FORM 10-Q

/X/ Quarterly Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934

For the Quarterly Period ended June 30, 2002

GREAT SOUTHERN BANCORP, INC.
(Exact name of registrant as specified in its charter)

DELAWARE
(State or other 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)

       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.

       The number of shares outstanding of each of the registrant's classes of common stock: 6,863,357 shares of common stock, par value $.01, outstanding at August 12, 2002.

PART I FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS.

NOTE 1: BASIS OF PRESENTATION

       The accompanying unaudited interim consolidated financial statements of Great Southern Bancorp, Inc. (the "Company") have been prepared in accordance with generally accepted accounting principles for interim financial information and with the instructions to Form 10-Q and Rule 10-01 of Regulation S-X. The financial statements presented herein reflect all adjustments which are, in the opinion of management, necessary to fairly present the financial position, results of operations and cash flows of the Company for the periods presented. Those adjustments consist only of normal recurring adjustments. Operating results for the six months ended June 30, 2002 and 2001 are not necessarily indicative of the results that may be expected for the full year. The consolidated statement of financial condition of the Company as of December 31, 2001, has been derived from the audited consolidated statement of financial condition of the Company as of that date.

       Certain information and note disclosures normally included in the Company's annual financial statements prepared in accordance with generally accepted accounting principles have been condensed or omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes thereto included in the Company's Annual Report on Form 10-K for 2001 filed with the Securities and Exchange Commission.

NOTE 2: OPERATING SEGMENTS

       The Company's banking operation is its only reportable segment. The banking operation segment is principally engaged in the business of originating residential and commercial real estate loans, commercial business loans and consumer loans. These loans are funded through the attraction of deposits from the general public, brokered deposit originations, and borrowings from the Federal Home Loan Bank ("FHLBank") and others. The operating results of this segment are regularly reviewed by management to make decisions about resource allocations and to assess performance.

       The following table provides information about segment profits and has been prepared using the same accounting policies as those described in Note 1. There are no material inter-segment revenues, thus no reconciliations to amounts reported in the consolidated financial statements are necessary. Revenue from segments below the reportable segment threshold is attributable to three operating segments of the Company. These segments include an insurance agency, a travel agency, and discount brokerage services.

NOTE 3: COMPREHENSIVE INCOME

       Statement of Financial Accounting Standards No. 130, Reporting Comprehensive Income, requires the reporting of comprehensive income and its components. Comprehensive income is defined as the change in equity from transactions and other events and circumstances from non-owner sources, and excludes investments by and distributions to owners. Comprehensive income includes net income and other items of comprehensive income meeting the above criteria. The Company's only component of other comprehensive income is the unrealized gains and losses on available-for-sale securities.

NOTE 4: CHANGES IN ACCOUNTING PRINCIPLES

       The Company has adopted Statement of Financial Accounting Standards ("SFAS") 142, Goodwill and Other Intangible Assets. This Statement establishes new financial accounting and reporting standards for acquired goodwill and other intangible assets. The Statement addresses how intangible assets that are acquired individually or with a group of other assets (but not those acquired in a business combination) should be accounted for in financial statements upon their acquisition. It also addresses how goodwill and other intangible assets (including those acquired in a business combination) should be accounted for after they have been initially recognized in the financial statements. Initial adoption of SFAS 142 had no effect on the Company's financial statements.

       The Company has adopted SFAS 144, Accounting for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed Of. This Statement addresses how and when to measure impairment on long-lived assets and how to account for long-lived assets that an entity plans to dispose of either through sale, abandonment, exchange or distribution to owners. The Statement also requires expected future operating losses from discontinued operations to be recorded in the period in which the losses are incurred rather than at the measurement date. Initial adoption of SFAS 144 had no effect on the Company's financial statements.

Forward-Looking Statements

       When used in this Form 10-Q and in future filings by the Company with the Securities and Exchange Commission (the "SEC"), in the Company's press releases or other public or shareholder communications, and in oral statements made with the approval of an authorized executive officer, the words or phrases "will likely result," "are expected to," "will continue," "is anticipated," "estimate," "project" or similar expressions are intended to identify "forward-looking statements" within the meaning of the Private Securities Litigation Reform Act of 1995. Such statements are subject to certain risks and uncertainties, including, among other things, changes in economic conditions in the Company's market area, changes in policies by regulatory agencies, fluctuations in interest rates, demand for loans and deposits in the Company's market area and competition, that could cause actual results to differ materially from historical earnings and those presently anticipated or projected. The Company wishes to advise readers that the factors listed above could affect the Company's financial performance and could cause the Company's actual results for future periods to differ materially from any opinions or statements expressed with respect to future periods in any current statements.

       The Company does not undertake-and specifically disclaims any obligation- to publicly release the result of any revisions which may be made to any forward-looking statements to reflect events or circumstances after the date of such statements or to reflect the occurrence of anticipated or unanticipated events.

Critical Accounting Policies, Judgments and Estimates

        The accounting and reporting policies of the Company conform with accounting principles generally accepted in the United States and general practices within the financial services industry. The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the amounts reported in the financial statements and the accompanying notes. Actual results could differ from those estimates.

        The Company considers that the determination of the allowance for loan losses involves a higher degree of judgment and complexity than its other significant accounting policies. The allowance for loan losses is calculated with the objective of maintaining an allowance level believed by management to be sufficient to absorb estimated loan losses. Management's determination of the adequacy of the allowance is based on periodic evaluations of the loan portfolio and other relevant factors. However, this evaluation is inherently subjective as it requires material estimates, including, among other, expected default probabilities, loss given default, expected commitment usage, the amounts and timing of expected future cash flows on impaired loans, value of collateral, estimated losses, and general amounts for historical loss experience. The process also considers economic conditions, uncertainties in estimating losses and inherent risks in the loan portfolio. All of these factors may be susceptible to significant change. To the extent actual outcomes differ from management estimates, additional provisions for loan losses may be required that would adversely impact earnings in future periods.

