SCHEDULE 14A INFORMATION
(RULE 14A-101)
INFORMATION REQUIRED IN PROXY STATEMENT

SCHEDULE 14A INFORMATION
PROXY STATEMENT PURSUANT TO SECTION 14(A) OF THE SECURITIES
EXCHANGE ACT OF 1934 (AMENDMENT NO. )

Filed by the Registrant [X]
Filed by a Party other than the Registrant [ ]

Check the appropriate box:
[ ] Preliminary Proxy Statement
[X ] Definitive Proxy Statement
[ ] Definitive Additional Materials
[ ] Soliciting Material Pursuant to Rule 14a-11(c)
or Rule 14a-12
[ ] Confidential, for Use of the Commission Only (as permitted
by Rule 14a-6(e)(2))

NORTH ARKANSAS BANCSHARES, INC.
- - ----------------------------------------------------------------
(Name of Registrant as Specified in its Charter)

- - ----------------------------------------------------------------
(Name of Person(s) Filing Proxy Statement, if other than
Registrant)

Payment of Filing Fee (Check the appropriate box):
[X] No Fee Required
[ ] Fee computed on table below per Exchange Act Rules
14a-6(i)(1) and 0-11.

1. Title of each class of securities to which
transaction applies:
________________________________________________________________

2. Aggregate number of securities to which transaction
applies:
________________________________________________________________

3. Per unit price or other underlying value of
transaction computed pursuant to Exchange Act Rule 0-11
(set forth the amount on which the filing fee is
calculated and state how it was determined):
________________________________________________________________

4. Proposed maximum aggregate value of transaction:
________________________________________________________________

5. Total fee paid:
________________________________________________________________

[ ] Fee paid previously with preliminary materials:
[ ] Check box if any part of the fee is offset as provided by
Exchange Act Rule 0-11(a)(2) and identify the filing for
which the offsetting fee was paid previously. Identify the
previous filing by registration statement number, or the
Form or Schedule and the date of its filing.

1. Amount previously paid:
____________________________________________

2. Form, Schedule or Registration Statement no.:
____________________________________________

3. Filing Party:
____________________________________________

4. Date Filed:
____________________________________________

NORTH ARKANSAS BANCSHARES, INC.
200 OLIVIA DRIVE
NEWPORT, ARKANSAS 72112

October 5, 1999

Dear Fellow Stockholder:

You are cordially invited to attend the 1999 Annual
Meeting of Stockholders of North Arkansas Bancshares, Inc. to be
held at Newport Federal Savings Bank, 200 Olivia Drive, Newport,
Arkansas on Friday, October 29, 1999 at 4:00 p.m., local time.
Your Board of Directors and Management look forward to
personally greeting those stockholders able to attend.

The attached Notice of Annual Meeting and Proxy Statement
describe the formal business to be transacted at the meeting.
During the meeting, we will also report on the operations of the
Company. Directors and officers of the Company will be present
to respond to any questions the stockholders may have.

WE URGE YOU TO SIGN, DATE AND RETURN THE ENCLOSED PROXY
CARD AS SOON AS POSSIBLE EVEN IF YOU CURRENTLY PLAN TO ATTEND
THE ANNUAL MEETING. Your vote is important, regardless of the
number of shares you own. This will not prevent you from voting
in person but will assure that your vote is counted if you are
unable to attend the meeting. On behalf of your Board of
Directors, thank you for your interest and support.

Sincerely,

/s/ Brad Snider

Brad Snider
President

________________________________________________________________
NORTH ARKANSAS BANCSHARES, INC.
200 OLIVIA DRIVE
NEWPORT, ARKANSAS 72112
(870) 523-3611
________________________________________________________________
NOTICE OF ANNUAL MEETING OF STOCKHOLDERS
TO BE HELD ON OCTOBER 29, 1999
________________________________________________________________

NOTICE IS HEREBY GIVEN that the Annual Meeting of
Stockholders (the "Meeting") of North Arkansas Bancshares, Inc.
(the "Company"), will be held at Newport Federal Savings Bank,
200 Olivia Drive, Newport, Arkansas at 4:00 p.m. on Friday,
October 29, 1999.

A Proxy Card and a Proxy Statement for the Meeting are
enclosed.

The Meeting is for the purpose of considering and acting
upon:

1. The election of two directors of the Company; and

2. The transaction of such other matters as may
properly come before the Meeting or any
adjournments thereof.

The Board of Directors is not aware of any other business
to come before the Meeting.

