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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

FORM 10-K

ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES ACT OF 1934

For the fiscal year ended June 30, 1998 Commission File Number 0-18082

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

Delaware 43-1524856
(State incorporation) (IRS Employer
Identification Number)

1451 E. Battlefield 65804
Springfield, Missouri (Zip Code)
(Address of principal executive offices)

(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. / /

The aggregate market value of the voting stock of the Registrant held by
non-affiliates of the Registrant on September 17, 1998, computed by reference
to the closing price of such shares, was $175,205,043. At September 18, 1998,
7,918,872 shares of Common Stock, par value $.01 per share, were outstanding.

DOCUMENTS INCORPORATED BY REFERENCE

Portions of the Registrant's Annual Report to Security Holders for the
fiscal year ended June 30, 1998 (the "Annual Report"), which was
electronically filed on September 22, 1998, 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 1998 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 1998 annual meeting of stockholders (the "Definitive Proxy
Statement"), which was electronically filed on September 22, 1998, are
incorporated by reference into Part III.

Index to Exhibits is page 49

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TABLE OF CONTENTS

Page
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Part I

Item 1. Business . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Primary Market Area . . . . . . . . . . . . . . . . . . . . . . 4
Lending Activities . . . . . . . . . . . . . . . . . . . . . . 5
Loan Portfolio Composition . . . . . . . . . . . . . . . . . . 7
Allowance for Losses on Loans and Foreclosed Assets . . . . . . 16
Loan Delinquencies and Defaults . . . . . . . . . . . . . . . . 19
Classified Assets . . . . . . . . . . . . . . . . . . . . . . . 21
Investment Activities . . . . . . . . . . . . . . . . . . . . . 23
Sources of Funds . . . . . . . . . . . . . . . . . . . . . . . 24
Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . 28
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Employees . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Government Supervision and Regulation . . . . . . . . . . . . . 29
Item 2. Properties . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Item 3. Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . 40
Item 4. Submission of Matters to a Vote of Security Holders . . . . . . 40
Item 4A. Executive Officers of the Registrant . . . . . . . . . . . . . 40

Part II

Item 5. Market for Registrant's Common Equity and Related
Stockholder Matters . . . . . . . . . . . . . . . . . . 41
Item 6. Selected Financial Data . . . . . . . . . . . . . . . . . . . 42
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations . . . . . . . . . . 43
Item 8. Financial Statements and Supplementary Data . . . . . . . . . 43
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosures . . . . . . . . . . 43

Part III

Item 10. Directors and Executive Officers of the Registrant . . .. . . 44
Item 11. Executive Compensation . . . . . . . . . . . . . . . . . . . . 44
Item 12. Security Ownership of Certain Beneficial Owners
and Management . . . . . . . . . . . . . . . . . . . . . 44
Item 13. Certain Relationship and Related Transactions . . . . . . . . 44

Part IV

Item 14. Exhibits, Financial Statement Schedules and Reports
on Form 8-K . . . . . . . . . . . . . . . . . . . . . . 45
Signatures . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Index to Exhibits . . . . . . . . . . . . . . . . . . . . . . 49

PART I

ITEM 1. BUSINESS.

THE COMPANY

Great Southern Bancorp, Inc.

Great Southern Bancorp, Inc. ("Bancorp" or "Company") is a bank holding
company which, as of June 30, 1998, owned directly all of the stock of Great
Southern Bank ("Great Southern" or the "Bank") and other non-banking
subsidiaries. Bancorp was incorporated under the laws of the State of Delaware
in July 1989 as a unitary savings and loan holding company. After receiving
the approval of the Federal Reserve Bank of St. Louis (the "Federal Reserve" or
"FRB"), the Company became a one bank holding company on June 30, 1998 upon the
conversion on June 30, 1998, of Great Southern to a Missouri-chartered trust
company.

As a Delaware corporation, the 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 Company currently conducts its
business as a bank holding company. Through the bank holding company
structure, it is possible to expand the size and scope of the financial
services offered by the Company beyond those offered by the Bank. The bank
holding company structure provides the 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 other
financial institutions as well as other companies. At June 30, 1998, Bancorp's
consolidated assets were $795 million, consolidated loans were $655 million,
consolidated deposits were $553 million and consolidated stockholders' equity
was $67 million. The assets of the Company consist of the stock of Great
Southern, the stock of other financial services companies (less than 5% of
each), interest in a local trust company and cash.

Through subsidiaries of the Bank, the Company offers insurance, appraisal,
travel, discount brokerage and related services, which are discussed further
below. The activities of the Company are funded by retained earnings and
through dividends from Great Southern and borrowings from third parties.
Activities of the Company may also be funded through sales of additional
securities or through income generated by other activities of the Company. At
this time, there are no plans regarding such activities.

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

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 charter as a federal savings bank and then on June 30, 1998, changed to a
Missouri-chartered trust company (the equivalent of a commercial bank
charter). Headquartered in Springfield, Missouri, Great Southern offers a
broad range of banking services through its 27 branches located in
southwestern and central Missouri. At June 30, 1998, the Bank had total
assets of $790 million, deposits of $557 million and stockholders' equity of
$59 million, or 7.5% 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 originating
residential and commercial real estate loans, commercial business and consumer
loans and funding these loans through attracting deposits from the general
public, originating brokered deposits and borrowing from the Federal Home Loan
Bank (the "FHLBank") and others.

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 while
also expanding and increasing its originations of commercial business and
consumer loans.

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.

Forward-Looking Statements

When used in this Form 10-K 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 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 declines 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.

Primary 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 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.

5
Great Southern's largest concentration of loans and deposits is in the
Greater Springfield area. With a population of approximately 306,000, 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 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 area, property values increased at unusually
high rates in the early 1990s. This has also provided for increased loan
demand and a more volatile lending market than has previously been present in
the Branson area. Property values have experienced downward pressure during
the past few years, partly as a result of this rapid increase.

A significant portion of the Bank's loan originations have been secured by
properties in the Branson area. Approximately $124 million, or 20%, of the
total loan portfolio at June 30, 1998 was secured by properties in this area.
Of this amount, $61 million are loans secured by commercial real estate,
commercial construction and other residential properties and $63 million are
loans secured by one- to four-family residential properties, one- to four-
family construction properties and consumer loans. See "- Commercial Real
Estate and Construction Lending", "- Commercial Business Lending", "-
Classified Assets" and "- Loan Delinquencies and Defaults".

Lending Activities-General

From its beginnings in 1923 through the early 1980s, Great Southern
primarily made long-term, fixed-rate residential real estate loans that it
retained in its loan portfolio. 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 and substantially all of the long-term
fixed-rate residential mortgage loans originated by Great Southern are sold
immediately in the secondary market.

Beginning in the mid-1990s, Great Southern increased its efforts to
originate commercial real estate and other residential loans, primarily with
adjustable rates or shorter-term fixed rates. During the past 18 months,
changes in competitor banking organizations provided Great Southern expanded
opportunity in these areas as well as in the origination of commercial business
and consumer loans, primarily the indirect automobile area. In addition to
direct origination of these loans, the Bank has expanded and enlarged its
relationships with smaller banks to purchase participations (at par, with no
servicing costs) in loans the smaller banks originate but are unable to retain
in their portfolios due to capital limitations. The Bank uses the same
underwriting guidelines in evaluating these participations as it does in its
direct loan originations.

6
One of the principal historical lending activities 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.
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.
Depending on the market conditions, the ongoing servicing of these loans is at
times retained by Great Southern and at other times released to the purchaser
of the loan. Great Southern retains substantially all of the adjustable-rate
mortgage loans in its portfolio.

Another principal lending activity of Great Southern, which has become
more prevalent in recent years, is the origination of commercial real estate
and construction loans. Since the early 1990s, this area of lending has been
an increasing percentage of the loan portfolio and currently accounts for
approximately 42% of the portfolio.