General

        The following should be read in conjunction with Management's Discussion and Analysis in the Company's December 31, 2001 Form 10-K.

        The profitability of the Company, and more specifically, the profitability of its primary subsidiary, Great Southern Bank (the "Bank"), depends primarily on its net interest income. Net interest income is the difference between the interest income the Company earns on its loans and investment portfolio, and the interest it pays on interest-bearing liabilities, which consists mainly of interest paid on deposits and borrowings. Net interest income is affected by the relative amounts of interest-earning assets and interest-bearing liabilities and the interest rates earned or paid on these balances. When interest-earning assets approximate or exceed interest-bearing liabilities, any positive interest rate spread will generate net interest income.

        The Company's profitability is also affected by the level of its non-interest income and non-interest expense. Non-interest income consists primarily of net realized gains on sales of loans and available-for-sale securities, service charges and ATM fees, commissions earned by non-bank subsidiaries and other general operating income. Non-interest expense consists primarily of salaries and employee benefits, net occupancy and equipment expenses, postage, insurance, advertising, office supplies and printing and other general operating expenses.

        The operations of the Bank, and banking institutions in general, are significantly influenced by general economic conditions and related monetary and fiscal policies of regulatory agencies. Deposit flows and the cost of deposits and borrowings are influenced by interest rates on competing investments and general market rates of interest. Lending activities are affected by the demand for financing real estate and other types of loans, which in turn are affected by the interest rates at which such financing may be offered and other factors affecting loan demand and the availability of funds.

Effect of Federal Laws and Regulations

        Federal legislation and regulation significantly affect the banking operations of the Company and the Bank, and have increased competition among commercial banks, savings institutions, mortgage banking enterprises and other financial institutions. In particular, the capital requirements and operations of regulated depository institutions such as the Company and the Bank have been and will be subject to changes in applicable statutes and regulations from time to time, which changes could, under certain circumstances, adversely affect the Company or the Bank.

Asset and Liability Management and Interest Rate Risk

        A principal operating objective of the Company is to produce stable earnings by achieving a favorable interest rate spread that can be sustained during fluctuations in prevailing interest rates. The Company has sought to reduce its exposure to adverse changes in interest rates by attempting to achieve a closer match between the periods in which its interest-bearing liabilities and interest-earning assets can be expected to reprice through the origination of adjustable-rate mortgages and loans with shorter terms to maturity, the purchase of other shorter term interest-earning assets and the use of interest rate swap agreements as hedges.

        The rates of interest the Bank earns on assets and pays on liabilities generally are established contractually for a period of time. Market interest rates change over time. Accordingly, the Company's results of operations, like those of other financial institutions, are impacted by changes in interest rates and the interest rate sensitivity of the Company's assets and liabilities. The risk associated with changes in interest rates and the Company's ability to adapt to these changes is known as interest rate risk and is the Company's most significant market risk.

        The term "interest rate sensitivity" refers to those assets and liabilities that mature within a stated period or reprice within that period in response to fluctuations in market rates and yields. As noted above, one of the principal goals of the Company's asset/liability program is to maintain and match the interest rate sensitivity characteristics of the asset and liability portfolios.

        In order to properly manage interest rate risk, the Bank's Board of Directors has established an Asset/Liability Management Committee ("ALCO") made up of members of management to monitor the difference between the Bank's maturing and repricing assets and liabilities and to develop and implement strategies to manage the "gap" between the two. The primary responsibilities of the committee are to assess the Bank's asset/liability mix, recommend strategies to the Board that will enhance income while managing the Bank's vulnerability to changes in interest rates and report to the Board the results of the strategies used. At times, depending on the level of general interest rates, the relationship between long- and short-term interest rates, market conditions and competitive factors, the ALCO may determine to increase the Bank's interest rate risk position in order to maintain its net interest margin. The Company's experience with interest rates is discussed in more detail under the heading "Results of Operations and Comparison of the Three and Six Months Ended June 30, 2002 and 2001."

        An important element of both earnings performance and liquidity is the management of interest rate sensitivity. Interest rate sensitivity reflects the potential effect on net interest income of a movement in interest rates. The difference between the Bank's interest-sensitive assets and interest-sensitive liabilities for a specified time frame is referred to as "gap." A financial institution is considered to be asset-sensitive, or have a positive gap, when the amount of its earning assets maturing or repricing within a given time period exceeds the amount of its interest-bearing liabilities also maturing or repricing within that time period. Conversely, a financial institution is considered to be liability-sensitive, or have a negative gap, when the amount of its interest-bearing liabilities maturing or repricing within a given period exceeds the amount of earning assets also maturing or repricing within that time period. During a period of rising interest rates, a positive gap would tend to increase net interest income, while a negative gap would tend to have an adverse effect on net interest income. During a period of falling interest rates, a positive gap would tend to have an adverse effect on net interest income, while a negative gap would tend to increase net interest income. At June 30, 2002, the Bank maintained a one-year gap position that was slightly positive.

       The Bank, through the ALCO, evaluates interest sensitivity risk and then formulates guidelines regarding asset generation, funding sources and the pricing of each, and off-balance sheet commitments in order to decrease sensitivity risk. These guidelines are based upon management's outlook regarding future interest rate movements, the state of the regional and national economy and other financial and business risk factors. The Bank uses a static gap model and a computer simulation to measure the effect on net interest income of various interest rate scenarios over selected time periods. The Bank's gap can be managed by repricing assets or liabilities, selling available-for-sale investments, replacing an asset or liability prior to maturity or adjusting the interest rate during the life of an asset or liability. Matching the amount of assets and liabilities repricing during the same time interval helps to reduce the risk and minimize the impact on net interest income in periods of rising or falling interest rates.

