------ ------- ------ ------ --- ------- ------
Total $ 724 $14,166 $212,238 $51,540 $12,326 $507 $291,501 100.00%
===== ====== ======= ====== ====== === ======= ======

36

Borrowings. Great Southern's other sources of funds include
advances from the FHLBank and collateralized borrowings. As a
member of the FHLBank, the Bank is required to own capital stock in
the FHLBank and is authorized to apply for advances from the
FHLBank. FIRREA requires that all long-term FHLBank advances be
for the purpose of financing residential housing. Pursuant to
FIRREA, the Federal Housing Finance Board has promulgated
regulations which establish standards of community investment for
FHLBank members to maintain continued access to long-term advances.
Each FHLBank credit program has its own interest rate, which may be
fixed or variable, and range of maturities. The FHLBank may
prescribe the acceptable uses for these advances, as well as other
risks on availability, limitations on the size of the advances and
repayment provisions. The Bank has a $75 million revolving line of
credit with the FHLBank which provides for immediately available
funds. At June 30, 1997, $30.8 million of the revolving line was
in use with $44.2 million remaining available. These funds can be
drawn by the Bank for lending or other liquidity needs with some
limitations.

The Bank's borrowings also include borrowings collateralized with
whole mortgage loans from the Bank's portfolio and investment
securities from the Bank's held-to-maturity portfolio. These
borrowings are also discussed in Note 8 of "Notes to Consolidated
Financial Statements included in the Annual Report to
Stockholders", which portions are incorporated herein by reference.

The following table sets forth the maximum month-end balances and
average daily balances of FHLBank advances and collateralized
borrowings during the periods indicated. The table is based on
information prepared in accordance with generally accepted
accounting principles.

Year Ended June 30,
------------------------------
1997 1996 1995
------------------------------
(Dollars in thousands)
Maximum Balance:
FHLBank advances $207,576 $188,450 $156,667
Collateralized borrowings 28,744 20,132 18,695

Average Balances:
FHLBank advances $166,023 $169,468 $127,361
Collateralized borrowings 18,894 17,344 15,607

37

The following table sets forth certain information as to the
Company's FHLBank advances and collateralized borrowings at the
dates indicated. The table is based on information prepared in
accordance with generally accepted accounting principles.

June 30,
-------------------------------
1997 1996 1995
-------- ------- --------
(Dollars in thousands)

FHLBank advances $151,881 $180,797 $154,323
Collateralized borrowings 28,744 16,468 13,947
------- ------- -------
Total borrowings $180,625 $197,265 $168,270
======= ======= =======

Weighted average interest rate
of FHLBank advances 6.42% 6.06% 6.61%
==== ==== ====

Weighted average interest rate
of collateralized borrowings 3.24% 2.63% 2.96%
==== ==== ====

Subsidiaries

Great Southern. As a federally-chartered savings bank, Great
Southern may invest up to 3% of its assets in service corporations.
The Bank had no investment in service corporations at June 30, 1997
and 1996.

Holding Company. At June 30, 1997, the Holding Company's total
investment in Great Southern Financial Corporation ("GSFC") and
Great Southern Capital Management, Inc. ("Capital Management") was
$1.1 million and $456,000, respectively. Both GSFC and Capital
Management are incorporated under the laws of the state of
Missouri. These subsidiaries are primarily engaged in the
following activities:

Appraisal Services. Appraisal Services, Inc., incorporated in
1976, is a wholly-owned subsidiary of GSFC and performs primarily
residential real estate appraisals for a number of clients, the
majority of which is for the Bank and its loan customers.
Appraisal Services, Inc. had a net loss of $2,000 and net income of
$7,000 in fiscal 1997 and 1996, respectively.

General Insurance Agency. Great Southern Insurance, a division of
GSFC, was organized in 1974. It acts as a general property,
casualty and life insurance agency for a number of clients,
including the Bank. Great Southern Insurance had net income of
$133,000 and $98,000 in fiscal 1997 and 1996, respectively.

38

Travel Agency. Great Southern Travel, a division of GSFC, was
organized in 1976. At June 30, 1997, it was the largest travel
agency based in southwestern Missouri. Great Southern Travel
operates from 15 full-time locations, including a facility at the
Springfield-Branson Regional Airport, and additional part-time
locations. It engages in personal, commercial and group travel
services. Great Southern Travel had net income of $46,000 and
$122,000 in fiscal 1997 and 1996, respectively.

Brokerage Services. Capital Management, organized in 1988, offers
a full line of financial consultation, investment counseling and
discount brokerage services. Capital Management operates through
Great Southern's branch office network. Capital Management had net
income of $243,000 and $257,000 in fiscal 1997 and 1996,
respectively.

Competition

Great Southern faces strong competition both in originating real
estate and other loans and in attracting deposits. Competition in
originating real estate loans comes primarily from other savings
institutions, commercial banks and mortgage bankers making loans
secured by real estate located in the Bank's market area.
Commercial banks and finance companies provide vigorous competition
in consumer lending. The Bank competes for real estate and other
loans principally on the basis of the interest rates and loan fees
it charges, the types of loans it originates and the quality of
services it provides to borrowers. The other lines of business of
the Bank including loan servicing and loan sales, as well as the
Holding Company subsidiaries, face significant competition in their
markets.

The Bank faces substantial competition in attracting deposits from
other savings institutions, commercial banks, money market and
mutual funds, credit unions and other investment vehicles. The
Bank attracts a significant amount of deposits through its branch
offices primarily from the communities in which those branch
offices are located; therefore, competition for those deposits is
principally from other savings institutions and commercial banks
located in the same communities. The Bank competes for these
deposits by offering a variety of deposit accounts at competitive
rates, convenient business hours, and convenient branch and ATM
locations with interbranch deposit and withdrawal privileges at
each branch location.

The authority to offer money market deposits and the expanded
lending and other powers authorized for thrift institutions by
federal and state legislation have resulted in increased
competition for both deposits and loans between thrift institutions
and other financial institutions such as commercial banks.

Employees

At June 30, 1997, the Bank and its affiliates had a total of 498
employees, including 213 part-time employees. None of the Bank's
employees is represented by any collective bargaining agreement.
Management considers its employee relations to be good.

39

REGULATION

General

Great Southern is a federal-chartered, federally insured, Federal
Savings Bank which is a member of the FHLBank System ("FHLBank
System"). Accordingly, Great Southern is subject to broad federal
regulation and oversight extending to all of its operations. Great
Southern is a member of the FHLBank of Des Moines and is subject to
certain limited regulation by the Board of Governors of the Federal
Reserve System ("Federal Reserve Board"). As the savings and loan
holding company of Great Southern, the Holding Company also is
subject to federal regulation and oversight. The purpose of the
regulation of the Holding Company is to protect Great Southern and
its depositors.

On August 9, 1989, FIRREA was enacted into law. FIRREA
substantially changed the regulatory structure and oversight for
all savings associations, including Great Southern, and their
holding companies. Prior to FIRREA, Great Southern's deposits were
insured by the Federal Savings and Loan Insurance Corporation
("FSLIC") and Great Southern was subject to regulation by the
FHLBB, as operating head of the FSLIC. Under FIRREA, the FHLBB was
abolished and its regulatory authority over Great Southern and its
holding company was transferred to the OTS. The FSLIC was abolished
and replaced by the SAIF, a new deposit insurance fund administered
by the FDIC. As a result, the FDIC has certain regulatory and
examination authority over Great Southern. FIRREA revised many
substantive requirements and limitations to which Great Southern is
subject, generally resulting in increased restrictions on Great
Southern's authorized investment and lending activities. FIRREA
also provided for various changes in the regulation of savings and
loan holding companies, such as the Holding Company. In addition,
FIRREA revised the structure of the FHLBank System, including the
requirements for obtaining advances from the FHLBank.

The Board of Directors of the Bank approved the conversion of the
Bank from a Missouri-chartered savings bank to a federal savings
bank charter. The conversion process required the preparation and
filing of an application with the OTS regional office. The OTS
approved the conversion in December 1994. By converting, the Bank
was able to eliminate the duplicate cost associated with complying
with both federal and state regulations and has not seen a material
change in its business.

The Company and Great Southern are subject to extensive regulation
by the federal government. The regulatory structure also gives the
regulators extensive discretion in their regulatory activities.
Any changes in such regulatory structure or regulation could have a
material adverse affect on the operations of the Company or Great
Southern. Certain of the material regulatory requirements and
restrictions applicable to the Company and the Bank are discussed
below or elsewhere in this document. However, the following is a
brief summary of certain aspects of the regulation of the Company
and Great Southern and does not purport to fully discuss such
regulation.

40

Federal Regulation

The OTS has extensive authority over the operations of the Bank.
As part of this authority, Great Southern is required to file
periodic reports with the OTS and is subject to periodic
examinations by the OTS. The investment and lending authority of
Great Southern is limited by federal law and regulations.

Certain of these regulations limit Great Southern's investments
including investments in equity securities, real estate, service
corporations and operating subsidiaries, as well as land loans and
nonresidential construction loans with loan-to-value ratios in
excess of 80%. In addition, as noted below, certain investments
increase the capital requirements of the Bank. Federal laws and
regulations also impose certain limitations on Great Southern's
operations, including restrictions on loans to one borrower,
transactions with affiliates and affiliated persons, liability
growth and capital distributions. Federal laws and regulations
also impose requirements for the retention of housing and thrift-
related investments. See "--Qualified Thrift Lender Test."

Federal law provides that no savings association may invest in
corporate debt securities not rated in one of the four highest
rating categories by a nationally recognized rating organization.
In addition, investment in loans secured by nonresidential real
property may not exceed 400% of capital, with authority in the OTS
to increase that investment level on a case-by-case basis. The
authority of Great Southern to engage in transactions with
affiliates, including the Holding Company and its non-savings
association subsidiaries, or to make loans to certain insiders, is
subject to certain provisions of the Federal Reserve Act. Among
other things, those provisions require that these transactions with
affiliates be on terms and conditions comparable to those for
similar transactions with non-affiliates. See "--Transactions With
Affiliates." In addition, these affiliate transactions are
regulated further by the OTS to address safety and soundness
concerns.