In addition, Great Southern in recent years has increased the emphasis on
the origination of commercial business loans, home equity loans, consumer loans
and student 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.

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.

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.

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 and Northern Arkansas, with the largest concentration of
its lending activity being in southwestern and central Missouri.

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,
-----------------------------------------------------------------------------------
1998 1997 1996 1995 1994
--------------- --------------- --------------- --------------- ---------------
Amount % Amount % Amount % Amount % Amount %
-------- ------ -------- ------ -------- ------ -------- ------ -------- ------
(Dollars in thousands)

Real Estate Loans:
Residential
One- to four- family $219,242 31.2% $244,767 39.5% $249,348 42.5% $243,771 43.5% $203,157 40.9%
Other Residential 89,141 12.7 95,886 15.4 81,191 13.8 77,744 13.9 65,906 13.2
Commercial 244,017 34.7 191,556 30.8 172,478 29.4 133,244 23.8 105,977 21.3
Residential Construction:
One- to four-family 16,032 2.3 9,529 1.5 13,455 2.3 13,319 2.4 18,338 3.7
Other residential 5,993 .8 4,243 .7 13,533 2.3 23,804 4.2 37,588 7.6
Commercial construction 27,156 3.9 21,932 3.5 16,518 2.8 27,273 4.9 30,894 6.2
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total real estate loans 601,581 85.6 567,913 91.4 546,523 93.1 519,155 92.7 461,860 92.9
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Other Loans:
Consumer loans:
Guaranteed student loans 12,736 1.8 11,592 1.9 11,256 1.9 11,822 2.1 9,445 1.9
Automobile 23,120 3.3 6,006 .9 6,062 1.1 5,651 1.0 4,814 1.0
Home equity and improvement 5,849 .8 4,183 .7 3,688 0.6 3,518 0.6 2,618 0.5
Other 4,862 .7 5,885 .9 5,921 1.0 5,272 1.0 4,513 0.9
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total Consumer loans 46,567 6.6 27,666 4.4 26,927 4.6 26,263 4.7 21,390 4.3
Commercial business loans 54,722 7.8 25,959 4.2 13,737 2.3 14,515 2.6 13,907 2.8
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total other loans 101,290 14.4 53,625 8.6 40,664 6.9 40,778 7.3 35,297 7.1
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total loans 702,870 100.0% 621,538 100.0% 587,187 100.0% 559,933 100.0% 497,157 100.0%
===== ===== ===== ===== =====
Less:
Loans in process 28,497 18,812 22,383 22,316 35,739
Deferred fees and discounts 2,774 3,493 3,689 3,761 4,032
Allowance for loan losses 16,373 15,524 14,356 14,601 13,636
------- ------- ------- ------- -------
Total loans receivable, net $655,226 $583,709 $546,759 $519,255 $443,750
======= ======= ======= ======= =======

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.

Fixed-Rate Loans:
Real Estate Loans
Residential
One- to four- family $ 12,799 1.8% $ 12,305 2.0% $ 13,212 2.2% $ 14,260 2.5% $ 15,488 3.1%
Other Residential 34,757 5.0 34,467 5.6 34,413 5.9 32,515 5.8 30,250 6.1
Commercial 28,004 4.0 5,865 .9 25,374 4.3 12,774 2.3 14,438 2.9
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total real estate loans 75,560 10.8 52,637 8.5 72,999 12.4 59,549 10.6 60,176 12.1
Consumer loans 27,319 3.9 10,769 1.7 12,844 2.2 11,706 2.1 9,282 1.8
Commercial business loans 1,645 .2 502 .1 415 0.1 994 0.2 864 0.2
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total fixed-rate loans 104,524 14.9 63,908 10.3 86,258 14.7 72,249 12.9 70,322 14.1
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Adjustable-Rate Loans:
Real Estate Loans
Residential
One- to four- family 206,443 29.4 232,462 37.4 236,136 40.2 229,510 41.0 187,670 37.7
Other Residential 54,384 7.7 61,419 9.9 46,778 8.0 45,228 8.1 37,675 7.6
Commercial 216,013 30.7 185,691 29.9 147,104 25.0 120,470 21.5 91,689 18.4
Residential construction:
One- to four-family 16,032 2.3 9,529 1.5 13,455 2.3 13,319 2.4 18,338 3.7
Other residential 5,993 .9 4,243 .7 13,533 2.3 23,804 4.2 35,568 7.2
Commercial construction 27,156 3.9 21,932 3.5 16,518 2.8 27,273 4.9 30,744 6.2
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total real estate loans 526,021 74.9 515,276 82.9 473,524 80.6 459,604 82.1 401,684 80.8
Consumer loans 19,248 2.7 16,897 2.7 14,083 2.4 14,559 2.6 12,108 2.5
Commercial business loans 53,077 7.5 25,457 4.1 13,322 2.3 13,521 2.4 13,043 2.6
------ ----- ------- ----- ------- ----- ------- ----- ------- -----
Total adjustable-rate loans 598,346 85.1 557,630 89.7 500,929 85.3 487,684 87.1 426,835 85.9
------- ----- ------- ----- ------- ----- ------- ----- ------- -----
Total loans 702,870 100.0% 621,538 100.0% 587,187 100.0% 559,933 100.0% 497,157 100.0%
===== ===== ===== ===== =====
Less:
Loans in process 28,497 18,812 22,383 22,316 35,739
Deferred fees and discounts 2,774 3,493 3,689 3,761 4,032
Allowance for loan losses 16,373 15,524 14,356 14,601 13,636
------- ------- ------- ------- -------
Total loans receivable, net $655,226 $583,709 $546,759 $519,255 $443,750
======= ======= ======= ======= =======

9
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)

1999(1) $ 6,877 8.28% $ 14,638 8.72% $ 47,765 9.37% $16,032 9.38%
2000 6,818 8.38 19,960 9.03 61,301 9.39 -- 0.00
2001 8,405 8.28 10,474 8.85 49,364 9.32 -- 0.00
2002 and 2003 13,755 8.15 19,684 8.66 59,188 9.33 -- 0.00
2004 to 2008 36,700 8.10 14,215 9.20 22,305 9.49 -- 0.00
2009 to 2013 40,186 8.08 14,486 9.03 31,250 9.41 -- 0.00
2014 to 2024 40,672 8.02 1,355 8.24 -- 0.00 -- 0.00
2025 and following 65,829 8.01 322 8.24 -- 0.00 -- 0.00
------- ------- ------- ------
$219,242 $ 95,134 $271,173 $ 16,032
======= ======= ======= ======

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)

1999 (1) $ 9,571 10.56% $ 4,838 8.85% $ 99,721 9.29%
2000 1,722 10.76 10,235 8.85 106,221 9.31
2001 19,043 8.66 12,191 8.84 99,477 9.00
2002 and 2003 6,758 10.40 3,312 8.83 102,697 9.10
2004 to 2008 3,100 10.27 4,310 8.78 80,630 8.80
2009 to 2013 184 9.59 19,688 8.84 105,794 8.75
2014 to 2024 -- 0.00 114 8.84 42,141 8.03
2025 and following 4 7.00 35 8.84 66,190 8.01
------ ------ -------
$46,567 $54,723 $702,871
====== ====== =======
- ----------------------
<FN>
(1) Includes demand loans, loans having no stated maturity and overdraft loans.
(2) Of the $603 million of loans due after June 30, 1999, $87 million, or
14%, have fixed rates of interest and $516 million, or 86%, have adjustable
rates of interest.

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 operations 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.

10
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, 1998 and 1997, loans secured by residential real estate
totaled $308 million and $341 million, respectively, and represented
approximately 43.9% and 54.9%, respectively, of the Bank's total loan
portfolio. Compared to historical rate levels, fixed rates were low and on the
decline during fiscal year 1998. This caused a higher than normal level of
refinancing of adjustable-rate loans into fixed-rate loans during the year, and
accounted for the decline in the Bank's residential real estate loan portfolio.