Any action may be taken on any one of the foregoing
proposals at the Meeting on the date specified above or on any
date or dates to which, by original or later adjournment, the
Meeting may be adjourned. Stockholders of record at the close
of business on September 17, 1999, are the stockholders entitled
to notice of and to vote at the Meeting and any adjournments
thereof.

You are requested to fill in and sign the enclosed form of
proxy which is solicited by the Board of Directors and to mail
it promptly in the enclosed envelope. The proxy will not be
used if you attend and vote at the Meeting in person.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Pamela Decker

PAMELA DECKER
SECRETARY
Newport, Arkansas
October 5, 1999

________________________________________________________________
IMPORTANT: THE PROMPT RETURN OF PROXIES WILL SAVE YOUR COMPANY
THE EXPENSE OF FURTHER REQUESTS FOR PROXIES IN ORDER TO ENSURE A
QUORUM. A SELF-ADDRESSED ENVELOPE IS ENCLOSED FOR YOUR
CONVENIENCE. NO POSTAGE IS REQUIRED IF MAILED IN THE UNITED
STATES. PLEASE ACT PROMPTLY.
________________________________________________________________

________________________________________________________________
PROXY STATEMENT
OF
NORTH ARKANSAS BANCSHARES, INC.
200 OLIVIA DRIVE
NEWPORT, ARKANSAS 72112

ANNUAL MEETING OF STOCKHOLDERS
OCTOBER 29, 1999
________________________________________________________________

________________________________________________________________
GENERAL
________________________________________________________________

This Proxy Statement is furnished in connection with the
solicitation of proxies by the Board of Directors of North
Arkansas Bancshares, Inc. (the "Company") to be used at the
Annual Meeting of Stockholders of the Company (the "Meeting")
which will be held at Newport Federal Savings Bank, 200 Olivia
Drive, Newport, Arkansas on Friday, October 29, 1999, at 4:00
p.m., local time. The accompanying Notice of Meeting and this
Proxy Statement are being first mailed to stockholders on or
about October 5, 1999.

________________________________________________________________
VOTING AND REVOCABILITY OF PROXIES
________________________________________________________________

Stockholders who execute proxies retain the right to
revoke them at any time. Unless so revoked, the shares
represented by such proxies will be voted at the Meeting and all
adjournments thereof. Proxies may be revoked by written notice
to the Secretary of the Company, at the address shown above, by
filing of a later-dated proxy prior to a vote being taken on a
particular proposal at the Meeting or by attending the Meeting
and voting in person. Proxies solicited by the Board of
Directors of the Company will be voted in accordance with the
directions given therein. WHERE NO INSTRUCTIONS ARE INDICATED,
PROXIES WILL BE VOTED FOR THE NOMINEES FOR DIRECTOR SET FORTH
BELOW. The proxy confers discretionary authority on the persons
named therein to vote with respect to the election of any person
as a director where the nominee is unable to serve or for good
cause will not serve, and matters incident to the conduct of the
Meeting. Proxies marked as abstentions, and shares held in
street name which have been designated by brokers on proxies as
not voted, will not be counted as votes cast. Proxies marked as
abstentions or as broker non-votes will, however, be treated as
shares present for purposes of determining whether a quorum is
present.

________________________________________________________________
VOTING SECURITIES AND PRINCIPAL HOLDERS THEREOF
________________________________________________________________

The securities entitled to notice of and to vote at the
Meeting consist of the Company's common stock, par value $.01
per share (the "Common Stock"). Stockholders of record as of
the close of business on September 17, 1999 (the "Record Date"),
are entitled to one vote for each share of Common Stock then
held. As of the Record Date, there were 333,270 shares of
Common Stock issued and outstanding. The presence, in person or
by proxy, of at least one-third of the total number of shares of
Common Stock outstanding and entitled to vote will be necessary
to constitute a quorum at the Meeting.

Persons and groups owning in excess of 5% of the Common
Stock are required to file certain reports regarding such
ownership pursuant to the Securities Exchange Act of 1934, as
amended (the "Exchange Act") with the Company and the Securities
and Exchange Commission ("SEC"). Based on such reports (and
certain other written information received by the Company),
management knows of no persons other than those set forth below
who owned more than 5% of the outstanding shares of Common Stock
as of the Record Date. The following table sets forth, as of
the Record Date, certain information as to those persons who
were the beneficial owners of more than five percent (5%) of the
Company's outstanding shares of Common Stock and the shares of
Common Stock beneficially owned by all executive officers and
directors of the Company as a group.

