DESCRIPTION OF BUSINESS

First Commerce Bancshares, Inc. (the Company) is a multi-bank holding company
organized as a Nebraska corporation. The Company's primary business is the
ownership and management of seven commercial bank subsidiaries, a mortgage
company and an asset management company. These subsidiaries provide a
comprehensive range of trust, commercial, consumer, correspondent, and mortgage
banking services. The Company provides computer services to banks throughout
Nebraska and surrounding states through its subsidiary, First Commerce
Technologies, Inc.  First Commerce Technologies presently has four computer
centers in Nebraska, one in Colorado, two in Kansas, one in Arkansas and one in
Florida.

The Company is geographically located throughout Nebraska with full service
banking offices in Alliance, Bridgeport, Grand Island, Hastings, Kearney,
Lincoln, McCook, North Platte and West Point.  Loan/deposit production offices
are located in Hyannis, Mullen, Snyder, Valentine and Wood River.


FINANCIAL HIGHLIGHTS  (In Thousands Except Per Share Data)
<TABLE>
                                                                                                       PERCENT
AT DECEMBER 31,                                                            1996            1995         CHANGE
                                                                           ----            ---- 

<S>                                                                     <C>             <C>              <C>
Assets                                                                  $2,028,012      $1,815,575       11.7%
Investments                                                                649,861         566,176       14.8
Loans                                                                    1,121,239       1,017,367       10.2
Deposits                                                                 1,574,544       1,463,205        7.6
Stockholders' equity                                                       197,398         180,021        9.7
Per share data:
  Stockholders' equity before net unrealized gains
     (losses) on securities available for sale                               13.92           12.58       10.7
  Total stockholders' equity                                                 14.57           13.27        9.8
  Closing bid price
     Class A                                                                 26.50           20.00       32.5
     Class B                                                                 19.50           14.25       36.8

                                                         PERCENT                         PERCENT
YEAR ENDED DECEMBER 31,                     1996          CHANGE           1995           CHANGE         1994
                                           -----         -------          -----          --------        -----   

<S>                                         <C>            <C>             <C>            <C>            <C>
Net interest income                         $70,106        15.1%           $60,889          5.4%         $57,793
Provision for loan losses                     6,839        95.7              3,495        952.7              332
Noninterest income                           44,030        30.1             33,850          7.9           31,363
Noninterest expense                          73,912        14.8             64,393          7.9           59,663
Net income                                   21,756        24.9             17,420         (8.5)          19,032

Return on average equity before
  net unrealized gains (losses) on
  securities available for sale                12.1%                           10.5%                        13.4%
Per share data:
  Net income                                  $1.60                           $1.29                        $1.46
  Dividends                                     .26                             .227                         .216

Global fund (cost)                          $33,163                        $27,327                       $23,376
Global fund (fair value)                     44,000                         34,191                        24,834

</TABLE>

DEAR STOCKHOLDERS,
   Our Company had a remarkably successful year in 1996.  Before providing in-
depth information, let me share some of the more noteworthy achievements in
summary form.

  w NET INCOME INCREASED 24.9% TO $21.8 MILLION.
  w TOTAL ASSETS INCREASED 11.7% TO $2.028 BILLION.
  w LOANS INCREASED 10.2% TO $1.12 BILLION AND "MANAGED LOANS" INCREASED
    15%.
  w THREE NEW LOAN/DEPOSIT PRODUCTION OFFICES WERE OPENED BY WESTERN
    NEBRASKA NATIONAL BANK - ONE IN VALENTINE, ONE IN MULLEN AND ONE IN
    HYANNIS.  LPO/DPOS HAVE ALSO BEEN OPENED IN WOOD RIVER AND IN SNYDER.
    THESE ARE OPERATING UNITS OF OVERLAND NATIONAL BANK IN
    GRAND ISLAND AND FIRST NATIONAL BANK IN WEST POINT, RESPECTIVELY.
  w NEW SENIOR MANAGEMENT HAS BEEN INSTALLED AT FIRST COMMERCE
    TECHNOLOGIES.
  w EXCELLENT GROWTH AND PROFITABILITY WAS ACHIEVED BY OUR CREDIT CARD
    JOINT VENTURE WITH CABELA'S.
  w OUR MORTGAGE COMPANY HAD EXCELLENT GROWTH AND NOW SERVICES 16,000 LOANS
    TOTALING OVER $1 BILLION.  PROFITS EXCEEDED $1 MILLION FOR THE YEAR.
  w FIRST COMMERCE OPENED NEARLY 9,000 NET NEW CHECKING ACCOUNTS.
  w NEW FUNDING SOURCES WERE ADDED OR ENHANCED TO PROVIDE US THE ABILITY TO
    CONTINUE TO GROW.
  w A NEW RETAIL BANKING EMPHASIS WAS BEGUN TO ENABLE US TO BETTER COMPETE
    IN THE CONSUMER MARKET IN FUTURE YEARS.
  w OUR GLOBAL FUND INCREASED TO $44 MILLION.  INVESTMENT RETURNS WERE
    APPROXIMATELY 17%.
  w OUR PRIMARY CO-MINGLED EQUITY TRUST FUND MANAGED BY FIRST COMMERCE
    INVESTORS WAS UP 25% FOR THE YEAR.
  w OUR CASH DIVIDEND RATE IN 1996 WAS 26 CENTS, UP FROM 22.7 CENTS IN
    1995.  IN DECEMBER, THE FCB BOARD APPROVED AN INCREASED DIVIDEND FOR
    1997 OF 30 CENTS.
  w LOAN LOSSES, EXCLUDING CREDIT CARD LOSSES, REMAINED AT LOW LEVELS.
  w GOOD PROGRESS WAS MADE IN OUR TECHNOLOGY ADVANCEMENTS NEEDED TO SUPPORT
    OUR NEW RETAIL THRUST AND TO SUPPORT FCT CUSTOMERS.