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.

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 the policy of Great Southern
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.

11
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 at that time
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 and has accelerated the rate of increase in recent years.

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

At June 30, 1998 and 1997, loans secured by commercial real estate totaled
$244 million and $192 million, respectively, or approximately 34.7% and 30.8%,
respectively, of the Bank's total loan portfolio. At June 30, 1998 and 1997,
construction loans secured by projects under construction and the land on which
the projects are located aggregated $49 million and $36 million, respectively,
or 7.0% and 5.7%, respectively, of the Bank's total loan portfolio. The
majority 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 between 75% and
80% 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. Current law subjects
state chartered banks 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, 1998, this limit was approximately $11.4
million. See "Regulation". At June 30, 1998 the Bank was in compliance with
the loans to one borrower limit.

12
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, 1998. 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 53 $ 69,038 $ 57,746 $ 163 $ 746
Commercial land development 135 50,442 31,481 516 --
Shopping centers 87 35,023 31,065 535 155
Medical and long term care 43 31,043 29,396 509 --
Office buildings 59 30,929 27,029 1,508 --
Golf courses and recreational 38 29,232 25,600 476 786
Industrial real estate 55 20,577 17,860 91 --
Restaurants 35 17,597 15,935 -- --
Universities and churches 19 6,055 4,607 10 --
Other 49 5,746 3,298 2,265 --
--- ------- ------- ----- -----
Total commercial real estate loans 573 295,682 244,017 6,073 1,687
--- ------- ------- ----- -----
Construction Loans
One- to four-family residential 152 16,298 9,679 6,353 91
Other residential 3 5,993 2,742 3,251 --
Commercial real estate:
Golf courses and recreational 2 6,149 2,679 3,471 --
Universities and churches 2 5,473 2,355 3,118 --
Office buildings 5 4,203 2,825 1,378 --
Commercial land development 9 3,405 2,829 839 --
Medical and long term care 1 3,153 3,069 84 --
Hotels/Motels 1 2,500 635 1,865 --
Other 4 2,010 1,583 426 --
--- ------- ------- ------ -----
Total construction loans 179 49,184 28,396 20,785 91
--- ------- ------- ------ -----
Total 752 $344,866 $272,413 $26,858 $1,778
=== ======= ======= ====== =====

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.
13
Lending Activities - Commercial Business Lending

At June 30, 1998 and 1997, respectively, Great Southern had $54.7 million
and $26.0 million in commercial business loans outstanding, or 7.8% and 4.2%,
respectively, of the Bank's total loan portfolio. 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.

Great Southern expects to continue to maintain or increase the current
percentage of commercial business loans in its total loan portfolio by
originating loans, subject to market conditions and to applicable regulatory
restrictions. See "Supervision and Regulation" below.

The following table sets forth information regarding the number and amount
of the Bank's commercial business loans as of June 30, 1998. The amounts shown
do not reflect allowances for losses. See "- Classified Assets" and "- Loan
Delinquencies and Defaults." 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 165 $29,771 $ 40
Stocks and bonds 31 15,733 --
Deposit accounts and promissory notes 40 5,948 --
Other 23 1,626 40
--- ------ ---
Total secured loans 259 53,078 80
Unsecured Loans 57 1,645 --
--- ------ ---
Total Commercial Business Loans 316 $54,723 $ 80
=== ====== ===

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.

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.

14
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, 1998, Great Southern had
60 letters of credit outstanding in the aggregate amount of $10.4 million.
Approximately 96% 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 $46.6 million and
$27.7 million at June 30, 1998 and 1997, respectively, or 6.6% and 4.4%,
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 have been
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.

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.
15
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.

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 banks, thrift institutions 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 increased 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
retains the servicing of these loans.

During the five fiscal years ending June 30, 1998, there were no loan
whole purchases by the Bank. At June 30, 1998 and 1997, approximately $10.6
million, or 1.5% and $11.6 million, or 1.9%, 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 banks, thrift institutions 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 when the servicing is retained by the Bank. Loan
participations are generally sold with Great Southern retaining control of the
servicing of the loan.

The Bank sold whole real estate loans and loan participations in aggregate
amounts of $73.7 million, $26.6 million and $36.6 million during the years
ended June 30, 1998, 1997 and 1996, 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 are generally 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.

16
The Bank sold guaranteed student loans in aggregate amounts of $9.7
million, $7.7 million and $8.6 million during the years ended June 30, 1998,
1997 and 1996, 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 primarily 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, 1998, 1997 and 1996 were $1,120,000 $530,000 and $540,000,
respectively. Of these amounts, $120,000, $130,000 and $125,000, respectively,
were gains from the sale of guaranteed student loans and $1,000,000, $400,000
and $415,000, respectively, were gains from the sale of fixed-rate residential
loans.

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 $60 million, $70 million and $80 million at
June 30, 1998, 1997 and 1996, respectively, of loans owned by others. The
servicing of these loans generated net servicing fees to the Bank for the years
ended June 30, 1998, 1997 and 1996 of $261,000, $272,000 and $316,000,
respectively. When guaranteed student loans are sold, the Bank typically
releases the responsibility for servicing the loans to the MOHELA.

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 $502,000, $916,000 and $487,000 for the years ended June 30,
1998, 1997 and 1996, 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.

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 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 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 area as a whole. Due to this
concern and the overall growth of the loan portfolio, and more specifically the
growth of the commercial business, consumer and commercial real estate loan
portfolios, management provided increased levels of loan loss allowances over
the past few years.

The allowance 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 allowance 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, 1998 and 1997, Great Southern had an allowance for losses on
loans and foreclosed assets of $16.4 million and $15.8 million, respectively,
of which $3.1 million and $3.4 million, respectively, had been allocated as an
allowance for specific loans, $0 and $319,000, respectively, had been allocated
for foreclosed assets and $1.5 million and $1.6 million, 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.

18
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,
-----------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
(Dollars in thousands)

Balance at beginning of period $15,524 $14,356 $14,601 $13,636 $10,590
------ ------ ------ ------ ------
Charge-offs:
One- to four-family residential 45 185 189 13 85
Other residential 67 34 1,072 474 101
Commercial real estate 529 364 509 227 33
Construction 82 14 0 0 0
Consumer 287 70 198 48 33
Commercial business 133 9 25 120 32
------ ------ ------ ------ ------
Total charge-offs 1,143 676 1,993 882 284
------ ------ ------ ------ ------
Recoveries:
One- to four-family residential 22 0 33 0 8
Other residential 1 11 0 0 0
Commercial real estate 68 88 136 442 181
Consumer 10 9 48 22 59
Commercial business 38 30 80 64 57
------ ------ ------ ------ ------
Total recoveries 139 138 297 528 307
------ ------ ------ ------ ------
Net charge-offs (recoveries) 1,004 538 1,696 354 (23)
Provision for losses on loans
(charged to expense) 1,853 1,706 1,451 1,319 3,023
------ ------ ------ ------ ------
Balance at end of period $16,373 $15,524 $14,356 $14,601 $13,636
====== ====== ====== ====== ======
Ratio of net charge-offs to
average loans outstanding .16% 0.09% 0.32% 0.07% (0.01%)
==== ==== ==== ==== ====

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,
-----------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
---------------- ---------------- ---------------- ----------------- ----------------
% 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 $ 811 33.5% $ 1,039 41.0% $ 757 44.8% $ 670 45.9% $ 363 44.6%
Other residential
and construction 615 13.5 35 16.1 503 16.1 480 8.1 668 20.8
Commercial real estate
and construction
and commercial
business 11,348 46.4 9,699 38.5 7,875 34.5 7,596 31.3 7,394 30.3
Consumer 743 6.6 502 4.4 488 4.6 546 4.7 414 4.3
Unallocated 2,586 0.0 4,249 0.0 4,733 0.0 5,309 0.0 4,797 0.0
------ ----- ------ ----- ------ ----- ----- ----- ----- -----
Total $16,373 100.0% $15,524 100.0% $14,356 100.0% $14,601 100.0% $13,636 100.0%
====== ===== ====== ===== ====== ===== ===== ===== ===== =====

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.

