Suburban Bancorp Inc – ‘10-K’ for 12/31/93 – EX-13

As of:  Friday, 3/25/94   ·   For:  12/31/93   ·   Accession #:  356981-94-2   ·   File #:  0-11138

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Annual Report   —   Form 10-K
Filing Table of Contents

Document/Exhibit                   Description                      Pages   Size 

 1: 10-K        Filing for 10K                                        18±    83K 
 2: EX-13       Annual Report Incorporated Into 10K                   43±   201K 

EX-13   —   Annual Report Incorporated Into 10K

MANAGEMENT'S REPORT ON RESPONSIBILITY FOR FINANCIAL REPORTING                   

The management of the Company has the responsibility for preparing the          
accompanying financial statements and for their integrity and objectivity.      
The statements were prepared in conformity with generally accepted account-     
ing principles.  The financial statements include amounts that are based on     
management's best estimates and judgments.                                      

The Company has established and maintains a system of internal accounting       
controls and a program of internal auditing designed to provide reasonable      
assurance as to the integrity and reliability of the financial statements.      
The system is also designed to provide reasonable assurance that transac-       
tions are executed in accordance with established authorizations and are        
recorded properly, and that assets are protected from unauthorized use or       
disposition.                                                                    

The audit committee of the Board of Directors, composed solely of directors     
who are not officers or employees, meets regularly with the Company's           
financial management, its internal audit manager and with the independent       
auditors engaged by the Company.  These meetings include discussion of          
internal accounting controls and the quality of financial reporting.  The       
independent auditors and the internal audit manager have free and independ-     
ent access to the audit committee to discuss the results of their audits or     
any other matters relating to the Company's financial affairs.                  

The accompanying consolidated financial statements have been audited by         
Deloitte & Touche, independent auditors, whose appointment was approved by      
the stockholders.  Deloitte & Touche's report follows.                          

/s/ Gerald F. Fitzgerald Jr.                                                    
President and Chief Executive Officer                                           

/s/ James G. Fitzgerald                                                         
Vice President, Treasurer and Chief Financial Officer                           

/s/ Edward C. Murawski                                                          
Senior Vice President, Chief Accounting Officer                                 
and Assistant Secretary                                                         

INDEPENDENT AUDITORS' REPORT                                                    

Board of Directors and Stockholders                                             
Suburban Bancorp, Inc.                                                          
Palatine, Illinois                                                              

We have audited the accompanying consolidated balance sheets of Suburban        
Bancorp, Inc. and subsidiaries as of December 31, 1993 and 1992, and the        
related statements of income, stockholders' equity and cash flows for each      
of the three years in the period ended December 31, 1993.  These financial      
statements are the responsibility of the Company's management.  Our respon-     
sibility is to express an opinion on these financial statements based on        
our audits.                                                                     

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

In our opinion, such consolidated financial statements present fairly, in       
all material respects, the financial position of Suburban Bancorp, Inc. and     
subsidiaries as of December 31, 1993 and 1992 and the results of their          
operations and their cash flows for each of the three years in the period       
ended December 31, 1993 in conformity with generally accepted accounting        
principles.                                                                     

As discussed in Note 1 to the consolidated financial statements, in 1993        
the Company changed its method of accounting for income taxes to conform        
with Statements of Financial Accounting Standard No. 109, "Accounting for       
Income Taxes."                                                                  

/s/ Deloite & Touche                                                            

Chicago, Illinois                                                               
February 4, 1994                                                                

                                                                [Download Table]
SUBURBAN BANCORP, INC. AND SUBSIDIARIES                                      
CONSOLIDATED BALANCE SHEETS                                                  
December 31, 1993 and 1992                                                   
                                                        1993            1992 
                                               ______________  ______________

                                                                             
ASSETS                                                                       
Cash and due from banks (Note 4)                  50,010,965      52,081,494 
Interest-bearing deposits with banks               2,282,212         305,000 
Federal funds sold and resale agreements          57,025,000      60,510,000 
Investment securities held for sale, at                                      
  lower of cost or market (approximate market                                
  value of $411,812,000 in 1993;                                             
  $433,851,000 in 1992) (Note 5)                 401,194,961     421,992,159 
Mortgage-backed and related securities held                                  
  for sale, at lower of cost or market                                       
  (approximated market value of $190,461,000                                 
  in 1993; $116,984,000 in 1992) (Note 5)        187,614,298     115,173,370 
Loans, less allowance for loan losses of                                     
  $11,074,631 in 1993; $9,602,586                                            
  in 1992 (note 6)                               566,952,628     480,940,727 
Buildings, equipment and leasehold                                           
  improvements, net (Note 7)                      23,621,140      24,243,050 
Goodwill and other intangibles, net                                          
  of accumulated amortization of                                             
  $5,895,420 in 1993; $5,061,616 in 1992           8,495,415       7,098,738 
Accrued interest and other assets                 18,911,387      17,221,522 
                                               --------------  --------------
     Total assets                              1,316,108,006   1,179,566,060 
                                               ==============  ==============
                                                                [Download Table]
LIABILITIES AND STOCKHOLDERS' EQUITY                                         
                                                                             
Deposits (Note 9)                                                            
  Noninterest-bearing                            229,293,520     196,320,988 
  Interest-bearing                               962,754,364     873,515,733 
                                               --------------  --------------
      Total deposits                           1,192,047,884   1,069,836,721 
Federal funds purchased                                                      
  and repurchase agreements                       13,410,412      12,062,997 
Notes payable (Note 10)                              500,000       3,500,000 
Accrued interest and other                                                   
  liabilities                                      9,341,264       9,228,277 
                                               --------------  --------------
      Total liabilities                        1,215,299,560   1,094,627,995 
                                               --------------  --------------
Commitments and contingencies (Note 12)                                      

Stockholders' equity (Notes 13 and 14)                                       
  Preferred stock, no par value, 500,000 shares                              
    authorized; none issued                                                  
  Common stock:                                                              
     Class A, $1 par value; 6,000,000 shares                                 
       authorized; shares issued-3,140,971         3,141,834       3,140,971 
     Class B, $1 par value; 3,000,000 shares                                 
       authorized; shares issued-1,293,113         1,292,250       1,293,113 
  Surplus                                         41,931,982      39,785,087 
  Retained earnings                               72,912,667      61,149,956 
  Treasury stock, at cost, 987,078 shares                                    
    in 1993; and 1,091,784 shares in 1992        (18,470,287)    (20,431,062)
                                               --------------  --------------
      Total stockholders' equity                 100,808,446      84,938,065 
                                               --------------  --------------
      Total liabilities and                                                  
        stockholders' equity                   1,316,108,006   1,179,566,060 
                                               ==============  ==============

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

CONSOLIDATED STATEMENTS OF INCOME                                               
Years Ended December 31, 1993, 1992 and 1991                                    

                                                        [Enlarge/Download Table]
                                                                1993          1992          1991 

                                                         ____________  ____________  ____________
INTEREST INCOME                                                                                  
                                                                                                 
Interest and fees on loans                               $45,239,422   $43,335,470   $45,537,505 
Interest on securities:                                                                          
  U.S. Treasury securities                                14,324,863    17,316,544    14,736,349 
  Obligations of other U.S. government agencies                                                  
    and corporations                                      11,125,326    10,879,823    12,492,498 
  Obligations of states and political subdivisions         5,935,408     5,091,773     5,542,713 
  Other securities                                           372,894       970,575     1,658,765 
Interest on federal funds sold and resale agreements       2,113,072     2,296,619     2,830,683 
Interest on deposits with banks                               65,257        13,925        40,244 
                                                         -----------   -----------   ----------- 
                                                          79,176,242    79,904,729    82,838,757 
                                                         -----------   -----------   ----------- 
INTEREST EXPENSE                                                                                 

Interest on deposits (Note 9)                             30,922,325    34,989,828    44,518,146 
Interest on notes payable                                     58,605       272,419       498,256 
Other interest expense                                       764,710       702,734       540,302 
                                                         -----------   -----------   ----------- 
                                                          31,745,640    35,964,981    45,556,704 
                                                         -----------   -----------   ----------- 
    Net interest income                                   47,430,602    43,939,748    37,282,053 
Provision for loan losses (Note 6)                         2,240,306     2,269,510     2,654,925 
                                                         -----------   -----------   ----------- 
    Net interest income after provision for loan losses   45,190,296    41,670,238    34,627,128 
                                                         -----------   -----------   ----------- 
NONINTEREST INCOME                                                                               
Service fees                                              10,355,001     8,778,888     7,451,301 
Securities gains (losses)                                  1,193,576       770,980       476,235 
Trust department revenue                                     916,596       801,129       658,959 
Other                                                      1,346,208     1,138,011     1,067,348 
                                                         -----------   -----------   ----------- 
                                                          13,811,381    11,489,008     9,653,843 
                                                         -----------   -----------   ----------- 
NONINTEREST EXPENSE                                                                              
Salaries and employee benefits (Note 11)                  20,302,268    17,814,063    15,949,566 
Occupancy, net                                             4,080,908     4,160,356     3,932,056 
Furniture and equipment                                    3,352,256     2,903,316     2,831,711 
Deposit insurance expense                                  2,433,747     2,192,695     1,851,753 
Amortization of goodwill                                     725,737       705,116       728,339 
Other                                                     10,600,678     8,980,913     8,699,412 
                                                         -----------   -----------   ----------- 
                                                          41,495,594    36,756,459    33,992,837 
                                                         -----------   -----------   ----------- 
    Income before income taxes and cumulative                                                    
      effect if a change in accounting principle          17,506,083    16,402,787    10,288,134 
Applicable income taxes (Note 8)                           4,346,950     3,983,247     1,895,612 
                                                         -----------   -----------   ----------- 
  Income before cumulative effect of a change                                                    
     in accounting principle                              13,159,133    12,419,540     8,392,522 
Cumulative effect on prior years of a change                                                     
   in accounting for income taxes (Note 1)                 1,500,000                             
                                                         -----------   -----------   ----------- 
   Net income                                            $14,659,133   $12,419,540   $ 8,392,522 
                                                         ===========   ===========   =========== 

Earnings per common share based upon a daily weighted                           
average of shares outstanding of 3,404,340 in 1993;                         
3,384,432 in 1992 and 3,486,055 in 1991                                     

                                                                [Download Table]
                                                                   

   Income before cumulative effect of a change                     
     in accounting principle                    $3.87  $3.67  $2.41
                                                =====  =====  =====
   Net Income                                   $4.31  $3.67  $2.41
                                                =====  =====  =====
Dividends per common share (Note 13)                               
     Class A Common                             $0.88  $0.70  $0.33
                                                =====  =====  =====
     Class B Common                             $0.80  $0.64  $0.30
                                                =====  =====  =====

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY                      
Years Ended December 31, 1993, 1992 and 1991                                    

                                                        [Enlarge/Download Table]
                                   Common Stock                                                               
                            _________________________                                                Total    
                                                                      Retained      Treasury  Stockholders'   

                                Class A      Class B      Surplus     Earnings         Stock        Equity    
                               ------------ ------------ ------------ ------------ ------------- -------------
                                                                                                              
Balance, December 31, 1990   $3,128,050   $1,306,034  $39,785,087  $43,749,753  ($16,393,724)  $71,575,200    
Net income                                                           8,392,522                   8,392,522    
Cash dividends declared                                                                                       
  (Note 13)                                                         (1,112,075)                 (1,112,075)   
Purchase of 18,000 shares                                                                                     
   of treasury stock                                                                (287,400)     (287,400)   
Class B shares exchanged                                                                                      
  for Class A shares                                                                                          
  (Note 13)                       9,580       (9,580)                                                    -    
                            ------------ ------------ ------------ ------------ ------------- -------------   
Balance, December 31, 1991    3,137,630    1,296,454   39,785,087   51,030,200   (16,681,124)   78,568,247    
Net income                                                          12,419,540                  12,419,540    
Cash dividends declared                                                                                       
  (Note 13)                                                         (2,299,784)                 (2,299,784)   
Purchase of 139,700 shares                                                                                    
   of treasury stock                                                              (3,749,938)   (3,749,938)   
Class B shares exchanged                                                                                      
  for Class A shares                                                                                          
  (Note 13)                       3,341       (3,341)                                                    -    
                            ------------ ------------ ------------ ------------ ------------- -------------   
Balance, December 31, 1992    3,140,971    1,293,113   39,785,087   61,149,956   (20,431,062)   84,938,065    
Net income                                                          14,659,133                  14,659,133    
Cash dividends declared                                                                                       
  (Note 13)                                                         (2,896,422)                 (2,896,422)   
Issuance of stock (Note 2)                              2,146,895                  4,137,000     6,283,895    
Purchase of 49,500 shares                                                         (2,176,225)   (2,176,225)   
   of treasury stock                                                                                          
Class B shares exchanged                                                                                      
  for Class A shares                                                                                          
  (Note 13)                         863         (863)                                                    -    
                            ------------ ------------ ------------ ------------ ------------- -------------   
                             $3,141,834   $1,292,250  $41,931,982  $72,912,667  ($18,470,287) $100,808,446    
                            ============ ============ ============ ============ ============= =============   

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

CONSOLIDATED STATEMENTS OF CASH FLOWS                                           
Years Ended December 31, 1993, 1992 and 1991                                    
                                              1993          1992          1991
                                       ___________   ___________   ___________

                                                                [Download Table]
                                                                                