        As a part of its asset and liability management strategy, the Bank has, throughout the past several years, increased its investment in loans which are interest rate sensitive by emphasizing the origination of adjustable-rate, one- to four-family residential loans and adjustable-rate or relatively short-term commercial real estate, commercial business and consumer loans, and originating fixed-rate, one- to four-family residential loans primarily for immediate resale in the secondary market. Approximately 45% of total assets are currently invested in commercial real estate, construction, and commercial business loans. This part of the strategy was designed to improve asset yield and fee income, to shorten the average maturity and increase the interest rate sensitivity of the loan portfolio. While efforts to date have contributed to the changes in the one-year interest rate sensitivity gap and increased net interest income, such lending has increased the Bank's risk levels, and has resulted in an increase in the level of non-performing assets. Management continually evaluates existing and potential commercial real estate and commercial business loans, in order to try to reduce undesirable risks including concentrations in a given geographic area or a particular loan category.

        In addition, the Company uses interest rate swaps to manage its interest rate risks from recorded financial liabilities. These instruments are utilized when they can be demonstrated to effectively hedge a designated liability and such liability exposes the Company to interest rate risk. The Company's experience with interest rate swaps is discussed in more detail under the heading "Item III. Quantitative and Qualitative Disclosures About Market Risk."

        Interest rate risk exposure estimates (the sensitivity gap) are not exact measures of an institution's actual interest rate risk. They are only indicators of interest rate risk exposure produced in a simplified modeling environment designed to allow management to gauge the Bank's sensitivity to changes in interest rates. The estimates do not necessarily indicate the impact of general interest rate movements on the Bank's net interest income because the repricing of certain categories of assets and liabilities is subject to competitive and other factors beyond the Bank's control. As a result, certain assets and liabilities indicated as maturing or otherwise repricing within a stated period may in fact mature or reprice at different times and in different amounts and would therefore cause a change (which potentially could be material) in the Bank's interest rate risk.

COMPARISON OF FINANCIAL CONDITION AT JUNE 30, 2002 AND DECEMBER 31, 2001

        During the six months ended June 30, 2002, total assets increased by $33.6 million to $1.36 billion. Cash and interest-bearing deposits increased $20.0 million, held-to-maturity securities increased $9.8 million, net loans receivable increased $18.0 million, foreclosed assets increased $1.2 million, and premises and equipment increased $2.0 million, partially offset by a decrease in available-for-sale securities of $13.7 million, a decrease in mortgage loans held for sale of $6.1 million, and a decrease in interest receivable of $1.0 million. In addition, other assets increased $3.2 million, primarily as a result of recording the change in mark-to-market value of the Company's interest rate swaps. Based upon the terms of these swap agreements, in accordance with generally accepted accounting principles, the Company records changes in the market value of its interest rate swaps in the category "other assets," with a corresponding increase or decrease to the liability being hedged. The increase in interest-bearing deposits was primarily related to the decrease in available-for-sale securities as certain of the Company's securities were called shortly before June 30, 2002.

        Total liabilities increased $24.9 million to $1.26 billion. Deposits increased $85.8 million, partially offset by a decrease in short-term borrowings of $32.8 million and a decrease in Federal Home Loan Bank ("FHLBank") advances of $26.9 million. Deposits increased in all categories. Retail certificates of deposit increased $37.3 million, to $344 million. Total brokered deposits were $365 million at June 30, 2002, up from $359 million at December 31, 2001. The weighted average cost of these deposits was approximately 171 basis points higher than the retail certificate of deposit portfolio, excluding the effect of the Company's interest rate swaps on a portion of these brokered certificates of deposit. The interest rate swaps reduce the weighted average cost of the brokered certificate of deposit portfolio to a rate that is approximately 136 basis points lower than the retail certificate of deposit portfolio. Interest-bearing checking balances accounted for $23.5 million of the increase in deposits. Non-interest-bearing checking balances increased $18.6 million. Checking and savings account balances totalled $263 million at June 30, 2002. The decrease in short-term borrowings was primarily the result of repayment of federal funds purchased. Certain FHLBank advances were also reduced as a result of the additional deposit account balances. Management continues to feel that FHLBank advances and brokered deposits are viable alternatives to retail deposits when factoring in all the costs associated with the generation and maintenance of additional retail deposits.

        Stockholders' equity increased $8.7 million primarily as a result of net income of $11.9 million, partially offset by dividend declarations of $2.8 million and net stock repurchases of $463,000. The Company repurchased 28,893 shares of common stock at an average price of $33.77 per share during the six months ended June 30, 2002 and reissued 24,450 shares of treasury stock at an average price of $17.69 per share to cover stock option exercises.

RESULTS OF OPERATIONS AND COMPARISON OF THE THREE AND SIX MONTHS ENDED JUNE 30, 2002 AND 2001

        The increase in net income of $2.0 million, or 44.2%, for the three months ended June 30, 2002 compared to the same period in 2001, was primarily due to an increase in net interest income of $2.8 million, or 29.2%, and an increase in non-interest income of $1.6 million, or 34.1%. These were partially offset by an increase in provision for income taxes of $1.2 million, or 47.7%, an increase in non-interest expense of $688,000, or 10.7%, and an increase in provision for loan losses of $600,000, or 57.1%, during the three month period.

        The increase in net income of $2.7 million, or 28.9%, for the six months ended June 30, 2002 compared to the same period in 2001, was primarily due to an increase in net interest income of $3.2 million, or 15.5%, and an increase in non-interest income of $1.7 million, or 19.1%. These were partially offset by an increase in provision for income taxes of $1.4 million, or 27.7%, an increase in non-interest expense of $627,000, or 4.8%, and an increase in provision for loan losses of $300,000, or 11.1%, during the six month period.