   For those of you who just want the big picture on 1996 results, you may
choose to stop reading here.  What follows is a more detailed explanation of the
bullet points above and other Company information. Detailed financial reports
and footnotes to the statements follow my letter and you may review these at any
depth you choose.  Our Annual Meeting is scheduled for Tuesday, April 15, 1997,
at The Country Club of Lincoln and I invite you to attend.  Formal notices will
be mailed in March.

   Needless to say, your management team is proud of this report card.  As I
have mentioned before, bottom line growth of FCB is not always as consistent as
we would like, due at times (such as the previous two years) to upward shifts in
interest rates which usually cause our spreads to shrink and interest margin to
decline. In 1996, interest rates were generally stable, and our net yield
spreads improved 17 basis points to 4.10%.  This spread improvement coupled with
the strong growth in loans and securities enabled our net interest income to
increase by $9 million over 1995 to $70 million in 1996.  This improvement,
caused partly by our successful growth strategies begun in the early 90's, and
partly by an interest rate environment that was favorable to us, was key to our
bottom line success in 1996.
<PAGE>
   Our loan growth during the year was excellent, up 10.2% to $1.12 billion at
December 31, 1996.  During the year, $56 million of credit card receivables were
securitized and "sold" into the secondary market.  We continue to manage this
credit card paper and thus we include this volume in our definition of "managed
assets" which increased 15%.  Over the past five years, our managed loan assets
have increased from $632 million at December 31, 1991 to $1.18 billion, an
increase of $548 million, or 87% - an average increase of 17% over the five year
period.

   In addition to the strong asset growth and spread improvement, our fee income
was also important to our strong earnings.  Many of our business units
contributed to our success including our mortgage company, our trust business,
our retail investment area, our credit card operation, service charge income due
to adding significant new customers and fee income from our loan activities.

   In addition to these ongoing operating functions, we had an unexpected, but
pleasant, tax refund of $405,000, after tax, booked during the first quarter of
the year at our McCook bank.  Also, $916,000 of after tax gains were taken in
Global.  At year end, we chose to make a $301,000 after tax donation to the NBC
Foundation.  The net positive impact on earnings from these three events was
$1,020,000.

   Now, let me comment on some of our operating units and on some of our newer
initiatives.

FIRST COMMERCE MORTGAGE
   FCM had a record year with bottom line profits of $1,079,000 and new
servicing volume of $226 million, bringing servicing as of December 31, 1996 to
$1.038 billion.  Doug Alford, President, and his capable staff run an efficient
company and provide a very important service to our bank customers, our many
correspondent bank customers, and the customers of FCM.  We have been in this
business for ten years.  Over time, we should be able to continue to grow this
business both in servicing and in profitability.  This business is not only a
profit center on its own, but provides important revenue to each of our
affiliate banks which originate mortgages for FCM.

RETAIL BANKING
   In the third quarter of 1996, we launched a new initiative designed to make
us more competitive in retail banking in future years.  We selected Jo Kinsey to
run this operation for us. She has a wealth of banking experience, and the
enthusiasm and drive to accomplish her mission. Included in this retail thrust
will be new services for our customers including telephone bill paying, personal
computer banking, and a 24 hour Customer Call Center.  Doing a better job for
the customer is our focus and our strong level of personal service to our
customers will not be lost in this new retail thrust.  Investments of additional
resources of both people and technology will be needed to make this new approach
successful.  A year from now we expect to see the beginning of more rapid growth
in our retail markets - and over the long run, we intend to be one of the best
retail banks in the country.