                                                                                
OPERATING ACTIVITIES                                                            
  Net income                           $ 14,659,133  $ 12,419,540   $ 8,392,522 
  Adjustments to reconcile net income                                           
   to net cash provided (used) by                                               
   operating activities:                                                        
  Cumulative effect on prior                                                    
   years of change in accounting         (1,500,000)            -             - 
  Provision for loan losses               2,240,306     2,269,510     2,654,925 
  Depreciation and amortization                                                 
   of premises and equipment              3,362,130     3,232,790     3,014,883 
  Gain on sale of investment                                                    
   securities held for sale                (256,874)     (713,730)     (476,235)
  Gain on sale of mortgage-backed                                               
   securities held for sale                (936,702)      (57,250)            - 
  Amortization and accretion on                                                 
  Investment securities and mortgage-                                           
   backed securities held for sale        5,679,536     3,929,474     1,790,550 
  Write down of property                    114,237             -       447,249 
  Gains on sale of other real estate        (26,805)      (93,446)      (83,957)
  Amortization of goodwill                                                      
   and other intangibles                    833,804       829,962     1,003,631 
  Deferred income taxes                    (703,019)     (421,080)     (413,929)
  Decrease (increase) in interest                                               
   receivable                                93,618       516,036      (319,455)
  Decrease in interest payable                 (865)     (523,219)     (101,017)
  Other - net                              (568,262)      931,842       922,209 
                                        ___________   ___________   ___________ 
     Net cash provided by                                                       
       operating activities              22,990,237    22,320,429    16,831,376 
                                        ___________   ___________   ___________ 
INVESTING ACTIVITIES                                                            
  Net (increase) decrease in interest-                                          
    bearing deposits with banks             200,788        (9,000)      803,865 
  Net (increase) decrease in federal                                            
   funds sold and resale agreements       4,900,000   (13,865,000)    2,675,000 
  Purchases of investment securities                                            
    held for sale                      (220,137,692) (237,334,263) (219,547,686)
  Purchases of mortgage-backed                                                  
    securities held for sale           (144,552,641)  (30,198,209)  (32,201,482)
  Proceeds from sales of investment                                             
    securities held for sale            118,763,589    50,962,672     69,428,859
  Proceeds from sales of mortgage-                                              
    backed securities held for sale      54,884,206     3,971,632             - 
  Proceeds from maturities and                                                  
    principle reductions of Investment                                          
    securities held for sale            123,875,358   119,656,031    81,097,237 
   Mortgage-backed securities                                                   
    held for sale                        27,574,950    29,245,487    21,101,639 
  Net increase in loans                 (70,582,230)  (44,713,273)  (26,479,085)
  Net cash acquired in acquisition          722,085            -              - 
  Purchases of premises and equipment    (2,821,102)   (2,655,059)   (2,266,617)
  Proceeds from sale of land                                                    
    held for sale                         1,216,000            -              - 
  Proceeds from sale of other                                                   
    real estate                           1,415,883     1,128,658       532,000 
                                        ___________   ___________   ___________ 
    Net cash used in                                                            
     investing activities              (104,540,806) (123,810,324) (104,856,270)
                                        ___________   ___________   ___________ 
FINANCING ACTIVITIES                                                            
  Net increase in deposits               86,205,272   101,807,629    90,980,244 
  Net increase in securities sold                                               
    under repurchase agreements           1,347,415     5,709,776     1,161,279 
  Proceeds from notes payable             2,650,000     3,500,000            -  
  Payment of notes payable               (5,650,000)   (4,300,000)   (4,150,000)
  Purchase of treasury stock             (2,176,225)   (3,749,938)     (287,400)
  Cash dividends paid                    (2,896,422)   (2,299,784)   (1,112,075)
                                        ___________   ___________   ___________ 
  Net cash provided by                                                          
    financing activities                 79,480,040   100,667,683    86,592,048 
                                        ___________   ___________   ___________ 
  Net decrease in cash and                                                      
    due from banks                       (2,070,529)     (822,212)   (1,432,846)

  Cash and due from banks                                                       
    at beginning of year                 52,081,494    52,903,706    54,336,552 
                                        ___________   ___________   ___________ 
  Cash and due from banks                                                       
    at end of period                   $ 50,010,965  $ 52,081,494  $ 52,903,706 
                                        ===========  ============   =========== 

  Supplemental disclosures                                                      
     as to cash flow:                                                           
    Cash paid during the year for:                                              
     Interest                          $ 31,638,438  $ 36,363,354   $45,532,875 
                                        ===========  ============   =========== 
     Income taxes                      $  5,304,732  $  4,650,000   $ 2,339,815 
                                        ===========  ============   =========== 
  Transfer to other real                                                        
    estate from loans                  $    424,263  $  1,335,758   $ 2,558,358 
                                        ===========  ============   =========== 
  Acquisitions:                                                                 
   Fair value of assets acquired       $ 42,982,035  $         -    $         - 
   Liabilities and equity assumed        42,855,585            -              - 
                                        ___________   ___________   ___________ 

   Cash paid for purchase of stock          126,450            -              - 
   Cash acquired                           (848,535)           -              - 
                                        ___________   ___________   ___________ 

   Net Cash acquired                   $   (722,085) $         -    $         - 
                                        ===========  ============   =========== 

The accompanying notes are an integral part of these consolidated financial     
statements.                                                                     

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS                                      

Note 1 - Summary of Significant Accounting                                      
Policies                                                                        

Basis of Accounting                                                             
The  accompanying  financial  statements are prepared  in  accordance  with 
generally  accepted  accounting principles and conform to  general  practices   
within the banking industry.                                                    

Principles of Consolidation                                                     
The consolidated financial statements of Suburban Bancorp, Inc. include the 
accounts of Suburban Bancorp, Inc. (the Parent) and its subsidiaries (collec-   
tively referred to with the Parent as the Company).                             

Investment Securities and Mortgage Backed Securities Held for Sale              
The Company's investment securities and mortgage-backed securities  portfo- 
lios  are held for sale and stated at the lower of amortized  cost,  adjusted   
for amortization of premiums and accretion of discounts, which are recognized   
as  adjustments  to interest income, or market value, determined  on  an  ag-   
gregate basis.  Unrealized losses, if any, are recognized on a current basis.   
Gains  or losses on the sale or disposition of securities are based on  the 
net  proceeds and the adjusted carrying amount of the securities sold,  using   
the  specific  identification method.  Losses on  individual  securities  are   
recorded when values are deemed to be permanently impaired.                     

Loans and Allowance for Loan Losses                                             
Loans  are stated at the amount of unpaid principal.  Interest  on  nondis- 
counted  loans  is recognized based upon the  principal  amount  outstanding.   
Interest  on discounted loans is recognized based on methods which  generally   
approximate  the interest method.  Accrual of interest is discontinued  on  a   
loan when management believes, after considering economic and business condi-   
tions,  collection  efforts  and available collateral,  that  the  borrowers'   
financial condition is such that collection of interest is doubtful.  When  a   
loan  is placed on nonaccrual status, all interest accrued but not  yet  col-   
lected  is  charged against interest income in the  current  year.   Interest   
income on nonaccrual loans is recognized only when collected.                   
The  adequacy  of the allowance for loan losses is  reviewed  regularly  by 
management.   Additions to the allowance for loan losses are made by  charges   
to  the  provision for loan losses.  On a quarterly  basis,  a  comprehensive   
review  of the adequacy of the allowance for loan losses is performed.   This   
assessment  is accomplished through analytical techniques which evaluate  the   
allowance in light of historical losses, changes in the nature and volume  of   
the  loan portfolio, overall portfolio quality, identified problem loans  and   
current economic conditions.                                                    

Buildings, Equipment and Leasehold Improvements                                 
Buildings  and equipment are stated at cost less  accumulated  depreciation 
computed  principally on the straight-line method over the  estimated  useful   
lives of the assets, which range from three to 30 years.   Leasehold improve-   
ments  are  amortized  on the straight-line method over the  shorter  of  the   
estimated  useful  lives  of the improvements or the  terms  of  the  related   
leases.                                                                         

Other Real Estate                                                               
Other real estate includes properties acquired in partial or total  settle- 
ment  of problem loans.  The properties are recorded at the lower of cost  or   
fair market value based on appraised value at the date acquired,less estimat-   
ed sales costs.  Losses arising at the time of acquisition of such properties   
are  charged  to the allowance for loan losses.  Any  subsequent  decline  in   
value is charged to current operations.                                         

Goodwill                                                                        
Goodwill represents the aggregate excess of the cost over the fair value of 
net assets acquired and is amortized on the straight-line method over periods   
not exceeding 15 years.                                                         

Other Intangibles                                                               
Other intangibles are capitalized and amortized on the straight-line method 
over periods not exceeding ten years.                                           

Income Taxes                                                                    
The Company files a consolidated federal income tax return.  As of  January 
1,  1993,  the Company changed its method of accounting for income  taxes  to   
conform with Statement of Financial Accounting Standards No. 109, "Accounting   
for  Income  Taxes"  ("SFAS 109").  The Cumulative effect  of  adopting  this   
standard,  recorded in the first quarter of 1993, was to increase  income  by   
$1,500,000, or $0.45 per share.                                                 
Prior  to the adoption of SFAS 109, the Company accounted for income  taxes 
in accordance with Accounting Principles Board Opinion No.11, which  required   
that  income  taxes were accrued based on income and  expenses  reported  for   
financial  statement  purposes.  SFAS 109 requires the use of  the  liability   
method in accounting for income taxes.                                          

Trust Assets and Fees                                                           
Assets  held  in  fiduciary or agency capacities are not  included  in  the 
consolidated  balance sheets since such items are not assets of the  Company.   
Income  from  trust  fees is recorded when received.  This  income  does  not   
differ materially from trust fees computed on an accrual basis.                 

Earnings Per Share                                                              
Earnings  per  share  are calculated based on the  daily  weighted  average 
number of shares outstanding.                                                   

Reclassifications                                                               
Certain  reclassifications have been made in prior years' financial  state- 
ments to conform with the current year presentation.                            

New Accounting Pronouncements                                                   
In  May  1993,  the Financial Accounting Standards  Board  ("FASB")  issued 
Statement of Financial Accounting Standards No. 114, "Accounting by Creditors   
for  Impairment  of a Loan" ("SFAS 114").  SFAS 114  requires  that  impaired   
loans, as defined, be measured based on the present value of expected  future   
cash flows, discounted at the loan's effective interest rate or, as a practi-   
cal expedient, at the loan's observable market price or the fair value of the   
collateral if the loan is collateral dependent.  SFAS  114 is  effective  for   
fiscal years beginning after December 15, 1994, although earlier  application   
is encouraged.  Management has not yet determined the impact of the adoption    
of SFAS 114 on the Company.                                                     
In  May 1993, the FASB issued Statement of Financial  Accounting  Standards 
No.  115, "Accounting for Certain Investments in Debt and Equity  Securities"   
("SFAS 115") which shall be effective for fiscal years beginning after Decem-   
ber 15, 1993. SFAS 115 requires that all debt and equity securities be classi-  
fied   as:  held-to-maturity,  available-for-sale  or  trading.    Securities   
held-to-maturity  are classified as such only when the company determines  it   
has the ability and intent to hold these securities to maturity.  Such  secu-   
rities  are carried at cost adjusted for amortization of premiums and  accre-   
tion  of discounts.  Securities available-for-sale, which include  securities   
to be held for indefinite periods of time or for trading, are carried at fair   
value.  Unrealized holding gains and losses for available-for-sale securities   
are excluded from earnings and reported as a net amount, adjusted for  income   
taxes,  in a separate component of stockholders' equity.  Unrealized  holding   
gains and losses on trading securities are included in operations.  At Decem-   
ber 31, 1993, the Company has classified $588.8 million of its securities  as   
available-for-sale.   Such securities had been accounted for at the lower  of   
cost  or  market.  If the securities had been accounted for under  SFAS  115,   
stockholders' equity would have increased by approximately $8.7 million.  The   
Company  will fully adopt the provisions of SFAS 115 in the first quarter  of   
1994.                                                                           

Note 2 - Acquisition                                                            

In July 1993, the Company completed its acquisition of Huntley  Bancshares, 
Inc. owner of the State Bank of Huntley, in a business combination  accounted   
for  as a purchase.  The aggregate purchase price was $6,410,345,  consisting   
of 154,206 shares of the Company's Class A Common Stock and $126,450 in cash.   
The  results of operations of the State Bank of Huntley are included  in  the   
accompanying  financial  statements since the date of acquisition.   The  net   
assets acquired were recorded at fair value at the date of acquisition.   The   
excess of purchase price over the fair value of assets acquired was allocated   
and will be amortized as follows:                                               
                                   Amount         Life            Method

                               __________     ________     _____________
Premium on investment securities   $  220,000      4 years     Straight-line    
Premium on furniture and equipment    164,357      5 years     Straight-line    
Premium on bank premises              227,951     10 years     Straight-line    
Goodwill                              412,414     10 years     Straight-line    
Premium on deposits                 1,800,000     10 years     Straight-line    
Premium on land                       303,000            -                 -    

The following table represents the combination of the historical results of 
the  Company  and Huntley Bancshares, as if the acquisition had  occurred  on   
January 1, 1992, and includes adjustments required by the purchase method  of   
accounting.  This pro forma information does not purport to be indicative  of   
the  results  that actually would have been obtained if the  acquisition  had   
occurred on January 1, 1992, and is not intended to be a projection of future   
results.                                                                        
(Dollars in thousands except per share amounts)   

                             1993       1992
                          -------    -------

                                                                [Download Table]
                                                              
                                                              
Interest income                             $80,680    $83,249
Interest expense                             32,453     37,711
                                            -------    -------
   Net interest income                       48,227     45,538
Provision for loan losses                     2,317      2,402
                                            -------    -------
   Net interest income after                                  
   provision for loan losses                 45,910     43,136
                                            -------    -------
Noninterest income                           14,026     11,842
Noninterest expense                          42,381     38,356
                                            -------    -------
   Income before income taxes and cumulative                  
     effect of a change in accounting        17,555     16,622
Applicable income taxes                       4,426      4,134
                                            -------    -------
   Income before cumulative effect of a                       
     change in accounting principle          13,129     12,488
Cumulative effect on prior years of a                         
 change in accounting for income taxes        1,500          -
                                            -------    -------
   Net income                               $14,629    $12,488
                                            =======    =======

Earnings per common share based                               
 upon a daily weighted average of                             
 shares outstanding of 3,447,006 in                           
 1993 and 3,489,138 in 1992                                   

   Income before cumulative effect of a                       
     change in accounting principle           $3.81      $3.58
                                            =======    =======
   Net income                                 $4.24      $3.58
                                            =======    =======