The OTS has extensive enforcement authority over all savings
associations and their holding companies, including Great Southern
and the Holding Company, and this enforcement authority has been
enhanced substantially by FIRREA and the Federal Deposit Insurance
Corporation Improvements Act of 1991 ("FDICIA"). This enforcement
authority includes, among other things, the ability to assess civil
money penalties, to issue cease-and-desist or removal orders and to
initiate injunctive actions. In general, these enforcement actions
may be initiated for violations of laws and regulations and unsafe
or unsound practices. Other actions or inactions may provide the
basis for enforcement action, including misleading or untimely
reports filed with the OTS. FIRREA significantly increased the
amount of and grounds for civil money penalties. FIRREA requires,
except under certain circumstances, public disclosure of final
enforcement actions by the OTS.

The FDIC has been granted certain regulatory and oversight
authority over federal associations by FIRREA. See "--Insurance of
Accounts and Regulation by the FDIC."

41

Insurance of Accounts and Regulation by the FDIC

The FDIC maintains two separate deposit insurance funds: the Bank
Insurance Fund (the "BIF") and the Savings Association Insurance
Fund (the "SAIF"). Great Southern's depositors are insured by the
SAIF up to $100,000 per insured account (as defined by law and
regulation). This insurance is backed by the full faith and credit
of the United States Government.

As insurer, the FDIC is authorized to conduct examinations of and
to require reporting by SAIF-insured associations. It also may
prohibit any FDIC-insured institution from engaging in any activity
the FDIC determines by regulation or order to pose a serious threat
to the SAIF. The FDIC also has the authority to initiate
enforcement actions against savings associations, after first
giving the OTS an opportunity to take such action.

On September 30, 1996, the President signed into law the Deposit
Insurance Fund Act of 1996 (the "Act"). The Act included
provisions to recapitalize the SAIF through a one-time special
assessment of 65.7 basis points of SAIF assessable deposits held by
savings associations at March 31, 1995. Great Southern's special
assessment was $2.5 million and was reflected in expense in the
September 1996 quarter.

Great Southern pays annual assessments for SAIF insurance. Under
current FDIC regulations, the annual SAIF assessment rate is based,
in part, on the degree of risk to the deposit insurance fund that,
in the opinion of the FDIC, is presented by a particular depository
institution compared to other depository institutions. The FDIC
uses a matrix having as variables the level of capitalization of a
particular institution and the level of supervision that its
operations require; and the risk-based amendment rates determined
in this fashion range from 0.00% of deposits for the least risky to
0.27% for the most risky. In establishing the SAIF assessment
rate, the FDIC is required to consider the SAIF's expected
operating expenses, case resolution expenditures and income and the
effect of the assessment rate on SAIF members' earnings and
capital. There is no cap on the amount the FDIC may increase the
SAIF assessment rate. The Bank currently has a risk based
assessment rate of 0.00%. In addition, the FDIC is authorized to
raise the assessment rates in certain instances. Any increases in
the assessments would negatively impact the earnings of Great
Southern.

The FDIC may terminate the deposit insurance of any insured
depository institution if it determines, after a hearing, that the
institution has engaged or is engaging in unsafe or unsound
practices, is in an unsafe or unsound condition to continue
operations or has violated any applicable law, regulation, order or
any condition imposed by or an agreement with the FDIC. It also
may suspend deposit insurance temporarily during the hearing
process for the permanent termination of insurance, if the
institution has no tangible capital. If insurance of accounts is
terminated, the accounts at the institution at the time of the
termination, less subsequent withdrawals, shall continue to be
insured for a period of six months to two years, as determined by
the FDIC.
42

The Act also authorized the FDIC to collect assessments against BIF
and SAIF assessable deposits to be paid to the Financing Coporation
(the FICO") to service interest on FICO debt issued during the
1980's. Beginning January 1997, the FICO assessment rate was set
at .0648% for SAIF insured deposits and .013% on BIF insured
deposits.

The Act also requires the Treasury Department to conduct a survey
of all issues considered to be relevant to the development of a
common charter for all FDIC insured institutions and the
termination of separate and distinct charters for banks and savings
associations. The law specifies that the BIF and SAIF are to be
merged by 1999, if there are no savings associations in existence
at that time. A merger of the deposit insurance funds could
potentially occur prior to 1999 if certain conditions are met.

Regulatory Capital Requirements

Federally insured savings associations, such as Great Southern, are
required to maintain a minimum level of regulatory capital. These
requirements have increased significantly in recent years. FIRREA
required the OTS to establish new capital standards for all savings
associations, including a tangible capital requirement, a leverage
ratio (or core capital) requirement and a risk-based capital
requirement. FIRREA mandated that these new capital requirements
be generally as stringent as the comparable capital requirements
for national banks.

The capital regulations promulgated pursuant to FIRREA require that
all savings associations have tangible capital of at least 1.5% of
adjusted total assets. Tangible capital generally includes common
stockholders' equity (including retained earnings), most non-
cumulative perpetual preferred stock and related earnings, certain
non-withdrawable accounts and pledged deposits at mutual
institutions and minority equity interests in fully consolidated
subsidiaries. Tangible capital excludes intangible assets, except
that purchased mortgage servicing rights remain includable in
tangible capital in an amount that may not exceed the lesser of (i)
90% of their fair market value (if determinable), or (ii) 100% of
their current amortized book value under GAAP (except that
purchased mortgage servicing rights owned on February 9, 1990 are
grandfathered and may be recognized for regulatory capital purposes
to the extent otherwise permitted by the OTS). Great Southern has
no purchased mortgage servicing rights. In general, for purposes
of calculating the tangible capital ratio, adjusted total assets is
defined as consolidated total assets in accordance with generally
accepted accounting principles ("GAAP"), excluding intangible
assets (except includable purchased mortgage servicing rights). In
addition, as described in more detail below, certain subsidiary
investments are excluded from capital and from adjusted total
assets for purposes of determining compliance with the tangible
capital requirement.

43

The OTS regulations establish special capitalization requirements
for savings associations that own service corporations and other
subsidiaries. According to these regulations certain subsidiaries
are consolidated for capital purposes and others are excluded from
assets and capital. In determining compliance with the tangible
capital requirement and the leverage limit, all subsidiaries
engaged solely in activities permissible for national banks,
engaged solely in mortgage-banking activities, or engaged in
certain other activities solely as agent for its customers are
includable subsidiaries that are consolidated for capital purposes
in proportion to the association's level of ownership, including
the assets of includable subsidiaries in which the association has
a minority interest that is not consolidated for GAAP purposes (the
investment in such subsidiaries is excluded from adjusted total
assets). For all other subsidiaries ("non-includable
subsidiaries"), the debt and equity investments in such
subsidiaries are deducted from assets and capital. At June 30,
1997, Great Southern had tangible capital equal to 7.7% of adjusted
total assets, which exceeds the minimum requirement of 1.5% as in
effect on June 30, 1997.

The capital standards mandated by FIRREA also include a leverage
ratio requirement that requires all savings associations to
maintain core capital equal to at least 3% of adjusted total
assets. Core capital generally consists of common stockholders'
equity (including retained earnings), most non-cumulative preferred
stock and related surplus, certain non-withdrawable accounts and
pledged deposits at mutual institutions and minority equity
interests in consolidated subsidiaries. Intangible assets,
including goodwill, are excluded from core capital, except, as
described in more detail below, purchased mortgage servicing
rights. In general, for purposes of calculating the core capital
ratio, adjusted total assets is defined as consolidated total
assets in accordance with GAAP, excluding intangible assets not
permitted to be included in core capital. In addition, the special
capitalization requirements for subsidiaries that apply for
determining the tangible capital requirement also apply for
determining the leverage ratio requirement.

Purchased mortgage servicing rights may be included in core capital
up to the lesser of (i) 90% of their fair market value (if
determinable), or (ii) their current amortized book value under
GAAP (except that purchased mortgage servicing rights owned on
February 9, 1990 are grandfathered and may be recognized for
regulatory capital purposes to the extent otherwise permitted by
the OTS). At June 30, 1997, Great Southern had no purchased
mortgage servicing rights eligible for inclusion in capital.

At June 30, 1997, Great Southern had core capital equal to 7.7% of
adjusted total assets, which exceeds the minimum leverage ratio
requirement of 3% now in effect.

44

The risk-based requirement promulgated by OTS requires savings
associations to have total capital of at least 8% of risk-weighted
assets. Total capital consists of core capital, as defined above,
and supplementary capital. Supplementary capital consists of
certain permanent and maturing capital instruments that do not
qualify as core capital, plus general loss reserves up to a maximum
of 1.25% of risk-weighted assets. The extent to which maturing
capital instruments may be included as supplementary capital
decreases as the maturity date of the instrument approaches. At
June 30, 1997, Great Southern had no capital instruments that
qualified as supplementary capital. At June 30, 1997, Great
Southern had $15.3 million in general loss reserves, which is $8.7
million greater than 1.25% of risk-weighted assets. Supplementary
capital qualifies as total capital only to the extent it does not
exceed an association's core capital. At June 30, 1997, Great
Southern had $6.6 million in qualifying supplementary capital.

To calculate risk-weighted assets, on-balance sheet assets and off-
balance sheet assets (after being converted to an on-balance sheet
credit equivalent amount) are risk-weighted in four risk categories
from 0% to 100%, depending on the credit risk inherent in the
asset. Before being assigned a risk-weight, off-balance sheet
items are adjusted by conversion factors of 0% to 100% to determine
the amount of the on-balance credit equivalent amount against which
risk-based capital must be maintained. The risk-weightings are
applied to the on-balance sheet credit equivalents based on the
obligor. On June 30, 1997, Great Southern had total capital
(including $53.8 million in core capital and $6.6 million in
qualifying supplementary capital) of $60.4 million and risk-
weighted assets (including $10 million in converted off-balance
sheet assets) of $519 million; or total capital of 11.6% of risk-
weighted assets. This amount is in excess of the required level.

The OTS has adopted a rule, implemented as of March 31, 1995,
incorporating an interest rate risk component into the risk-based
capital requirement for savings associations such as the Bank.
Under this rule, an institution's interest rate risk is measured by
the decline in net portfolio value ("NPV") resulting from a
hypothetical 200 basis point increase or decrease in interest rates
(whichever leads to the lower NPV) divided by the estimated
economic value of its assets. An institution is required to make a
deduction from total capital for purposes of calculating its risk-
based capital if a decline in its NPV (resulting from a 200 basis
point shock) exceeds 2 percent of its assets (expressed in present
value terms). Such an institution is required to deduct from its
total risk-based capital an amount equal to one-half of the
difference between its measured interest rate risk and 2 percent,
multiplied by the estimated economic value of its assets. The new
rule has not had a significant effect on Great Southern's
compliance with capital requirements.