TECHNOLOGY
   This past year we have paid for new or upgraded personal computers for the
entire Company to enable all of us to function in an upgraded Windows
environment.  Although expensive, it is imperative that we be able to drive the
more powerful software programs to maintain excellence in customer service and
internal efficiency.  In addition, substantial work was done in 1996 and will be
completed in 1997 to implement the major new products discussed under our retail
strategies including personal computer banking and telephone bill paying.  Also
scheduled for completion in 1997 is the development of a data base marketing
system for use by both our retail banking and our credit card businesses.
<PAGE>
   None of this is moonshot stuff which could cause inordinate risk to the
Company.  But, it will be important to develop just what we need at reasonable
costs.  Brad Korell, President of National Bank of Commerce, keeps a watchful
eye on these projects to make certain these projects don't take on a life of
their own at excessive costs.

NBC CREDIT CARD DIVISION
   NBC's credit card business is now comprised of two basic businesses; 1)
management of our proprietary card base (our customers exclusively) and 2)
management of our credit card joint venture with Cabela's which we call the
Cabela's LLC (Limited Liability Company).

   On our proprietary card side, we have 78,000 active card customers and $81
million of credit card receivables as of December 31, 1996.  This business over
the past four years has become extremely competitive with many large players
entering the market with attractive features associated with their cards to
attract customers.  As this has occurred, our losses in this business have
increased and attrition has increased causing the business profitability to
decline.  Our losses are lower than national averages, but have gone up.  The
increased loan loss provision for FCB, up $3.3 million over 1995 to $6.8 million
is nearly all due to credit card and consumer loan charge offs.

   New technology including a data base warehouse and better prediction tools
are seeming to be helpful.  Profitability in this business, even with the
increased losses, remains very good and thus we are hopeful we can get the
losses stabilized or reduced, and then find some card offerings that will be
attractive to the market place.  We have a new concept planned for rollout in
1997 which we are quite enthusiastic about.

   Performance of our joint venture with Cabela's has been excellent.  Our first
rollout took place in May of 1995.  We ended 1996 with 66,000 active cards, had
$74 million of receivable volume and we achieved our earnings objectives while
being fully reserved.  Losses in this portfolio are less than in our proprietary
business.

   We continue to be very pleased with the quality of our partner and are
anticipating future growth in 1997 and beyond.

LOAN QUALITY
   During the year our loan quality (without credit card) continued to be very
good. Non credit card charge offs were $1,518,000, only .14% of total loans. Our
troubled loan category (our "Watch List") actually declined to less than .6% of
total loans.

   1996 was generally a good crop year for our farmers, and fat cattle prices
were at levels that enabled our cattle feeding customers to return to
profitability.  All of this, as well as a strong regional and national economy,
strengthened our portfolio.
<PAGE>
NBC TRUST DIVISION
   Our Trust Division, led by Steve Caswell, has many highly skilled customer
service oriented people.  The business increased revenues to $5.8 million in
1996, up 11% over the previous year and produced profits of almost $2 million
after all expenses and overhead allocations.  Some of this success is due to a
higher level of managed assets due to excellent stock and bond market returns,
but we also have added new customers fleeing from some of our competitor banks -
customers looking for quality service from our trust experts.  Our hats are off
to this wonderful group of professionals.

FIRST COMMERCE TECHNOLOGIES
   In June of 1996, we hired Patric Jerge to manage our technology company.
Since his arrival we have been very pleased with the progress made at FCT.
Continued and new emphasis has been placed on customer service and quality.  To
achieve these results, we have invested in additional people and additional
computer power.  A new sales leader and a new leader of our software people have
also joined the team and have made good progress in our development objectives.

   At this point, we have signed some important pieces of new business and
renewed nearly all existing bank contracts. This continues to be a complicated
and competitive business, but we like what we see and the potential for success,
if we continue to make progress, is substantial.

WESTERN NEBRASKA NATIONAL BANK
   Western had a good year last year.  Net income was $886,000 after goodwill
amortization of $267,000.  We opened LPOs in Valentine, Mullen and Hyannis to
provide service locations to the ranching needs of the entire Sandhills area.
We strengthened the home loan origination and retail investment functions and
added some technical talent in our operations area.  Our note case improved a
good deal due to good crops and better prices for our cattle feeders.

   Our new headquarters building in North Platte will be completed this spring
and will add to our operating efficiencies and enable us to serve our customers
better. Our new business objectives have been largely successful and Mike
Jacobson, President, is the perfect person to continue to lead this drive for
more good new business.  Added depreciation expense due to the new building and
continued amortization expense will require us to continue with our rapid growth
in order to cover this overhead.

FIRST COMMERCE INVESTORS
   FCI, our investment company, had a very good year.  They (10 people) have two
primary customers - The National Bank of Commerce Trust Division where they
manage the co-mingled funds and individual trust assets, and First Commerce
Bancshares where they help me manage the Global Fund.  The Company is led by
James Stuart, III, Chairman and CEO, and H. Cameron Hinds, President and Chief
Investment Officer.  Equity Fund C increased in value by 25%, putting that fund
performance in the top 12% of similar type funds.