Note 3 - Disclosures about Fair Value of Financial Instruments                  
Statement  of  Financial Accounting Standards No. 107 ("SFAS  107"),  "Dis- 
closures  about Fair Value of Financial Instruments," requires disclosure  of   
estimated  fair values of financial instrument assets and liabilities.   Many   
of  the Company's financial instruments, however, lack an  available  trading   
market.   Estimated fair values have been determined by the Company by  using   
the  best  available  data and an estimation methodology  suitable  for  each   
category  of  financial instruments.  Considerable  judgment  is  necessarily   
required, however, to interpret market data to develop the estimates of  fair   
value.   Accordingly, the estimates which follow are not necessarily  indica-   
tive  of the amounts that the Company could realize in a current  market  ex-   
change.  The use of different market assumptions and/or estimation methodolo-   
gies may have a material effect on the estimated fair value amounts.            
For  loans and deposits with floating interest rates, it is  presumed  that 
the carrying value approximates the estimated fair value.                       
The  methods and assumptions used to estimate the fair value of each  class 
of  financial instrument, along with the corresponding carrying value  as  of   
December 31, 1993, and 1992, are as follows:                                    
For  financial instruments having a short term maturity the carrying  value 
is a reasonable estimate of fair value.  These financial instruments include;   
cash and due from banks, interest-bearing deposits with banks, federal  funds   
sold and  resale agreements.                                                    
Financial instruments which are actively traded have been valued using  the 
available market prices.                                                        
($ in thousands)                                                                
                         1993                     1992
                         ______________________   ______________________

                                                                [Download Table]
                                                                             
                             Carrying   Estimated     Carrying   Estimated   
                                Value  Fair Value       Amount  Fair Value   
  Securities held for sale   $401,195    $411,812     $421,992    $433,851   
  Mortgage-backed and related                                                
   securities held for sale   187,614     190,461      115,173     116,984   

  The fair value of the loan portfolio has been estimated by discounting  the
future  cash  flows using the current rates at which similar loans  would  be
made  to  borrowers with similar credit ratings and for  the  same  remaining
maturities.   In computing the estimated fair value for all loans,  estimated
future cash flows have been reduced by the allowance for loan losses.        

                                      1993                     1992          
                             ______________________   ______________________ 
                             Carrying   Estimated     Carrying   Estimated   
                                Value  Fair Value       Amount  Fair Value   
  Net loans                  $566,953    $575,108     $480,941    $488,812   

  Fair value of financial instrument liabilities with stated maturities  have
been  estimated using the present value of discounted cash flow with  a  dis-
count rate approximating current market for similar liabilities.             

                                      1993                     1992          
                             ______________________   ______________________ 
                             Carrying   Estimated     Carrying   Estimated   
                                Value  Fair Value       Amount  Fair Value   
  Deposits with                                                              
  stated maturities          $314,367    $318,045     $278,245    $281,227   
  Securities sold under                                                      
  repurchase agreements        13,410      13,410       12,063      12,063   
  Notes payable                   500         500        3,500       3,500   

Deposits  with no stated maturities have an estimated fair value  equal  to 
the carrying value.                                                             
The  Company's  remaining assets and liabilities are not considered  to  be 
financial instruments for purposes of  SFAS 107 and, accordingly,  disclosure   
of  their  estimated fair value is not required.  The fair value  of  certain   
other  assets and liabilities may be significantly different than the  amount   
reflected on the Company's balance sheet.  These include the Company's build-   
ings,  equipment  and leasehold  improvements,  as well as the Company's core   
deposit base.  The Company's buildings, equipment and leasehold  improvements   
have a carrying value,  based upon  depreciated historic cost of  $23,621 and   
$24,243, at December 31,  1993, and  1992,  respectively.   The Company  does   
not record any value for its ongoing  relationships  with  its deposit custo-   
mers, or its core deposit base,  except in connection with acquisitions  acc-   
ounted for by the purchase method.   Neither of  these  adjustments have been   
reflected in the fair value amounts disclosed above.                            
There  is no material difference between the notional amount and the  esti- 
mated fair value of off-balance sheet items which totaled $43,706 and $30,064   
at  December 31, 1993 and 1992, respectively, and are primarily comprised  of   
unfunded loan commitments which are generally priced at market at the time of   
funding.                                                                        

Note 4 - Cash and Due From Banks                                                
The   Company's  subsidiary banks are required by federal law  to  maintain 
reserves  against  their deposits.  Reserves are held either in the  form  of   
vault cash, balances with correspondent banks or balances maintained directly   
with  the  Federal Reserve Bank.  Required reserves are a function  of  daily   
average  deposit  balances and statutory reserve ratios required by  type  of   
deposit.   At  December  31, 1993 and 1992, the amounts  so  restricted  were   
approximately $11,233,000 and $9,416,000, respectively.                         

Note 5 - Securities Held for Sale                                               
Carrying values and approximate market values of investment securities held 
for sale are summarized as follows:                                             
                       1993                     1992
                     ------------------------- -------------------------
                      Carrying   Approximate    Carrying   Approximate
                        Value     Market-Value    Value     Market-Value
                     ------------ ------------ ------------ ------------

                                                                [Download Table]
                                                                            
                                                                            
U.S. Treasury securities $247,688,700 $252,066,000 $263,504,915 $270,161,000
Obligations of U.S.                                                         
  government agencies                                                       
   and corporations        52,459,882   53,287,000   63,640,645   65,245,000
Obligations of states and                                                   
  political subdivisions   98,002,985  103,126,000   94,433,465   97,990,000
Other securities            3,043,394    3,333,000      413,134      455,000
                         ------------ ------------ ------------ ------------
                         $401,194,961 $411,812,000 $421,992,159 $433,851,000
                         ============ ============ ============ ============

Carrying  values  and  approximate market values  of  mortgage-backed  and
related securities held for sale are summarized as follows:                     
                       1993                     1992
                     ------------------------- -------------------------

                                                                [Download Table]
                                                                            
                           Carrying   Approximate    Carrying   Approximate 
                            Value     Market-Value    Value     Market-Value
                         ------------ ------------ ------------ ------------
                                                                            
Mortgage-backed and                                                         
 related securities                                                         
  GNMA certificates      $ 79,447,077 $ 80,524,000 $     50,060 $     55,000
  FNMA and FHLMC                                                            
    certificates           36,498,701   37,711,000   84,222,400   85,754,000
  Collateralized mortgage                                                   
   obligations             64,849,846   65,198,000   24,975,073   25,081,000
  SBA guaranteed loan                                                       
    pool certificates       5,197,843    5,386,000    2,521,383    2,612,000
  Other                     1,620,831    1,642,000    3,404,454    3,482,000
                         ------------ ------------ ------------ ------------
                         $187,614,298 $190,461,000 $115,173,370 $116,984,000
                         ============ ============ ============ ============

Securities with a carrying value amount of $142,199,788 and $115,447,344 at 
December  31,  1993  and 1992, respectively, were pledged  to  secure  public   
deposits, securities sold under repurchase agreements and for other  purposes   
required or permitted by law.                                                   

The   following  table  summarizes,  by maturity,  the unrealized gains and 
losses on  investment  securities  held for sale by maturity at  December 31,   
1993, with comparative totals at December 31, 1992.                             

                                                        [Enlarge/Download Table]
                                               U.S. Government     States &    Other Bonds                
                                U.S. Treasury         Agency   Subdivisions   & Securities         Totals 
                                -------------- -------------- -------------- -------------- --------------
                                                                                                          
                                                                                                          
Within one year                                                                                           
  Carrying amount                $ 87,840,186   $ 33,058,841   $ 23,865,326     $   66,667   $144,831,020 
  Approximate market value         89,054,000     33,558,000     24,025,000         68,000    146,705,000 
  Unrealized gain                   1,213,814        499,159        170,304          1,333      1,884,610 
  Unrealized loss                           -              -        (10,630)             -        (10,630)
After one year but                                                                                        
  Within five years                                                                                       
  Carrying amount                 159,848,514     17,904,486     47,972,461        326,164    226,051,625 
  Approximate market value        163,012,000     18,232,000     50,062,000        327,000    231,633,000 
  Unrealized gain                   3,247,203        373,825      2,169,926            836      5,791,790 
  Unrealized loss                     (83,717)       (46,311)       (80,387)             -       (210,415)
After five years but                                                                                      
  Within ten years                                                                                        
  Carrying amount                           -      1,496,555     14,546,236              -     16,042,791 
  Approximate market value                  -      1,497,000     15,976,000              -     17,473,000 
  Unrealized gain                           -         10,000      1,458,833              -      1,468,833 
  Unrealized loss                           -         (9,555)       (29,069)             -        (38,624)
After ten years                                                                                           
  Carrying amount                           -              -     11,618,962              -     11,618,962 
  Approximate market value                  -              -     13,063,000              -     13,063,000 
  Unrealized gain                           -              -      1,459,445              -      1,459,445 
  Unrealized loss                           -              -        (15,407)             -        (15,407)
Equity investments                                                                                        
  Carrying amount                           -              -              -      2,650,563      2,650,563 
  Approximate market value                  -              -              -      2,938,000      2,938,000 
  Unrealized gain                           -              -              -        329,875        329,875 
  Unrealized loss                           -              -              -        (42,438)       (42,438)

Total carrying amount            $247,688,700   $ 52,459,882    $98,002,985     $3,043,394   $401,194,961 
Total approximate market value    252,066,000     53,287,000    103,126,000      3,333,000    411,812,000 
Total unrealized gain               4,461,017        882,984      5,258,508        332,044     10,934,553 
Total unrealized loss                 (83,717)       (55,866)      (135,493)       (42,438)      (317,514)

Comparative totals at December 31, 1992:                                                                  
Total carrying amount            $263,504,915   $ 63,640,645    $94,433,465    $   413,134   $421,992,159 
Total approximate market value    270,161,000     65,245,000     97,990,000        455,000    433,851,000 
Total unrealized gain               6,674,118      1,643,146      3,827,830         41,866     12,186,960 
Total unrealized loss                 (18,033)       (38,791)      (271,295)             -       (328,119)

The  following table summarizes the unrealized gains and losses on  invest- 
ments  in mortgage-backed securities at December 31, 1993,  with  comparative   
totals at December 31, 1992.                                                    

                                                        [Enlarge/Download Table]
                                                                Collateral-                                               
                                                    FNMA and           ized  SBA Guaranteed                               
                                         GNMA          FHLMC       Mortgage      Loan Pool                                
                                 Certificates   Certificates    Obligations   Certificates          Other           Total 
                                -------------- -------------- -------------- -------------- --------------  --------------
                                                                                                                          
                                                                                                                          
Mortgage/asset backed                                                                                                     
  Carrying amount                 $79,447,077    $36,498,701    $64,849,846     $5,197,843     $1,620,831    $187,614,298 
  Approximate market value         80,524,000     37,711,000     65,198,000      5,386,000      1,642,000     190,461,000 
  Unrealized gain                   1,106,614      1,217,303        541,720        188,157         21,169       3,074,963 
  Unrealized loss                     (29,691)        (5,004)      (193,566)             -              -        (228,261)

Comparative totals at December 31, 1992:                                                                                  
  Carrying amount                     $50,060    $84,222,400    $24,975,073     $2,521,383     $3,404,454    $115,173,370 
  Approximate market value             55,000     85,754,000     25,081,000      2,612,000      3,482,000     116,984,000 
  Unrealized gain                       4,940      1,531,600        159,044         90,617         79,515       1,865,716 
  Unrealized loss                           -              -        (53,117)             -         (1,969)        (55,086)

  Gross gains of $1,510,526 in 1993 and $795,271 in 1992, and gross losses of                                             
$316,950  in  1993 and $24,291 in 1992, were recognized on  investments  sold                                             
during the respective years.                                                                                              

Note 6 - Loans                                                                                                            
  Major classifications of loans are as follows:                                                                          

                                           1993          1992                                                             
                                      ------------ -------------                                                          
Commercial and industrial             $ 92,827,896 $ 70,850,012                                                           
Real estate-construction                37,213,612   25,410,214                                                           
Real estate-mortgage                                                                                                      
  Residential                          241,991,588  206,605,597                                                           
  Home equity                           41,339,297   35,467,578                                                           
  Commercial                           126,345,626  110,295,370                                                           
Consumer                                40,946,572   44,408,063                                                           
                                      ------------ ------------                                                           
                                       580,664,591  493,036,834                                                           
Deferred loan fees                      (1,980,955)  (1,718,149)                                                          
Unearned discount                         (656,377)    (775,372)                                                          
                                      ------------ ------------                                                           
                                       578,027,259  490,543,313                                                           
Allowance for loan losses              (11,074,631)  (9,602,586)                                                          
                                      ------------ ------------                                                           
Loans, net                            $566,952,628 $480,940,727                                                           
                                      ============ ============                                                           

Loans  on  which  the accrual of interest  has  been  discontinued  totaled 
$6,222,529,  $6,499,141, and $7,180,058 at December 31, 1993, 1992 and  1991,   
respectively.  If interest on those loans had been accrued, such income would   
have  approximated  $592,019, $658,427 and $830,287 for 1993, 1992  and  1991   
respectively.   Interest income on those loans, which is recorded  only  when   
received,  amounted  to $149,864, $291,145 and $229,810 for  1993,  1992  and   
1991, respectively.                                                             

Changes in the allowance for loan losses were as follows:                   

             1993        1992         1991
       ----------  ----------   ----------

                                                                [Download Table]
                                                              
                                                              
Balance, beginning                                            
  of year                 $9,602,586  $8,362,870   $6,919,085 
Allowance acquired                                            
 in business combination     361,559           -            - 
Provision charged                                             
  to operations            2,240,306   2,269,510    2,654,925 
Recoveries                   612,769     893,632    1,145,274 
Loans charged off         (1,742,589) (1,923,426)  (2,356,414)
                          ----------  ----------   ---------- 
Balance, end of year     $11,074,631  $9,602,586   $8,362,870 
                         ===========  ==========   ========== 

At  various  times, certain officers, directors and  their  affiliates  have  
borrowed money from the Company's subsidiary banks.  These loans were made in   
the  ordinary course of business at substantially the same  terms,  including   
interest rate and collateral, as those prevailing at the time for  comparable   
transactions with other customers.  In the opinion of management these  loans   
do  not involve more than the normal risk of collectibility or present  other   
unfavorable  features.  These officers, directors and their  affiliates  also   
had on deposit with the Company's subsidiary banks $6,446,000 and  $6,060,000   
at December 31, 1993, and 1992 respectively.                                    