45

Any savings association that fails any of the new capital standards
is subject to enforcement actions by the OTS or the FDIC. In
addition, FIRREA authorizes, and under certain circumstances
requires, the OTS to take certain actions against associations that
fail to meet current or future capital requirements. OTS shall
prohibit the asset growth of any association not meeting its
capital standards, except for certain limited growth in low-risk
assets up to net interest credited, and shall issue a capital
directive against the association. FIRREA enables associations to
seek exemptions from the various sanctions or penalties for failure
to meet their capital requirements, other than the mandatory growth
restrictions and appointment of a conservator or receiver. The OTS
will grant no exemptions without the submission of an approved
capital plan. FDICIA, which is discussed below, also requires
certain regulatory actions if a savings institution does not meet
these capital standards.

Capital Distributions Regulation

An OTS regulation limits the capital distributions that can be made
by savings associations, including cash dividends, payments by an
association to repurchase or otherwise acquire its shares, payments
to shareholders of another institution in a cash-out merger and
other distributions charged against capital (the "Capital
Distributions Regulation"). The Capital Distributions Regulation
establishes a three-tiered system of regulation based primarily on
capital levels, with the greatest flexibility being afforded to
well-capitalized, well-managed institutions.

An association that has capital immediately prior to, and on a pro
forma basis after giving effect to, a proposed capital distribution
that is equal to or greater than the amount of its fully phased-in
capital requirement, as modified to reflect any individual minimum
capital requirement applicable to the association would be a Tier 1
association ("Tier 1 Association"), provided the association has
not been notified by the OTS that it is in need of more than normal
supervision. An association that satisfies the Tier 1 capital
criteria but that has been notified that it has need of more than
normal supervision could be treated as a Tier 2 or Tier 3
association (a determination left to the discretion of the OTS).

An association that has capital immediately prior to, and on a pro
forma basis after giving effect to, a proposed capital distribution
that is equal to or in excess of its minimum capital requirement
but that is less than its fully phased-in capital requirement would
be a Tier 2 association ("Tier 2 Association"). An association
that does not satisfy its minimum capital requirement immediately
prior to, or on a pro forma basis after giving effect to, the
proposed capital distribution would be a Tier 3 association ("Tier
3 Association").

46

A Tier 1 Association could, after prior notice but without the need
to obtain prior approval from the OTS, make capital distributions
during a calendar year up to the higher of (1) 100% of the
association's net income to date during the calendar year plus the
amount that would reduce by one-half the association's "surplus
capital ratio" (the percentage by which its capital-to-assets ratio
exceeds the ratio of its fully phased-in capital requirement to its
assets) at the beginning of the calendar year or (2) 75% of the
association's net income over the most recent four-quarter period.
Any additional amount of capital distributions would require prior
regulatory approval.

A Tier 2 Association could, after prior notice but without the need
to obtain prior approval from the OTS, (1) make capital
distributions of up to 75% of its net income over the most recent
four-quarter period if the association's current capital satisfies
the risk-based capital standard that was applicable to it on
January 1, 1993, or (2) make capital distributions of up to 50% of
its net income over the most recent four-quarter period if the
association's current capital satisfies the risk-based standard
that was applicable to it on January 1, 1991; or (3) make capital
distributions of up to 25% of its net income over the most recent
four-quarter period if the association's current capital satisfies
the current risk-based capital requirement applicable to it. In
computing an association's current permissible amount of capital
distributions, an association must deduct the amount of capital
distributions that it has previously made during the most recent
four-quarter period. Any additional amount of capital
distributions would require prior regulatory approval.

A Tier 3 Association is not permitted to make any capital
distributions without prior regulatory approval unless the capital
distribution is consistent with a pre-approved capital plan.

The Capital Distributions Regulation provides that its requirements
supersede the provisions of agreements or conditions to approved
applications controlling associations' capital distributions that
are less stringent than the restrictions imposed under the Capital
Distributions Regulation. An association that is subject to
restrictions under an agreement or application condition that is
more stringent than the restrictions imposed under the Capital
Distributions Regulation may seek approval from the OTS to become
subject exclusively to the restrictions imposed under the Capital
Distributions Regulation.

The OTS has notified Great Southern that for purposes of the
Capital Distributions Regulation it is currently being treated as a
Tier 1 Association for purposes of computing permissible capital
distributions. Notwithstanding the Capital Distribution
Regulations, the regulatory authorities have broad discretion to
prohibit the payment of capital distributions in certain instances,
including if such authorities determine that the payment would
constitute an unsafe or unsound practice. In addition, FDICIA can
limit capital distributions. See also "Item 5. Market for the
Registrant's Common Stock and Related Stockholder Matters" and
"FDICIA" below.

47

Liquidity

Federally insured savings associations are required to maintain an
average daily balance of liquid assets equal to a certain
percentage of the sum of average daily balances of net withdrawable
deposit accounts and borrowings payable in one year or less. The
liquidity requirement may vary from time to time (between 4% and
10%) depending upon economic conditions and savings flows of all
savings associations. At the present time, the required liquid
asset ratio is 5%.

For purposes of this ratio, liquid assets include specified short-
term assets (e.g., cash, certain time deposits, certain bankers'
acceptances and short-term United States Treasury obligations), and
long-term assets (e.g., United States Treasury obligations of more
than one and less than five years and state agency obligations with
a maximum term of two years). The regulations governing liquidity
requirements include as liquid assets debt securities hedged with
forward commitments obtained from, or debt securities subject to
repurchase agreements with, members of the Association of Primary
Dealers in United States Government Securities or banks whose
accounts are insured by the FDIC, debt securities directly hedged
with a short financial futures position, and debt securities that
provide the holder with a right to redeem the security at par
value, regardless of the stated maturities of such securities.
FIRREA also authorizes the OTS to designate as liquid assets
certain mortgage-related securities and certain mortgage loans
(qualifying as backing for certain mortgage-backed securities) with
less than one year to maturity. Short-term liquid assets currently
must constitute at least 1% of an association's average daily
balance of net withdrawable deposit accounts and current
borrowings. Penalties may be imposed upon associations for
violations of liquidity requirements. At June 30, 1997, Great
Southern was in compliance with these requirements, with an overall
liquidity ratio of 7.4% and a short-term liquidity ratio of 5.8%.

The Company has been in various buy-back programs since May 1990.
During the year ended June 30, 1997, the Company repurchased
961,967 shares of its common stock at an average price of $16.20
per share and reissued 254,992 shares of treasury stock at an
average price of $2.01 per share for stock option exercises.
During the year ended June 30, 1996, the Company repurchased
281,196 shares of its common stock at an average price of $11.92
per share and reissued 87,776 shares of treasury stock at an
average price of $1.58 per share for stock option exercises.

Management intends to continue its stock buy-back programs as long
as repurchasing the stock contributes to the overall growth of
shareholder value. The number of shares of stock that will be
repurchased and the price that will be paid is the result of many
factors, several of which are outside of the control of the
Company, the primary factors of which are the number of shares
available in the market from sellers at any given time and the
price of the stock within the market as determined by the market.

48

Management believes that the Company had at June 30, 1997, and
continues to have, sufficient cash flows and borrowing capacity
available to meet its commitments and other foreseeable cash needs
for operations. At June 30, 1997, the Company had commitments of
approximately $80 million to fund loan originations, issued lines
of credit, outstanding letters of credit and unadvanced loans.

Accounting

An OTS policy statement clarifies and reemphasizes that the
investment activities of a savings association must be in
compliance with approved and documented investment policies and
strategies, and must be accounted for in accordance with GAAP.
Under the policy statement, management must support its
classification of and accounting for loans and securities (i.e.,
whether held for investment, sale or trading) with appropriate
documentation. In addition, auditors must document their
concurrence or lack thereof with management's investment policy and
strategies, at least annually, and to monitor the association's
compliance with such strategies. See "Business -- Investment
Activities."

Qualified Thrift Lender Test

Savings associations are required to satisfy a qualified thrift
lender ("QTL") test. The QTL test currently requires a savings
association to hold at least 65% of its portfolio assets in
qualified thrift investments and to continue to maintain such
percentage holdings for at least nine months of each preceding
twelve-month period. Certain temporary and limited exceptions from
meeting the new test may be granted by the OTS. Portfolio assets
are total assets less intangible assets, the value of properties
used to conduct business and certain liquid assets (up to 20% of
total assets). Qualified thrift investments include certain assets
(generally, residential housing related assets) which are
includible without limitation and assets which are includible
subject to percentage limitations. The Management of Great
Southern believes it satisfied the QTL test at June 30, 1997.

Any savings association that fails to meet the QTL test must
convert to a bank charter, unless it requalifies as a QTL. If the
association does not requalify, and converts to a bank charter, it
must remain SAIF-insured until the date upon which the FDIC permits
it to transfer to the Bank Insurance Fund. If an association that
fails the test has not yet requalified and has not converted to a
bank, its new investments and activities are limited to those
permissible for a national bank, and it is limited to national bank
branching rights in its home state. In addition, the association
is immediately ineligible to receive any new FHLBank advances and
is subject to national bank limits for payment of dividends.

49

If such association has not requalified or converted to a bank
within three years after the failure, it must divest itself of all
investments and cease all activities not permissible for a national
bank. In addition, it must repay promptly any outstanding FHLBank
advances. If any association that fails the QTL test and is
subject to these restrictions on activities and advances is
controlled by a holding company, then within one year after the
failure the holding company must register as a bank holding company
and become subject to all restrictions applicable to bank holding
companies.

Transactions with Affiliates

Transactions involving a savings association and its affiliates are
subject to sections 23A and 23B of the Federal Reserve Act.
Generally, these requirements and limits restrict certain of these
transactions to a percentage of the Bank's capital and require all
such transactions to be on terms at least as favorable to the Bank
as are available in transactions with non-affiliates. In addition,
a savings association may not lend to any affiliate engaged in
activities not permissible for a bank holding company or acquire
shares of most affiliates. These provisions currently apply to
transactions between the Bank and the Holding Company or the Bank
and the Holding Company's non-savings association subsidiaries.
Affiliates of Great Southern include, without limitation, any
company whose management is under a common controlling influence
with the management of the Bank, any company controlled by
controlling stockholders of the Bank, any company with a majority
of interlocking directors with the Bank, and any company sponsored
and advised on a contractual basis by the Bank or any of its
affiliates.