   Global achieved returns of approximately 17%, which was better than the
global indexes we measure ourselves against.
<PAGE>
   We plan to convert our co-mingled equity funds and our bond funds to mutual
funds in 1997 providing us with a larger market for our managed funds and making
our products more user friendly.  We have a singular purpose at FCI: selecting
and buying stocks that produce excellent returns to our customers over a three
to five year timeframe.  We are investment driven - good investment returns will
attract new business.

CORPORATE - GENERAL
   We are pleased to see that our stock price (Class B) improved nicely in 1996
from $14.25 in January to $19.50 in December, an increase of 37%.  We continue
to be surprised and disappointed over the spread between Class A and Class B
shares - a spread that should be minimal.  Your Board in December increased the
cash dividend rate to 30 cents per year, beginning in March of 1997.  This is
approximately a 17% dividend payout rate.  As earnings improve, dividends will
keep pace.

   We looked at a few acquisitions this past year and made none.  Due to the
fact that we choose not to use our Class A voting stock when making
acquisitions, we are not allowed to use an accounting method called "pooling" in
our acquisitions.  This makes the future earnings results of a high priced cash
acquisition generally look very disappointing, since all of the purchase price
in excess of fair value of net assets must be booked as goodwill, and written
off against earnings over 15 years.  When excellent synergies exist, we will
look hard; otherwise, it is a lot more profitable to grow from within or to buy
our own stock at half the price of most acquisitions.  Needless to say, we don't
agree with this accounting treatment.

   We purchased 22,682 shares of FCB Class B stock during the year and will buy
more as the price is right.  This investment of Company funds compares very
favorably to paying 2x book value or more for another bank and having to write
off half of it.

   We have very little term debt - $18.5 million at December 31, 1996.  We will
retire $2.5 million of this in 1997.  This issue becomes callable in 1999.  Our
modest leverage position adds excellent flexibility and stability to our
Company.

   We currently have $4 million of FCB Commercial Paper outstanding which we
intend to use as a funding source for our subsidiary banks.

   Last summer we completed our first "sale" of securitized credit card
receivables.  In excess of fifty million dollars was sold, enabling us to
continue our asset growth when raising deposits to fund this growth becomes too
costly.

EXPENSES
   Another area of ongoing importance to me is control of our expenses.  Our
expense reduction program was quite successful this past year with costs being
reduced by $1 million.  However, when you look at total non interest expenses,
the increases were substantial, up 14.8%, nearly $10 million.  Accounting rules
require that we add up the similar expense categories such as equipment rental
and depreciation, salaries and benefits, etc. of each of our businesses that are
not necessarily similar, and it sometimes causes distortions.  That is why I
like to point out in this letter the financial results of some specific
operating units and how they on a stand alone basis really performed, such as
the mortgage company and our credit card division.

Included in this other noninterest expense, for example, are increased BankCard
fees which were up $3.3 million, almost entirely due to costs incurred in the
Cabela's LLC, and which had fee income on the revenue side to offset this.
Another big number in the other expense category was an increase in minority
interest expense of $764,000, a large part being Cabela's share of the LLC
profit.  On Page 43 of this report is a very detailed explanation of this entire
category of expenses if you care to study further.
<PAGE>
   We are watching and working on expenses. We also don't mind spending or
investing reasonable amounts of money to enable us to make more, or to improve
service levels, so we can keep what we have. This is called investing.

   We are, however, geared for growth, as without growth, over the long run,
expenses such as heat, lights, telephones, technology and people costs, will eat
us up.  Short term, expenses can be cut, but the impact on long term success of
a major "re-engineering" through expense slashing can be a disaster if you plan
to create long term success.  The graphs to the right highlight the foregoing.

   What clearly is important is balance which we believe we have. When we
compare ourselves to our peer group, our net non interest expense is much less
than the averages.

   For the past few years, our asset growth has been excellent, and in 1996, due
to some degree having favorable interest rates, the results of the excellent
growth impacted the bottom line favorably.  We need to be mindful that the
economy, other than the cattle markets, has been excellent.  Just as with stock
markets, we all know things just aren't great all the time.  We have had things
our way for some time now.

   Our forecasts for this new year look pretty good. We budgeted for managed
loan growth of about 10%.  I don't know where these loan increases are coming
from at this writing, but we do have good momentum, and we do have many good
people out knocking on doors, looking for good business. The technology advances
we are making are important, but at the same time, our continued commitment to
outstanding personal customer service will be unwavering and important to our
continued success.  Brad Korell and I get many, many letters and people stop us
on the street to share with us their appreciation of the excellent service they
receive from our people.  Our people are really good, and it keeps our customers
and their friends coming back for more.  There are many wonderful service
success stories all across our organization.  This is a large part of what we
are about and a major part of why we are winning.

   We keep working on being better and finding new people or businesses to
serve.  If you have any ideas where you think you can help us, drop me a note or
give me a call.

   As always, we have lots of work to do.  Many thanks for your support.