These loans are summarized as follows:                                        

                           1993         1992

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

                                                                [Download Table]
                                                               
                                                               
Balance, beginning of year           $10,637,764   $13,056,263 
Additional loans                       4,518,170     5,559,598 
Loan repayments                       (6,027,972)   (7,978,097)
                                      -----------  ----------- 
Balance, end of year                  $ 9,127,962  $10,637,764 
                                      ===========  =========== 

Note 7 - Buildings, Equipment and Leasehold Improvements                        
Major classifications of these assets are summarized as follows:              

                           1993         1992
                     -----------   -----------

                                                                [Download Table]
                                                                
                                                                
Land                                  $ 5,300,604   $ 4,159,139 
Buildings                              20,082,392    19,012,535 
Property held for                                               
  sale                                  1,480,000     3,070,794 
Property held for                                               
  future expansion                      1,162,797       912,797 
Equipment                              20,460,360    18,995,122 
Leasehold improvements                  2,512,328     2,443,823 
                                      -----------   ----------- 
                                       50,998,481    48,594,210 
Accumulated depreciation                                        
  and amortization                    (27,377,341)  (24,351,160)
                                      -----------   ----------- 
                                      $23,621,140   $24,243,050 
                                      ===========   =========== 

Note 8 - Income Taxes                                                           

Income taxes reflected in the statements of income consist of the following:  

            1993         1992         1991
      ----------   ----------   ----------

                                                                [Download Table]
                                                              
                                                              
Current                                                       
 Federal                 $5,049,969   $4,404,327   $2,309,541 
 State                            -            -            - 
Deferred                   (703,019)    (421,080)    (413,929)
                         ----------   ----------   ---------- 
                         $4,346,950   $3,983,247   $1,895,612 
                         ==========   ==========   ========== 

The  deferred tax provision reflects a number of temporary differences,  the  
tax effects of which are as follows:                                            
           1993          1992         1991
      ---------    ----------   ----------

                                                                [Download Table]
                                                             
                                                             
Provision for                                                
  loan losses            $(393,982)   $(521,964)   $(288,757)
Deferred compensation      (39,082)      13,255       (8,549)
Depreciation                                                 
  and amortization        (110,804)      35,272        2,461 
Lease obligation            32,830       27,683      (29,450)
Write down of property     (17,500)           -      (77,000)
Adjust temporary                                             
 differences to 35%       (178,039)           -            - 
Other                        3,558       24,674      (12,634)
                         ----------   ----------   ----------
                         $(703,019)   $(421,080)   $(413,929)
                         ==========   ==========   ==========

A  reconciliation between taxes computed at the U.S. federal statutory  rate  
and the consolidated effective tax rate follows:                                

    1993         1992         1991
  ------       ------       ------

                                                                [Download Table]
                                              <C.         
                                                          
U.S. federal                                              
  statutory rate          35.0%        34.0%        34.0% 
Tax-exempt interest                                       
  from loans                                              
  and investments        (10.7)        (9.6)        (16.1)
Amortization of goodwill                                  
  and other intangibles    2.1          2.3           4.3 
Alternative minimum tax      -         (2.5)         (1.4)
$10,000,000 taxed at 34%  (0.6)           -             - 
Adjust temporary                                          
 differences              (1.0)           -             - 
Other                        -          0.1          (2.4)
                         ------       ------       ------ 
                          24.8%        24.3%         18.4%
                         ======       ======       ====== 

Deferred  income taxes reflect the net tax effects of temporary  differences  
between the carrying amounts of assets and liabilities for financial  report-   
ing  purposes and the amounts used for income tax purposes.  The tax  effects   
of  significant items comprising the Company's net deferred tax asset  as  of   
December 31, 1993, and January 1, 1993, are as follows:                         

                     December 31,   January 1,
                           1993         1993
                     ----------  -----------

                                                                [Download Table]
                                                              
                                                              
 Deferred tax assets:                                         
 Allowance for loan losses            $ 3,828,314  $ 3,264,879
 Deferred compensation                  1,026,988      903,178
 Difference between book and tax                              
   basis of property                       86,355       13,419
 Write down of land held for sale         255,458      231,160
 Other, net                                 7,766       35,378
                                       ----------  -----------
Net deferred tax asset                $ 5,204,881  $ 4,448,014
                                      ===========  ===========

At December 31, 1993, the Company had approximately $15.4 million of  unused  
net operating loss carryforwards, for state tax purposes which may be applied   
against future state taxable income, until the year 2005.                       

Note 9 - Deposits                                                               
The major components of deposits are summarized as follows:                   

                                                                [Download Table]
                                             1993            1992
                                     ------------    ------------
                                                                 
                                                                 
Noninterest-bearing                  $229,293,520    $196,320,988
Regular savings                       109,510,121      92,677,806
NOW accounts                          156,489,398     141,052,298
Money market                          382,387,432     361,540,939
Certificates of deposit,                                         
  $100,000 and over                    66,770,364      49,444,370
Certificates of deposit               167,005,993     153,611,505
Individual retirement accounts         80,591,056      75,188,815
                                   --------------  --------------
                                   $1,192,047,884  $1,069,836,721
                                   ==============  ==============

Individual retirement accounts also include deposits of $100,000 and over.    
Interest expense on interest-bearing deposits is summarized as follows:       

             1993        1992         1991
        ----------  -----------  -----------

                                                                [Download Table]
                                                              
                                                              
Regular savings           $2,764,048  $ 2,920,984  $ 3,653,880
NOW accounts               3,070,510    3,651,665    4,660,146
Money market              11,069,852   11,982,011   14,294,268
Certificates of deposit,                                      
  $100,000 and over        2,433,660    2,720,481    3,487,302
Certificates of deposit    7,371,910    9,225,961   13,207,256
Amortization of premium                                       
 on deposits acquired        108,067      124,846      429,954
Individual retirement                                         
  accounts                 4,104,278    4,363,880    4,785,340
                         -----------  -----------  -----------
                         $30,922,325  $34,989,828  $44,518,146
                         ===========  ===========  ===========

Note 10 - Notes Payable                                                         
Notes payable consists of an unsecured demand note bearing interest at 6% in  
the  amount  of  $500,000 in 1993, and notes due January  29,  1993,  bearing   
interest at the rate of 5.125%, and in the amount of $3,500,000 in 1992.        

Note 11 - Employee Benefit Plans                                                
The Company maintains a non-contributory, trusteed profit sharing plan which  
covers substantially all full-time and part-time employees who have completed   
service  requirements.  Contributions are made by the Company  in  accordance   
with resolutions passed by the respective Boards of Directors and are record-   
ed  as expense in the period in which the resolutions are passed.   Contribu-   
tions  were  $1,506,360, $1,324,510 and $1,188,289 for 1993, 1992  and  1991,   
respectively.                                                                   
The  Company  has adopted plans granting stock appreciation  rights  to  the  
presidents  of the Parent and its subsidiary banks.  Such rights are  awarded   
based  on formulas related to defined earning performance and deposit  growth   
and  are subject to the discretion of the Boards of Directors of  the  Parent   
and each subsidiary bank.  These stock appreciation rights mature at the  end   
of four years and are realized in cash for the difference between the defined   
value  per  share of common stock at the time of the award and  at  maturity.   
The  Company recorded expenses of $198,527, $168,773 and $167,748  for  1993,   
1992 and 1991, respectively, in connection with these plans.                    
The  Company  has entered into a deferred compensation  agreement  with  the  
Chairman  of its Board of Directors.  At December 31, 1993, the  accrued  li-   
ability,  which represents the present value of future deferred  compensation   
payments,  amounted to $2,244,700. Payments made in 1993, under  this  agree-   
ment, amounted to $344,825, of which $200,904 was expensed as other interest.   
The Company pays bonuses under an Executive Incentive Plan to  participating  
employees.                                                                      
In addition to the previously mentioned benefit plans, certain health  care,  
life  insurance  and disability benefits are provided  to  qualifying  active   
employees.  The Company does not provide these benefits to retired employees.   

Note 12 - Commitments and Contingencies                                         
Commitments to Extend Credit                                                    
In  the normal course of business, the Company's subsidiary banks make  con-  
tractual  commitments to extend credit and issue standby letters  of  credit.   
These  contracted commitments are subject to the banks' credit  approval  and   
monitoring  procedures.  Contracted commitments to extend  credit  aggregated   
approximately  $35,862,000  and $23,281,000 at December 31,  1993  and  1992,   
respectively.   Commitments  under  standby  letters  of  credit   aggregated   
$7,844,158  and $6,783,420 at December 31, 1993 and 1992, respectively.   The   
Company  does not anticipate any material losses as a result of such  commit-   
ments and contingent liabilities.                                               

Concentration of Credit Risk                                                    
The  Company's real estate-construction and real estate-mortgage  loans  are  
made  within the market areas of the Company's subsidiary banks.   Loans  se-   
cured  by  real estate represented 77% of total loans  at December  31,  1993   
and 1992.  The  Company manages its exposure  to this concentration by  cont-   
inually  reviewing local market conditions and closely monitoring  collateral   
values.  No unusual losses are anticipated as a result of this concentration.   
Investment securities collateralized by mortgage  obligations represented 32%   
and 20% of the investment securities at December 31, 1993, and 1992 respecti-   
vely.                                                                           

Litigation                                                                      
The  Company  is a defendant in legal actions arising from  normal  business  
activities.   Management believes that such actions are without merit or that   
the  ultimate  liability,  if any, resulting from them  will  not  materially   
affect the Company's financial position, or results of operation.               

Leases                                                                          
Certain  subsidiary  banks  have entered into operating  leases  with  third  
parties  for the rental of bank premises.  Remaining lease terms  range  from   
one  to  five  years and include certain renewal options from  one  to  fifty   
years.  These lease agreements provide for aggregated minimum rental  commit-   
ments as follows:                                                               

Year Ended December 31,                                                       
-----------------------                                                       

                                                                [Download Table]
                                  
                                  
1994                    $  681,570
1995                       637,924
1996                       607,331
1997                       503,524
1998                       344,831
Due in remaining                  
 term of leases          1,552,341
                        ----------
                        $4,327,521
                        ==========

Certain leases have contingent rentals which are based on increases in  real  
estate taxes, deposits and/or total building expenses.                          

The following schedule shows the composition of total rental expense:         

        1993         1992         1991
    --------     --------     --------

                                                                [Download Table]
                                                            
                                                            
Minimum rentals          $648,026     $568,188     $513,583 
Contingent rentals         49,061       58,425       75,463 
Less sublease rentals     (40,332)     (39,988)     (24,225)
                         --------     --------     -------- 
 Total                   $656,755     $586,625     $564,821 
                         ========     ========     ======== 

Note 13 - Common Stock                                                          
Class  A Common Stockholders are entitled to one vote per share on all  mat-  
ters  to be voted on by the Company's stockholders.  The holders of  Class  B   
Common  Stock are entitled to ten votes per share on all matters to be  voted   
on by the Company's stockholders.  The Class A Common stockholders are  enti-   
tled to elect 25% of the directors, while the remaining directors are elected   
by Class B stockholders.                                                        
Class  A  Common Stock carries a dividend of 110% of the dividend  rate  de-  
clared to Class B Common Stock.                                                 
Class  B Common Stock is irrevocably convertible on a share for share  basis  
into Class A Common Stock.                                                      

Note 14 - Retained Earnings                                                     
The  Company's  subsidiary  banks are subject to  statutory  and  regulatory  
restrictions  on  the amount of dividends which may be paid  to  the  Parent.   
Dividends  which can be paid to the Parent by bank subsidiaries  without  ob-   
taining prior approval from bank regulatory agencies amounted to approximate-   
ly  $15,656,000 and $11,725,000 at December 31, 1993 and 1992,  respectively.   
The  Company and its subsidiary banks are also required to  maintain  minimum   
amounts of capital to total "risk weighted" assets, as defined by the banking   
regulators.   At December 31, 1993, the Company is required to  have  minimum   
Tier  I and Total capital ratios of 4.00% and 8.00%, respectively.  The  Com-   
pany's  actual ratios at that date were 14.52% and 15.77%.  Each of the  Com-   
pany's subsidiary banks also had Tier I and Total capital ratios substantial-   
ly exceeding the minimum standards.                                             

Note 15 - Condensed Financial Information - Parent Company Only                 
SUBURBAN BANCORP, INC.                                                          

CONDENSED BALANCE SHEETS                                                        
December 31, 1993 and 1992                                                      

                                                        1993          1992
ASSETS                                              ___________    __________   

                                                                [Download Table]
                                                                              
                                                                              
Cash on deposit in subsidiary bank                   $  138,288    $  125,830 
Cash - other financial institutions                       2,198         6,462 
Interest-bearing deposits with                                                
  other financial institutions                          400,212             - 
Securities held for sale, at lower of                                         
  cost or market (approximate market value                                    
  of $2,938,000 in 1993; $313,000 in 1992)            2,650,563       280,000 
Due from:                                                                     
  Bank subsidiaries                                     253,332       188,276 
  Nonbank subsidiaries                                3,852,616     4,907,281 
Equity investment in subsidiaries                                             
  Bank subsidiaries                                  86,167,148    76,804,078 
  Nonbank subsidiaries                                      987       (32,219)
Equipment and leasehold                                                       
  improvements, net                                      76,047       120,941 
Goodwill and other intangibles net                    8,495,415     7,116,805 
Other assets                                          1,857,324     2,157,084 
                                                   ------------   ----------- 
                                                   $103,894,130   $91,674,538 
                                                   ============   =========== 