Total Interest Income

        Total interest income decreased $1.9 million, or 8.8%, during the three months ended June 30, 2002, when compared to the three months ended June 30, 2001. The decrease was due to a $3.2 million, or 16.9%, decrease in interest income on loans as a result of lower average rates, partially offset by higher average balances. This decrease was partially offset by a $1.3 million, or 41.7%, increase in interest income on investment securities and other interest-earning assets. Interest income on investment securities and other interest-earning assets increased due to higher average balances.

        Total interest income decreased $7.0 million, or 14.9%, during the six months ended June 30, 2002, when compared to the six months ended June 30, 2001. The decrease was due to a $8.9 million, or 22.1%, decrease in interest income on loans as a result of lower average rates, partially offset by higher average balances. This decrease was partially offset by a $1.9 million, or 29.7%, increase in interest income on investment securities and other interest-earning assets. Interest income on investment securities and other interest-earning assets increased due to higher average balances.

        While there were no significant unusual items impacting interest income in the six months ended June 30, 2002, the following items did have a positive effect on interest income during the six months ended June 30, 2001:

• Interest income was positively impacted by a recovery of $420,000 of interest on a commercial real estate loan that was charged off in a prior year.
  
  
• Interest income was positively impacted by a recovery of $280,000 of interest on a loan relationship that was removed from non-performing status.
  
  
• Interest income was positively impacted by yield increases due to securities that were purchased at discounts and were called at par value. This resulted in an increase of approximately $500,000.

Interest Income - Loans

        During the three months ended June 30, 2002, interest income on loans decreased from lower average interest rates, partially offset by higher average balances. Interest income decreased $5.0 million as the result of lower average interest rates. The average yield on loans decreased from 8.34% during the three months ended June 30, 2001, to 6.41% during the three months ended June 30, 2002, primarily due to lower market rates of interest. A large portion of the Bank's loan portfolio adjusts with changes to the "prime rate" of interest. The prime rate of interest averaged 7.35% during the three months ended June 30, 2001, compared to an average of 4.75% during the three months ended June 30, 2002.

        Interest income increased $1.8 million as the result of higher average loan balances from $913 million during the three months ended June 30, 2001, to $988 million during the three months ended June 30, 2002. The higher average balance resulted from the Bank's increase in commercial real estate and construction lending, multi-family residential lending, and indirect dealer consumer lending. The Bank's one- to four- family residential loan portfolio has decreased since December 31, 2000, due to the origination of a greater dollar amount of fixed-rate rather than adjustable-rate loans. The Bank generally sells these fixed-rate loans in the secondary market.

        During the six months ended June 30, 2002, interest income on loans decreased from lower average interest rates, partially offset by higher average balances. Interest income decreased $12.4 million as a result of lower average interest rates. The average yield on loans decreased from 8.84% during the six months ended June 30, 2001, to 6.40% during the six months ended June 30, 2002, primarily due to lower market rates of interest. A large portion of the Bank's loan portfolio adjusts with changes to the "prime rate" of interest. The prime rate of interest averaged 7.99% during the six months ended June 30, 2001, compared to an average of 4.75% during the six months ended June 30, 2002.

        Interest income increased $3.5 million as the result of higher average loan balances from $914 million during the six months ended June 30, 2001, to $985 million during the six months ended June 30, 2002. The higher average balance resulted from the Bank's increase in commercial real estate and construction lending, multi-family residential lending, and indirect dealer consumer lending. The Bank's one- to four- family residential loan portfolio has decreased since December 31, 2000, due to the origination of a greater dollar amount of fixed-rate rather than adjustable-rate loans. The Bank generally sells these fixed-rate loans in the secondary market.

Interest Income - Investment Securities and Other Interest-Earning Assets

        Interest income on investment securities and other interest-earning assets increased from higher average balances, partially offset by lower average interest rates during the three months ended June 30, 2002 when compared to the three months ended June 30, 2001. Interest income increased $1.4 million as a result of higher average balances from $201 million during the three months ended June 30, 2001 to $298 million during the three months ended June 30, 2002. This increase was primarily in available-for-sale securities, where additional securities were acquired for liquidity and pledging to deposit accounts under repurchase agreements and public funds. Interest income decreased $130,000 as a result of lower average yields from 6.08% during the three months ended June 30, 2001, to 5.81% during the three months ended June 30, 2002, due to lower market rates of interest in 2002.

        Interest income on investment securities and other interest-earning assets increased from higher average balances, partially offset by lower average interest rates during the six months ended June 30, 2002 when compared to the six months ended June 30, 2001. Interest income increased $2.7 million as a result of higher average balances from $192 million during the six months ended June 30, 2001 to $290 million during the six months ended June 30, 2002. This increase was primarily in available-for-sale securities, where additional securities were acquired for liquidity and pledging to deposit accounts under repurchase agreements and public funds. Interest income decreased $738,000 as a result of lower average yields from 6.76% during the six months ended June 30, 2001, to 5.81% during the six months ended June 30, 2002, due to lower market rates of interest in 2002, and the yield increases in 2001 discussed above.

Total Interest Expense

        Total interest expense decreased $4.8 million, or 38.5%, during the three months ended June 30, 2002 when compared with the same period in 2001. The decrease during the three month period was due to a $3.4 million, or 38.1%, decrease in interest expense on deposits, a $1.1 million, or 37.2%, decrease in interest expense on FHLBank advances, and a $313,000, or 49.4%, decrease in interest expense on short-term borrowings and trust preferred securities.

        Total interest expense decreased $10.2 million, or 39.4%, during the six months ended June 30, 2002 when compared with the same period in 2001. The decrease during the six month period was due to a $6.9 million, or 37.4%, decrease in interest expense on deposits, a $2.8 million, or 43.2%, decrease in interest expense on FHLBank advances, and a $607,000, or 48.4%, decrease in interest expense on short-term borrowings and trust preferred securities.