Sincerely,


James Stuart, Jr.
Chairman and CEO
<PAGE>

                         INDEX TO FINANCIAL INFORMATION




          CONSOLIDATED BALANCE SHEETS.............................10
          CONSOLIDATED STATEMENTS OF INCOME.......................11
          CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY.........12
          CONSOLIDATED STATEMENTS OF CASH FLOWS...................13
          NOTES TO CONSOLIDATED FINANCIAL STATEMENTS..............14
          INDEPENDENT AUDITORS' REPORT............................26
          SELECTED QUARTERLY FINANCIAL DATA.......................27
          SELECTED FINANCIAL DATA.................................28
          MANAGEMENT'S DISCUSSION AND ANALYSIS....................32
          OFFICERS AND DIRECTORS..................................46

<PAGE>
<TABLE>
CONSOLIDATED BALANCE SHEETS
<CAPTION>
                                                 DECEMBER 31,
                                               ----------------
                                               1996        1995
                                              -----        ----
                                            (Amounts In Thousands)
                                     ASSETS

<S>                                       <C>         <C>
Cash and due from banks                   $  131,309  $  102,451
Federal funds sold                            28,528      32,738

 Cash and cash equivalents                   159,837     135,189
Mortgages held for sale                       16,293      25,574
Securities available for sale (cost of
 $366,181,000 and $351,076,000)              379,849     365,494
Securities held to maturity (fair value of
 $271,886,000 and $200,739,000)              270,012     200,682
Loans                                      1,121,239   1,017,367
Less allowance for loan losses                20,157      19,017
                                           ---------   ---------
   Net loans                               1,101,082     998,350
Accrued interest receivable                   20,193      18,690
Premises and equipment                        48,695      48,036
Other assets                                  32,051      23,560
                                          ----------  ----------
                                          $2,028,012  $1,815,575
                                          ==========  ========== 


                      LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
 Noninterest bearing                      $  328,826  $  277,679
 Interest bearing                          1,245,718   1,185,526
                                           ---------   ---------
                                           1,574,544   1,463,205

Securities sold under agreement to
  repurchase                                 134,212      92,726
Federal funds purchased and other
  short-term borrowings                       45,980       5,214
Accrued interest payable                       7,650       7,530
Accrued expenses and other liabilities        15,255      11,360
Long-term debt                                52,973      55,519
                                           ---------   ---------
   Total liabilities                       1,830,614   1,635,554
Commitments and contingencies
Stockholders' equity:
 Common stock:
   Class A voting, $.20 par value; authorized
   10,000,000 shares; issued and
   outstanding 2,606,336 shares;                 521         521
   Class B nonvoting, $.20 par value; authorized
   40,000,000 shares; issued and outstanding
   10,940,651 and 10,963,348 shares            2,188       2,193
 Paid-in capital                              21,628      21,665
 Retained earnings                           164,176     146,269
 Net unrealized gains (losses) on
  securities available for sale (net of tax)   8,885       9,373
                                             -------     -------
    Total stockholders' equity               197,398     180,021
                                          ----------  ----------
                                          $2,028,012  $1,815,575
                                          ==========  ==========
</TABLE>

See notes to consolidated financial statements.

<PAGE>
<TABLE>
CONSOLIDATED STATEMENTS OF INCOME
<CAPTION>
                                           YEAR ENDED DECEMBER 31,
                                          ------------------------
                                              1996   1995    1994
                                             -----   ----    ----
                                 (Amounts In Thousands Except Per Share Data)
Interest income:
 <S>                                      <C>      <C>      <C>
 Loans                                    $ 97,228 $ 85,494 $ 68,380
 Securities:
   Taxable                                  32,885   31,943   28,264
   Nontaxable                                1,483    1,610    1,510
   Dividends                                   913      771      602
 Mortgages held for sale                     1,953    1,213      865
 Federal funds sold                          2,037    2,966    2,161
                                           -------  -------   ------
    Total interest income                  136,499  123,997  101,782
Interest expense:
 Deposits                                   55,315   55,156   38,833
 Short-term borrowings                       7,341    4,835    3,195
 Long-term debt                              3,737    3,117    1,961
                                           -------  -------   ------
    Total interest expense                  66,393   63,108   43,989
                                           -------  -------  -------
Net interest income                         70,106   60,889   57,793
Provision for loan losses                    6,839    3,495      332
                                           -------  -------  -------
Net interest income after
  provision for loan losses                 63,267   57,394   57,461
Noninterest income:
 Computer services                           8,491    8,147    8,293
 Credit card                                10,591    4,965    4,289
 Mortgage banking                            4,868    3,571    2,997
 Service charges on deposits                 5,231    4,893    4,849
 Other services charges and fees             6,217    5,293    5,007
 Trust services                              5,840    5,272    5,007
 Gains on securities sales                   1,672      581      182
 Other income                                1,120    1,128      739
                                            ------  -------  -------
    Total noninterest income                44,030   33,850   31,363
                                            ------   ------  -------
Noninterest expense:
 Salaries and employee benefits             35,808   33,101   29,647
 Net occupancy expense                       3,980    3,815    3,552
 Equipment rentals, depreciation and
   maintenance                               5,523    4,770    4,900
 Communications                              4,159    3,647    3,215
 Business development                        3,990    2,649    2,624
 Supplies                                    2,404    2,395    1,911
 Fees and insurance                         10,825    8,868    9,366
 Other expenses                              7,223    5,148    4,448
                                            ------  -------  -------
    Total noninterest expense               73,912   64,393   59,663
                                            ------   ------   ------
Income before income taxes                  33,385   26,851   29,161
Income tax provision                        11,629    9,431   10,129
                                            ------   ------   ------
Net income                                $ 21,756 $ 17,420 $ 19,032
                                           =======  ======  ========