LIABILITIES AND STOCKHOLDERS' EQUITY                                          

Notes payable                                       $   500,000   $ 3,500,000 
Other liabilities                                     2,585,684     3,236,473 
                                                   ------------   ----------- 
Total liabilities                                     3,085,684     6,736,473 

Stockholders' equity                                100,808,446    84,938,065 
                                                   ------------   ----------- 
                                                   $103,894,130   $91,674,538 
                                                   ============   =========== 

Note 15 - Condensed Financial Information - Parent Company Only (continued)     
SUBURBAN BANCORP, INC.                                                          

CONDENSED STATEMENTS OF INCOME                                                  
Years Ended December 31, 1993, 1992 and 1991                                    

                                              1993         1992         1991
                                       ___________  ___________   __________

                                                                [Download Table]
                                                                               
                                                                               
INCOME                                                                         
Dividends received from                                                        
  bank subsidiaries                     $ 10,897,000  $ 7,422,000   $4,038,000 
Interest and dividends                        43,896       18,871       95,829 
Bank servicing and other                   1,963,910    2,034,019    1,920,002 
                                         -----------   ----------   ---------- 
                                          12,904,806    9,474,890    6,053,831 
                                         -----------   ----------   ---------- 
EXPENSES                                                                       
Interest                                     259,509      490,185      729,285 
Salaries and employee benefits             1,234,616    1,106,329    1,186,733 
Occupancy, net                               149,287      142,104      128,991 
Furniture and equipment                      104,036       56,982       72,812 
Amortization of goodwill and intangibles     833,804      829,962    1,003,631 
Amortization of purchase                                                       
  accounting adjustments                     318,765      536,813      625,731 
Other operating expenses                   1,077,502    1,242,818    1,105,981 
                                          ----------    ---------   ---------- 
                                           3,977,519    4,405,193    4,853,164 
                                          ----------    ---------   ---------- 
  Income before applicable income                                              
   tax benefits and undistributed                                              
    income of subsidiaries                 8,927,287    5,069,697    1,200,667 
Applicable income tax benefits              (717,327)    (541,357)    (491,281)
                                          ----------    ---------   ---------- 
                                           9,644,614    5,611,054    1,691,948 

Equity in undistributed net income of                                          
  subsidiary banks                         5,439,203    7,024,355    7,229,371 
Equity in undistributed net income                                             
  (loss) of nonbank subsidiaries             237,579     (215,869)    (528,797)
                                          ----------   ----------   ---------- 
   Income before cumulative effect                                             
    of a change in accounting             15,321,396   12,419,540    8,392,522 

Cumulative effect on prior years of a                                          
 change in accounting for income taxes      (662,263)           -            - 
                                          ----------   ----------   ---------- 
  Net income                            $ 14,659,133  $12,419,540   $8,392,522 
                                        ============  ===========   ========== 

Note 15 - Condensed Financial Information - Parent Company Only (continued)     
SUBURBAN BANCORP, INC.                                                          

CONDENSED STATEMENTS OF CASH FLOWS                                              
Years Ended December 31, 1993, 1992 and 1991                                    

                                                                [Download Table]
                                                1993           1992           1991 
                                        ____________   ____________    ___________ 
                                                                                   
                                                                                   
OPERATING ACTIVITIES                                                               
  Net income                            $ 14,659,133   $ 12,419,540   $  8,392,522 
  Adjustments to reconcile net income                                              
   to net cash provided (used)                                                     
    by operating activities:                                                       
      Cumulative effect of a change                                                
       in accounting principles              662,263              -              - 
      Net equity in undistributed                                                  
        income of subsidiaries            (5,676,782)    (6,808,486)    (6,700,574)
      Depreciation and amortization           72,068         87,969         95,817 
      Amortization of intangibles          1,152,569      1,366,775      1,629,362 
      Increase (decrease) in                                                       
       interest payable                      (29,728)        29,978              - 
      Others - net                        (1,028,265)       321,339        385,463 
                                         -----------   ------------    ----------- 
       Net cash provided by operations     9,811,258      7,417,115      3,802,590 
                                         -----------   ------------    ----------- 
INVESTING ACTIVITIES                                                               
  Contribution of capital to subsidiaries          -       (181,868)      (527,097)
  Decrease (increase) in                                                           
   due from subsidiaries                   1,193,982       (180,684)       (19,308)
  Purchase of securities                  (2,370,563)      (280,000)             - 
  Funds invested in acquisitions            (126,450)             -              - 
  Purchase of property and equipment         (27,174)       (37,632)       (12,449)
                                         -----------    -----------    ------------
       Net cash used in                                                            
        investing activities              (1,330,205)      (680,184)      (558,854)
                                         -----------    -----------    ------------
FINANCING ACTIVITIES                                                               
  Proceeds from note payable               2,650,000      3,500,000              - 
  Net proceeds from transfer of                                                    
   banks' retirement liability                     -              -      1,716,000 
  Payment of notes payable                (5,650,000)    (4,300,000)    (4,150,000)
  Purchase of treasury stock              (2,176,225)    (3,749,938)      (287,400)
  Cash dividends paid                     (2,896,422)    (2,299,784)    (1,112,075)
                                         -----------    -----------    ----------- 
       Net cash used in                                                            
        financing activities              (8,072,647)    (6,849,722)    (3,833,475)
                                         -----------    -----------    ----------- 
Net decrease in cash                         408,406       (112,791)      (589,739)
Cash at beginning of year                    132,292        245,083        834,822 
                                         -----------    -----------   ------------ 
Cash at end of period                    $   540,698    $   132,292   $    245,083 
                                         ===========    ===========   ============ 

Supplemental disclosures to the cash flow information:                             
  Cash paid during the                                                             
   year for interest                     $   289,237    $   460,202   $    729,285 
                                         ===========    ===========   ============ 

SELECTED FINANCIAL DATA                                                         

  The following table consists of financial data derived from the consolidated
financial statements of the Company.  The acquisition of Huntley Bancshares in  
1993 has effected the comparability of the information set forth below.  This   
information should be read in connection with Management's Discussion and       
Analysis of Financial Condition and Results of Operations and the Company's     
consolidated financial statements included elsewhere in this report.            

                                                        [Enlarge/Download Table]
                                                        Years Ended December 31,                    
                                         ---------------------------------------------------------- 

                                              1993        1992        1991        1990        1989  
                                         ----------  ----------  ----------  ----------  ---------- 

                                              (Dollars in thousands except per share data)          
                                                                                                    
                                                                                                    
SUMMARY OF OPERATIONS                                                                               
Interest income                         $   79,176  $   79,905  $   82,839  $   82,651  $   75,915  
Interest expense                            31,746      35,965      45,557      46,842      40,191  
                                         ----------  ----------  ----------  ----------  ---------- 
Net interest income                         47,430      43,940      37,282      35,809      35,724  
Provision for loan loss                      2,240       2,270       2,655       6,965       3,496  
                                         ----------  ----------  ----------  ----------  ---------- 
Net interest income after                                                                           
   provision for loan losses                45,190      41,670      34,627      28,844      32,228  
Noninterest income                          13,812      11,489       9,231       7,500       6,864  
Noninterest expense                         41,496      36,756      33,570      33,649      29,156  
                                         ----------  ----------  ----------  ----------  ---------- 
 Income before income taxes                                                                         
   and cumulative effect                    17,506      16,403      10,288       2,695       9,936  
Applicable income taxes                      4,347       3,983       1,895         513       1,984  
                                         ----------  ----------  ----------  ----------  ---------- 
 Income before cumulative effect                                                                    
   of a change in accounting principle      13,159      12,420       8,393       2,182       7,952  
Cumulative effect on prior years                                                                    
  of a change  in accounting                                                                        
  for income taxes                           1,500           -           -           -           -  
                                         ----------  ----------  ----------  ----------  ---------- 
  Net income                            $   14,659  $   12,420  $    8,393  $    2,182  $    7,952  
                                         ==========  ==========  ==========  ==========  ========== 
PER SHARE OF COMMON STOCK                                                                           
 Income before cumulative                                                                           
  effect  of a change                                                                               
   in accounting principle              $     3.87  $     3.67  $     2.41  $     0.59  $     2.04  
Net income                                    4.31        3.67        2.41        0.59        2.04  
Class A Cash dividends declared               0.88        0.70        0.33        0.31        0.28  
Class B Cash dividends declared               0.80        0.64        0.30        0.28        0.25  
Book value                                   29.25       25.41       22.56       20.45       19.95  

SELECTED BALANCES - END OF PERIOD                                                                   
Total assets                            $1,316,108  $1,179,566  $1,066,543  $  969,556  $  917,184  
Net loans                                  566,952     480,941     439,796     418,439     398,359  
Deposits                                 1,192,048   1,069,837     968,029     877,049     826,473  
Stockholders' equity                       100,808      84,938      78,568      71,575      77,038  

RATIOS                                                                                              
Return on average total assets                1.18 %      1.11 %      0.83 %      0.23 %      0.94 %
Return on average stockholders' equity       15.28       15.40       11.34        2.92       10.67  
Total cash dividends to net income           19.76       18.52       13.25       50.26       13.00  
Average equity to average assets              7.71        7.20        7.35        7.95        8.81  
Net interest margin (1)                       4.16        4.30        4.11        4.29        4.70  
Net interest margin non-FTE                   3.81        3.92        3.70        3.81        4.22  

(1) Net interest income as a percentage of average total assets stated on a     
fully taxable equivalent basis assuming a federal income tax rate of 35% in     
1993, 34% in prior years, and a state income tax rate of 7.3% in 1993 through   
1990 and 6.9% in 1989.                                                          

SELECTED QUARTERLY FINANCIAL DATA                                               
(UNAUDITED)                                                                     

                                                        [Enlarge/Download Table]
                                                          First      Second       Third      Fourth
                                                        Quarter     Quarter     Quarter     Quarter
         (Dollars in thousands except per share data)                                              
                                                                                                   
                                                                                                   
1993                                                                                               
Interest income                                      $   19,133  $   19,480  $   20,462  $   20,101
Net interest income                                      11,289      11,689      12,175      12,277
Provision for loan losses                                   827         568         315         530
Income before cumulative effect of a                                                               
   change in accounting principle                         2,986       3,551       3,458       3,164
Net income                                                4,486       3,551       3,458       3,164
Per share of common stock                                                                          
Income before cumulative effect of a                                                               
   change in accounting principle                          0.89        1.06        1.00        0.92
 Net income                                                1.34        1.06        1.00        0.92

1992                                                                                               
Interest income                                          20,063      20,059      20,052      19,731
Net interest income                                      10,310      10,750      11,356      11,524
Provision for loan losses                                   609         759         431         471
Net income                                                2,505       3,079       3,307       3,529
 Per share of common stock                                 0.73        0.90        0.99        1.06

1991                                                                                               
Interest income                                          20,330      20,645      20,933      20,931
Net interest income                                       8,847       9,261       9,400       9,774
Provision for loan losses                                   751         747         477         680
Net income                                                1,582       2,098       2,248       2,465
 Per share of common stock                                 0.45        0.60        0.65        0.71


MANAGEMENT'S DISCUSSION AND ANALYSIS OF                                         
FINANCIAL CONDITION AND RESULTS OF OPERATION                                    

The following discussion and analysis provides information regarding the    
Company's financial condition and results of operations for the years ended     
December 31, 1993, 1992 and 1991.  This discussion and analysis should be       
read in conjunction with financial statements, notes, tables and graphs         
included elsewhere in this report.  Unless otherwise stated, all dollar         
amounts are expressed in thousands.  Income stated on a fully taxable equiv-    
alent basis "(FTE)" means income which is exempt from either Illinois income    
taxation, federal income taxation or both and is stated as if such income       
were subject to all applicable taxation.  All the presentations that follow     
assume a federal income tax rate of 35% in 1993, 34% in prior years, and an     
Illinois income tax rate of 7.3% in 1993 through 1990 and 6.9% in 1989.         

Overview                                                                        
Income before the cumulative effect of a change in accounting principle for 
1993 amounted to $13.2 million, or $3.87 per share, compared to income of       
$12.4 million, or $3.67 per share, for 1992.  The increase in earnings for      
1993 was primarily the result of an increase in net interest income, driven     
by a reduction in interest expense from the 1992 level.  Net income for 1993,   
including the $1.5 million cumulative effect of a change in accounting prin-    
ciple, was $14.7 million, or $4.31 per share.                                   
In 1993 the Company continued on a course of solid growth.  Total assets    
increased during 1993 by 11.6%.  This increase, which includes 3.6% related     
to an acquisition, was driven by deposit growth, from year-end to year-end,     
of 11.4%.  In July 1993, the Company completed its acquisition of Huntley       
Bancshares, owner of the State Bank of Huntley in a business combination        
accounted for as a purchase.  The aggregate purchase price was approximately    
$6.41 million consisting of 154,206 shares of the Company's Class A Common      
Stock and $126,450 in cash.  As a result of the acquisition, total assets,      
net loans and deposits increased by approximately $43 million, $18 million      
and $36 million respectively.  The results of operations of the State Bank of   
Huntley are included in the accompanying financial statements from the date     
of acquisition.                                                                 

Analysis of Consolidated Statements of Income                                   

Set forth below are selected performance ratios showing components of the   
Company's net income as a percentage of average assets over the past three      
years.                                                                          

                                                                [Download Table]
                                            Years Ended December 31,     
                                       ----------------------------------
                                                                         
                                                                         
                                       1993          1992          1991  
                                        ----          ----          ---- 
Net interest income (non-FTE)           3.81%         3.92%         3.70%
Taxable equivalent adjustment           0.35          0.38          0.41 
                                        ----          ----          ---- 
Net interest income (FTE)               4.16          4.30          4.11 
Provision for loan losses               0.18          0.20          0.26 
                                        ----          ----          ---- 
Net interest income after                                                
  provision for loan losses             3.98          4.10          3.85 
Noninterest income                      1.01          0.96          0.91 
Securities gains (losses)               0.10          0.07          0.05 
Noninterest expense                     3.33          3.28          3.38 
                                        ----          ----          ---- 
Income before:                          1.76          1.85          1.43 
Taxes and FTE adjustment                0.70          0.74          0.60 
                                        ----          ----          ---- 
Income before:                          1.06          1.11          0.83 
 Cumulative effect on prior years                                        
  of a change in accounting for                                          
  income taxes                           .12             -             - 
                                        ----          ----          ---- 
Net income                              1.18%         1.11%         0.83%
                                        ====          ====          ==== 

Net Interest Income                                                             
Net interest income, defined as interest income less interest expense,      
represents the Company's major source of income.  Net interest income is        
dependent on the size of the spread between rates earned on interest earning    
assets and rates paid on interest-bearing liabilities.                          
While interest income decreased in each of the last two years from the 1991 
level, interest expense decreased dramatically, during the same period.  The    
current interest rate environment has been favorable to many financial insti-   
tutions, including the Company.  In this environment, the Company was able to   
reduce its cost of funds significantly while offering interest rates competi-   
tive enough to fuel the deposit growth experienced in each of the last three    
years.  The interest rate environment in which the Company operates is sub-     
ject to many factors beyond the control of the Company.                         
The following table presents the Company's average statements of condition  
and net interest (FTE) yield for the past three years.                          