PERCENT OF SHARES
NAME AND ADDRESS AMOUNT AND NATURE OF OF COMMON STOCK
OF BENEFICIAL OWNER BENEFICIAL OWNERSHIP(1) OUTSTANDING
- - ------------------- ----------------------- ----------------

North Arkansas Bancshares, Inc. 29,624 (2) 8.89%
Employee Stock Ownership Plan
200 Olivia Drive
Newport, Arkansas 72112

Brad Snider 18,108 (3) 5.26
200 Olivia Drive
Newport, Arkansas 72112

Jeffrey L. Gendell 37,025 11.11%
Tontine Management, L.L.C.
Tontine Financial Partner, L.P.
Tontine Overseas Associates, L.L.C.
200 Park Avenue, Suite 3900
New York, New York 10166

All Executive Officers and Directors 60,751 (4) 17.18%
as a Group (5 persons)
<FN>
__________
(1) For purposes of this table, a person is deemed to be the beneficial owner
of any shares of Common Stock if he or she has or shares voting or
investment power with respect to such Common Stock or has a right to
acquire beneficial ownership at any time within 60 days from the Record
Date. As used herein, "voting power" is the power to vote or direct the
voting of shares and "investment power" is the power to dispose or direct
the disposition of shares. Except as otherwise noted, ownership is
direct, and the named persons exercise sole voting and investment power
over the shares of the Common Stock.
(2) These shares are held in a suspense account for future allocation among
participating employees as the loan used to purchase the shares is
repaid. The trustees of the North Arkansas Bancshares, Inc. Employee
Stock Ownership Plan (the "ESOP"), currently Directors Minor, Guinn and
Hodges, vote all allocated shares in accordance with instructions of the
participants. Unallocated shares and shares for which no instructions
have been received generally are voted by the ESOP trustees in the same
ratio as participants direct the voting of allocated shares or, in the
absence of such direction, as directed by the Company's Board of
Directors. As of the Record Date, 2,962 shares had been allocated.
(3) Includes 11,109 shares underlying currently exercisable stock options
granted under the Option Plan, 882 shares allocated to Mr. Snider's
account under the ESOP, and 5,000 shares held by spouse.
(4) Includes 38,291 shares which Directors and executive officers own
individually, 882 shares which have been allocated to the accounts of
executive officers under the ESOP, 20,442 shares underlying currently
exercisable stock options granted to directors and officers under the
Company's 1998 Stock Option and Incentive Plan (the "Option Plan"), and
1,136 shares awarded to Directors and executive officers under the
Company's Management Recognition Plan ("MRP"). Does not include 2,164
shares with respect to which Directors Minor, Guinn and Hodges have
voting power by virtue of their positions as trustees of a trust formed
to hold assets of the MRP. Does not include 26,662 unallocated shares
held by the ESOP.
</FN>

________________________________________________________________
PROPOSAL I -- ELECTION OF DIRECTORS
________________________________________________________________

The Company's Board of Directors is composed of five
members. The Company's Charter requires that directors be
divided into three classes, as nearly equal in number as
possible, each class to serve for a three year period,

with approximately one-third of the directors elected each year.
The Board of Directors has nominated O. E. Guinn, Jr. and
Kaneaster Hodges, Jr. to serve as directors for a three-year
period.

If any nominee is unable to serve, the shares represented
by all valid proxies will be voted for the election of such
substitute as the Board of Directors may recommend or the size
of the Board may be reduced to eliminate the vacancy. At this
time, the Board knows of no reason why any nominee might be
unavailable to serve.

Under the Company's Bylaws, directors shall be elected by
a plurality of the votes of the shares present in person or by
proxy at the Meeting. Votes which are not cast at the Meeting,
either because of abstentions or broker non-votes, are not
considered in determining the number of votes which have been
cast for or against the election of a nominee. Unless otherwise
specified on the proxy, it is intended that the persons named in
the proxies solicited by the Board will vote for the election of
the named nominees.

The following table sets forth the name of the Board's
nominees for election as directors of the Company and of those
directors who will continue to serve as such after the Meeting.
Also set forth is certain other information with respect to each
person's age, the year he first became a director of the
Company's wholly owned subsidiary, Newport Federal Savings Bank
(the "Bank" or "Newport Federal"), the expiration of his term as
a director, and the number and percentage of shares of the
Common Stock beneficially owned. All of the individuals were
initially appointed as director of the Company in 1997 in
connection with the Company's incorporation, except Mr. McMinn
who was appointed in September 1998 to fill the vacancy caused
by the death of Paul K. Holmes.