Weighted average shares outstanding         13,566   13,497   13,071
                                           =======   ======   ======

Net income per share                          $1.60   $1.29    $1.46
                                              =====   =====    =====



See notes to consolidated financial statements
</TABLE>

CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>

                              NET UNREALIZED
                                 CLASS A       CLASS B                                              GAINS (LOSSES)
                                  COMMON        COMMON     PAID-IN       RETAINED    TREASURY       ON SECURITIES
                                  STOCK         STOCK      CAPITAL       EARNINGS     STOCK       AVAILABLE FOR SALE
                               ------------    -------     -------       --------    --------     ------------------             
                                               (Amounts in Thousands)

<S>                                   <C>       <C>          <C>          <C>        <C>               <C>
Balance, January 1, 1994              $521      $2,085       $14,183      $116,699   $        -        $ 3,805
Purchase of treasury stock               -           -             -             -       (1,088)             -
Issuance of Class B common stock
  in bank acquisition, net of cost
  of $87,000                             -          65         3,829             -            -              -
Cash dividends ($.216 per share)         -           -             -        (2,823)           -              -
Change in net unrealized
  gains (losses) on securities
  available for sale, net of tax
  effect of $3,744,000                   -           -             -             -            -         (6,954)
Net income                               -           -             -        19,032            -              -

Balance, December 31, 1994             521       2,150        18,012       132,908       (1,088)        (3,149)


Purchase of treasury stock               -           -             -             -          (82)             -
Retirement of treasury stock             -         (19)         (154)         (997)       1,170              -
Cash dividends ($.227 per share)         -           -             -        (3,062)           -              -
Issuance of Class B common
  stock in bank acquisition,
  net of cost of $35,000                 -          62         3,807             -            -              -
Change in net unrealized
  gains (losses) on securities
  available for sale, net of
  tax effect of $6,742,000               -           -             -             -            -         12,522
Net income                               -           -             -        17,420            -              -

Balance, December 31, 1995             521       2,193        21,665       146,269            -          9,373


Purchase and retirement of stock         -          (5)          (37)         (321)           -              -
Cash dividends ($.26 per share)          -           -             -        (3,528)           -              -
Change in net unrealized
  gains (losses) on securities
  available for sale, net of
  tax effect of $262,000                 -           -             -             -            -           (488)
Net income                               -           -             -        21,756            -
                                      ----      ------       -------      --------  ------------       --------
Balance, December 31, 1996            $521      $2,188       $21,628      $164,176  $         -        $ 8,885
                                      ====      ======       =======      ========    ==========        ======
</TABLE>

See notes to consolidated financial statements.