The following table presents the Company's daily average statements of          
condition and net interest yield for the past three years.                      

                                                        [Enlarge/Download Table]

                                                                          Years Ended December 31,                               
                                        ___________________________   ____________________________  ____________________________ 

                                                     1993                          1992                          1991            
                                        ___________________________   ____________________________  ____________________________ 
                                          Average                       Average                       Average                    
                                          Balance  Interest  Rate       Balance  Interest   Rate      Balance  Interest   Rate   
                                        ___________________________   ____________________________  ____________________________ 
                                                                                                                                 
                                                                                                                                 
Assets                                                                                                                           
Interest earning assets:                                                                                                         
  Loans, net of unearned                                                                                                         
    discount (1)(2)                       $530,262 $45,651   8.609 %    $470,022  $43,806   9.320 %   $440,363  $45,977  10.441 %
  Investment securities:                                                                                                         
    Taxable                                467,095  27,269   5.838       433,869   30,941   7.131      361,765   30,638   8.469  
    Tax-exempt                              97,150   8,432   8.679        68,379    7,076  10.348       68,473    7,468  10.906  
                                        -------------------           --------------------          --------------------         
  Total investment securities              564,245  35,701   6.327       502,248   38,017   7.569      430,238   38,106   8.857  
  Time deposits in banks                     1,266      65   5.134           290       14   4.828          551       40   7.260  
  Federal funds sold & resale agreements    61,611   2,113   3.430        62,260    2,297   3.689       50,660    2,828   5.582  
                                        -------------------           --------------------          --------------------         
Total interest earning assets            1,157,384  83,530   7.217     1,034,820   84,134   8.130      921,812   86,951   9.433  
                                        -------------------           --------------------          --------------------         
Noninterest earning assets:                                                                                                      
  Cash and due from banks                   45,776                        43,747                        44,040                   
  Premises and equipment, net               25,544                        24,710                        25,075                   
  Other assets                              26,546                        25,169                        23,177                   
  Allowance for loan losses                (10,472)                       (9,200)                       (7,478)                  
                                        -----------                   -----------                   -----------                  
Total noninterest earning assets            87,394                        84,426                        84,814                   
                                        -----------                   -----------                   -----------                  
TOTAL ASSETS                            $1,244,778                    $1,119,246                    $1,006,626                   
                                        ===========                   ===========                   ===========                  
Liabilities and Stockholders' Equity                                                                                             
Interest-bearing liabilities:                                                                                                    
  Regular savings                         $101,356  $2,764   2.727       $87,669   $2,921   3.332      $81,251   $3,654   4.497  
  NOW accounts                             144,314   3,071   2.128       124,903    3,652   2.924      104,998    4,660   4.438  
  Money market                             375,361  11,070   2.949       331,833   11,982   3.611      265,392   14,294   5.386  
  Certificates of deposit                  223,303   9,805   4.391       223,280   11,946   5.350      237,695   16,695   7.024  
  IRA's                                     78,029   4,104   5.260        71,848    4,364   6.074       65,808    4,785   7.271  
  Premium on deposits                                  108                            125                           430          
  Federal funds purchased                                                                                                        
    and repurchase agreements               14,812     564   3.808        10,488      485   4.624        5,465      309   5.654  
  Deferred compensation                      2,311     201   8.698         2,448      218   8.905        2,553      231   9.048  
  Notes payable                                932      59   6.330         4,325      272   6.289        5,554      498   8.967  
                                        -------------------           --------------------          --------------------         
Total interest-bearing liabilities         940,418  31,746   3.376       856,794   35,965   4.198      768,716   45,556   5.926  
                                        -------------------           --------------------          --------------------         
Noninterest-bearing liabilities:                                                                                                 
  Demand deposits                          199,298                       172,880                       155,770                   
  Other liabilities                          9,136                         8,931                         8,132                   
Stockholders' Equity                        95,926                        80,641                        74,008                   
                                        -----------                   -----------                   -----------                  
TOTAL LIABILITIES and                                                                                                            
  STOCKHOLDERS' EQUITY                  $1,244,778                    $1,119,246                    $1,006,626                   
                                        ===========                   ===========                   ===========                  
Net interest earnings                              $51,784                        $48,169                       $41,395          
                                                   ========                      =========                     =========         

Net yield on interest earning assets                         4.474%                         4.655%                        4.491% 
                                                           ========                       ========                      ======== 
Net yield on interest earning assets                                                                                             
  (non-FTE)                                                  4.098%                         4.246%                        4.044% 
                                                           ========                       ========                      ======== 

(1)  Includes tax-exempt loans of $4,795 in 1993, $5,785 in 1992 and $6,407 in  
1991.                                                                 
(2)  The reduction in interest income caused by nonaccrual loans is reflected   
in all net interest income and related yield calculations.            

Analysis of Changes in Net Interest Income                                      

The following table sets forth the changes in interest income and interest  
expense attributable to rate and volume variances.  The calculations in this    
table have been made on the basis that:  (1) income is recognized on nonac-     
cruing loans only when collected; and (2) there were no prior period adjust-    
ments.  Change in income due to volume is calculated by multiplying the         
annual change in volume times the prior year's rate.  Change in income due to   
rate is calculated by multiplying the annual change in rate times the prior     
year's volume.  Changes due to rate/volume have been classified as changes      
due to volume.                                                                  

                                                        [Enlarge/Download Table]
                                 1993 Compared to 1992              1992 Compared to 1991             1991 Compared to 1990       
                           _________________________________  _________________________________  _________________________________

                           Change Due Change Due      Total   Change Due Change Due      Total   Change Due Change Due      Total 
                            to Volume    to Rate     Change    to Volume    to Rate     Change    to Volume    to Rate     Change 
                           _________________________________  _________________________________  _________________________________
                                                                                                                                  
                                                                                                                                  
Interest earned on:                                                                                                               
  Loans, net of                                                                                                                   
    unearned discount          $5,187    ($3,342)    $1,845       $2,765    ($4,936)   ($2,171)      $1,839    ($3,035)   ($1,196)
  Taxable investment                                                                                                              
    securities                  1,938     (5,610)    (3,672)       5,143     (4,837)       306        7,222     (1,758)     5,464 
  Tax-exempt investment                                                                                                           
    securities                  2,497     (1,141)     1,356          (10)      (382)      (392)      (2,213)       190     (2,023)
  Time deposits in banks           50          1         51          (13)       (13)       (26)         (74)       (61)      (135)
  Federal funds sold                                                                                                              
   and resale agreements          (23)      (161)      (184)         428       (962)      (534)        (674)    (1,587)    (2,261)
                           ---------------------------------  ---------------------------------  ---------------------------------
    Total interest income       9,649    (10,253)      (604)       8,313    (11,130)    (2,817)       6,100     (6,251)      (151)
                           ---------------------------------  ---------------------------------  ---------------------------------
Interest expense on:                                                                                                              
  Regular Savings                 373       (530)      (157)         214       (947)      (733)          52       (110)       (58)
  NOW accounts                    413       (994)      (581)         582     (1,590)    (1,008)         478       (405)        73 
  Money market                  1,285     (2,197)      (912)       2,399     (4,711)    (2,312)       2,743     (1,776)       967 
  Certificates of                                                                                                                 
   deposits                         0     (2,141)    (2,141)        (770)    (3,979)    (4,749)        (494)    (2,056)    (2,550)
  IRA's                           325       (585)      (260)         367       (788)      (421)         493       (344)       149 
  Premium on deposits             (17)         0        (17)        (305)         -       (305)         (52)         -        (52)
  Federal funds purchased                                                                                                         
    and repurchase                                                                                                                
    agreements                    165        (86)        79          232        (56)       176           63        (84)       (21)
  Deferred compensation           (12)        (5)       (17)          (9)        (4)       (13)         231          0        231 
  Notes payable                  (215)         2       (213)         (77)      (149)      (226)          27        (52)       (25)
                           ---------------------------------  ---------------------------------  ---------------------------------
    Total interest expense      2,317     (6,536)    (4,219)       2,633    (12,224)    (9,591)       3,541     (4,827)    (1,286)
                           ---------------------------------  ---------------------------------  ---------------------------------
Net interest income            $7,332    ($3,717)    $3,615       $5,680     $1,094     $6,774       $2,559    ($1,424)    $1,135 
                           =================================  =================================  =================================

Noninterest Income                                                              

The following table depicts noninterest income information for the years      
indicated.                                                                      

                                                        [Enlarge/Download Table]
                                        1993                1992                1991       
                                 -----------------   -----------------   ----------------- 
                                    Non-     % of       Non-     % of       Non-     % of  
                                 Interest Average    Interest Average    Interest Average  
                                  Income   Assets     Income   Assets     Income   Assets  
                                 -------- --------   -------- --------   -------- -------- 
                                                                                           
                                                                                           
Service charge-deposits            5,075     0.41%   $5,057      0.45      4,757     0.47% 
Other service charges and fees     5,280     0.42     3,722      0.34      2,695     0.27  
Securities gains (losses)          1,194     0.10       771      0.07        476     0.05  
Trust department revenue             916     0.07        801     0.07        659     0.06  
Other                              1,346     0.11      1,138     0.10      1,067     0.11  
                                --------            --------            --------           
      Totals                     $13,811     1.11%   $11,489     1.03%    $9,654     0.96% 
                                ========            ========            ========           

Noninterest income continued its growth pattern, which has approximated 20% 
in each of the last three years.  The increase in service fees in 1993 and      
1992 was principally the result of an increase in fees generated from mort-     
gage origination activities which amounted to $1.78 million in 1993 and         
$570,000 in 1992.  Noninterest income attributable to the acquisition of        
Huntley Bancshares amounted to $230,000 in 1993.                                
The Company began a mortgage origination program in 1992.  Under this       
initiative, the Company originated 1,551 mortgages in the amount of $149.4      
million in 1993 and 559 mortgages in the amount of $53.5 million in 1992.  A    
substantial majority of these mortgages have been sold in the secondary         
market.  The remaining increases seen in both 1993 and 1992, were the result    
of increased rates, improved realization procedures and a larger deposit base   
resulting from sustained deposit growth.                                        
Securities gains were recognized in the first six months of 1993 on the     
sale of $61 million in U.S. Treasury and agency securities.  The majority of    
the securities sold were scheduled to mature, or reprice, in 1993 or the        
first quarter of 1994.   Similar transactions occurred in the second quarter    
of 1992, resulting in gains totaling $683,000.  The securities gains realized   
in 1991 reflect a reduction in the Company's investment in tax free securi-     
ties in order to eliminate the effects of the alternative minimum tax.          

Noninterest Expense                                                             

The following table presents noninterest expense for the years indicated.   

                                                        [Enlarge/Download Table]
                                       1993               1992               1991      
                                -----------------  -----------------  -----------------
                                   Non-     % of      Non-     % of      Non-     % of 
                                Interest Average   Interest Average   Interest Average 
                                Expense   Assets   Expense   Assets   Expense   Assets 
                                -------- --------  -------- --------  -------- --------
                                                                                       
                                                                                       
Salaries and employee benefits  $20,302     1.63%  $17,814     1.59%  $15,950     1.59%
Occupancy, net                    4,081     0.33     4,160     0.37     3,932     0.39 
Furniture and equipment           3,352     0.27     2,903     0.26     2,832     0.28 
Amortization of goodwill            726     0.06       705     0.06       728     0.07 
F.D.I.C. insurance                2,434     0.19     2,193     0.20     1,852     0.18 
Other                            10,601     0.85     8,981     0.80     8,699     0.87 
                                --------           --------           --------         
     Totals                     $41,496     3.33%  $36,756     3.28%  $33,993     3.38%
                                ========           ========           ========         

Although noninterest expense increased in absolute dollars in both 1993 and 
1992, noninterest expense expressed as a percent of average assets remains in   
line with the 1991 level.  The increases in salaries and employee benefits in   
both 1993 and 1992 primarily resulted from the addition of staff associated     
with the mortgage origination operation and additional staffing levels re-      
sponding to deposit growth.                                                     
Noninterest expenses attributed to the acquisition of Huntley Bancshares in 
1993 amounted to $1.25 million, of which approximately $340,000 was of a        
nonrecurring nature.                                                            

Analysis of Consolidated Balance Sheets                                         

Investment Securities                                                           
Investment securities play a substantial role in the Company's operations,  
profitability and management of its interest rate risks.  At December 31,       
1993 and 1992, investment securities represented 44.7% and 45.5% of total       
assets, respectively.                                                           
The Company generally invests in fixed-rate securities having a maturity of 
five years or less.  Securities having a maturity in excess of five years are   
generally floating-rate securities.  As a result, the maturity structure of     
the Company's investment portfolio is relatively short-term in nature and the   
market value of the portfolio remains very close to its book value, despite     
interest rate fluctuations.  At December 31, 1993, the approximate market       
value of the Company's investment portfolio was equal to 102.3% of its book     
value, reflecting an unrealized gain of $13.5 million in the total portfolio.   
Although the Company has the ability to hold investment securities to       
maturity, in order to achieve one or more of its investment objectives the      
Company may sell certain securities prior to maturity in response to changes    
in related economic or business conditions.  In December of 1992 the Company    
reclassified its entire investment portfolio from securities held for invest-   
ment to securities held for sale.  Securities held for sale include all         
investment securities currently owned by the Company and which may be sold in   
response to changes in the interest rate environment, liquidity needs or        
other changes in economic or business conditions.  These securities are         
stated at the lower of amortized cost or market value.                          
Gains will typically only be taken on securities when the proceeds can be   
reinvested at a similar or higher fully taxable equivalent yield and hence      
will not adversely affect future income and investment yield, or when the       
reduction in yield is offset by a sufficient increase in the quality of the     
issue purchased.                                                                