SHARES OF
YEAR FIRST COMMON STOCK
ELECTED AS CURRENT BENEFICIALLY
AGE AT DIRECTOR OF TERM OWNED AT THE PERCENT
NAME RECORD DATE THE BANK TO EXPIRE RECORD DATE(1) OF CLASS(2)
---- ----------- ----------- --------- -------------- -----------

BOARD NOMINEES FOR TERMS TO EXPIRE IN 2002

O. E. Guinn, Jr. 70 1971 1999 16,488 (2) 4.90%

Kaneaster Hodges, Jr. 60 1979 1999 13,068 (3) 3.88%

DIRECTORS CONTINUING IN OFFICE

John Minor 65 1971 2000 12,487 (4) 3.71%

Brad Snider 39 1991 2000 18,108 (5) 5.26%

J. C. McMinn 64 1998 2001 600 0.18%
<FN>
___________
(1) Includes stock held in joint tenancy; stock owned as tenants in common;
stock owned or held by a spouse or other member of the individual's
household; stock allocated through certain employee benefit plans of the
Company; stock in which the individual either has or shares voting and/or
investment power and shares which the individual has the right to acquire
at any time within 60 days of the Record Date. Each person or relative
of such person whose shares are included herein exercises sole or shared
voting and dispositive power as to the shares reported. Does not include
shares with respect to which Directors Minor, Guinn and Hodges have
"voting power" by virtue of their positions as trustees of the trust
holding 29,624 shares under the Company's ESOP. The ESOP trustees must
vote all allocated shares held in the ESOP in accordance with the
instructions of the participants. Unallocated shares and allocated
shares for which no timely direction is received are voted by the ESOP
trustees in proportion to the participant-directed voting of allocated
shares. Does not include shares with respect to which Directors Minor,
Guinn, Hodges have "voting power" by virtue of their positions as
trustees of the trust holding 2,164 shares under the Company's MRP.

(2) Includes 500 shares held by spouse, 4,204 shares held in an IRA account
and 4,500 shares held by spouse's IRA account. Also includes 3,111
shares that may be purchased pursuant to the exercise of options.
(3) Includes 5,000 shares held by spouse and 2,000 shares held in a trust.
Also includes 3,111 shares that may be purchased pursuant to the exercise
of options.
(4) Includes 1,600 shares held by spouse, 4,603 shares held in IRA and 3,000
shares held by spouse's IRA. Also includes 3,111 shares that may be
purchased pursuant to the exercise of options.
(5) Includes 11,109 shares underlying currently exercisable stock options
granted under the Option Plan, 882 shares allocated to Mr. Snider's
account under the ESOP, and 5,000 shares held by spouse.
</FN>

The principal occupation of each director of the Company
for the last five years is set forth below.

O. E. GUINN, JR. has been retired since 1994. Prior to
his retirement, he was self-employed as an insurance salesman
specializing in fire and casualty insurance. He is a member of
the Chamber of Commerce and the Newport Lions Club.

KANEASTER HODGES, JR. is an attorney in private practice
in Newport. He is also involved in farming and real estate
investments and operates a Newport-based energy conservation
firm, PSE, LLC. He is a member of the Newport Relief Society,
the Newport Levee District and the Walton Family Charitable
Support Foundation. He also serves on the White River Basin
Study Commission and the Arkansas State University-Beebe
Charitable Foundation, Inc.

JOHN MINOR is an insurance and real estate salesman in
Newport. He is Past President of the Arkansas Professional
Insurance Agents' League, Past President of the Lions Club, the
Newport Booster Club and the Jackson County Wildlife Federation.
He is a former member of the Newport School Board.

BRAD SNIDER has served as President and Chief Executive
Officer and Director since 1991. He has served as President of
the Newport Area Chamber of Commerce and serves on the boards of
the United Way of Jackson County, the Arkansas League of
Savings, the Newport Industrial Development Association and the
Arkansas State University/Newport Foundation. He is also a
Commissioner of the Newport Housing Authority of the City of
Newport and is a member of the Rotary Club.

J. C. MCMINN has served as Manager of Eldridge Supply
Company, a farm implement supply company based in Newport since
1987. He is a member of the Newport Kiwanis Club. He served on
the Newport Civil Service Commission, the City Beautiful
Commission, the American Legion Baseball Committee and the
Chamber of Commerce Agricultural Committee.
________________________________________________________________
MEETINGS AND COMMITTEES OF THE BOARD OF DIRECTORS
________________________________________________________________

The Board of Directors conducts its business through
meetings of the board and through activities of its committees.
During the year ended June 30, 1999, the board of directors held
12 regular meetings and 3 special meetings. No director
attended fewer than 75% of the total meetings of the board of
directors and committees on which such director served during
the year ended June 30, 1999.