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 President and Senior Lending
Officer also work 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, 1998 were $13.1 million compared to $14.5
million at June 30, 1997. This decrease is mainly attributable to a decrease
in the 60-89 days and the 90 days and over delinquent categories partially
offset by an increase in the 30-59 days category. The decrease in total
delinquencies mainly occurred in the one- to four-family residential real
estate and the other residential real estate partially offset by an increase in
the commercial real estate category. 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 below sets forth information concerning delinquent mortgage and
other loans held in the Bank's portfolio at June 30, 1998, as well as
comparative information for June 30, 1997, 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 that 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.

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 9 8 15 32
Amount $ 458 $ 689 $ 667 $ 1,814
Percent 0.08% 0.10% 0.09% 0.26%
Other residential:
Number of loans 1 0 6 7
Amount $ 217 $ 0 $4,535 $ 4,752
Percent 0.03% 0.00% 0.65% 0.68%
Commercial real estate:
Number of loans 0 7 4 11
Amount $ 0 $3,266 $1,687 $ 4,953
Percent 0.00% 0.46% 0.24% 0.70%
Construction:
Number of loans 3 1 2 6
Amount $ 301 $ 165 $ 91 $ 557
Percent 0.04% 0.02% 0.02% 0.08%
Consumer:
Number of loans 65 23 21 109
Amount $ 436 $ 109 $ 147 $ 692
Percent 0.06% 0.02% 0.02% 0.10%
Commercial business:
Number of loans 2 4 6 12
Amount $ 145 $ 154 $ 80 $ 379
Percent 0.02% 0.02% 0.01% 0.05%
Total June 30, 1998:
Number of loans 80 43 54 177
Amount $1,557 $4,383 $7,207 $13,147
Percent 0.22% 0.62% 1.03% 1.87%

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%

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 a potential weakness, are required to be
designated "special mention" by management. In addition, a bank's regulators
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 the bank. 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, 1998.

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

Loans $15,605 $ 16 $ 57 $15,678 $16,373
Foreclosed assets 4,525 0 0 4,525 --
------ ----- --- ------ ------
Total $20,130 $ 16 $ 57 $20,203 $16,373
====== ===== === ====== ======

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. For such loans originated in fiscal 1993 or fiscal 1994,
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. The majority of the loans presented in
this category are performing and the Bank is accounting for the interest on
these loans on the accrual method.

June 30,
-------------------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
(Dollars in thousands)

Non-accruing loans:
One- to four-family residential $ 522 $ 2,018 $ 1,195 $ 149 $ 341
Other residential 4,535 3,826 934 -- 200
Commercial real estate 1,687 316 1,407 2,004 4,500
One- to four-family construction 91 655 121 -- --
Consumer 147 219 202 260 195
Commercial business 80 600 744 652 786
Commercial construction -- -- 851 -- --
------ ------ ------ ------ ------
Total non-accruing loans 7,062 7,634 5,454 3,065 6,022
Loans in connection with sales of
foreclosed assets 145 246 453 775 1,321
------ ------ ------ ------ ------
Total non-performing loans 7,207 7,880 5,907 3,840 7,343
------ ------ ------ ------ ------
Foreclosed assets:
One- to four-family residential 400 544 517 695 1,440
Other residential 175 1,150 7,121 3,359 1,709
Commercial real estate 4,176 4,276 3,309 4,878 6,180
------ ------ ------ ------ ------
Total foreclosed assets 4,751 5,970 10,947 8,932 7,620
------ ------ ------ ------ ------
Total non-performing assets $11,958 $13,850 $16,854 $12,772 $14,963
====== ====== ====== ====== ======
Total non-performing assets as a
percentage of average total assets 1.60% 2.07% 2.45% 2.18% 2.83%
==== ==== ==== ==== ====

Impaired loans totaled $9,485,000 and $10,163,000 at June 30, 1998 and
1997, respectively.

Interest of $1,009,000 and $487,000 was recognized on average impaired
loans of $12,009,000 and $9,362,000 for 1998 and 1997. Interest recognized on
impaired loans on a cash basis during 1998 and 1997 was not materially
different.

23
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 1994, 1995, 1997 and 1998.
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.

Investment Activities

The Bank's investment securities portfolio at June 30, 1998 and 1997
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.

As of June 30, 1998 and 1997, the Bank held approximately $50.4 million
and $49.8 million, respectively, in principal amount of investment securities
which the Bank intends to hold until maturity. As of such dates, these
securities had market values of approximately $50.5 million and $49.9 million,
respectively. In addition, as of June 30, 1998 and 1997, the Company held
approximately $6.4 million and $7.4 million, respectively, in principal amount
of investment securities which the Company classified as available-for-sale.
This issue is discussed further 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, 1998
--------------------------------------------------
Gross Gross Approximate
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
--------- ---------- ---------- -----------
(Dollars in thousands)

AVAILABLE-FOR-SALE SECURITIES:
Equity securities $ 4,645 $1,718 $ 0 $ 6,363
====== ===== === =====
HELD-TO-MATURITY SECURITIES:
U.S. Treasury $ 2,103 $ 4 $ 0 $ 2,107
U.S. government agencies 48,260 174 0 48,434
------ ----- --- ------
Total held-to-maturity securities $50,363 $ 178 $ 0 $50,541
====== ===== === ======
- ------------------------------------

24
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
====== === === ======

The following table presents the contractual maturities and weighted
average yields of held-to-maturity securities at June 30, 1998. 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 $31,762 6.05% $31,894
After one through five years 18,601 5.75% 18,647
------ ------
Total $50,363 $50,541
====== ======

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"), 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.

25
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,
-----------------------------------------------------------------
1998 1997 1996
------------------ ------------------- ------------------
Percent Percent Percent
Amount of Total Amount of Total Amount of Total
-------- -------- --------- -------- -------- --------
(Dollars in thousands)

Time deposits:
0.00% - 3.99% $ 62 .01 $ 724 .16% $ 2,376 0.60%
4.00% - 4.99% 17,476 3.16 14,166 3.08 14,472 3.65
5.00% - 5.99% 257,704 46.57 212,238 46.22 169,905 42.79
6.00% - 6.99% 51,064 9.23 51,540 11.22 32,596 8.21
7.00% - 7.99% 3,711 .67 12,326 2.69 17,123 4.31
8.00% - 10.25% 251 .04 507 .11 646 0.16
------- ------ ------- ------ ------- ------
Total Time deposits 330,268 59.68 291,501 63.48 237,118 59.72
Non-interest-bearing demand deposits 29,375 5.31 14,572 3.17 8,886 2.24
Savings deposits (2.51%-2.51%-2.50%) 34,644 6.26 35,065 7.64 37,010 9.32
Interest-bearing demand
deposits (2.36%-2.41%-2.51%) 155,485 28.10 115,232 25.09 112,224 28.26
Accrued Interest 3,593 .65 2,866 .62 1,817 .46
------- ------ ------- ------ ------- ------
Total Deposits $553,365 100.00% 459,236 100.00% $397,055 100.00%
======= ====== ======= ====== ======= ======

A table showing rate and maturity information for the Bank's time deposits
as of June 30, 1998 is presented in Note 6 of Notes to Consolidated Financial
Statements in the Annual Report to Stockholders, which portions are
incorporated herein by reference.