The following table shows the relative stated maturities of investment debt   
securities (at amortized cost) held by the Company's subsidiary banks on a      
consolidated basis at December 31, 1993, and the weighted average interest      
rate for each range of maturities.                                              

                                                        [Enlarge/Download Table]
                                                          Average                                      
                                                                                               taxable 
                                       U.S. Government       States &      Other bonds      equivalent 
                       U.S. Treasury          Agency     subdivisions     & securities           yield 
                       --------------  --------------   --------------   --------------  --------------
                                                                                                       
                                                                                                       
Under 1 year                $ 87,840        $ 33,059          $23,865          $    67            6.59%
1 to 5 years                 159,849          17,904           47,972              326            6.19 
5 to 10 years                      -           1,497           14,546                -            9.84 
Over 10 years                      -               -           11,619                -           11.08 
Mortgage/asset backed              -         184,815                -            2,799            4.23 
                       --------------  --------------   --------------   --------------                
Totals                      $247,689        $237,275          $98,002          $ 3,192                 
                       ==============  ==============   ==============   ==============                

Securities in the mortgage/asset backed category are primarily adjustable   
rate mortgage backed securities with a stated maturity of greater than ten      
years.  The average life of these securities is approximately seven years       
based on current prepayment patterns.                                           

Loans                                                                           

The following table shows the major categories of the Company's loan port-  
folio at the dates indicated.                                                   

                                                        [Enlarge/Download Table]
                                                        December 31,                     
                                    -----------------------------------------------------
                                        1993       1992       1991       1990       1989 
                                    --------   --------   --------   --------   -------- 
                                                                                         
                                                                                         
Commercial and industrial           $ 92,828   $ 70,850   $ 72,390   $ 95,659   $ 86,699 
Real estate-construction              37,214     25,410     29,990     28,696     20,557 
Real estate-residential              241,991    206,606    156,969    155,132    146,793 
Real estate-home equity               41,339     35,468     44,034     29,388     22,795 
Real estate-commercial               126,346    110,295     94,391     54,333     57,817 
Consumer                              40,947     44,408     52,828     65,303     72,351 
                                    --------   --------   --------   --------   -------- 
       Gross loans                   580,665    493,037    450,602    428,511    407,012 
Less:                                                                                    
Deferred loan fees                     1,981      1,718      1,178        893        850 
Unearned discount                        656        775      1,265      2,260      2,839 
Allowance for loan losses             11,075      9,603      8,363      6,919      4,964 
                                    --------   --------   --------   --------   -------- 
Net loans                           $566,953   $480,941   $439,796   $418,439   $398,359 
                                    ========   ========   ========   ========   ======== 
Ratio of net loans to total assets      43.1%      40.8%      41.2%      43.2%      43.4%
                                    ========   ========   ========   ========   ======== 

The Company's gross loans grew approximately 17.8% in 1993 at the subsidi-  
ary banks.  The growth in loans outpaced deposit and total asset growth, both   
of which approximated 11.5%.                                                    
As a consequence of loan growth exceeding asset growth, the ratio of net    
loans to total assets has been restored to the levels of 1989 and 1990.  The    
controlled growth pattern is the result of management's efforts to maintain     
the quality of the loan portfolio by accepting primarily secured, quality       
loans within the natural market areas of the subsidiary banks.  The majority    
of the Company's commercial and industrial loans are made to small businesses   
in the communities where the Company's banking facilities are located.  Real    
estate-mortgage, real estate-construction and consumer loans are also made      
within the natural market areas of the Company's subsidiary banks.  Because     
the Company's loan portfolio is classified by collateral rather than purpose,   
real estate-residential includes some credits for commercial purposes which     
are secured by residential real estate.  First mortgages on residential         
properties are generally made at either floating rates or with three to five    
year maturities.                                                                
The Company does not engage in the origination or purchase of highly lever- 
aged or foreign loans and makes very few agricultural loans.  The Company       
engages on a limited basis in the issuance of letters of credit for its         
customers.  The amount of outstanding letters of credit was $7.8 million at     
December 31, 1993.                                                              

Nonperforming Assets                                                            

The following table shows the aggregate amount of assets which were nonper- 
forming as of the dates indicated.                                              

                                                        [Enlarge/Download Table]
                                                                   December 31,                 
                                               -----------------------------------------------  
                                                  1993       1992      1991      1990      1989 
                                               -------     ------    ------    ------    ------ 

                                                                                                
                                                                                                
Nonaccrual loans                                $6,223     $6,499    $7,180    $6,141    $1,865 
Restructured loans                                  90        455         -         -         - 
90 day past due loans                              902        126       289       421     1,119 
                                                ------     ------    ------    ------    ------ 
Total nonperforming loans                        7,215      7,080     7,469     6,562     2,984 
                                                ------     ------    ------    ------    ------ 
Other real estate owned                          1,703      2,668     2,368       257        76 
                                                ------     ------    ------    ------    ------ 
Total nonperforming assets                      $8,918     $9,748    $9,837    $6,819    $3,060 
                                                ======     ======    ======     =====    ====== 
Nonperforming assets to net loans                 1.57%      2.03%     2.24%     1.63%      .77%
                                                ======     ======    ======     =====    ====== 
Gross amount of interest that would have been                                                   
 recorded if all nonperforming loans had been                                                   
 accruing interest at their original terms      $  592     $  658    $  830    $  588    $  261 
Income actually collected and recognized          (150)      (291)     (230)     (117)     (112)
                                                ------     ------    ------    ------    ------ 
Net reduction in interest income                $  442     $  367    $  600    $  471    $  149 
                                                ======     ======    ======    ======    ====== 

The increase in nonaccrual loans between 1989 and 1990 reflected isolated   
credit quality deterioration identified by management in the first part of      
1990.  A general slowdown in the local economy resulted in an increase in       
nonaccrual loans during 1991, which remained relatively stable through 1993.    
Other real estate owned at December 31, 1993 is stated at fair market value     
and consists of six parcels ranging in value from $100,000 to $1,030,000.       
Nonperforming assets at December 31, 1993 represent $5.4 million of commer-     
cial and industrial loans; $3.3 million of real estate mortgages; $100,000      
of real estate construction loans, and $100,000 of consumer loans.              
Nonperforming assets which were collateralized by commercial real estate        
totaled $4.3 million; $4.4 million were secured by residential real estate      
and $200,000 were secured by other collateral.                                  
Generally, the Company places a loan on nonaccrual status when it reaches   
90 days past due or, when management believes, after considering economic and   
business conditions and collection efforts, that the borrower's financial       
condition is such that collection of interest is doubtful.                      

Allowance for Loan Losses                                                       
The allowance for loan losses reduces the gross level of loans outstanding  
by an estimate of uncollectible loans.  When management determines that loans   
are uncollectible, the loans are charged off against the allowance for loan     
losses.  Periodically, a provision for loan losses is charged against current   
income.  This provision restores the allowance for loan losses to a level       
management deems adequate to cover anticipated future losses in the portfo-     
lio.                                                                            
The 1993 year-end allowance for loan losses was 3.7 times the average       
annual net charge-offs to average loans from 1989 to 1993.  Management be-      
lieves that the allowance continues to preserve the Company's ability to        
absorb unexpected loan losses in the future.  There is no accurate means to     
predict loan losses or amounts which ultimately will be charged off.  The       
conclusion that a loan may become uncollectible is a matter of judgment.        
Decisions to make provisions for loan losses charged against operating income   
are made by the managements of the Company's subsidiary banks.  Such deci-      
sions are based primarily on unfavorable collectibility factors relating to     
specific loans, historical loan loss experience and current economic condi-     
tions in the market area.  On a quarterly basis, a comprehensive review of      
the adequacy of the allowance for loan losses is performed.  This assessment    
is accomplished through analytical techniques which evaluate the allowance in   
light of historical losses, changes in the nature and volume of the loan        
portfolio, overall portfolio quality, identified problem loans and current      
economic conditions.  In addition to management's assessment, the loans of      
the Company's subsidiary banks are examined periodically by the Company's       
independent loan review firm and by state and federal banking authorities.      
The allowance for loan losses is also reviewed by independent auditors as       
part of the audit of the Company's consolidated financial statements.           

The following table shows activity affecting the allowance for loan losses  
for the five year period ending December 31, 1993.                              

                                                        [Enlarge/Download Table]
                                                                                   December 31,                 
                                                             -------------------------------------------------- 
                                                                1993       1992       1991       1990      1989 
                                                             -------     ------     ------     ------    ------ 
                                                                                                                
                                                                                                                
Allowance for loan losses at beginning of period             $ 9,603     $8,363     $6,919     $4,964    $4,147 
Allowance of acquired subsidiaries                               362          -          -          -         - 
                                                             -------     ------     ------     ------    ------ 
                                                               9,965      8,363      6,919      4,964     4,147 
Amount of loans charged off during the year:                                                                    
 Commercial and industrial                                     1,496      1,243      1,447      4,703     2,729 
 Real estate, mortgage and construction                           22        250        183        175         - 
 Consumer                                                        225        431        726      1,095       376 
                                                             -------     ------     ------     ------    ------ 
Total loans charged off                                        1,743      1,924      2,356      5,973     3,105 
Amount of loan recoveries during the year:                                                                      
 Commercial and industrial                                       409        671        815        659       202 
 Real estate, mortgage and construction                           50          6          -        117       102 
 Consumer                                                        154        217        330        187       122 
                                                             -------     ------     ------     ------    ------ 
Total loan recoveries                                            613        894      1,145        963       426 
                                                             -------     ------     ------     ------    ------ 
Net loans charged off                                          1,130      1,030      1,211      5,010     2,679 
Provision for loan losses                                      2,240      2,270      2,655      6,965     3,496 
                                                             -------     ------     ------     ------    ------ 
Allowance for loan losses at end of period                   $11,075     $9,603     $8,363     $6,919    $4,964 
                                                             =======     ======     ======     ======    ====== 
Allowance for loan losses to loans net of unearned discount     1.92%      1.96%      1.87%      1.63%     1.23%

Ratio of net loans charged off to average                                                                       
loans outstanding during the year                                .21        .22        .28       1.19       .69 

Allocation of Allowance for Loan Losses                                         

The following table sets forth the allocation of the Company's allowance    
for loan losses, along with the percentage of loans in each category to total   
loans.  The allocation of the allowance by loan category includes unallocated   
amounts assigned to each category.  The entire allowance for loan losses is     
available to absorb losses in any particular category of loans, notwithstand-   
ing management's allocation of the allowance.                                   

                                                        [Enlarge/Download Table]
                                                           December 31,                             
                           -------------------------------------------------------------------------
                                1993          1992           1991           1990           1989     
                           -------------   ------------   ------------   ------------   ------------
                            Amount     %   Amount     %   Amount     %   Amount     %   Amount     %
                           -------   ---   ------   ---   ------   ---   ------   ---   ------   ---
                                                                                                    
                                                                                                    
Commercial and industrial  $ 6,081    16   $5,283    14   $4,605    16   $4,094    22   $2,221    21
Real estate, mortgage and                                                                           
  construction               3,192    77    2,783    77    2,091    72    1,383    63    1,251    61
Consumer                     1,802     7    1,537     9    1,667    12    1,442    15    1,492    18
                            ------   ---   ------   ---   ------   ---   ------   ---   ------   ---
                    Total  $11,075   100   $9,603   100   $8,363   100   $6,919   100   $4,964   100
                            ======   ===   ======   ===   ======   ===   ======   ===   ======   ===

Maturity and Rate Sensitivity                                                   

The following table sets forth the maturity distribution and interest       
sensitivity of the Company's commercial, industrial and real estate construc-   
tion loan portfolio at December 31, 1993.                                       

                                                                [Download Table]
                                             Remaining Maturity              
                              -----------------------------------------------
                              One Year        One to    Over Five            
                               Or Less    Five Years        Years       Total
                              --------    ----------    ---------    --------
                                                                             
                                                                             
Commercial and industrial     $ 42,539      $ 39,048      $11,241    $ 92,828
Real estate-construction        37,214             -            -      37,214
                              --------    ----------    ---------    --------
                              $ 79,753      $ 39,048      $11,241    $130,042
                              ========    ==========    =========    ========
Interest rate sensitivity                                                    
     Commercial and industrial                                               
       Fixed rate                           $ 26,802      $10,341    $ 37,143
       Variable rate                          12,246          900      13,146
                                          ----------    ---------    --------
          Total                             $ 39,048      $11,241    $ 50,289
                                          ==========    =========    ========

Deposits                                                                        

Total deposits increased 11.4% over the past year from $1,069.8 million at  
December 31, 1992, to $1,192.1 million at December 31, 1993.  On a daily        
average basis, total deposits grew 10.8% during 1993 to $1,121.7 million.       
The following table provides a breakdown by category of the Company's       
deposits on a daily average basis for the past three years.                     