The Company's Nominating Committee consists of the entire
Board of Directors. The Board met once in this capacity during
fiscal year 1999.

The full Board functions as an Audit Committee, in
conjunction with regularly scheduled Board meetings.

The Investment Committee consists of Directors Snider,
Hodges and Guinn. In addition to addressing investment issues
on regular Board meetings, the Committee meets as needed for
analysis and decision making.
4

________________________________________________________________
EXECUTIVE COMPENSATION
________________________________________________________________

SUMMARY COMPENSATION TABLE. The following table sets
forth the cash and non-cash compensation awarded to or earned by
the Chief Executive Officer of the Company and the Bank. No
other employee earned in excess of $100,000 for the year ended
June 30, 1999.

LONG-TERM
COMPENSATION AWARDS
ANNUAL COMPENSATION -----------------------
-------------------------------- RESTRICTED SECURITIES
NAME AND FISCAL OTHER ANNUAL STOCK UNDERLYING ALL OTHER
PRINCIPAL POSITION YEAR SALARY BONUS COMPENSATION(1) AWARD(S)(2) OPTIONS COMPENSATION
- - ------------------ ------ ------ ----- --------------- ----------- ---------- ------------

Brad Snider 1999 $75,245 $ -- $10,500 $18,057 (2) 11,109 $4,085 (2)
1998 75,245 -- 10,500 -- -- 4,085
1997 71,662 -- 10,500 -- -- 4,085
<FN>
___________
(1) Consists of director fees.
(2) As of June 30, 1999, Mr. Snider held 1,235 shares of restricted stock which, based on the closing
price of the Common Stock of $8.3125 at June 30, 1999, had a value of $10,266. Shares of
restricted stock awarded during fiscal year 1999 will fully vest upon the completion of two years
from the date of award.
(3) Consists of premiums paid on behalf of Mr. Snider for split-dollar life insurance ($2,465) and
disability insurance ($1,620).
</FN>

OPTION GRANTS IN LAST FISCAL YEAR. The following table
contains information concerning the grant of stock options under
the Option Plan to the Chief Executive Officer of the Company
and the Bank during fiscal 1999.

NUMBER OF % OF TOTAL
SECURITIES OPTIONS
UNDERLYING GRANTED TO EXERCISE
OPTIONS EMPLOYEES IN OR BASE EXPIRATION
NAME GRANTED (1) FISCAL YEAR PRICE DATE
- - ---- ----------- ------------ -------- ------------

Brad Snider 11,109 100% $9.75 12/19/2008
<FN>
____________
(1) Options became 100% vested and immediately exercisable upon the
date of effectiveness of the Option Plan, December 21, 1998.
</FN>

YEAR-END OPTION/SAR VALUES. The following table sets
forth information concerning the number and potential realizable
value at the end of the fiscal year of options held by the Chief
Executive Officer of the Company and the Bank. Mr. Snider did
not exercise any options during fiscal 1999.

NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY OPTIONS
OPTIONS AT FISCAL YEAR-END AT FISCAL YEAR-END (1)
-------------------------- -----------------------------
NAME EXERCISABLE UNEXERCISABLE EXERCISABLE UNEXERCISABLE
- - ---- ----------- ------------- ----------- -------------

Brad Snider 11,109 $ -- $ -- $ --
<FN>
___________
(1) The exercise price of the options ($9.75 per share) exceeded the market
value of the Common Stock at June 30, 1999.
</FN>

PENSION PLAN TABLE. The following table indicates the annual
retirement benefit that would be payable under the plan upon
retirement at age 65 to a participant electing to receive his
retirement benefit in the standard form of benefit, assuming
various specified levels of plan compensation and various
specified years of credited service. Mr. Snider's credited
years of service under the plan are 7.5 years.