<TABLE>

<CAPTION>
CONSOLIDATED STATEMENTS OF CASH FLOWS
                                                                                    Year Ended December 31,       
                                                                                  -------------------------------                  
                                                                                  1996        1995          1994  
                                                                                  ----        ----          ----
                                                                                        (Amounts in Thousands)
<S>                                                                             <C>           <C>         <C>
Net income                                                                      $ 21,756      $ 17,420    $ 19,032
Adjustments to reconcile net income to net cash flows from
 operating activities:
 Depreciation and amortization                                                     7,901         6,034       5,868
 Provision for loan losses                                                         6,839         3,495         332
 Deferred income taxes                                                              (491)          (81)        512
 Gain on sales of mortgages and securities                                        (1,445)         (605)        (17)
Changes in assets and liabilities:
 Accrued interest receivable                                                      (1,503)       (3,725)     (1,097)
 Accrued interest payable                                                            120         1,623       1,541
 Other assets                                                                       (759)       (3,581)      1,558
 Accrued expenses and other liabilities                                              224         1,187        (973)
 Purchase of mortgages held for sale                                            (350,675)     (216,875)   (154,550)
 Proceeds from sales of mortgages held for sale                                  359,803       196,128     174,760
 Other                                                                            (1,450)        2,871        (345)
                                                                                --------       --------    --------
   Total adjustments                                                              18,564       (13,529)     27,589
                                                                                --------       --------    --------  
Net cash flows from operating activities                                          40,320         3,891      46,621
Cash flows from investing activities:
 Proceeds from sale of securities held to maturity                                   502         6,015      21,038
 Proceeds from maturities of securities held to maturity                         123,744        91,751     131,443
 Purchases of securities held to maturity                                       (193,574)      (33,659)   (129,548)
 Proceeds from sale of  securities available for sale                              8,913        18,706      76,264
 Proceeds from maturities of  securities available for sale                       71,553        80,850      53,348
 Purchases of  securities available for sale                                     (93,591)     (165,555)   (166,591)
 Net increase in loans                                                          (165,571)     (140,074)    (59,341)
 Securitization and sale of credit card loans                                     56,000             -           -
 Purchase of premises and equipment                                               (6,229)       (7,761)     (3,368)
 Cash and cash equivalents from bank acquisition,
  net of cash expenses                                                                 -         1,775       3,939
 Other                                                                            (4,484)       (2,457)        562
                                                                                ---------     ---------    -------- 
Net cash flows from investing activities                                        (202,737)     (150,409)    (72,254)
Cash flows from financing activities:
 Net increase in deposits                                                        111,339        69,550         300
 Change in short-term borrowings                                                  82,252        24,808      (1,267)
 Proceeds from long-term debt                                                     10,000        24,269      10,000
 Repayment of long-term debt                                                     (12,546)       (2,000)     (2,000)
 Repurchase of common stock                                                         (363)          (82)     (1,088)
 Cash dividends paid                                                              (3,528)       (3,062)     (2,823)
 Other                                                                               (89)          (81)        (97)
                                                                                 --------      --------    --------  
Net cash flows from financing activities                                         187,065       113,402       3,025
                                                                                 --------      -------     --------
Net change in cash and cash equivalents                                           24,648       (33,116)    (22,608)
Cash and cash equivalents at beginning of year                                   135,189       168,305     190,913
                                                                                 -------       --------    --------
Cash and cash equivalents at end of year                                        $159,837      $135,189    $168,305
                                                                                ========       ========   ========   

Supplemental disclosure:
 Interest paid                                                                   $66,210       $61,422     $42,380
 Income taxes paid                                                                12,540         9,484      10,186
 Common stock exchanged for acquisition of bank
  net of cash and cash equivalents                                                     -         3,869       3,894
See notes to consolidated financial statements.

</TABLE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Columnar amounts in footnotes are in thousands except per share amounts)

A.  SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
BUSINESS - First Commerce Bancshares, Inc. (the Company) is a multi-bank holding
company whose primary business is providing the normal banking functions of
trust, commercial, consumer, correspondent, and mortgage banking services
through its Nebraska based banks and affiliated organizations.

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements include the
accounts of the Company and all of its wholly-owned and majority-owned
subsidiaries.  All material intercompany accounts and transactions have been
eliminated in consolidation.  Certain prior years' amounts have been
reclassified to conform to current year's classifications.

Assets held in agency or fiduciary capacities are not assets of the subsidiary
banks and accordingly, are not included in the accompanying financial
statements.

USE OF ESTIMATES -In preparing the consolidated financial statements, management
is required to make estimates and assumptions that affect the reported amounts
of assets and liabilities and disclosure of contingent assets and liabilities as
of the date of the balance sheet and income and expense for the period.  Actual
results could differ significantly from those estimates.  A material estimate
that is particularly susceptible to significant change relates to the adequacy
of the allowance for loan losses.

CASH AND CASH EQUIVALENTS - For purposes of the statements of cash flows, the
Company considers cash, due from banks, federal funds sold and certain
securities that are purchased and sold for one-day periods to be cash
equivalents.

MORTGAGES HELD FOR SALE - Mortgages held for sale are stated at the lower of
aggregate cost or market. Net unrealized losses are recognized through a
valuation allowance by charges to expense.

SECURITIES - Debt securities for which the Company has the positive intent and
ability to hold to maturity are classified as held to maturity, and are reported
at amortized cost.  Securities that are acquired and held principally for the
purpose of selling them in the near term are classified as trading securities
and are reported at their fair values, with unrealized gains and losses included
in earnings.  Debt and equity securities not classified as either held to
maturity or trading securities are classified as available for sale securities
and reported at fair value, with unrealized gains and losses reported, net of
tax, as a separate component of stockholders' equity.  Realized gains and losses
on sales of investments are recognized on the specific identification method.

Premiums and discounts are recognized in interest income using the interest
method over the period to maturity.

LOANS - Loans are stated at the principal amount outstanding, net of the
allowance for loan losses.  Interest on loans is calculated by the interest
method on the daily outstanding principal balance.  Accrual of interest is
discontinued on a loan 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. Certain direct loan
costs and fees are deferred and recognized over the life of the loan on the
interest method. Annual bank card fees are recognized on a straight-line basis
over the period that cardholders may use the card.