Certain of these transactions are also subject to conflict of
interest regulations enforced by the OTS. These regulations
require regulatory approvals for transactions by the Bank with
affiliated persons involving the sale or purchase of property.
Affiliated persons include officers, directors and controlling
stockholders. These conflict of interest regulations also impose
restrictions on loans to affiliated persons. FIRREA also subjects
loans to directors and executive officers to section 22(h) of the
Federal Reserve Act and the regulations promulgated thereunder.
Among other things, such loans must be made on terms substantially
the same as loans to unaffiliated individuals.

FDICIA

In December, 1991, the Federal Deposit Insurance Corporation
Improvements Act of 1991 became law; this statute, and the
regulations adopted under it, have made extensive changes in
federal banking law. Some of these changes are discussed below.

50

Prompt Corrective Regulatory Action.

FDICIA requires the Federal banking regulators to take prompt
corrective action if an institution fails to satisfy certain
minimum capital requirements. Under the law, capital requirements
include a leverage limit, a risk-based capital requirement, and a
core capital requirement. All institutions, regardless of their
capital levels, will be restricted from making any capital
distribution or paying any management fees that would cause the
institution to fail to satisfy the minimum levels for any of its
capital requirements. An institution that fails to meet the
minimum level for any relevant capital measure (an
"undercapitalized institution") will be: (i) subject to increased
monitoring by the appropriate Federal banking regulator; (ii)
required to submit an acceptable capital restoration plan within 45
days; (iii) subject to asset growth limits; and (iv) required to
obtain prior regulatory approval for acquisitions, branching and
new lines of business.

The capital restoration plan must include a guarantee by the
institution's holding company that the institution will comply with
the plan until it has been adequately capitalized on average for
four consecutive quarters, under which the holding company would be
liable up to the lesser of 5% of the institution's total assets or
the amount necessary to bring the institution into capital
compliance as of the date it failed to comply with its capital
restoration plan. Critically undercapitalized institutions,
defined as those with a ratio of tangible equity to total assets of
2 percent or less, must be seized and placed in receivership or
conservatorship within 90 days of becoming critically
undercapitalized, unless the Federal banking regulators determine
that other action would better resolve the problems of such insured
depository institution at the least possible long-term loss to the
deposit insurance fund. If the regulator determines that an
institution is in unsafe or unsound condition, or is engaged in an
unsafe or unsound practice that it has not corrected, it may
reclassify an institution from the "well capitalized", "adequately
capitalized", or "undercapitalized" categories into the next lower
category. Great Southern does not expect the prompt corrective
action provisions to have a significant effect on its operations.

Conservatorship and Receivership Amendments. FDICIA amended the
grounds for the appointment of a conservator or receiver for an
insured depository institution to include the following events: (i)
consent by the board of directors of the institution; (ii)
cessation of the institution's status as an insured depository
institution; (iii) the institution is undercapitalized and has no
reasonable prospect of becoming adequately capitalized when
required to do so, fails to submit an acceptable capital plan or
materially fails to implement an acceptable capital plan; and (iv)
the institution is critically undercapitalized or otherwise has
substantially insufficient capital. FDICIA provides that an
institution's directors shall not be liable to its stockholders or
creditors for acquiescing in or consenting to the appointment of
the FDIC or FTC as receiver or conservator or to a supervisory
acquisition of the institution.

51

Standards for Safety and Soundness.

FDICIA required the Federal bank regulatory agencies to prescribe
standards for all insured depository institutions and depository
institution holding companies relating to: (i) internal controls,
information systems and audit systems; (ii) loan documentation;
(iii) credit underwriting; (iv) interest rate risk exposure; (v)
asset growth; and (vi) compensation, fees and benefits. The
compensation standards prohibit employment contracts, compensation
or benefit arrangements, stock option plans, fee arrangements or
other compensatory arrangements that provide excessive
compensation, fees or benefits or could lead to material financial
loss. In addition, the Federal banking regulatory agencies are
required to prescribe by regulation standards specifying: (i)
maximum classified assets to capital ratios; (ii) minimum earnings
sufficient to absorb losses without impairing capital; and (iii) to
the extent feasible, a minimum ratio of market value to book value
for publicly traded shares of depository institutions and
depository institution holding companies.

Other Deposit Insurance Reforms.

FDICIA amended the Federal Deposit Insurance Act to prohibit
insured depository institutions that are not well-capitalized from
accepting brokered deposits unless a waiver has been obtained from
the FDIC; and it limits the rate of interest that institutions
receiving such waivers may pay on brokered deposits. Deposit
brokers are required to register with the FDIC. FDICIA directed
the FDIC to establish a risk-based assessment system for deposit
insurance, as previously discussed. As required by FDICIA, the
Federal bank regulatory agencies adopted regulatory guidelines for
real estate loans that became effective on March 19, 1993. The
Federal bank regulatory agencies are required to biannually review
risk-based capital standards to ensure that they adequately address
interest rate risk, concentration of credit risk and risks from
non-traditional activities.

Other Regulatory or Legislative Developments.

The Riegle-Neal Interstate Banking and Branching Efficiency Act of
1994 ("Riegle-Neal"), effective September 1995, eliminated certain
restrictions which have heretofore prevented bank holding companies
located in states other than those contiguous to the state of
Missouri from acquiring banks or bank holding companies located
within the state of Missouri. As a result of the Act, financial
institutions located outside the midwest are now permitted, with
certain limitations, to acquire Missouri banks. If such
acquisitions occur, they may present added competition for the
Bank.

Effective August 28, 1995, the State of Missouri amended certain
provisions of the Missouri statutes, implementing minimum periods a
bank must be in existence to be eligible for acquisition by an out-
of-state bank holding company and limiting out-of-state de novo
charters in the State of Missouri.

52

Effective June 1, 1997, the Riegle-Neal also repealed certain
restrictions on the establishment of interstate branches located
within the state of Missouri. Out-of-state financial institutions
are able to establish certain interstate branches within the state
of Missouri. Management believes that any such actions would
likely benefit its competitors. In addition, various legislative
proposals relating to depository institutions have been or are
expected to be introduced in the current session of Congress. Such
proposals may restrict, regulate or otherwise alter the power or
ability of the Bank and other depository institutions to sell
mutual funds and annuities or insurance products. No prediction
can be made as to what, if any, legislative action will ultimately
be taken, or what affect it may have on the Bank.

Certain Transactions

Prior to FIRREA, Great Southern, like many financial institutions,
followed a policy of granting loans to certain of its officers,
directors and employees, generally for the financing of their
personal residences at favorable interest rates. Generally,
residential loans were granted at interest rates 1% above the
Bank's cost of funds, subject to annual adjustments. These loans
were made in the ordinary course of business, on substantially the
same terms and collateral as those of comparable transactions
prevailing at the time, and did not involve more than the normal
risk of collectibility or present other unfavorable features. All
loans by Great Southern to its directors and executive officers are
subject to OTS regulations restricting loans and other transactions
with affiliated persons of Great Southern. Effective August 9,
1989, FIRREA required that all such transactions be on terms and
conditions comparable to those for similar transactions with non-
affiliates. It also provided that the Company could have a policy
allowing favorable rate loans to employees as long as it is an
employee benefit available to a broad group of employees with in
guidelines defined by the policy. The Bank has such a policy in
place that allows for loans to full-time employees with at least
two years of service. The terms are the same as those used prior
to FIRREA. In addition, all loans and other transactions between
Great Southern and its affiliates will be subject to approval by a
majority of the directors of Great Southern, including a majority
of its disinterested directors.

Holding Company Regulation

The Holding Company is a non-diversified unitary savings and loan
holding company subject to regulatory oversight of the OTS. As
such, the Holding Company is required to register and file reports
with the OTS and is subject to regulation and examination by the
OTS. In addition, the OTS has enforcement authority over the
Holding Company and its non-savings association subsidiaries.
Among other things, this authority permits the OTS to restrict or
prohibit activities that are determined to be a serious risk to the
subsidiary savings association. The Bank must notify the OTS at
least 30 days before declaring any dividend to the Holding Company.

53

As a unitary savings and loan holding company, the Holding Company
generally is not subject to the regulatory limitations that are
applicable to the scope of permissible activities of diversified
multiple holding companies. If the Holding Company were to acquire
control of another savings association as a separate subsidiary, it
would become a multiple savings and loan holding company, and the
activities of the Holding Company and any of its subsidiaries
(other than the Bank or any other SAIF-insured savings association)
would become subject to new restrictions.

If the Bank fails the QTL test, the Holding Company may not
commence or continue after such failure, directly or through its
other subsidiaries, any business activity other than (i) furnishing
or performing management services for a subsidiary savings
association, (ii) conducting an insurance agency or an escrow
business, (iii) holding or managing or liquidating assets owned by
or acquired from a subsidiary savings association, (iv) holding or
managing properties used or occupied by a subsidiary savings
association, (v) acting as trustee under deeds of trust, (vi)
performing other activities authorized by the Board of Governors of
the Federal Reserve System and not prohibited or limited by
regulation, or (vii) purchasing, holding or disposing of stock
acquired in connection with the qualified stock issuance if
approved as required by law.

The Holding Company must obtain approval from the OTS before
acquiring control of any other SAIF-insured association. Such
acquisitions may sometimes be prohibited if they result in a
multiple savings and loan holding company controlling savings
associations in more than one state. However, such interstate
acquisitions may be permitted based on specific state authorization
or in a supervisory acquisition of a failing savings association.

The Holding Company and any of its non-savings association
subsidiaries may acquire up to 5%, in the aggregate, of the voting
stock of any non-subsidiary savings association or savings and loan
holding company. This 5% limitation does not apply to certain
types of acquisitions, including acquisitions as a bona fide
fiduciary, as an underwriter or in an account solely for trading
purposes.