YEARS OF SERVICE
CAREER AVERAGE -------------------------------------------
COMPENSATION 15 20 25 30 35
- - -------------- ------- ----- ------ ----- ------

$20,000 $ 4,500 $ 6,000 $ 7,500 $ 9,000 $ 10,500
40,000 9,000 12,000 15,000 18,000 21,000
60,000 13,500 18,000 22,500 27,000 31,500
80,000 18,000 24,000 30,000 36,000 42,000
100,000 22,500 30,000 27,500 45,000 52,500

EMPLOYMENT AGREEMENT. The Bank has entered into an
employment agreement with President, Brad Snider. Mr. Snider's
current base salary under the employment agreement is $75,245.
The employment agreement has a term of three years. The
agreement is terminable by the Bank for "just cause" as defined
in the agreement. If the Bank terminate Mr. Snider without just
cause or if Mr. Snider terminates his employment for "good
reason", Mr. Snider will be entitled to a continuation of his
salary from the date of termination through the remaining term
of the agreement, plus an additional 12 months. The employment
agreement also contains a provision stating that in the event of
the termination of employment in connection with any change in
control of the Company or the Bank, Mr. Snider will be paid a
lump sum amount equal to 2.99 times his five year average annual
taxable cash compensation. If such payments had been made under
the agreement as of June 30, 1999, such payments would have
equaled approximately $212,000. The aggregate payments that
would have been made to Mr. Snider would be an expense to the
Bank, thereby reducing the Bank's net income and the Bank's
capital by that amount. The agreement may be renewed annually
by the board of directors upon a determination of satisfactory
performance within the board's sole discretion. If Mr. Snider
shall become disabled during the term of the agreement, he shall
continue to receive payment of 100% of the base salary for a
period of up to 180 days. Such payments shall not be reduced by
any other benefit payments made under other disability program
in effect for employees. If Mr. Snider's employment terminates
for a reason other than just cause, he will be entitled to
purchase from the Bank family medical insurance through any
group health plan maintained by the Bank.

________________________________________________________________
DIRECTORS' COMPENSATION
________________________________________________________________

Each of the directors is paid an annual fee of $10,500.
Total aggregate fees paid to the directors for the year ended
June 30, 1999 were $52,500.

DIRECTOR RETIREMENT PLAN. The Bank adopted the Newport
Federal Savings Bank Retirement Plan for Directors, effective
May 29, 1997. On the effective date, the Bank established a
bookkeeping account in the name of each non-employee director,
and credited each account with an amount equal to the product of
(i) $2,898, and (ii) the director's full years of service as a
director, up to 20 years. On each fiscal year end, each
participant who is then a director and has 20 or fewer years of
service shall have his account credited with an amount equal to
the product of $2,898 and the safe performance factor, which is
determined based on actual performance as compared to budgeted
goals for return on average equity, non-performing assets and
composite regulatory rating, provided that the safe performance
factor may not exceed 1.2. Also on the effective date, the
account of Brad Snider was credited for $60,000. On each June
30 during each of the years from 1998 until 2006, his account
will be credited with an additional amount equal to the product
of $19,600 and the safe performance factor. In the event Mr.
Snider should die or become disabled, his account will be
credited with an amount equal to the difference (if any) between
(i) 50% of the present value of all benefits

which would have been credited to his account if he had
otherwise remained employed by the Bank to age 65, and (ii) the
benefits which are actually credited to his account at the time
of his death or disability. If his employment terminates in
connection with or following a "change in control" of the Bank,
his account will be credited with an amount equal to the
difference (if any) between (i) 100% of the present value of all
benefits which would have been credited to his account if he had
otherwise remained employed by the Bank to age 65, and (ii) the
benefits which are actually credited to his account at the time
of his termination, subject to applicable "golden parachute"
limitations under federal income tax laws. At June 30, 1999,
approximately $110,000 would have been credited to Mr. Snider's
account had a change in control occurred at such date and his
employment agreement was also in effect. All amounts credited
to participants' accounts are fully vested at all times. Until
distributed in accordance with the terms of the plan, each
participant's account will be credited with a rate of return
equal to the Bank's highest rate of interest paid on
certificates of deposit having a term of one year. Following
the Bank's mutual to stock conversion, each participant may
prospectively elect to have the dividend-adjusted rate of return
on the Common Stock measure future appreciation.

Each participant may elect to receive plan benefits in a
lump sum cash payment or over a period shorter than ten years,
and in the absence of an election will receive payments in ten
substantially equal installments. In the event of a
participant's death, the balance of his plan account will be
paid in a lump sum (unless the participant elects a distribution
period up to ten years) to his designated beneficiary, or if
none, his estate.

Any compensation accrued under the plan will be paid from
the Bank's general assets. The Bank has established a trust in
order to hold assets with which to pay compensation. Trust
assets would be subject to claims of the Bank's general
creditors. In the event a participant prevails over the Bank in
a legal dispute as to the terms or interpretation of the plan,
he would be reimbursed for his legal and other expenses. Upon
the implementation of the plan, the Bank recognized compensation
expense totaling $286,000 to provide for participants' initial
account balances. In fiscal 1999, no allocations were made
under the plan.