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. Deposit flows at
banks 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,
----------------------------------------
1998 1997 1996
---------- ---------- ----------
(Dollars in thousands)

Opening balance $ 459,236 $ 397,055 $ 384,327
Deposits 2,716,544 2,143,074 1,731,347
Withdrawals 2,637,581 2,092,700 1,730,268
Interest credited 15,166 11,807 11,649
--------- --------- ---------
Ending Balance $ 553,365 $ 459,236 $ 397,055
========= ========= =========
Net increase $94,129 $62,181 $12,728
====== ====== ======
Percent increase 20.5% 15.66% 3.31%
==== ==== ====

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.

The following table sets forth the time remaining until maturity of the Bank's time deposits as of June 30,
1998. The table is based on information prepared in accordance with generally accepted accounting principles.

Maturity
---------------------------------------------------------
Over 30 Over Over
30 Days Days to 6 to 12 12
or Less 6 Months Months Months Total
-------- -------- -------- -------- --------
(Dollars in thousands)

Time deposits:
Less than $100,000 $ 27,385 $ 57,477 $41,603 $36,151 $162,616
$100,000 or more 14,455 13,139 12,571 7,035 47,200
Brokered 37,598 47,079 30,925 3,375 118,977
Public funds (1) -- 1,034 441 -- 1,475
------ ------- ------ ------ -------
Total $ 79,438 $118,729 $85,540 $46,561 $330,268
====== ======= ====== ====== =======
<FN>
(1) Deposits from governmental and other public entities.

27
Borrowings. Great Southern's other sources of funds include advances from
the FHLBank and, prior to converting to a state trust charter at June 30, 1998,
included 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 that 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 $50 million revolving line of credit with the FHLBank which
provides for immediately available funds. At June 30, 1998, $27.2 million of
the revolving line was in use with $22.8 million remaining available. These
funds can be drawn by the Bank for lending or other liquidity needs with some
limitations.

The Bank's borrowings previous to June 30, 1998 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,
------------------------------
1998 1997 1996
------------------------------
(Dollars in thousands)
Maximum Balance:
FHLBank advances $211,270 $207,576 $188,450
Collateralized borrowings 41,176 28,744 20,132

Average Balances:
FHLBank advances $161,913 $166,023 $169,468
Collateralized borrowings 32,234 18,894 17,344

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,
-------------------------------
1998 1997 1996
-------- ------- --------
(Dollars in thousands)

FHLBank advances $169,563 $151,881 $180,797
Collateralized borrowings -- 28,744 16,468
------- ------- -------
Total borrowings $169,563 $180,625 $197,265
======= ======= =======

Weighted average interest rate
of FHLBank advances 6.00 6.42% 6.06%
==== ==== ====

Weighted average interest rate
of collateralized borrowings n/a 3.24% 2.63%
==== ==== ====
28
Subsidiaries

Great Southern. As a Missouri-chartered trust company, Great Southern may
invest up to 3% of its assets in service corporations. At June 30, 1998, the
Bank's total investment in Great Southern Financial Corporation ("GSFC") was
$1.1 million. GSFC is incorporated under the laws of the state of Missouri.
This subsidiary is 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 net income of $13,000 and a
net loss of $2,000 in fiscal 1998 and 1997, 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 $145,000 and $133,000 in fiscal 1998 and 1997,
respectively.

Travel Agency. Great Southern Travel, a division of GSFC, was organized
in 1976. At June 30, 1998, it was the largest travel agency based in
southwestern Missouri and estimated to be in the top 5% (based on gross
revenue) of travel agencies nation-wide. Great Southern Travel operates from
26 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
$122,000 and $46,000 in fiscal 1998 and 1997, respectively.

GSB One, L.L.C. This is a Missouri limited liability company that was
incorporated in March of 1998 and had not become active except for some minor
expense payments for organizing.

GSB Two, L.L.C. This is a Missouri limited liability company that was
incorporated in March of 1998 and had not become active except for some minor
expense payments for organizing.

At June 30, 1998, the Company's total investment in Great Southern Capital
Management ("Capital Management") was $473,000. Capital Management was
incorporated and organized in 1988 under the laws of the state of Missouri.
Capital Management is a registered broker/dealer and a member of the National
Association of Securities Dealers, Inc. ("NASD") and the Securities Investors
Protection Corporation ("SIPC"). Capital Management offers a full line of
financial consultation, investment counseling and discount brokerage services
including execution of transactions involving stocks, bonds, options, mutual
funds and other securities. In addition, Capital Management is registered as a
municipal securities dealer. Capital Management operates through Great
Southern's branch office network. Capital Management had net income of
$279,000 and $243,000 in fiscal 1998 and 1997, 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 commercial banks, savings institutions
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 Bank and Company subsidiaries, face significant
competition in their markets.

29
The Bank faces substantial competition in attracting deposits from other
commercial banks, savings institutions, 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 commercial banks and savings institutions 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 inter-branch deposit and withdrawal
privileges at each branch location.

Employees

At June 30, 1998, the Bank and its affiliates had a total of 529
employees, including 246 part-time employees. None of the Bank's employees is
represented by any collective bargaining agreement. Management considers its
employee relations to be good.

Supervision and Regulation

General

On June 30, 1998, the Bank converted from a federal savings bank to a
Missouri-chartered trust company, with the approval of the Missouri Division of
Finance ("MDF") and the FRB. By converting, the Bank was able to expand its
consumer and commercial lending authority.

Bancorp and its subsidiaries are subject to supervision and examination by
applicable federal and state banking agencies. The earnings of the Bank's
subsidiaries, and therefore the earnings of Bancorp, are affected by general
economic conditions, management policies and the legislative and governmental
actions of various regulatory authorities, including the FRB, the Federal
Deposit Insurance Corporation ("FDIC") and the MDF. In addition, there are
numerous governmental requirements and regulations that affect the activities
of the Company and its subsidiaries. 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.

Bank Holding Company Regulation

As a result of the conversion, the Company became a bank holding company,
subject to comprehensive regulation by the FRB under the Bank Holding Company
Act of 1956, as amended (the "BHCA"), and the regulations of the FRB. As a
bank holding company, the Company is required to file reports with the FRB and
such additional information as the FRB may require, and is subject to regular
inspections by the FRB. The FRB also has extensive enforcement authority over
bank holding companies, including, among others things, the ability to assess
civil money penalties, to issue cease and desist or removal orders and to
require that a holding company divest subsidiaries (including its bank
subsidiaries). In general, enforcement actions may be initiated for violations
of law and regulation as well as unsafe or unsound practices.

Under FRB policy, a bank holding company must serve as a source of
strength for its subsidiary banks. Under this policy the FRB may require, and
has required in the past, bank holding companies to contribute additional
capital to undercapitalized subsidiary banks. Under the BHCA, a bank holding
company must obtain FRB approval before, among other matters: (i) acquiring,
directly or indirectly, ownership or control of any voting shares of another
bank or bank holding company if, after such acquisition, it would own or
control more than 5% of such shares (unless it already owns or controls the
majority of such shares); (ii) acquiring all or substantially all of the assets
of another bank or bank holding company; or (iii) merging or consolidating with
another bank holding company

30
The BHCA prohibits a bank holding company, with certain exceptions, from
acquiring direct or indirect ownership or control of more than 5% of the
voting shares of any company which is not a bank or bank holding company, or
from engaging directly or indirectly in activities other than those of
banking, managing or controlling banks, or providing services for its
subsidiaries. The principal exceptions to these prohibitions involve certain
non-bank activities which, by statute or by FRB regulation or order, have been
identified as activities closely related to the business of banking or
managing or controlling banks. The list of activities permitted by the FRB
includes, among other things, operating a savings institution, mortgage
company, finance company, credit card company or factoring company; performing
certain data processing operations; providing certain investment and financial
advice; underwriting and acting as an insurance agent for certain types of
credit-related insurance; leasing property on a full-payout, non-operating
basis; selling money orders, travelers' checks and United States Savings
Bonds; real estate and personal property appraising; providing tax planning
and preparation services; and providing securities brokerage services for
customers. The scope of permissible activities may be expanded from time to
time by the FRB. Such activities may also be affected by federal legislation.