54

Federal Reserve System

The Federal Reserve Board requires all depository institutions to
maintain reserves against their transaction accounts (primarily NOW
and Super NOW checking accounts) and non-personal time deposits.
Reserves of 3% must be maintained against net transaction accounts
of $52 million or less (subject to adjustment by the Federal
Reserve Board) and a reserve of 10% (subject to adjustment by the
Federal Reserve Board to a level between 8% and 14%) must be
maintained against the portion of total transaction accounts in
excess of such amount. In addition, a reserve of between 0% to 9%
(subject to adjustment by the Federal Reserve Board) must be
maintained on non-personal time deposits. Under current
regulations, this reserve percentage is 0%. The Bank may elect not
to maintain reserves against approximately $4.4 million in accounts
subject to these reserve requirements. At June 30, 1997, the Bank
was in compliance with these reserve requirements. The balances
maintained to meet the reserve requirements imposed by the Federal
Reserve Board may be used to satisfy liquidity requirements that
may be imposed by the OTS. See "Regulation - Liquidity" above.

Savings associations are authorized to borrow from the Federal
Reserve Bank "discount window," but Federal Reserve Board
regulations require associations to exhaust other reasonable
alternative sources of funds, including FHLBank advances, before
borrowing from the Federal Reserve Bank.

Federal Home Loan Bank System

The Bank is a member of the FHLBank of Des Moines, which is one of
12 regional FHLBanks that, prior to the enactment of FIRREA, were
regulated by the FHLBB. FIRREA separated the home financing credit
function of the FHLBanks from the regulation and insurance of
accounts for savings associations by transferring oversight over
the FHLBanks to a new federal agency, the Federal Home Financing
Board (FHFB). As part of that separation, the savings association
supervisory and examination function performed by the FHLBanks was
transferred to the OTS.

As a member, Great Southern is required to purchase and maintain
stock in the FHLBank of Des Moines in an amount equal to the
greater of 1% of its aggregate unpaid residential mortgage loans,
home purchase contracts or similar obligations at the beginning of
each year (if less than 30% of its assets were so invested, the
calculation must be made as if 30% of its assets were so invested),
or 5% (or such greater percentage as established by the FHLBank) of
its outstanding FHLBank advances. At June 30, 1997, Great Southern
had $10.8 million in FHLBank stock, which was in compliance with
this requirement. In past years, the Bank has received substantial
dividends on its FHLBank stock. Over the past five years, such
dividends have averaged 7.7% and were 7.0% for fiscal year 1997.
Certain provisions of FIRREA require all 12 FHLBanks to provide
financial assistance for the resolution of troubled savings
associations and to contribute to affordable housing programs
through direct loans or interest subsidies on advances targeted for
community investment and low- and moderate-income housing projects.

55

These contributions could cause rates on the FHLBank advances to
increase and could affect adversely the level of FHLBank dividends
paid and the value of FHLBank stock in the future.

Each FHLBank serves as a reserve or central bank for its members
within its assigned region. It is funded primarily from proceeds
derived from the sale of consolidated obligations of the FHLBank
System. It makes loans to members (i.e., advances) in accordance
with policies and procedures established by the board of directors
of the FHLBank. These policies and procedures are subject to the
regulation and oversight of the FHFB.

FIRREA established collateral requirements for FHLBank advances.
First, all advances must be fully secured by sufficient collateral
as determined by the FHLBank. FIRREA prescribed eligible
collateral as fully disbursed, whole first mortgage loans not more
than 90 days delinquent or securities evidencing interests therein,
securities (including mortgage-backed securities) issued, insured
or guaranteed by the federal government or any agency thereof,
FHLBank deposits and, to a limited extent, real estate with readily
ascertainable value in which a perfected security interest may be
obtained. All member's stock in the FHLBank also serves as
collateral for indebtedness to the FHLBank. Other forms of
collateral may be accepted as over collateralization or, under
certain circumstances, to renew advances outstanding on the date of
enactment of FIRREA. All long-term advances are required to be
used to provide funds for residential home financing. The FHFB has
established standards of community service that members must meet
to maintain access to long-term advances. FIRREA authorizes the
FHLBanks to make short-term liquidity advances to solvent
associations in poor financial condition but with prospects of
improving, upon the request of the OTS. In addition, pursuant to
FHFB regulations, each FHLBank is required to establish programs
for affordable housing that involve interest subsidies from the
FHLBanks on advances to members engaged in lending at subsidized
interest rates for low- and moderate-income, owner-occupied housing
and affordable rental housing, and certain other community
purposes.

FEDERAL AND STATE TAXATION

The following discussion contains a summary of certain federal and
state income tax provisions applicable to the Holding Company and
the Bank. It is not a comprehensive description of the federal
income tax laws that may affect the Holding Company and the Bank.
The following discussion is based upon current provisions of the
Internal Revenue Code of 1986 (the "Code") and Treasury and
judicial interpretations thereof.

56

General

The Holding Company and its subsidiaries file a consolidated
federal income tax return using the accrual method of accounting
for the taxable year ending June 30. All corporations joining in
the consolidated federal income tax return are jointly and
severally liable for taxes due and payable by the consolidated
group. The following discussion primarily focuses upon the
taxation of the Bank, since the federal income tax law contains
certain special provisions with respect to savings and loan
associations.

Thrift associations, such as the Bank, are subject, with certain
exceptions, to the provisions of the Code generally applicable to
corporations.

Bad Debt Reserve - Fiscal 1996 and prior

A thrift association was permitted to establish a reserve for bad
debts and to deduct each year a reasonable addition to that reserve
in computing its taxable income. Thrift associations that met
certain tests relating to the nature of their regulatory
supervision, business operations, income and assets ("qualifying
thrifts") were allowed to calculate their allowable bad debt
deduction under the special rules of section 593 of the Code. In
order to be a qualifying thrift, at least 60% of the thrift's
assets in any year had to be qualifying assets (including United
States government securities, loans secured by an interest in
residential real property or deposits, cash and certain other
assets). The Bank had been a qualifying thrift.

The Code provided different methods for computing the additions to
the bad debt reserve for qualifying real property loans and
nonqualifying loans. Generally, a qualifying real property loan
included any loan secured by an interest in improved real property
or real property to be improved out of the proceeds of the loan and
a regular or residual interest in certain real estate mortgage
investment conduits. A nonqualifying loan was any loan which was
not a qualifying real property loan. A qualifying thrift could
elect annually to compute its addition to its reserve for
qualifying real property loans under the more favorable of (i) a
method based on the thrift's actual loss experience (the
"experience method") or (ii) a method based on a specified
percentage of the thrift's taxable income, as adjusted (the
"percentage of taxable income" method). The addition to the
reserve for nonqualifying loans was computed under the experience
method.

57

Under the experience method, the deductible annual addition was the
amount necessary to increase the balance of the reserve at the
close of the taxable year to the greater of (i) the amount which
bore the same ratio to loans outstanding at the close of the
taxable year as the total net bad debts sustained during that year
and the five preceding taxable years bore to the sum of the loans
outstanding at the close of those six years or (ii) the balance in
the reserve account at the close of the last taxable year beginning
before 1988 (the "base year"), subject to further limitations in
the event total loans outstanding were less than the total amount
outstanding at the close of the base year.

Under the percentage of taxable income method, a qualifying thrift
generally was allowed to deduct as an addition to its bad debt
reserve an amount equal to 8% of such thrift's taxable income
determined without regard to such deduction and with certain
adjustments. The amount thus computed was reduced by the amount
permitted as a deduction for nonqualifying loans under the
experience method. The maximum effective federal income tax rate
(exclusive of the corporate minimum tax) payable by a thrift using
the percentage of taxable income method was approximately 31.3%
compared to a maximum rate of 34% for other corporations.

Although the Bank filed a consolidated federal income tax return
with the Holding Company, the Bank generally was permitted to take
only its separate taxable income (as adjusted for this purpose)
into account when computing its allowable bad debt reserve
deduction under the percentage of taxable income method. If,
however, the Holding Company or another member of the consolidated
group incured tax losses in activities "functionally related" to
the Bank's business, those losses would reduce the Bank's taxable
income for purposes of the bad debt reserve computation. In
addition, taxable income was reduced by net operating loss
carryforwards of the Bank.

The amount of the addition to the reserve for losses on qualifying
real property loans under the percentage of taxable income method
could not exceed the amount necessary to increase the balance of
the reserve for losses on qualifying real property loans at the
close of the taxable year to 6% of the balance of the qualifying
real property loans outstanding at that time. In addition, the
thrift's aggregate addition to its reserve for losses on qualifying
real property loans could not exceed the greater of (i) the amount
which, when added to the addition to the reserve for losses on
nonqualifying loans, equaled the amount by which 12% of the total
deposits and withdrawable accounts of depositors of the thrift at
the close of the taxable year exceeded the sum of the thrift's
surplus, undivided profits and reserves at the beginning of such
year or (ii) the amount determined under the experience method.

58

To the extent that a qualifying thrift's reserve for losses on
qualifying real property loans exceeded the amount that would have
been allowed under the experience method (the "excess bad debt
reserve"), and if the thrift made distributions to stockholders
that were considered to result in withdrawals from that excess bad
debt reserve, the amounts withdrawn were included in such thrift's
gross income in the year of withdrawal. A dividend distribution
was treated as first out of the thrift's current or accumulated
earnings and profits, as calculated for federal income tax
purposes. Dividend distributions in excess of such thrift's
current or accumulated earnings and profits were considered to be
from the thrift's excess bad debt reserve, to the extent of the
excess bad debt reserve, and thus included in the thrift's taxable
income. The amount considered to be withdrawn by such a
distribution was the amount of the distribution that was deemed to
have been made from the bad debt reserve plus the amount necessary
to pay tax with respect to the withdrawal, so the total amount
included in gross income, when reduced by the income tax
attributable to the inclusion of such amount in gross income, was
equal to the amount of the distribution that was deemed to have
been made from the bad debt reserve. Distributions in redemption
of stock and distributions in partial or complete liquidation of a
thrift were considered to be first out of such thrift's excess bad
debt reserve and then out of the thrift's current or accumulated
earnings and profits.