Interest Expense - Deposits

        Interest expense on deposits decreased $5.4 million due to lower average interest rates on time deposits from 5.65% during the three months ended June 30, 2001, to 2.86% during the three months ended June 30, 2002, and increased $2.1 million as a result of higher average balances of time deposits from $584 million during the three months ended June 30, 2001, to $698 million during the three months ended June 30, 2002. The average balances on time deposits increased as a result of the Bank's continued use of brokered deposits and retail certificates of deposit. The average interest rates decreased due to lower overall market rates of interest and the effects of the Company's interest rate swaps. Interest on demand deposits decreased $490,000 due to lower average rates from 1.84% during the three months ended June 30, 2001, to 1.18% during the three months ended June 30, 2002, and increased $363,000 due to higher average balances from $146 million during the three months ended June 30, 2001, to $184 million during the three months ended June 30, 2002. Interest on savings deposits decreased insignificantly.

        Interest expense on deposits decreased $11.0 million due to lower average interest rates on time deposits from 5.88% during the six months ended June 30, 2001, to 3.03% during the six months ended June 30, 2002, and increased $4.5 million as a result of higher average balances of time deposits from $575 million during the six months ended June 30, 2001, to $690 million during the six months ended June 30, 2002. The average balances on time deposits increased as a result of the Bank's continued use of brokered deposits and retail certificates of deposit. The average interest rates decreased due to lower overall market rates of interest and the effects of the Company's interest rate swaps. Interest on demand deposits decreased $968,000 due to lower average rates from 1.91% during the six months ended June 30, 2001, to 1.13% during the six months ended June 30, 2002, and increased $652,000 due to higher average balances from $135 million during the six months ended June 30, 2001, to $172 million during the six months ended June 30, 2002. Interest on savings deposits decreased $105,000 due to lower average balances and lower average rates.

Interest Expense - FHLBank Advances, Short-term Borrowings and Trust Preferred Securities

        Interest expense on FHLBank advances, short-term borrowings and trust preferred securities decreased $1.4 million due to lower average rates of interest from 5.01% in the three months ended June 30, 2001 to 3.00% in the three months ended June 30, 2002. The Company's use of FHLBank advances, short-term borrowings and trust preferred securities which reprice daily, monthly, or quarterly contributed to the significant decrease in average rates of interest. This decrease was slightly offset by an increase in average balances from $277 million during the three months ended June 30, 2001, to $281 million during the three months ended June 30, 2002.

        Interest expense on FHLBank advances, short-term borrowings and trust preferred securities decreased $3.6 million due to lower average rates of interest from 5.46% in the six months ended June 30, 2001 to 2.97% in the six months ended June 30, 2002. The Company's use of FHLBank advances, short-term borrowings and trust preferred securities which reprice daily, monthly, or quarterly contributed to the significant decrease in average rates of interest. This decrease was slightly offset by an increase in average balances from $281 million during the six months ended June 30, 2001, to $289 million during the six months ended June 30, 2002.

Net Interest Income

        The Company's overall interest rate spread increased 63 basis points, or 20.9%, from 3.02% during the three months ended June 30, 2001, to 3.65% during the three months ended June 30, 2002. The increase was due to a 230 basis point decrease in the weighted average rates paid on interest-bearing liabilities, partially offset by a 167 basis point decrease in the weighted average yields received on interest-earning assets. In comparing the two periods, the yield on loans decreased 193 basis points while the yield on investment securities decreased 27 basis points. In addition, the rates paid on deposits decreased 238 basis points while the rates paid on FHLBank advances and other borrowings decreased 201 basis points. The Company's overall net interest margin increased 42 basis points, or 12.1%, from 3.48% during the three months ended June 30, 2001, to 3.90% during the three months ended June 30, 2002.

        The prime rate of interest averaged 7.35% during the three months ended June 30, 2001, compared to an average of 4.75% during the three months ended June 30, 2002. As a large percentage of the Bank's loans are tied to prime, this decrease was the primary reason for the decrease in the weighted average yields received on interest-earning assets.

        The Company's overall interest rate spread increased 24 basis points, or 7.3%, from 3.29% during the six months ended June 30, 2001, to 3.53% during the six months ended June 30, 2002. The increase was due to a 246 basis point decrease in the weighted average rates paid on interest-bearing liabilities, partially offset by a 222 basis point decrease in the weighted average yields received on interest-earning assets. In comparing the two periods, the yield on loans decreased 244 basis points while the yield on investment securities decreased 95 basis points. In addition, the rates paid on deposits decreased 243 basis points while the rates paid on FHLBank advances and other borrowings decreased 249 basis points. The Company's overall net interest margin remained unchanged at 3.79% during the six months ended June 30, 2001, and the six months ended June 30, 2002. See "Total Interest Income" for a discussion of additional items that impacted net interest income for the six months ended June 30, 2001.

       The prime rate of interest averaged 7.99% during the six months ended June 30, 2001, compared to an average of 4.75% during the six months ended June 30, 2002. As a large percentage of the Bank's loans are tied to prime, this decrease was the primary reason for the decrease in the weighted average yields received on interest-earning assets.

Provision for Loan Losses

       The provision for loan losses increased from $1.1 million during the three months ended June 30, 2001 to $1.7 million during the three months ended June 30, 2002. For the six months ended June 30, 2002, the provision for loan losses was $3.0 million compared to $2.7 million for the same period in 2001.

       Management records a provision for loan losses in an amount it believes sufficient to result in an allowance for loan losses that will cover current net charge-offs as well as risks believed to be inherent in the loan portfolio of the Bank. The amount of provision charged against current income is based on several factors, including, but not limited to, past loss experience, current portfolio mix, actual and potential losses identified in the loan portfolio, economic conditions, regular reviews by internal staff and regulatory examinations.