Interstate Banking and Branching

In 1994, the Riegle-Neal Interstate Banking and Branching Efficiency Act
of 1994 (the "Riegle-Neal Act") was enacted to ease restrictions on interstate
banking. Effective September 29, 1995, the Riegle-Neal Act allows the FRB to
approve an application of an adequately capitalized and adequately managed
bank holding company to acquire control of, or acquire all or substantially
all of the assets of, a bank located in a state other than such holding
company's home state, without regard to whether the transaction is prohibited
by the laws of any state. The FRB may not approve the acquisition of a bank
that has not been in existence for the minimum time period (not exceeding five
years) specified by the statutory law of the host state. The Riegle-Neal Act
also prohibits the FRB from approving an application if the applicant (and its
depository institution affiliates) controls or would control more than 10% of
the insured deposits in the United States or 30% or more of the deposits in
the target bank's home state or in any state in which the target bank
maintains a branch. The Riegle-Neal Act does not affect the authority of
states to limit the percentage of total insured deposits in the state which
may be held or controlled by a bank or bank holding company to the extent such
limitation does not discriminate against out-of-state banks or bank holding
companies. Individual states may also waive the 30% state-wide concentration
limit contained in the Riegle-Neal Act.

Additionally, the federal banking agencies are authorized to approve
interstate merger transactions without regard to whether such transactions are
prohibited by the law of any state, unless the home state of one of the banks
opted out of the Riegle-Neal Act by adopting a law after the date of enactment
of the Riegle-Neal Act and prior to June 1, 1997 which applies equally to all
out-of-state banks and expressly prohibits merger transactions involving out-
of-state banks. Texas and Montana have opted out. Interstate acquisitions of
branches are permitted only if the law of the state in which the branch is
located permits such acquisitions. Interstate mergers and branch acquisitions
are also subject to the nationwide and statewide insured deposit concentration
amounts described above.

The Riegle-Neal Act authorizes the OCC and the FDIC to approve interstate
branching de novo by national and state banks, respectively, only in states
which specifically allow for such branching. As required by the Riegle-Neal
Act, the OCC, FDIC and FRB have prescribed regulations which prohibit any out-
of-state bank from using the interstate branching authority primarily for the
purpose of deposit production, including guidelines to ensure that interstate
branches operated by an out-of-state bank in a host state reasonably help to
meet the credit needs of the communities which they serve.

31
Certain Transactions with Affiliates and Other Persons

Transactions involving a bank 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 bank generally may not lend to any affiliate engaged in activities not
permissible for a bank holding company or acquire shares of an affiliate.
These provisions currently apply to transactions between the Bank and the
Company or the Bank and the Holding Company's non-bank subsidiary. 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.

Prior to the enactment of the Financial Institutions Reform, Recovery and
Enforcement Act of 1989 ("FIRREA") on August 9, 1989, 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 FRB
regulations restricting loans and other transactions with affiliated persons of
Great Southern. FIRREA required that all such transactions be on terms and
conditions comparable to those for similar transactions with non-affiliates and
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 within 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.

Dividends

The FRB has issued a policy statement on the payment of cash dividends by
bank holding companies, which expresses the FRB's view that a bank holding
company should pay cash dividends only to the extent that its net income for
the past year is sufficient to cover both the cash dividends and a rate of
earning retention that is consistent with the holding company's capital needs,
asset quality and overall financial condition. The FRB also indicated that it
would be inappropriate for a company experiencing serious financial problems
to borrow funds to pay dividends. Furthermore, under the prompt corrective
action regulations adopted by the FRB, the FRB may prohibit a bank holding
company from paying any dividends if the holding company's bank subsidiary is
classified as "undercapitalized."

Bank holding companies are required to give the FRB prior written notice
of any purchase or redemption of its outstanding equity securities if the
gross consideration for the purchase or redemption, when combined with the net
consideration paid for all such purchases or redemptions during the preceding
12 months, is equal to 10% or more of their consolidated net worth. The FRB
may disapprove such a purchase or redemption if it determines that the
proposal would constitute an unsafe or unsound practice or would violate any
law, regulation, FRB order, or any condition imposed by, or written agreement
with, the FRB. This notification requirement does not apply to any company
that meets the well-capitalized standard for commercial banks, has a safety
and soundness examination rating of at least a "2" and is not subject to any
unresolved supervisory issues. Under Missouri law, the Bank may pay dividends
from certain undivided profits and may not pay dividends if its capital is
impaired.

32
The Federal banking agencies have adopted capital-related regulations.
Under those regulations, a bank will be well capitalized if it: (i) has a risk-
based capital ratio of 10% or greater; (ii) has a ratio of Tier I capital to
risk-adjusted assets of 6% or greater; (iii) has a ratio of Tier I capital to
adjusted total assets of 5% or greater; and (iv) is not subject to an order,
written agreement, capital directive or prompt corrective action directive to
meet and maintain a specific capital level for any capital measure. A bank
will be adequately capitalized if it is not "well capitalized" and: (i) has a
risk-based capital ratio of 8% or greater; (ii) has a ratio of Tier I capital
to risk-adjusted assets of 4% or greater; and (iii) has a ratio of Tier I
capital to adjusted total assets of 4% or greater (except that certain
associations rated "Composite 1" under the federal banking agencies' CAMEL
rating system may be adequately capitalized if their ratios of core capital to
adjusted total assets are 3% or greater). As of June 30, 1998, the Bank was
"well capitalized."

Banking agencies have recently adopted final regulations that mandate that
regulators take into consideration concentrations of credit risk and risks from
non-traditional activities, as well as an institution's ability to manage those
risks, when determining the adequacy of an institution's capital. This
evaluation will be made as part of the institution's regular safety and
soundness examination. Banking agencies also have recently adopted final
regulations requiring regulators to consider interest rate risk (when the
interest rate sensitivity of an institution's assets does not match the
sensitivity of its liabilities or its off-balance-sheet position) in the
evaluation of a bank's capital adequacy. Concurrently, banking agencies have
proposed a methodology for evaluating interest rate risk. After gaining
experience with the proposed measurement process, these banking agencies intend
to propose further regulations to establish an explicit risk-based capital
charge for interest rate risk.

The FRB has established capital regulations for bank holding companies
that generally parallel the capital regulations for banks. As of June 30,
1998, the Company was "well capitalized."

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 take enforcement actions against banks and savings
associations.

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.
33
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.

The FDIC collects 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 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.

The Federal banking regulators are required 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 FDIC has jurisdiction
over the Bank for purposes of prompt corrective action.

Insured depository institutions that are not well-capitalized are
prohibited 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

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 $43.1 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 $4.7 million in accounts subject
to these reserve requirements. At June 30, 1998, the Bank was in compliance
with these reserve requirements.

Banks are authorized to borrow from the Federal Reserve Bank "discount
window," but Federal Reserve Board regulations only allow this borrowing for
short periods of time and generally require banks to exhaust other reasonable
alternative sources of funds where practical, including FHLBank advances,
before borrowing from the Federal Reserve Bank.

34
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, 1998, Great Southern had $9.5
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 7.4% and were 6.8% for
fiscal year 1998. 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.

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.

There are 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 members' 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. 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.

35
Legislative and Regulatory Proposals

Any changes in the extensive regulatory scheme to which Charter One is
and will be subject, whether by any of the Federal banking agencies or
Congress, could have a material effect on Charter One, and Charter One cannot
predict what, if any, future actions may be taken by legislative or regulatory
authorities or what impact such actions may have.