Bad Debt Reserves - Beginning Fiscal Year 1997

Legislation passed by Congress and signed by the President repealed
the bad debt reserve method of accounting for bad debts by large
thrifts for taxable years beginning after 1995 (year ended June 30,
1997 for the Bank). The legislation requires applicable excess
reserves accumulated after 1987 (year ended June 30, 1988 for the
Bank) be recaptured and restored to income over a six year period
with the first year beginning after 1995 (year ended June 30, 1997
for the Bank), and eliminates recapture of the applicable excess
reserves accumulated prior to 1988 for thrifts converting to bank
charters. The post 1987 recapture may be delayed for a one- or
two-year period if certain residential loan origination
requirements are met. The Bank met the residential loan
origination requirements and delayed the recapture for one year.
The amount of post 1987 recapture for the Bank is estimated at $5
million which would create tax of approximately $2 million, or
$400,000 per year for each of the remaining five years. The $2
million of tax has been accrued by the Bank in previous periods and
would not be reflected in earnings when paid.

Beginning with the year ending June 30, 1997, the Bank is required
to follow the specific charge-off method which only allows a bad
debt deduction equal to actual charge-offs, net of recoveries,
experienced during the fiscal year of the deduction. In a year
where recoveries exceed charge-offs, the Bank would be required to
include the net recoveries in taxable income.

59

Interest Deduction

In the case of a financial institution, such as the Bank, no
deduction is allowed for the pro rata portion of its interest
expense which is allocable to tax-exempt interest on obligations
acquired after August 7, 1986. A limited class of tax-exempt
obligations acquired after August 7, 1986 will not be subject to
this complete disallowance rule. For tax-exempt obligations
acquired after December 31, 1982 and before August 8, 1986 and for
obligations acquired after August 7, 1986 that are not subject to
the complete disallowance rule, 80% of interest incurred to
purchase or carry such obligations will be deductible. No portion
of the interest expense allocable to tax-exempt obligations
acquired by a financial institution before January 1, 1983 which is
otherwise deductible will be disallowed. The interest expense
disallowance rules cited above do not significantly impact the
Bank.

Alternative Minimum Tax

Corporations generally are subject to a 20% corporate alternative
minimum tax ("AMT"). The AMT must be paid by a corporation to the
extent it exceeds that corporation's regular federal income tax
liability. The AMT is imposed on "alternative minimum taxable
income," defined as taxable income with certain adjustments and tax
preference items, less any available exemption. Such adjustments
and items include, but are not limited to, (i) net interest
received on certain tax-exempt bonds issued after August 7, 1986;
and (ii) 75% of the difference between adjusted current earnings
and alternative minimum taxable income, as otherwise determined
with certain adjustments. Net operating loss carryovers may be
utilized, subject to adjustment, to offset up to 90% of the
alternative minimum taxable income, as otherwise determined. A
portion of the AMT paid, if any, may be credited against future
regular federal income tax liability. In addition, for taxable
years beginning after 1986 and before 1996, corporations generally
were also subject to an environmental tax equal to 0.12% of the
excess of the alternative minimum taxable income (computed without
regard to any net operating loss deduction) for a taxable year in
excess of $2 million.

Missouri Taxation

Missouri based thrift institutions, such as the Bank, are subject
to a franchise tax which is imposed on the thrift's net income at
the rate of 7% of the net income. The net income is determined
without regard for any net operating losses. Missouri based thrift
institutions are entitled to a credit against the franchise tax for
all other state or local taxes on thrift institutions, except taxes
on real and tangible personal property owned by the Bank and held
for lease or rental to others, contributions paid pursuant to the
Missouri unemployment compensation law, social security taxes and
sales and use taxes.

60

The Holding Company and its non-financial subsidiaries are subject
to an income tax which is imposed on the corporation's net income
at the rate of 6.25% for fiscal year 1997. The return is filed on
a consolidated basis by all members of the consolidated group
excluding the Bank.

Delaware Taxation

As a Delaware corporation, the Holding Company is required to file
annual returns with and pay annual fees to the State of Delaware.
The Holding Company is also subject to an annual franchise tax
imposed by the State of Delaware based on the number of authorized
shares of Holding Company common stock.

Examinations

The Holding Company and its consolidated subsidiaries have not been
audited recently by the Internal Revenue Service with respect to
consolidated federal income tax returns, and as such, these returns
have been closed without audit through June 30, 1993.

Item 2. Properties.

The following table sets forth certain information concerning the
main office and each branch office of the Company at September 15,
1997. The aggregate net book value of the Company's premises and
equipment was $7.4 million and $6.7 million, respectively, at June
30, 1997 and 1996. See also Note 5 and Note 11 of the Notes to
Consolidated Financial Statements included in the Annual Report to
Stockholders, which portions are incorporated herein by reference.
Substantially all buildings owned are free of encumbrances or
mortgages. In the opinion of Management, the facilities are
adequate and suitable for the needs of the Company.

Owned Lease Expiration
Year or (Including Any
Location Opened Leased Renewal Option)
- ----------------------------------------------------------- ------ ------- -----------------

CORPORATE HEADQUARTERS AND MAIN BANK:

1451 E. Battlefield Springfield, Missouri 1976 Owned N/A

BRANCH BANKS:

430 South Avenue Springfield, Missouri 1983 Owned N/A
Kearney at Kansas Springfield, Missouri 1976 Leased* 2000
2410 N. Glenstone Springfield, Missouri 1977 Leased* 2003

1955 S. Campbell Springfield, Missouri 1979 Leased* 2030
2631 E. Sunshine Springfield, Missouri 1988 Leased* 2017
1580 W. Battlefield Springfield, Missouri 1985 Leased* 2018

61

Owned Lease Expiration
Year or (Including Any
Location Opened Leased Renewal Option)
- ----------------------------------------------------------- ------ ------- -----------------

723 N. Benton Springfield, Missouri 1985 Owned N/A
Highway 14 Nixa, Missouri 1995 Leased* 2019
1505 S. Elliot Aurora, Missouri 1985 Leased 2003

Jefferson & Washington Ava, Missouri 1982 Owned N/A
110 W. Hensley Branson, Missouri 1982 Owned N/A
919 W. Dallas Buffalo, Missouri 1976 Owned N/A

527 Ozark Cabool, Missouri 1989 Leased 2004
400 S. Garrison Carthage, Missouri 1990 Owned N/A
1710 E. 32nd Street Joplin, Missouri 1989 Leased* 2031

Highway 00 and 13 Kimberling City, Missouri 1984 Owned N/A
528 S. Jefferson Lebanon, Missouri 1978 Leased* 2018
714 S. Neosho Boulevard Neosho, Missouri 1991 Owned N/A

Highway 54 Osage Beach, Missouri 1987 Owned N/A
1000 W. Jackson ** Ozark, Missouri 1985 Owned N/A
1701 W. Jackson Ozark, Missouri 1997 Owned N/A
208 South Street Stockton, Missouri 1988 Leased 2005

323 E. Walnut Thayer, Missouri 1978 Leased* 2011
1210 Parkway Shopping Center West Plains, Missouri 1975 Owned N/A
1729 W. Highway 76 Branson, Missouri 1983 Owned N/A

TRAVEL OFFICES:

5000 E. Kearney Springfield, Missouri 1982 Leased 2000
_____________________________
* Building owned with land leased.
** Branch was moved to 1701 W. Jackson. This property is vacant and in the process of being sold.

The Bank maintains depositor and borrower customer files on an on-
line basis, utilizing a telecommunications network, portions of
which are leased. The book value of all data processing and
computer equipment utilized by the Bank at June 30, 1997 was
$597,000 compared to $578,000 at June 30, 1996. Management has a
disaster recovery plan in place with respect to the data processing
system as well as the Bank as a whole.

The Bank maintains a network of Automated Teller Machines ("ATMs").
The Bank utilizes an external service for operation of the ATMs
which also allows access to the various national ATM networks. A
total of 65 ATMs are located at various branches and primarily
convenience stores located throughout southwest and central
Missouri. The book value of all ATMs utilized by the Bank at June
30, 1997 was $689,000 compared to $485,000 at June 30, 1996.

62

Item 3. Legal Proceedings.

The Registrant and its subsidiaries are involved as plaintiff or
defendant in various legal actions arising in the normal course of
their businesses. While the ultimate outcome of the various legal
proceedings involving the Registrant and its subsidiaries cannot be
predicted with certainty, it is the opinion of management, after
consultation with legal counsel, that these legal actions currently
are not material to the Registrant.

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

No matters were submitted to a vote of security holders during the
quarter ended June 30, 1997.

Executive Officers of the Registrant.

Pursuant to General Instruction G(3) of Form 10-K and Instruction 3
to Item 401(b) of Regulation S-K, the following list is included as
an unnumbered item in Part I of this Form 10-K in lieu of being
included in the Registrant's Definitive Proxy Statement, which was
filed on September 18, 1997.

The following information as to the business experience during the
past five years is supplied with respect to executive officers of
the Holding Company and its subsidiaries who are not directors of
the Holding Company and its subsidiaries. There are no
arrangements or understandings between the persons named and any
other person pursuant to which such officers were selected. The
executive officers are elected annually and serve at the discretion
of their respective Boards of Directors with the exception of
Messrs Gibson and Turner who have three year employment contracts
with the Bank.

Don M. Gibson. Mr. Gibson, age 53, is the Vice-Chairman, Chief
Operating Officer, Chief Financial Officer and Secretary of the
Bank and the Executive Vice President, Chief Operating Officer,
Chief Financial Officer and Secretary of the Holding Company. He
has supervisory responsibilities over the Bank's Information
Services, Accounting, Staff and Line Operations areas. Mr. Gibson
has been with the Holding Company since its inception in 1989 and
the Bank since 1975.

Joseph W. Turner. Mr. Turner, age 33, is Executive Vice President
and General Counsel of the Holding Company and President and
General Counsel in the commercial lending area at the Bank. Mr.
Turner joined the Bank in June 1991 and the Holding Company in
1995. Prior to joining the Bank, Mr. Turner was an attorney with
the Kansas City, Missouri law firm of Stinson, Mag and Fizzell.
His practice was primarily in the areas of banking, creditors'
rights and securities regulation. Mr. Turner is the son of Mr.
William V. Turner and the nephew of Mr. Albert F. Turner.

63

Richard L. Wilson. Mr. Wilson, age 39, is Senior Vice President
and Controller of the Bank. He joined the Bank in 1986 and is
responsible for the internal and external financial reporting of
the Holding Company and its subsidiaries. Mr. Wilson is a
Certified Public Accountant.