       Weak economic conditions, higher inflation or interest rates, or other factors may lead to increased losses in the portfolio. Management has established various controls in an attempt to limit future losses, such as a watch list of possible problem loans, documented loan administration policies and a loan review staff to review the quality and anticipated collectibility of the portfolio. Management determines which loans are potentially uncollectible, or represent a greater risk of loss, and makes additional provisions to expense, if necessary, to maintain the allowance at a satisfactory level.

       Non-performing assets were $19.5 million, up $6.9 million from December 31, 2001. Non-performings as a percentage of total assets were 1.41%. Non-performing loans increased $5.7 million to $15.2 million while foreclosed assets increased $1.2 million to $4.3 million. Non-performing loans increased primarily as a result of the addition of one relationship totaling $2.3 million in the quarter ended March 31, 2002, and another relationship totaling $8.7 million in the quarter ended June 30, 2002. The $2.3 million relationship is comprised of twenty-seven loans which are primarily secured by residential rental properties. This relationship was described in the March 31, 2002, Quarterly Report on Form 10-Q and was included in non-performing loans. The $8.7 million relationship is primarily secured by condominium buildings and lots, single-family residences and lots, a golf course, and other developed and undeveloped land. This relationship was described in the December 31, 2001, Annual Report on Form 10-K and was previously included in potential problem loans. Non-performing loans decreased as a result of charging off another $1.6 million loan which was part of this $8.7 million relationship. Non-performing loans also decreased $2.0 million as a result of the foreclosure of a relationship secured by a motel, condominium units and vacant land in the Branson, Missouri area. This relationship was described in the December 31, 2001, Annual Report on Form 10-K and was included in non-performing loans. This $2.0 million addition to foreclosed assets was partially offset by the sale of a single-family residence with a book value of $485,000 which was described in the December 31, 2001, Annual Report on Form 10-K.

       The two non-performing loan relationships described above make up about 70% of the total balance of non-performing loans. The Company does not expect this increase to have a material negative impact on its net interest income in the coming quarters.

        During the six months ended June 30, 2002, net income and expense on foreclosed assets was negatively impacted by a write-down during the period totaling $250,000 on one foreclosed property. This write-down was the result of an updated valuation of the property during the period. During the six months ended June 30, 2001, net income and expense on foreclosed assets was positively impacted by the sale of one large parcel of undeveloped land at a gain of $535,000. Net income and expense on foreclosed assets was negatively impacted by write-downs during this same time period totaling $514,000 on three foreclosed properties. These write-downs were the result of updated valuations of the properties during the period.

        Potential problem loans decreased $9.7 million during the six months ended June 30, 2002 from $18.7 million at December 31, 2001 to $9.0 million at June 30, 2002, due primarily to the reclassification of the $8.7 million relationship described above from potential problem to non-performing status and other smaller relationships which were removed from or added to the problem asset watchlist. Significant relationships included in potential problem loans involve one $3.6 million relationship secured by a motel in Springfield, Missouri. Potential problem loans are loans which management has identified through routine internal review procedures as having possible credit problems which may cause the borrowers difficulty in complying with current loan repayment terms. These loans are not reflected in the non-performing loans.

       The Bank's allowance for loan losses as a percentage of total loans was 2.13% and 2.16% at June 30, 2002, and December 31, 2001, respectively. Management considers the allowance for loan losses adequate to cover losses inherent in the Company's loan portfolio at this time, based on current economic conditions. If economic conditions deteriorate significantly, it is possible that additional assets would be classified as non-performing, and accordingly, additional provisions for losses would be required, thereby adversely affecting future results of operations and financial condition.

Total Non-interest Income

       Total non-interest income increased $1.6 million, or 34.1%, in the three months ended June 30, 2002 when compared to the same period in 2001. The increase was primarily due to: (i) an increase in commission revenues earned by the Company's travel, insurance and investment subsidiaries in 2002 of $324,000, or 22.6%; and (ii) an increase in net realized gains on sales of available-for-sale securities of $2.0 million. Both the travel and investment subsidiaries experienced decreased sales activity as a result of general economic conditions prevailing in 2001. While economic conditions have not improved greatly in 2002, both subsidiaries have been able to increase revenues over the same period in the previous year. The travel subsidiary has negotiated a new incentive program with American Airlines which replaces the discontinued program previously in place with Trans World Airlines. The increase in gain on sale of available-for-sale securities was primarily due to the sale of the Company's holdings of the common stock of another publicly traded company. This transaction was completed on April 2, 2002, and was previously discussed in SEC filings by the Company.

       This quarterly increase was partially offset by (i) a decrease in net realized gains on sales of fixed-rate residential and student loans of $409,000, or 61.6%; and (ii) a decrease in service charges and ATM fees of $107,000, or 5.0%. During the three months ended June 30, 2001, the Bank sold significantly more residential and student loans than in the same period during 2002. During the 2001 period, rapidly declining interest rates were conducive to the generation of new and refinanced fixed-rate mortgages, rather than adjustable-rate mortgages. The Bank typically sells its fixed-rate mortgage originations. In addition, during the 2001 period, the Company sold one commercial real estate loan that was purchased at a discount from the Resolution Trust Corporation in a prior year, resulting in a gain of $300,000. The decrease in service charges and ATM fees resulted from slightly lower volume of activity in overdrafts and insufficient funds checks. Also, the Company incurred net expenses on foreclosed assets of $167,000 in 2002 versus net expenses on foreclosed assets of $11,000 in 2001.