The Clinton Administration and Congressional leaders have been
considering measures to restructure the regulation of banks and savings
associations. Legislation pending in the Senate, which passed the House of
Representatives as H.R. 10, would, if ultimately enacted into law, provide for
sweeping financial modernization of the banking system. The stated purposes
of H.R. 10 are to enhance consumer choice in the financial services
marketplace, level the playing field among providers of financial services and
increase competition. H.R. 10 would remove certain restrictions contained in
the Glass-Steagall Act of 1933 and the BHCA, thereby allowing qualified
financial holding companies to control banks, securities firms, insurance
companies and other financial firms. Conversely, securities firms, insurance
companies and other financial firms would be allowed to own or affiliate with
commercial banks. Under the new framework, the FRB would serve as an umbrella
regulator to oversee the new financial holding company structure. Securities
affiliates would be required to comply with all applicable federal securities
laws, including registration and other requirements applicable to broker-
dealers. H.R. 10 would also provide that insurance affiliates of banks be
subject to applicable state insurance regulations and supervision. With
respect to the thrift industry, H.R. 10 would, among other things, restrict
the interstate branching authority of federal savings associations to that
applicable to banks, but permit institutions to keep existing branches. In
addition, the bill would merge the OTS and the OCC, and would also merge the
SAIF and the Bank Insurance Fund after a waiting period. There can be no
assurance of when or if the legislation described will be enacted, or if
enacted, what form such legislation will ultimately take.

FEDERAL AND STATE TAXATION

The following discussion contains a summary of certain federal and state
income tax provisions applicable to the Company and the Bank. It is not a
comprehensive description of the federal income tax laws that may affect the
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.

General

The 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 banks.

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

36
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.

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
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 Company or another member of the consolidated group incurred 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.

37
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.

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 two
years. The amount of post 1987 recapture for the Bank is estimated at $5
million which would create tax of approximately $2 million, or $500,000 per
year for each of the remaining four 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.

38
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 banks, such as the Bank, are subject to a franchise tax
which is imposed on the larger of (i) the bank's net income at the rate of 7%
of the net income (determined without regard for any net operating losses); or
(ii) the banks assets at a rate of .05% of total assets less deposits and the
investment in greater than 50% owned subsidiaries. Missouri based banks are
entitled to a credit against the franchise tax for all other state or local
taxes on banks, 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.

The Company and all 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
1998. The return is filed on a consolidated basis by all members of the
consolidated group including the Bank.

Delaware Taxation

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

39
Examinations

The 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, 1994.

Item 2. Properties.

The following table sets forth certain information concerning the main
office and each branch office of the Company at September 15, 1998. The
aggregate net book value of the Company's premises and equipment was $9.5
million and $7.4 million, respectively, at June 30, 1998 and 1997. 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
3961 S. Campbell Springfield, Missouri 1998 Leased 2028
2631 E. Sunshine Springfield, Missouri 1988 Leased* 2017

1580 W. Battlefield Springfield, Missouri 1985 Leased* 2018
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
1232 S. Rangeline Joplin, Missouri 1998 Leased* 2018
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

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
_____________________________
* Building owned with land leased.
** Lease has unlimited successive 5 year renewals after the first 5 year term.
In addition, the travel division has offices in many of the above locations as well as several small
offices in other locations including some of its larger corporate customer's headquarters.

40
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, 1998 was $2 million compared to $597,000 at June 30, 1997.
The increase is primarily in connection with the core system upgrade and Year
2000 discussion in "Management's Discussion and Analysis - Year 2000" in the
Annual Report to Stockholders, which portions are incorporated herein by
reference. Management has a disaster recovery plan in place with respect to
the data processing system as well as the Banks operations as a whole.

The Bank maintains a network of Automated Teller Machines ("ATMs"). The
Bank utilizes an external service for operation of the ATMs that also allows
access to the various national ATM networks. A total of 95 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, 1998 was $943,000 compared to $689,000 at June 30, 1997. The Bank will
evaluate and relocate existing ATMs as needed, but has no plans in the near
future to materially increase its investment in the ATM network.

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, 1998.

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 22, 1998.

The following information as to the business experience during the past five
years is supplied with respect to executive officers of the Company and its
subsidiaries who are not directors of the 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.

Richard L. Wilson. Mr. Wilson, age 40, 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 Company and its subsidiaries.
Mr. Wilson is a Certified Public Accountant.

Michael D. Lawson. Mr. Lawson, age 34, is First Vice President and Commercial
Business Development Officer 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 46, is First Vice President and Senior
Lending 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.

41
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 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." For the table setting
forth the range of high and low bid prices of the Company's Common Stock during
each fiscal quarter for fiscal years 1998 and 1997, as reported by the NASD,
see the table under the heading "Stock Information", which such portions are
incorporated herein by reference.
Dividend
Declarations
Fiscal Year 1998 First Quarter $.10
Second Quarter .11
Third Quarter .11
Fourth Quarter .11

Fiscal Year 1997 First Quarter $.0875
Second Quarter .10
Third Quarter .10
Fourth Quarter .10

The last inter-dealer bid for the Company's Common Stock on June 30, 1998 was
$25 3/8.

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.

42
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,
----------------------------------------------------------
1998 1997 1996 1995 1994 1993
-------- -------- -------- -------- -------- --------
(Dollars in thousands, except per share data)

Summary Statement of Condition Information:
Year-end assets $795,091 707,841 $668,105 $622,380 $534,740 $515,293
Year-end loans receivable, net 655,226 583,709 546,759 519,255 443,750 419,527
Year-end allowance for loan losses 16,373 15,524 14,356 14,601 13,636 10,590
Year-end available-for-sale securities 6,363 7,408 4,656 3,091 -- --
Year-end held-to-maturity securities 50,363 49,757 49,182 46,970 48,217 51,218
Year-end foreclosed assets held for sale, net 4,751 5,651 9,862 7,999 6,070 8,909
Year-end allowance for foreclosed asset losses -- 319 1,086 933 1,549 1,192
Year-end intangibles 626 -- 1,102 1,187 1,272 1,356
Year-end deposits 553,365 459,236 397,055 384,327 358,987 326,611
Year-end total borrowings 169,563 180,625 197,265 168,270 108,587 130,253
Year-end stockholders' equity (retained
earnings substantially restricted) 67,409 60,348 67,808 62,982 61,462 51,723
Average loans receivable, net 624,290 561,146 536,695 486,726 433,638 376,620
Average total assets 747,901 670,172 643,885 584,536 527,842 479,261
Average deposits 487,386 416,041 385,734 374,011 340,933 327,647
Average stockholders' equity 64,212 62,200 65,355 60,942 57,758 50,618
Year-end number of deposit accounts 74,070 69,762 60,649 59,461 58,054 53,960
Year-end number of full-service offices 25 25 25 25 25 25

Summary Income Statement Information:
Interest income $61,932 $55,540 $53,938 $47,110 $ 38,988 $ 37,162
Interest expense 31,992 28,822 28,132 23,411 17,433 16,810
Net interest income 29,940 26,718 25,806 23,699 21,555 20,352
Provision for loan losses 1,853 1,706 1,451 1,319 3,023 4,677
Net interest income after provision for loan losses 28,087 25,012 24,355 22,380 18,532 15,675
Service charge fees 3,841 2,785 2,382 2,273 2,131 1,762
Net realized gains on sales of
available-for-sale securities 1,398 205 680 21 -- --
Net realized gains on sales of loans 1,125 522 540 92 565 387
Income (expense) on foreclosed assets 326 286 728 (243) 588 352
Other non-interest income 7,060 6,645 5,994 5,771 5,565 4,692
Non-interest expenses 20,469 20,363 16,274 15,293 14,661 13,599
Income before income taxes 21,368 15,091 18,405 15,001 12,720 9,269
Provision for income taxes 6,924 5,751 7,111 5,513 4,379 4,533
Income before change in accounting principle 14,444 9,340 11,294 9,488 8,341 4,736
Change in accounting principle -- -- -- -- 3,375 --
Net income $14,444 $ 9,340 $11,294 $ 9,488 $ 11,716 $ 4,736