Vicki L. Bilyeu. Mrs. Bilyeu, age 43, is First Vice President in
the mortgage lending area at the Bank. Mrs. Bilyeu joined the Bank
in December 1992. Prior to joining the Bank, Mrs. Bilyeu was a
lending officer and branch manager with a national mortgage loan
company.

Michael D. Lawson. Mr. Lawson, age 33, is First Vice President in
the commercial lending area at the Bank. Mr. Lawson joined the
Bank in November 1996. Prior to joining the Bank, Mr. Lawson was a
lending officer and branch manager with a competing $1 billion
bank.

Steven G. Mitchem. Mr. Mitchem, age 45, is First Vice President
and Credit Administration Officer of the Bank. He joined the Bank
in 1990 and is responsible for administration of commercial lending
policies and banking regulatory matters. Prior to joining the
Bank, Mr. Mitchem was a Senior Bank Examiner for the Federal
Deposit Insurance Corporation.

PART II

Responses incorporated by reference into the items under Part II of
this Form 10-K are done so pursuant to Rule 12b-23 and General
Instruction G(2) for Form 10-K.

Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters.

Market Information. The Holding Company's Common Stock is listed
on the National Market System of the National Association of
Securities Dealers Automated Quotations ("NASDAQ") System under the
symbol "GSBC." The following table sets forth the range of high
and low bid prices of the Holding Company's Common Stock during
each fiscal quarter for fiscal years 1997 and 1996, as reported by
the NASD. These quotations represent bid prices between dealers
and do not include retail mark-up, mark-down, or commissions and do
not necessarily represent actual transactions.

Dividend
High Low Declarations
Fiscal Year 1997
First Quarter $15 1/2 $13 1/8 $.0875
Second Quarter 18 14 1/2 .10
Third Quarter 18 1/4 17 .10
Fourth Quarter 18 16 1/8 .10

Fiscal Year 1996
First Quarter $11 1/4 $ 9 1/4 $.0875
Second Quarter 12 3/8 10 5/8 .0875
Third Quarter 12 11/16 11 5/8 .0875
Fourth Quarter 13 3/4 12 .0875
64

The last inter-dealer bid for the Holding Company's Common Stock on
June 30, 1997 was $16 1/4.

Holders. For a discussion of the holders of the Registrant's
Common Stock and dividends on such stock, see the discussion under
the headings "Corporate Profile" and "Stock Information" of the
Annual Report to Stockholders, which portions are incorporated
herein by reference.

Item 6. Selected Financial Data.

The following selected financial data should be read in
conjunction with the Company's consolidated financial statements,
the notes thereto and the accompanying independent accountant's
opinion included in the Company's Annual Report to Stockholders,
which portions are incorporated herein by reference, and the
following information is qualified by reference thereto.

Year Ended June 30,
----------------------------------------------------------
1997 1996 1995 1994 1993 1992
-------- -------- -------- -------- -------- --------
(Dollars in thousands, except per share data)

Summary Statement of Condition Information:
Year-end assets $707,841 $668,105 $622,380 $534,740 $515,293 $470,672
Year-end loans receivable, net 583,709 546,759 519,255 443,750 419,527 352,016
Year-end allowance for loan losses 15,524 14,356 14,601 13,636 10,590 6,029
Year-end available-for-sale securities 7,408 4,656 3,091 -- -- --
Year-end held-to-maturity securities 49,757 49,182 46,970 48,217 51,218 61,915
Year-end foreclosed assets held for sale, net 5,651 9,862 7,999 6,070 8,909 12,386
Year-end allowance for foreclosed asset losses 319 1,086 933 1,549 1,192 1,117
Year-end intangibles -- 1,102 1,187 1,272 1,356 1,441
Year-end deposits 459,236 397,055 384,327 358,987 326,611 350,346
Year-end total borrowings 180,625 197,265 168,270 108,587 130,253 64,994
Year-end stockholders' equity (retained
earnings substantially restricted) 60,348 67,808 62,982 61,462 51,723 49,879
Average loans receivable, net 561,146 536,695 486,726 433,638 376,620 340,365
Average total assets 670,172 643,885 584,536 527,842 479,261 465,107
Average deposits 416,041 385,734 374,011 340,933 327,647 347,511
Average stockholders' equity 62,200 65,355 60,942 57,758 50,618 49,614
Year-end number of deposit accounts 69,762 60,649 59,461 58,054 53,960 53,251
Year-end number of full-service offices 25 25 25 25 25 27

Summary Income Statement Information:
Interest income $55,540 $53,938 $47,110 $ 38,988 $ 37,162 $ 39,023
Interest expense 28,822 28,132 23,411 17,433 16,810 22,136
Net interest income 26,718 25,806 23,699 21,555 20,352 16,887
Provision for loan losses 1,706 1,451 1,319 3,023 4,677 2,857
Net interest income after provision for loan losses 25,012 24,355 22,380 18,532 15,675 14,030
Service charge fees 2,785 2,382 2,273 2,131 1,762 1,623
Net realized gains on sales of
available-for-sale securities 205 680 21 -- -- --
Net realized gains on sales of loans 522 540 92 565 387 295
Income (expense) on foreclosed assets 286 728 (243) 588 352 (1,068)
Other non-interest income 6,645 5,994 5,771 5,565 4,692 4,282
Non-interest expenses 20,363 16,274 15,293 14,661 13,599 12,826
Income before income taxes 15,091 18,405 15,001 12,720 9,269 6,336
Provision for income taxes 5,751 7,111 5,513 4,379 4,533 2,544
Income before change in accounting principle 9,340 11,294 9,488 8,341 4,736 3,792
Change in accounting principle -- -- -- 3,375 -- --
Net income $ 9,340 $11,294 $ 9,488 $ 11,716 $ 4,736 $ 3,792

65
Year Ended June 30,
---------------------------------------------------------
1997 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- -------
Per Common Share Data:
Primary earnings per common share:
Income before change in accounting principle $1.10 $1.23 $1.00 $ .83 $.46 $.34
Change in accounting principle -- -- -- .34 -- --
Net Income 1.10 1.23 1.00 1.17 .46 .34
Fully diluted earnings per common share:
Income before change in accounting principle 1.10 1.23 1.00 .83 .46 .34
Change in accounting principle -- -- -- .67 -- --
Net Income 1.10 1.23 1.00 1.17 .46 .34
Cash dividends declared .39 .35 .30 .15 .07 .07
Book value 7.45 7.70 7.00 6.42 5.41 4.93
Average shares outstanding 8,394 8,926 9,162 9,648 9,798 11,100
Year-end actual shares outstanding 8,105 8,812 9,006 9,570 9,558 10,110
Year-end fully diluted shares outstanding 8,488 9,218 9,478 10,056 10,254 11,100

Earnings Performance Ratios:
Return on average assets 1.39% 1.75% 1.62% 1.58% 0.99% 0.82%
Return on average stockholders' equity 15.02 17.28 15.57 14.44 9.37 7.64
Non-interest expense to average total assets 3.04 2.53 2.62 2.78 2.77 2.99
Average interest rate spread 3.79 3.82 3.86 4.05 4.20 3.55
Year-end interest rate spread 3.90 3.72 3.79 3.87 3.71 3.60
Net interest margin (1) 4.17 4.21 4.25 4.31 4.51 3.87
Adjusted efficiency ratio (excl. foreclosed assets) 55.2 45.97 48.01 49.17 50.01 55.56
Average interest-earning assets as a percentage
of average interest-bearing liabilities 108.5 108.4 109.3 107.4 108.3 107.5

Year Ended June 30,
---------------------------------------------------------
1997 1996 1995 1994 1993 1992
------- ------- ------- ------- ------- -------

Asset Quality Ratios:
Allowance for loan losses/year-end loans 2.66% 2.63% 2.81% 3.08% 2.52% 1.71%
Non-performing assets/year-end
loans and foreclosed assets 2.30 2.83 2.25 3.33 3.40 4.64
Allowance for loan losses/non-performing loans 197.01 243.03 380.23 186.04 237.50 130.89
Net charge-offs/average loans .10 .32 .07 (0.01) 0.03 0.46
Non-performing assets/average total assets 2.02 2.45 2.18 2.83 3.04 3.89

Capital Ratios:
Average stockholders' equity to average assets 9.28% 10.15% 10.43% 10.94% 10.56% 10.67%
Year-end tangible stockholders' equity to assets 8.53 10.09 9.93 11.26 9.77 10.28
Common dividend pay-out ratio 35.2 28.6 30.0 13.9 13.0 17.6

(1) For further discussion, refer to Management's Discussion and Analysis of Financial Condition and Results of
Operations-Average Balances, Interest Rates and Yields in the Annual Report to Stockholders, which portions are
incorporated herein by reference.

Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operation.

See "Management's Discussion and Analysis of Financial Condition
and Results of Operation" in the Annual Report to Stockholders,
which portions are incorporated herein by reference.

Item 8. Financial Statements and Supplementary Information.

The financial statements and supplementary data required by this
Item are set forth in the Annual Report to Stockholders, which
portions are incorporated herein by reference. All financial
statement schedules should be read in conjunction with the
financial statements the notes thereto and the related report of
the Company's independent accountants in the Annual Report and are
qualified by reference thereto.
66

Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure.

None.

PART III

Responses incorporated by reference into the items under Part III
of this Form 10-K are done so pursuant to Rule 12b-23 and General
Instruction G(3) to Form 10-K. The Registrant's Definitive Proxy
Statement was electronically filed on September 18, 1997.

Item 10. Directors and Executive Officers of the Registrant.

(a) Directors of the Registrant

See "Election of Directors" in the Registrant's Definitive
Proxy Statement for fiscal year 1997, which portion is
incorporated herein by reference.

(b) Executive Officers of the Registrant

Included under Part I of this Form 10-K.

(c) Compliance with Section 16(a) of the Exchange Act

See "Beneficial Ownership Reports of Management" in the
Registrant's Definitive Proxy Statement for the fiscal year
1997, which portion is incorporated herein by reference.

Item 11. Executive Compensation.

See "Executive Compensation" in the Registrant's Definitive Proxy
Statement, which portion is incorporated herein by reference except
for the "Report on Executive Compensation" and the "Stock
Performance Graph."

Item 12. Security Ownership of Certain Beneficial Owners and
Management.