       Total non-interest income increased $1.7 million, or 19.1%, in the six months ended June 30, 2002 when compared to the same period in 2001. The increase was primarily due to: (i) an increase in commission revenues earned by the Company's travel, insurance and investment subsidiaries in 2002 of $71,000, or 2.2%; and (ii) an increase in net realized gains on sales of available-for-sale securities of $2.6 million. Both the travel and investment subsidiaries experienced decreased sales activity as a result of general economic conditions prevailing in 2001. While economic conditions have not improved greatly in 2002, both subsidiaries have been able to increase revenues over the same period in the previous year, primarily during the second quarter of 2002. The travel subsidiary has negotiated a new incentive program with American Airlines which replaces the discontinued program previously in place with Trans World Airlines. The increase in gain on sale of available-for-sale securities was primarily due to the sale of the Company's holdings of the common stock of another publicly traded company. This transaction was completed on April 2, 2002, and was previously discussed in SEC filings by the Company.

       This six month increase was partially offset by (i) a decrease in net realized gains on sales of fixed-rate residential and student loans of $326,000, or 32.0%; and (ii) a decrease in service charges and ATM fees of $264,000, or 6.4%. During the six months ended June 30, 2001, the Bank sold significantly more residential and student loans than in the same period during 2002. During the 2001 period, rapidly declining interest rates were conducive to the generation of new and refinanced fixed-rate mortgages, rather than adjustable-rate mortgages. The Bank typically sells its fixed-rate mortgage originations. In addition, during the 2001 period, the Company sold one commercial real estate loan that was purchased at a discount from the Resolution Trust Corporation in a prior year, resulting in a gain of $300,000. The decrease in service charges and ATM fees resulted from slightly lower volume of activity in overdrafts and insufficient funds checks. Also, the Company incurred net expenses on foreclosed assets of $494,000 in 2002 versus net expenses on foreclosed assets of $93,000 in 2001. In 2002, the Company incurred expenses of $250,000 to provide for potential losses on foreclosed assets due to additional valuation allowances on certain properties.

Total Non-interest Expense

        Total non-interest expense increased $688,000, or 10.7%, in the three months ended June 30, 2002, compared to the same period in 2001. The increase was primarily due to: (i) an increase of $197,000, or 5.2%, in salaries and employee benefits primarily due to normal merit increases for existing employees; (ii) an increase in net occupancy and equipment expense of $239,000, or 22.8%, primarily due to increases in depreciation and various maintenance projects on buildings and equipment; and (iii) minor increases and decreases in other non-interest expense areas.

        Total non-interest expense increased $627,000, or 4.8%, in the six months ended June 30, 2002, compared to the same period in 2001. The increase was primarily due to: (i) an increase of $471,000, or 6.4%, in salaries and employee benefits primarily due to normal merit increases for existing employees; and (ii) an increase in net occupancy and equipment expense of $359,000, or 17.2%, primarily due to increases in depreciation and various maintenance projects on buildings and equipment. This was partially offset by (i) a decrease in other operating expenses of $198,000, or 9.8%, due primarily to approximately $250,000 of fees paid to consultants in the 2001 period for implementation of new customer products and services; and (ii) minor increases and decreases in other non-interest expense areas.

Provision for Income Taxes

       Provision for income taxes as a percentage of pre-tax income increased slightly from 34.9% in the three months ended June 30, 2001, to 35.5% in the three months ended June 30, 2002. Provision for income taxes as a percentage of pre-tax income decreased slightly from 34.9% in the six months ended June 30, 2001, to 34.7% in the six months ended June 30, 2002.

Average Balances, Interest Rates and Yields

        The following tables present, for the periods indicated, the total dollar amount of interest income from average interest-earning assets and the resulting yields, as well as the interest expense on average interest-bearing liabilities, expressed both in dollars and rates, and the net interest margin. Average balances of loans receivable include the average balances of non-accrual loans for each period. Interest income on loans includes interest received on non-accrual loans on a cash basis. The tables do not include non-interest-bearing demand deposits and do not reflect any effect of income taxes.

___________________
(1) Defined as the Company's net interest income divided by total interest-earning assets.

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(1) Defined as the Company's net interest income divided by total interest-earning assets.

Rate/Volume Analysis

       The following table presents the dollar amount of changes in interest income and interest expense for major components of interest-earning assets and interest-bearing liabilities for the periods shown. For each category of interest-earning assets and interest-bearing liabilities, information is provided on changes attributable to (i) changes in rate (i.e., changes in rate multiplied by old volume) and (ii) changes in volume (i.e., changes in volume multiplied by old rate). For purposes of this table, changes attributable to both rate and volume, which cannot be segregated, have been allocated proportionately to volume and to rate.

Liquidity and Capital Resources

       Liquidity is a measure of the Company's ability to generate sufficient cash to meet present and future financial obligations in a timely manner through either the sale or maturity of existing assets or the acquisition of additional funds through liability management. These obligations include the credit needs of customers, funding deposit withdrawals, and the day-to-day operations of the Company. Liquid assets include cash, interest-bearing deposits with financial institutions and certain investment securities and loans. As a result of the Company's management of the ability to generate liquidity primarily through liability funding, management believes that the Company maintains overall liquidity sufficient to satisfy its depositors' requirements and meet its customers' credit needs. At June 30, 2002, the Company had commitments of approximately $138 million to fund loan originations, issued lines of credit, outstanding letters of credit and unadvanced loans.

        Management continuously reviews the capital position of the Company and the Bank to ensure compliance with minimum regulatory requirements, as well as exploring ways to increase capital either by retained earnings or other means.

       The Company's stockholders' equity was $93.9 million, or 6.9% of total assets of $1.36 billion at June 30, 2002, compared to equity at $85.3 million, or 6.4%, of total assets of $1.32 billion at December 31, 2001.