43
Year Ended June 30,
---------------------------------------------------------
1998 1997 1996 1995 1994 1993
------- ------- ------- ------- ------- -------
Per Common Share Data:
Basic earnings per common share:
Income before change in accounting principle $1.79 $1.11 $1.27 $1.04 $ .86 $.48
Change in accounting principle -- -- -- -- .35 --
Net Income 1.79 1.11 1.27 1.04 1.21 .48
Diluted earnings per common share:
Income before change in accounting principle 1.76 1.10 1.23 1.00 .83 .46
Change in accounting principle -- -- -- -- .67 --
Net Income 1.76 1.10 1.23 1.00 1.17 .46
Cash dividends declared .43 .39 .35 .30 .15 .07
Book value 8.47 7.45 7.70 7.00 6.42 5.41
Average shares outstanding 8,052 8,394 8,926 9,162 9,648 9,798
Year-end actual shares outstanding 7,962 8,105 8,812 9,006 9,570 9,558
Year-end fully diluted shares outstanding 8,204 8,488 9,218 9,478 10,056 10,254

Earnings Performance Ratios:
Return on average assets 1.93% 1.39% 1.75% 1.62% 1.58% 0.99%
Return on average stockholders' equity 22.49 15.02 17.28 15.57 14.44 9.37
Non-interest expense to average total assets 2.74 3.04 2.53 2.62 2.78 2.77
Average interest rate spread 3.79 3.79 3.82 3.86 4.05 4.20
Year-end interest rate spread 3.81 3.90 3.72 3.79 3.87 3.71
Net interest margin (1) 4.18 4.17 4.21 4.25 4.31 4.51
Adjusted efficiency ratio (excl. foreclosed assets) 47.20 55.22 45.97 48.01 49.17 50.01
Average interest-earning assets as a percentage
of average interest-bearing liabilities 108.6 108.5 108.4 109.3 107.4 108.3

Year Ended June 30,
---------------------------------------------------------
1998 1997 1996 1995 1994 1993
------- ------- ------- ------- ------- -------

Asset Quality Ratios:
Allowance for loan losses/year-end loans 2.50% 2.66% 2.63% 2.81% 3.08% 2.52%
Non-performing assets/year-end
loans and foreclosed assets 1.81 2.30 2.83 2.25 3.33 3.40
Allowance for loan losses/non-performing loans 227.18 197.01 243.03 380.23 186.04 237.50
Net charge-offs/average loans .16 .10 .32 .07 (0.01) 0.03
Non-performing assets/average total assets 1.60 2.02 2.45 2.18 2.83 3.04

Capital Ratios:
Average stockholders' equity to average assets 8.59% 9.28% 10.15% 10.43% 10.94% 10.56%
Year-end tangible stockholders' equity to assets 8.40 8.53 10.09 9.93 11.26 9.77
Common dividend pay-out ratio 24.0 35.2 28.6 30.0 13.9 13.0

<FN>
(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.

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 22, 1998.

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 1998, which portion is
incorporated herein by reference.

(b) Executive Officers of the Registrant

Included under Part I of this Form 10-K.

See "Beneficial Ownership Reports of Management" in the
Registrant's Definitive Proxy Statement for the fiscal year
1998, 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.

45
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 19, 1998, 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.

(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.

46
(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.

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

The Registrant's Annual Report to Stockholders for the fiscal year
ended June 30, 1998 is attached hereto as exhibit 13.

(16) Letter re change in certifying accountant

Inapplicable.

(18) Letter re change in accounting principles

Inapplicable.

47
(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

On June 8, 1998, the Registrant filed a Form 8-K disclosing,
under Item 5, that its 100% owned subsidiary, Great Southern
Travel, issued a press release announcing the acquisition of a
travel agency located in Monett, Missouri. The disclosure
indicated the acquisition would not have a material impact on the
asset size, capital or earnings of the Registrant.

On July 2, 1998, the Registrant filed a Form 8-K disclosing,
under Item 5, the issuance of a press release announcing the
conversion of its subsidiary thrift, Great Southern Bank, to a
Missouri chartered trust company effective June 30, 1998.

48
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)

Daate: September 16, 1998 By: /s/ William V. Turner
------------------------------------
William V. Turner
Chairman of the Board, President,
Chief Executive Officer and Director
(Principal Executive Officer)

POWER OF ATTORNEY
We, the undersigned officers and directors of Great Southern Bancorp,
Inc., hereby severally and individually constitute and appoint William V.
Turner and Don M. Gibson, and each of them, the true and lawful attorneys and
agents of each of us to execute in the name, place and stead of each of us
(individually and in any capacity stated below) any and all amendments to this
Annual Report on Form 10-K and all instruments necessary or advisable in
connection therewith and to file the same with the Securities and Exchange
Commission, each of said attorneys and agents to have the power to act with or
without the others and to have full power and authority to do and perform in
the name and on behalf of each of the undersigned every act whatsoever
necessary or advisable to be done in the premises as fully and to all intents
and purposes as any of the undersigned might or could do in person, and we
hereby ratify and confirm our signatures as they may be signed by our said
attorneys and agents or each of them to any and all such amendments and
instruments.

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 16, 1998
- ---------------------- the Board and Director
(William V. Turner) (Principal Executive
Officer)

/s/ Don M. Gibson Executive Vice President, September 16, 1998
- ---------------------- Secretary and Treasurer
(Don M. Gibson) (Principal Financial
Officer and Principal
Accounting Officer)

/s/ William E. Barclay Director September 16, 1998
- ------------------------
(William E. Barclay)

/s/ Larry D. Frazier Director September 16, 1998
- -------------------------
(Larry D. Frazier)

Director September 16, 1998
- -------------------------
(William K. Powell)

/s/ Joseph W. Turner Director September 16, 1998
- -------------------------
(Joseph W. Turner)
49

Great Southern Bancorp, Inc.
Index to Exhibits
Exhibit
No. Document Page No.
- --------- -------------------------------------------- ----------
11 Statement Re Computation of Earnings Per Share . . 50
21 Subsidiaries of the Registrant . . . . . . . . . . 51
23 Consent of Baird, Kurtz & Dobson,
Certified Public Accountants . . . . . . . . . . 52
27 Financial Data Schedule, which is submitted
electronically to the Securities and Exchange
Commission for information only and not filed. . 53

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

Year Ended June 30,
-----------------------
1998 1997
---------- ----------
Basic:
Average shares outstanding 8,052,413 8,394,080
========== =========
Net income $14,444,049 $9,339,865
========== =========
Per share amount $1.79 $1.11
==== ====

Diluted:
Average shares outstanding 8,052,413 8,394,080
Net effect of dilutive stock options -
based on the treasury stock method
using the higher of average market
price or period end market price 151,162 93,682
---------- ---------
Diluted shares 8,203,575 8,487,762
========== =========
Net income $14,444,049 $ 9,339,865
========== =========
Per share amount $1.76 $1.10
==== ====

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

SUBSIDIARIES OF THE REGISTRANT

State of
Percentage Incorporation
of or
Parent Subsidiary Ownership Organization
- ------------------------------------ --------------------------------------- ---------- -------------

Great Southern Bancorp, Inc. Great Southern Bank 100% Missouri

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

Great Southern Bank Great Southern Financial Corporation 100% Missouri

Great Southern Bank GSB One, L.L.C. 100% Missouri

Great Southern Bank GSB Two, L.L.C. 100% Missouri

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

Exhibit 27
----------

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, 1998.

/s/ Baird, Kurtz & Dobson

September 24, 1998
Springfield, Missouri