                                                                [Download Table]
                                                  Year Ended December 31,    
                                          ---------------------------------- 
                                                1993         1992        1991
                                          ----------   ----------    --------
                                                                             
                                                                             
Noninterest-bearing deposits              $  199,298   $  172,880    $155,770
Regular savings                              101,356       87,669      81,251
NOW accounts                                 144,314      124,903     104,998
Money market                                 375,361      331,833     265,392
Certificates of deposit                      223,303      223,280     237,695
Individual retirement accounts                78,029       71,848      65,808
                                          ----------   ----------    --------
     Total deposits                       $1,121,661   $1,012,413    $910,914
                                          ==========   ==========    ========

The Company relies upon its core deposits, rather than on purchased money,  
as its principal source of funds.  Although the Company's subsidiary banks      
accept certificates of deposit and other time deposits over $100,000, gener-    
ally the rate paid on these deposits is not significantly different from        
other smaller instruments.  The following table shows the maturity structure    
and amounts of the Company's time deposits of $100,000 or more for the last     
three years.                                                                    

                                                                [Download Table]
                                       December 31,       
                              --------------------------- 
                                 1993       1992      1991
                              -------    -------   -------
                                                          
                                                          
Under 3 months                $29,439    $25,410   $30,185
3 to 6 months                  14,409      9,739    11,579
6 to 12 months                 12,641      8,176    10,760
Over 12 months                 10,281      6,119     4,909
                              -------    -------   -------
     Total                    $66,770    $49,444   $57,433
                              =======    =======   =======

Capital Resources                                                               

Stockholders' equity at December 31, 1993 was $100.8 million, an increase   
of 18.7% over the $84.9 million level at December 31, 1992.  The Company        
remains well capitalized.  Stockholders equity represented 7.66% of total       
assets at December 31, 1993, compared to 7.20% at December 31, 1992.  The       
increase in the ratio was primarily the result of the reissuance of treasury    
shares in completing the acquisition of Huntley Bancshares, Inc.                
The Board of Directors of the Company have authorized the purchase of the   
Company's Class A Common Stock in an amount not to exceed 10% of the Com-       
pany's net worth, per year.  The following table sets forth the aggregate       
open market stock purchases of the Company's Class A Common Stock.              

                                   Average
       Shares      Aggregate          Cost
Year      Purchased          Cost     per Share     
------     ---------     ----------    ---------      

                                                                [Download Table]
                                              
                                              
1989       185,500     $3,600,000       $19.41
1990       361,179      6,547,803        18.13
1991        18,000        287,400        15.97
1992       139,700      3,749,938        26.84
1993        49,500      2,176,225        43.96

At year-end the Company had short-term indebtedness of $500,000, a          
decrease of $3.0 million from the prior year.  The indebtedness was incurred    
to purchase equity investments in other financial institutions, and will be     
repaid through ongoing operations.                                              
Bank regulators have established capital guidelines.  The guidelines assign 
different risk weighting to assets and certain off-balance sheet activities.    
Capital is defined as: Tier I capital which includes stockholders' equity       
reduced by intangibles; and Tier II Capital which includes certain long-term    
debt and a portion of the allowance for loan losses.  The guidelines require    
that companies must have ratios of 4% and 8% for Tier I and total capital       
(which includes Tier II Capital), respectively.  At December 31, 1993 the       
Company had Tier I capital and total capital ratios substantially exceeding     
the minimum standards.  The Tier I and total capital ratios of each of the      
Company's subsidiary banks were also in excess of the minimum standards.  The   
elements of these capital levels are shown below:                               

                                                                [Download Table]
                                                        December 31,         
                                           ----------------------------------
                                                1993        1992        1991 
                                           ----------   ---------   ---------
                                                                             
                                                                             
Risk-based capital                                                           
   Stockholders' equity                     $100,808     $84,938     $78,568 
   Less goodwill and other intangibles         8,495       7,117       8,042 
                                            ---------   ---------   ---------
      Total Tier I capital                    92,313      77,821      70,526 
                                            ---------   ---------   ---------
   Allowable allowance for loan losses         7,946       6,997       6,693 
                                            ---------   ---------   ---------
      Total Tier II capital                    7,946       6,997       6,693 
                                            ---------   ---------   ---------
      Total capital                          100,259      84,818      77,219 
                                            =========   =========   =========
   Risk-adjusted assets                     $635,694    $559,730    $535,470 
                                            =========   =========   =========
   Tier I capital to risk-adjusted assets      14.52%      13.90%      13.17%
                                            =========   =========   =========
   Total capital to risk-adjusted assets       15.77%      15.15%      14.42%
                                            =========   =========   =========

Liquidity                                                                       
Liquidity involves the ability to meet the cash flow requirements of cus-   
tomers, who may be either depositors wanting to withdraw funds or borrowers     
needing assurance that sufficient funds will be available to meet their         
credit needs.  Cash and cash equivalents, federal funds sold and marketable     
investment securities, particularly unpledged U.S. Government securities with   
a maturity of five years or less, are the Company's principal sources of        
asset liquidity.  Although the Company does not                                 
generally rely on federal funds purchased or brokered deposits as sources of    
liquidity, some of the Company's subsidiary banks hold positions in federal     
funds purchased from time to time.                                              
The Company's base of core deposits is relatively stable, due to the retail 
nature of its banking business.  Nonetheless, the Company seeks to maintain a   
high level of liquidity in order to meet possible deposit withdrawal require-   
ments and loan demands of its customers as well as to maintain the ability to   
change the nature of a substantial portion of its assets in response to         
changes in general economic conditions.  The Company's liquidity ratio (the     
percent of total liquid assets to net deposits), as internally calculated       
using a modified OCC formula, was 51% at December 31, 1993, compared to 53%     
at December 31, 1992.  Historically, the Company has not had, nor does man-     
agement foresee any unusual short-term or long-term liquidity needs.  Manage-   
ment intends to continue maintaining high levels of liquidity.                  

Asset/Liability Management                                                      
The purpose of asset/liability management is to structure the maturities    
and interest rate variability of the Company's assets and liabilities in such   
a way that changes in interest rates do not adversely impact the net interest   
margin.  Interest rate variability differs with various types of interest       
earning assets and interest-bearing liabilities.  Overnight federal funds       
sold, on which rates change daily, and loans which are tied to the prime rate   
differ considerably from long-term investments and fixed-rate loans.  Simi-     
larly, new and maturing certificates of deposit and money market accounts are   
more interest sensitive than passbook savings accounts.                         
Traditionally the most common measure of a bank's interest rate risk has    
been the static gap (GAP).  GAP reports measure imbalances that exist between   
the repricing schedules for an institution's financial assets and liabilities   
for a given period of time.  This method is limited by its static nature, and   
does not allow for varying degrees of sensitivity to interest rates present     
in the financial assets and liabilities.                                        
The Asset/Liability Management Committee of the Company has established     
guidelines which limit the amount of interest rate risk which the Company is    
willing to accept.  To ensure compliance with these risk limits, the Commit-    
tee regularly monitors the level of interest sensitivity.  The Company's        
interest rate sensitivity at December 31, 1993, is within the guidelines        
established by the Asset/Liability Management Committee.                        

The following table reflects the repricing sensitivity of both earning      
assets and interest-bearing liabilities at December 31, 1993, on a static GAP   
basis.                                                                          

                                                        [Enlarge/Download Table]
                                                0-3          4-12           1-5        Over 5               
                                             Months        Months         Years         Years         Total 

                                        ------------  ------------  ------------  ------------  ------------
                                                                                                            
  Assets                                                                                                    
  Loans                                     $69,113      $219,103      $136,570      $153,241      $578,027 
  Securities                                 90,637       209,335       258,161        28,025       586,158 
  Interest-bearing deposits with banks        2,282             -             -             -         2,282 
  Short-term investments                     57,025             -             -             -        57,025 
                                        ------------  ------------  ------------  ------------  ------------
    Total                                   219,057       428,438       394,731       181,266     1,223,492 
                                        ------------  ------------  ------------  ------------  ------------
Liabilities                                                                                                 
  Interest-bearing demand deposits          156,489             -             -             -       156,489 
  Money market accounts                     382,387             -             -             -       382,387 
  Certificates of deposit                    72,042       102,178        45,650        13,906       233,776 
  Individual retirement accounts              7,727        57,620        14,584           660        80,591 
  Savings accounts                          109,510             -             -             -       109,510 
  Borrowed funds                              5,897         8,013             -             -        13,910 
                                        ------------  ------------  ------------  ------------  ------------
    Total                                   734,052       167,811        60,234        14,566       976,663 
                                        ------------  ------------  ------------  ------------  ------------
Interest sensitive GAP                    ($514,995)     $260,627      $334,497       $166,700     $246,829 
                                        ============  ============  ============  ============  ============
Cumulative GAP                            ($514,995)    ($254,368)     $ 80,129       $246,829              
                                        ============  ============  ============  ============              

The static GAP table shown above assumes that all deposits will reprice on  
a contractual basis.  A significant portion of the Company's retail core        
deposit base, however, historically has not repriced on a contractual basis.    
In response to external market interest changes, the Company's interest rates   
may change quickly and dramatically on some balance sheet items, but very       
little on other items, if at all.  The traditional static GAP does not recog-   
nize these differences in balance sheet items, as it only measures balance      
sheet volumes without regard for differences in rate sensitivity.  The Com-     
pany's Asset/Liability Management Committee also uses a dynamic simulation      
model, including statistical analysis, which is able to reflect many of the     
variables not addressed in the static GAP analysis.                             

Effects of Inflation                                                            
In contrast to industrial companies, virtually all of the assets and li-    
abilities of the Company are monetary in nature.  As a result, interest rates   
have a more significant impact on the Company's performance than the effects    
of general levels of inflation.  Although interest rates can be affected by     
inflation, interest rates do not necessarily move in the same direction or      
have the same magnitude as changes in the price of goods and services.  In      
the current economic environment, liquidity and interest rate adjustment        
features of the Company's assets and liabilities are important in maintaining   
acceptable performance levels.                                                  

Business Review                                                                 
The Company is a Delaware-chartered bank holding company, headquartered in  
Palatine, Illinois, which owns all of the stock of 13 banks operating in        
Cook, DuPage, Kane, Lake and McHenry Counties, Illinois.  The Company also      
has two active indirect subsidiaries which are bank service corporations.       
Active competition exists in all areas in which the Company's subsidiary    
banks are presently engaged, not only with commercial banks, but also with      
savings and loan associations, credit unions, finance companies, money market   
mutual funds, brokerage houses and other financial institutions.                
As of December 31, 1993, the Company and its subsidiaries had 575 full time 
equivalent employees.                                                           
The banks are generally located in growing, affluent suburban communities   
in the Chicago area and are primarily retail oriented.  The banks operated at   
30 banking locations as of December 31, 1993.                                   

Market Price of and Dividends on the Company's Common Equity                    

The Company's Class A Common Stock is quoted on the NASDAQ National Market  
System and is traded over the counter.  NASDAQ quotations for the Company's     
Class A Common Stock for 1992 and 1993 are set forth in the following table:    

                                                                [Download Table]

                            High       Low  
                           ------     ------
                                            
                                            
1st quarter 1992           27 1/2     24 1/2
2nd quarter 1992           28 1/4     26    
3rd quarter 1992           34 3/4     27    
4th quarter 1992           35 1/2     33    
1st quarter 1993           45         34    
2nd quarter 1993           44 1/2     39 1/2
3rd quarter 1993           45         40 3/4
4th quarter 1993           45 1/2     41 3/4

On February 1, 1994, there were 2,190,520 shares of Class A Common Stock    
and 1,256,486 shares of Class B Common Stock outstanding.  On that date,        
951,314 shares of Class A Common Stock and 35,764 shares of Class B Common      
Stock were held as treasury shares and were not outstanding.  The outstanding   
Class A Common Stock was held by 890 stockholders of record.  The outstanding   
Class B Common Stock was held by 79 stockholders of record.                     
In 1989 the Company paid quarterly dividends of $.066 per share on the      
shares of the Class A Common Stock and $.06 per share on the shares of Class    
B Common Stock for the first three quarterly dividends.  For the fourth         
quarter of 1989 and all of 1990, the Company paid a quarterly dividend of       
$.077 and $.07 on the shares of Class A and Class B Common stock respective-    
ly.  In 1991 the Company paid quarterly dividends of $.077 and $.07 for the     
first two quarters and $.088 and $.08 for the second two quarters on the        
shares of Class A and Class B Common Stock respectively.  In 1992 the Company   
paid quarterly dividends of $0.176 and $.16 on the shares of Class A and        
Class B Common Stock respectively.  In 1993 the Company paid quarterly divi-    
dends of $0.22 and $.20 on the shares of Class A and Class B Common Stock       
respectively. On January  21, 1994, the Board of Directors of the Company       
increased the quarterly dividend to $0.25 and $0.227 on the shares of Class A   
and Class B Common stock respectively.                                          
The Company uses funds derived primarily from the payment of dividends by   
its subsidiaries for, among other purposes, the payment of dividends to the     
Company's stockholders.                                                         
The directors of a national bank may generally declare a dividend of as     
much of the net profits (as defined) of the bank as they deem proper.  Howev-   
er, the approval of the Comptroller of the Currency is required for any         
dividend paid to the Company by national bank subsidiaries if the total of      
all dividends, including any proposed dividend declared by that bank in any     
calendar year, exceeds the total of its net profits (as defined) for that       
year and retained net profits (as defined) for the preceding two years.         
Under provisions of the Illinois Banking Act, dividends may not be declared 
by the Company's state banking subsidiaries except out of each bank's net       
profit (as defined), and unless each bank has transferred to surplus at least   
one-tenth of its net profits since the date of the declaration of the last      
preceding dividend until the amount of its surplus is at least equal to its     
common stock.  Presently, the surplus of each of the Company's state banks      
equals or exceeds capital.                                                      
All dividends paid to the Company by its subsidiary banks and by the Compa- 
ny to its stockholders are further restricted by Capital Asset Guidelines       
adopted in substantially the same form by all the relevant Federal regulatory   
agencies.  Dividends available to the Company from the subsidiary banks,        
without obtaining prior approval from bank regulatory agencies, amounted to     
approximately $15.7 million at December 31, 1993.                               

Dates Referenced Herein

This ‘10-K’ Filing		Date		Other Filings
		12/15/94		None on these Dates
Filed on:		3/25/94
		2/4/94
		2/1/94
		1/21/94
For Period End:		12/31/93
		1/29/93
		1/1/93
		12/31/92
		1/1/92
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