________________________________________________________________
TRANSACTIONS WITH MANAGEMENT
________________________________________________________________

The Bank offers loans to its directors, officers, and
employees. These loans currently are made in the ordinary
course of business with the same collateral, interest rates and
underwriting criteria as those of comparable transactions
prevailing at the time and to not involve more than the normal
risk of collectibility or present other unfavorable features.
Under current law, the Bank's loans to directors and executive
officers are required to be made on substantially the same
terms, including interest rates, as those prevailing for
comparable transactions and must not involve more than the
normal risk of repayment or present other unfavorable features.
Furthermore, loans above the greater of $25,000 or 5% of the
Bank's capital and surplus (i.e., up to $500,000) to such
persons must be approved in advance by a disinterested majority
of the board of directors. At June 30, 1999, the Bank's loans
to directors and executive officers totaled $954,848, or 19.32%
of the Company's stockholders' equity at that date.

________________________________________________________________
RELATIONSHIP WITH INDEPENDENT AUDITORS
________________________________________________________________

On January 28, 1999, the Company, with the approval of the
board of directors, dismissed the Company's independent public
auditors, KPMG LLP, and engaged Baird, Kurtz & Dobson, Certified
Public Accountants. KPMG LLP served as the Company's
independent public auditors from 1989 through January 28, 1999.
KPMG LLP's reports on the financial statements of the Company
for the past two fiscal years did not contain any adverse
opinion or disclaimer of opinion, nor were they qualified or
modified as to uncertainty, audit scope or accounting
principles. There have not been any disagreements between the
Company and KPMG LLP on any matter of accounting principles or
practices, consolidated financial statement disclosure or audit
scope or procedure. During the two most recent fiscal years and
the subsequent interim period preceding the dismissal, there
were not any disagreements between the Company and KPMG LLP on
any matter of accounting principles or practices, financial
statement disclosure or auditing

scope or procedure which, if not resolved to the satisfaction of
KPMG LLP would have caused it to make reference to the subject
matter of such disagreement in connection with its report.

Effective January 28, 1999, Baird, Kurtz & Dobson,
Certified Public Accountants was engaged as the Company's
independent public auditors. The Company has not requested or
obtained any advice from Baird, Kurtz & Dobson, Certified Public
Accountants concerning any material accounting, auditing or
financial reporting issue regarding the application of
accounting principles to a specified transaction or the type of
audit opinions that might be rendered on the Company's
consolidated financial statements.

The board of directors has ratified the appointment of
Baird, Kurtz & Dobson, Certified Public Accountants to be the
Company's independent certified public accountants for the
fiscal year ending June 30, 2000. A representative of Baird,
Kurtz & Dobson, Certified Public Accounts is expected to be
present at the Meeting to respond to appropriate questions and
to make a statement, if so desired.

________________________________________________________________
SECTION 16(a) BENEFICIAL OWNERSHIP REPORTING COMPLIANCE
________________________________________________________________

Pursuant to regulations promulgated under the Exchange
Act, the Company's officers, directors and persons who own more
than ten percent of the outstanding Common Stock are required to
file reports detailing their ownership and changes of ownership
in such Common Stock, and to furnish the Company with copies of
all such reports. Based on the Company's review of such reports
which the Company received during the last fiscal year, or
written representations from such persons that no annual report
of change in beneficial ownership was required, the Company
believes that, during the last fiscal year, all persons subject
to such reporting requirements have complied with the reporting
requirements with the exception of Mr. Snider with respect to
two sales which were reported on a Form 5 rather than a Form 4
and Mr. Gendell who, to the Company's knowledge, did not file a
Form 3 upon becoming a greater than ten percent stockholder.

________________________________________________________________
OTHER MATTERS
________________________________________________________________

The Board of Directors is not aware of any business to
come before the Meeting other than those matters described above
in this Proxy Statement. However, if any other matters should
properly come before the Meeting, it is intended that proxies in
the accompanying form will be voted in respect thereof in
accordance with the determination of the Board of Directors.

________________________________________________________________
MISCELLANEOUS
________________________________________________________________

The cost of soliciting proxies will be borne by the
Company. The Company will reimburse brokerage firms and other
custodians, nominees and fiduciaries for reasonable expenses
incurred by them in sending proxy materials to the beneficial
owners of Common Stock. In addition to solicitations by mail,
directors, officers and regular employees of the Company may
solicit proxies personally or by telegraph or telephone without
additional compensation.