       Banks are required to maintain minimum risk-based capital ratios. These ratios compare capital, as defined by the risk-based regulations, to assets adjusted for their relative risk as defined by the regulations. Guidelines require banks to have a minimum Tier 1 risk-based capital ratio, as defined, of 4.00%, a minimum total risk-based capital ratio of 8.00%, and a minimum 4.00% core capital ratio. To be considered "well capitalized," banks must have a minimum Tier 1 risk-based capital ratio, as defined, of 6.00%, a minimum total risk-based capital ratio of 10.00%, and a minimum 5.00% core capital ratio. On June 30, 2002, the Bank's Tier 1 risk-based capital ratio was 9.59%, total risk-based capital ratio was 10.85% and the core capital ratio was 7.67%. As of June 30, 2002, the Bank was "well capitalized" as defined by the Federal banking agencies' capital-related regulations. The Federal Reserve Bank has established capital regulations for bank holding companies that generally parallel the capital regulations for banks. On June 30, 2002, the Company's Tier 1 risk-based capital ratio was 10.35%, total risk-based capital ratio was 11.61% and the leverage ratio was 8.28%. As of June 30, 2002, the Company was "well capitalized" as defined by the Federal banking agencies' capital-related regulations.

       At June 30, 2002, the held-to-maturity investment portfolio included $-0- of gross unrealized losses.

       The Company's primary sources of funds are certificates of deposit, FHLBank advances, other borrowings, loan repayments, proceeds from sales of loans and available-for-sale securities and funds provided from operations. The Company utilizes particular sources of funds based on the comparative costs and availability at the time. The Company has from time to time chosen not to pay rates on deposits as high as the rates paid by certain of its competitors and, when believed to be appropriate, supplements deposits with less expensive alternative sources of funds.

       Statements of Cash Flows. During the six months ended June 30, 2002, and 2001, respectively, the Company experienced positive cash flows from operating activities and financing activities.

       Cash flows from operating activities for the periods covered by the Statements of Cash Flows have been primarily related to changes in accrued and deferred assets, credits and other liabilities, the provision for loan losses, the provision for losses on foreclosed assets, depreciation, and the amortization of deferred loan origination fees and discounts (premiums) on loans and investments, all of which are non-cash or non-operating adjustments to operating cash flows. Net income adjusted for non-cash and non-operating items and the origination and sale of loans held-for-sale were the primary sources of cash flows from operating activities during the six months ended June 30, 2002 and 2001. Operating activities provided cash flows of $17.3 million during the six months ended June 30, 2002, and $15.5 million during the six months ended June 30, 2001.

       During the six months ended June 30, 2002 and 2001, respectively, investing activities used cash of $18.8 million and $44.7 million primarily due to the net increase in loans and investment securities.

       Changes in cash flows from financing activities during the periods covered by the Statements of Cash Flows are due to increases in deposits after interest credited and proceeds from the issuance of trust preferred debentures, offset by decreases in FHLBank advances, decreases in short-term borrowings, as well as purchases of treasury stock and dividend payments to stockholders. Financing activities provided $21.4 million in cash during the six months ended June 30, 2002 and $43.2 million in cash during the six months ended June 30, 2001. Financing activities in the future are expected to primarily include changes in deposits, FHLBank advances, and short-term borrowings, purchase of treasury stock, and payment of dividends.

        Dividends. During the six months ended June 30, 2002, the Company declared dividends of $.41 per share, or 24% of net income per share, and paid dividends of $.27 per share, or 16% of net income per share, compared to dividends declared and paid during the six months ended June 30, 2001 of $.25 per share, or 19% of net income per share. The Board of Directors meets regularly to consider the level and the timing of dividend payments.

       Common Stock Repurchases. The Company has been in various buy-back programs since May 1990. During the six months ended June 30, 2002, the Company repurchased 28,893 shares of its common stock at an average price of $33.77 per share and reissued 24,450 shares of treasury stock at an average price of $17.69 per share to cover stock option exercises. During the six months ended June 30, 2001, the Company repurchased 9,642 shares of its common stock at an average price of $23.03 per share and reissued 22,634 shares of treasury stock at an average price of $15.11 per share to cover stock option exercises.

       Management intends to continue its stock buy-back programs from time to time as long as repurchasing the stock contributes to the overall growth of shareholder value after taking into consideration the earnings of the Company and other alternative uses of available capital. 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, however, 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.

ITEM III. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

       As discussed in the "Asset and Liability Management and Interest Rate Risk" section of Management's Discussion and Analysis, the Company utilizes interest rate swaps to effectively convert a portion of its fixed rate brokered deposits and fixed rate trust preferred securities to variable rates of interest.

       In addition to the disclosures previously made by the Company in the December 31, 2001, Annual Report on Form 10-K, the following table summarizes interest rate sensitivity information for the Company's interest rate derivatives at June 30, 2002.

PART II. OTHER INFORMATION

Item 1.   Legal Proceedings

       From time to time, the Company and its subsidiaries are involved as plaintiff or defendant in various legal actions arising in the normal course of their business. 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 Company.

Item 2.   Changes in Securities

       None.

Item 3.   Defaults Upon Senior Securities

       None.

Item 4.   Submission of Matters to Vote of Common Stockholders

       a)  Results of 2002 Annual Meeting of Stockholders of Great Southern Bancorp, Inc.

Item 5.   Other Information

       None.

Item 6.   Exhibits and Reports on Form 8-K

       a) Exhibits

              See the attached Exhibit 11, Statement re computation of earnings per share.

       b) Reports on Form 8-K

              None.

       Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CERTIFICATION

       Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, each of the undersigned hereby certifies in his capacity as an officer of GREAT SOUTHERN BANCORP, INC. (the "Company") that the Quarterly Report of the Company on Form 10-Q for the quarterly period ended June 30, 2002 fully complies with the requirements of Section 13(a) of the Securities Exchange Act of 1934 and that the information contained in such report fairly presents, in all material respects, the financial condition and results of operations of the Company as of the dates and for the periods presented in the financial statements included in such report.