(a) See "Voting" in the Registrant's Definitive Proxy Statement,
which portion is incorporated herein by reference.

(b) See "Stock Ownership of Management" in the Registrant's
Definitive Proxy Statement, which portion is incorporated
herein by reference.

Item 13. Certain Relationships and Related Transactions.

See "Indebtedness of Management and Transactions with Certain
Related Persons" in the Registrant's Definitive Proxy Statement,
which portion is incorporated herein by reference.

67

PART IV

Item 14. Exhibits, Financial Statement Schedules, and Reports on
Form 8-K.

(a) List of Documents Filed as Part of This Report

(1) Financial Statements

The financial statements and related notes, together with the
report of Baird, Kurtz and Dobson dated August 8, 1997, which
appears on pages 25 through 39 of the Registrant's Annual
Report to Stockholders, which portion is incorporated herein by
reference.

(2) Financial Statement Schedules

The financial statement schedules are included in the
Annual Report to Stockholders, which portions are incorporated
herein by reference into Item 8 of Part II of this Form 10-K.

All financial statement schedules should be read in conjunction
with the financial statements the notes thereto and the related
report of the Company's independent accountants in the Annual
Report to Stockholders and are qualified by reference thereto.
Schedules and exhibits for which provision is made in the
applicable accounting regulations of the Securities and
Exchange Commission not included with these financial statement
schedules have been omitted because they were not applicable,
significant or the required information is shown in the
financial statements or note thereto.

(3) List of Exhibits

Exhibits incorporated by reference below are incorporated by
reference pursuant to Rule 12b-32.

(2) Plan of acquisition, reorganization, arrangement,
liquidation, or succession

Inapplicable.

(3) Articles of incorporation and Bylaws

(i) The Registrant's Certificate of Incorporation
previously filed with the Commission (File no. 33-
30597) as Exhibit 3.1 to the Registrant's Registration
Statement on Form S-1 dated August 18,1989, is
incorporated herein by reference as Exhibit 3.1.

(ii) The Registrant's Certificate of Amendment of
Certificate of Incorporation is attached hereto as
Exhibit 3.2.

68
(iii) The Registrant's Bylaws, as amended, previously
filed with the Commission (File no. 33-30597) as
Exhibit 3.2 to the Registrant's Annual Report on Form
10-K for fiscal year ended June 30, 1990, is
incorporated herein by reference as Exhibit 3.3.

(4) Instruments defining the rights of security holders,
including indentures

Inapplicable.

(9) Voting trust agreement

Inapplicable.

(10) Material contracts

The Registrant's 1989 Stock Option and Incentive Plan
previously filed with the Commission (File no. 33-
30597) as Exhibit 10.2 to the Registrant's Annual
Report on Form 10-K for the fiscal year ended June 30,
1990, is incorporated herein by reference as Exhibit
10.1.

An Employment Agreement dated February 1, 1990 between
the Registrant and William V. Turner previously filed
with the Commission (File no. 33-30597) as Exhibit 10.3
to the Registrant's Registration Statement on Form S-1
dated August 18, 1989, is incorporated herein by
reference as Exhibit 10.2.

An Employment Agreement dated February 1, 1990 between
the Registrant and Don M. Gibson previously filed with
the Commission (File no. 33-30597) as Exhibit 10.3 to
the Registrant's Registration Statement on Form S-1
dated August 18, 1989, is incorporated herein by
reference as Exhibit 10.3.

An Employment Agreement dated July 1, 1993 between the
Registrant and Joseph W. Turner previously filed with
the Commission (File no. 33-30597) as Exhibit 10.4 to
the Registrant's Annual Report on Form 10-K for the
fiscal year ended June 30, 1994, is incorporated herein
by reference as Exhibit 10.4.

The Registrant's 1997 Stock Option and Incentive Plan
previously filed with the Commission (File no. 33-
30597) as Annex A to the Registrant's Definitive Proxy
Statement for the fiscal year ended June 30, 1997, is
incorporated herein by reference as Exhibit 10.5.

(11) Statement re computation of per share earnings

The Statement re computation of per share earnings is
attached hereto as exhibit 11.

(12) Statements re computation of ratios

Inapplicable.
69

(13) Annual report to security holders, Form 10-Q or quarterly
report to security holders

The Annual Report to Stockholders was filed
electronically on September 19, 1997.

(16) Letter re change in certifying accountant

Inapplicable.

(18) Letter re change in accounting principles

Inapplicable.

(21) Subsidiaries of the registrant

A listing of the Registrant's subsidiaries is attached
hereto as Exhibit 21.

(22) Published report regarding matters submitted to vote of
security holders

Inapplicable.

(23) Consents of experts and counsel

The consent of Baird, Kurtz & Dobson to the
incorporation by reference into the Form S-8 previously
filed on December 16, 1992 with the Commission (File
no. 33-55832) of their report on the financial
statements included in this Form 10-K, is attached
hereto as Exhibit 23.

(24) Power of attorney

Inapplicable.

(27) Financial Data Schedule

Inapplicable.

(28) Information from reports furnished to state insurance
regulatory authorities

Inapplicable.

(99) Additional Exhibits

Inapplicable.

(b) Reports on Form 8-K

None.

70

SIGNATURES

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

GREAT SOUTHERN BANCORP, INC.
(Registrant)

By /s/ William V. Turner
William V. Turner
President and Chairman of the Board
(Principal Executive Officer)

Date: September 17, 1997

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

Signature Capacity in which signed Date
- --------------------- ------------------------- ------------------
/s/ William V. Turner President, Chairman of September 17, 1997
the Board and Director
(Principal Executive
Officer)

/s/Don M. Gibson Executive Vice President, September 17, 1997
Secretary and Treasurer
(Principal Financial
Officer and Principal
Accounting Officer)

/s/ William E. Barclay Director September 17, 1997

/s/ Larry D. Frazier Director September 17, 1997

/s/ William K. Powell Director September 17, 1997

/s/ Albert F. Turner Director September 17, 1997

71

Great Southern Bancorp, Inc.
Index to Exhibits
Exhibit
No. Document Page No.
- --------- -------------------------------------------- ----------
3.2 Certificate of Amendment of
Certificate of Incorporation 72
11 Statement Re Computation of Earnings Per Share . . 73
21 Subsidiaries of the Registrant . . . . . . . . . . 74
23 Consent of Baird, Kurtz & Dobson,
Certified Public Accountants . . . . . . . . . . 75
27 Financial Data Schedule, which is submitted
electronically to the Securities and Exchange
Commission for information only and not filed. . 76

72
Certificate of Amendment
of
Certificate of Incorporation
of
Great Southern Bancorp, Inc.
* * * * * *
Great Southern Bancorp, Inc., a corporation organized and
existing under and by virtue of the General Corporation Law of the
State of Delaware, DOES HEREBY CERTIFY:

FIRST: that at a meeting of the board of directors of Great
Southern Bancorp, Inc. resolutions were duly adopted setting forth
a proposed amendment to the Certificate of Incorporation of said
corporation, declaring said amendment to be advisable and calling a
meeting of the stockholders of said corporation for consideration
thereof. The resolution setting forth the proposed amendment is as
follows:

RESOLVED. That the Certificate of Incorporation of this
corporation be amended by changing the FOURTH Article thereof
so that as amended said Article shall be and read as follows:

FOURTH:
A. The total number of shares of all classes of stock
which the Corporation shall have authority to issue is
Twenty-One Million (21,000,000) consisting of:
(a) One Million (1,000,000) shares of Preferred
Stock, par value one cent ($.01) per share
(the "Preferred Stock"); and
(b) Twenty Million (20,000,000) shares of Common
Stock, par value one cent ($.01) per share
(the "Common Stock").

SECOND: That thereafter, pursuant to resolution of its Board of
Directors, an annual meeting of the stockholders of said
corporation was duly called and held, upon notice in accordance
with Section 222 of the General Corporation Law of the State of
Delaware at which meeting the necessary number of shares as
required by statue were voted in favor of the amendment.

THIRD: That said amendment was duly adopted in accordance with
the provisions of Section 242 of the General Corporation Law of the
State of Delaware.

IN WITNESS WHEREOF, said Great Southern Bancorp, Inc. has caused
this certificate to be signed by William V. Turner, its President,
this 16th day of October 1996.

Place
CORPORATE SEAL
Here Great Southern Bancorp, Inc.
(If no seal, state "None,")
/s/ William V. Turner
----------------------------
ATTEST: William V. Turner, President

/s/Don M. Gibson
- -----------------------------
,Secretary
73

Exhibit 11
----------
Statement Re Computation of Earnings Per Share

Year Ended June 30,
-----------------------
1997 1996
---------- ----------
Primary:
Average shares outstanding 8,394,080 8,926,192
Net effect of dilutive stock options -
based on the treasury stock method
using average market price 93,682 269,412
--------- ---------
Primary Shares 8,487,762 9,195,604
========= =========
Net income $ 9,339,865 $11,293,955
========== =========
Per share amount $1.10 $1.23
==== ====

Fully diluted:
Average shares outstanding 8,394,080 8,926,192
Net effect of dilutive stock options -
based on the treasury stock method
using the higher of average market
price or period end market price 93,682 291,958
--------- ---------
Fully diluted shares 8,487,762 9,218,150
========= =========
Net income $ 9,339,865 $11,293,955
========== =========
Per share amount $1.10 $1.23
==== ====

74

Exhibit 21
----------

SUBSIDIARIES OF THE REGISTRANT

State of
Percentage Incorporation
of or
Parent Subsidiary Ownership Organization
- ---------------- ---------------------- ---------- -------------
Great Southern Great Southern Bank 100% Missouri
Bancorp, Inc.

Great Southern Great Southern 100% Missouri
Bancorp, Inc. Financial Corporation

Great Southern Great Southern Capital 100% Missouri
Bancorp, Inc. Management, Inc.

Great Southern Appraisal Services, Inc. 100% Missouri
Financial
Corporation

75

We consent to the incorporation by reference in Registration
Statement No. 33-55832 on Form S-8 dated December 16, 1992, of our
report on the consolidated financial statements and schedules
included in the Annual Report on Form 10-K of GREAT SOUTHERN
BANCORP, INC. for the year ended June 30, 1997.

/s/ Baird, Kurtz & Dobson

August 8, 1997
Springfield, Missouri