The Company's Annual Report to Stockholders, including
financial statements, is being mailed to all stockholders of
record as of the Record Date. Any stockholder who has not
received a copy of such Annual Report may obtain a copy by
writing to the Secretary of the Company. Such Annual Report is
not to be treated as a part of the proxy solicitation materials
or as having been incorporated herein by reference.

________________________________________________________________
STOCKHOLDER PROPOSALS
________________________________________________________________

In order to be eligible to be considered for inclusion in
the Company's proxy materials for the Company's Annual Meeting
in 2000, any stockholder proposal to take action at such meeting
must be received at the Company's executive office at 200 Olivia
Drive, Newport, Arkansas 72112, no later than June 7, 2000. Any
such proposal shall be subject to the requirements of the proxy
rules adopted under the Exchange Act.

Stockholder proposals to be considered at such Annual
Meeting, other than those submitted pursuant to the Exchange
Act, must be stated in writing, delivered or mailed to the
Secretary of the Company, not less than thirty days nor more
than sixty days prior to the date of the Annual Meeting. If
less than forty days' notice of the meeting is given to
stockholders, such notice shall be delivered or mailed to the
Secretary not later than the close of business on the tenth day
following the day on which notice of the meeting was mailed to
stockholders.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ Pamela Decker

PAMELA DECKER
SECRETARY
Newport, Arkansas
October 5, 1999

________________________________________________________________
FORM 10-KSB
________________________________________________________________

A COPY OF THE COMPANY'S FORM 10-KSB FOR THE FISCAL YEAR
ENDED JUNE 30, 1999 AS FILED WITH THE SECURITIES AND EXCHANGE
COMMISSION WILL BE FURNISHED WITHOUT CHARGE TO STOCKHOLDERS AS
OF THE RECORD DATE UPON WRITTEN REQUEST TO THE SECRETARY, NORTH
ARKANSAS BANCSHARES, INC., 200 OLIVIA DRIVE, NEWPORT, ARKANSAS
72112.
________________________________________________________________

NORTH ARKANSAS BANCSHARES, INC.
200 OLIVIA DRIVE
NEWPORT, ARKANSAS 72112

This proxy is solicited on behalf of the Board of Directors

The undersigned hereby appoints John Minor, Brad Snider and J.
C. McMinn, with full powers of substitution, to act as proxies
for the undersigned, to vote all shares of common stock of North
Arkansas Bancshares, Inc. (the "Company") which the undersigned
is entitled to vote at the Annual Meeting of Stockholders (the
"Meeting"), to be held at Newport Federal Savings Bank, 200
Olivia Drive, Newport, Arkansas, on Friday, October 29, 1999 at
4:00 p.m., local time, and at any and all adjournments thereof,
as follows:

A VOTE "FOR" THE PROPOSAL IS RECOMMENDED BY THE BOARD OF
DIRECTORS

1. Election of directors
[ ] FOR all nominees listed below (except as marked to
the contrary)
[ ] WITHHOLD AUTHORITY to vote for all nominees

O. E. Guinn, Jr. Kaneaster Hodges, Jr.

Instructions: To withhold authority to vote for any individual
nominees, write the nominees name in the space provided.

THIS PROXY WILL BE VOTED AS DIRECTED, BUT IF NO INSTRUCTIONS ARE
SPECIFIED, THIS PROXY WILL BE VOTED FOR THE NOMINEES FOR
DIRECTOR LISTED ABOVE. IF ANY OTHER BUSINESS IS PRESENTED AT
THE MEETING, THIS PROXY WILL BE VOTED BY THOSE NAMED IN THIS
PROXY IN ACCORDANCE WITH THE DETERMINATION OF THE BOARD OF
DIRECTORS. AT THE PRESENT TIME, THE BOARD OF DIRECTORS KNOWS OF
NO OTHER BUSINESS TO BE PRESENTED AT THE MEETING. THIS PROXY
CONFERS DISCRETIONARY AUTHORITY ON THE HOLDERS THEREOF TO VOTE
WITH RESPECT TO THE ELECTION OF ANY PERSON AS DIRECTOR WHERE THE
NOMINEE IS UNABLE TO SERVE OR FOR GOOD CAUSE WILL NOT SERVE AND
MATTERS INCIDENT TO THE CONDUCT OF THE MEETING.

_______________________________, 1999

_______________________________
Signature

_______________________________
Signature if Held Jointly

Please sign exactly as your name appears above. For joint
accounts, both owners should sigh. When signing as executor,
administrator, attorney, trustee or guardian, etc., please give
your full title. If a corporation, please sign in full
corporate name by President or other authorized officer. If a
partnership, please sign in partnership name by authorized
person.