ALLOWANCE FOR LOAN LOSSES - The allowance for loan losses is established through
a provision for loan losses charged to expense.  Loans are charged against the
allowance for loan losses when management believes that the collectibility of
the principal is unlikely. The allowance is an estimate of the amount that
management believes will be adequate to absorb possible losses based on prior
loan loss experience, the nature and volume of the loan portfolio, review of
specific problem loans and an evaluation of the overall portfolio quality under
current economic conditions.  A change in the economy can quickly affect the
financial status of borrowers and loan quality.  Such changes can require
significant adjustments in the allowance for loan losses on very short notice
and are possible in the future.


Impaired loans are measured based on either the present value of expected future
cash flows discounted at the loan's effective rate, the market price of the
loan, or, the method predominately used by the Company, the fair value of the
underlying collateral if the loan is collateral dependent.  Specific reserves
are established for any impaired loan for which the recorded investment exceeds
the measured value of the loan.

PREMISES AND EQUIPMENT - Premises and equipment are stated at cost, less
accumulated depreciation and amortization.  Depreciation and amortization are
computed using the straight-line method over the estimated useful lives of the
related assets.  Leasehold improvements are amortized over the terms of the
respective leases or the useful lives of the improvements, whichever is shorter.

OTHER REAL ESTATE OWNED - Other real estate owned is carried at the lower of
fair value, minus estimated costs to sell, or the balance of the loan on the
property at the date of acquisition.  Gains or losses from the sale of other
real estate owned or further reductions in the carrying value from a decline in
the property value are charged against operating expenses.  The Company did not
have any other real estate owned at December 31, 1996 and 1995.

SECURITIES SOLD UNDER AGREEMENT TO REPURCHASE - The Company enters into sales of
securities under agreement to repurchase with customers of the subsidiary banks,
which provide for the repurchase of the same security. These agreements may be
open ended or of a specific term in length. Securities sold under agreement to
repurchase identical securities are collateralized by assets which are held in a
safekeeping agent account at the Federal Reserve.

LOAN SERVICING - Effective July 1, 1995, the Company adopted Statement of
Financial Accounting Standards No. 122 (SFAS 122), "Accounting for Mortgage
Servicing Rights, an amendment to FASB Statement No. 65," on a prospective
basis.  SFAS 122 provides that an institution that acquires mortgage servicing
rights through either the purchase or origination of mortgage loans and sells or
securitizes those loans with servicing rights retained should allocate the total
cost of the mortgage loans to the mortgage servicing rights and the loans
(without the mortgage servicing rights) based on their relative fair values.
Mortgage servicing rights should be amortized in proportion to and over the
period of estimated net servicing income and should be evaluated for impairment
based on their fair value.  The impairment evaluation should stratify the
mortgage servicing rights based upon one or more of the predominant risk
characteristics of the underlying loans. The effect of adopting SFAS 122 was not
significant to the financial statements or results of operations.

The unamortized purchased servicing rights included in other assets were
$5,666,000 and $2,999,000 at
December 31, 1996 and 1995, respectively. The amount of mortgage loans serviced
for others approximated $1,038,021,000, $812,351,000 and $707,327,000 at
December 31, 1996, 1995, and 1994, respectively.  As of December 31, 1996,
credit card loans of $56,000,000 were serviced for others.

As of December 31, 1996 and 1995, the fair value of the Company's capitalized
mortgage servicing rights (including mortgage servicing rights purchased) was
approximately $18.5 million and $11.0 million, respectively.  There was no
valuation allowance for impairment relative to such rights.  Fair value was
estimated by determining the present value of the estimated future cash flows
using discount rates commensurate with the risks involved. The predominant risk
characteristics which the Company uses to stratify mortgage servicing rights are
loan type, interest rate and origination date.

INCOME TAXES - The Company and its subsidiaries file a consolidated income tax
return.  The amount of income taxes payable or refundable is recognized in the
current year and deferred tax assets and liabilities are reflected on items that
are recognized in different time periods for financial accounting and income tax
purposes using the then current enacted tax rates on the asset and liability
method.

NET INCOME PER SHARE - Net income per share is based on the weighted average
number of shares of common stock outstanding.

ACCOUNTING PRONOUNCEMENTS - In June 1996, Statement of Financial Accounting
Standards No. 125, "Accounting for Transfers and Servicing of Financial Assets
and Extinguishments of Liabilities," was issued.  The statement establishes
accounting standards of the transfers and servicing of financial assets and
extinguishments of liabilities.  The Company does not expect the adoption of
this statement to be material to the consolidated financial statements.


B.  RESTRICTED CASH BALANCES
The average compensating balances held at correspondent banks during 1996 and
1995 were $11,498,000 and $9,844,000 respectively.  The subsidiary banks
maintain such compensating balances to offset charges for services rendered by
the correspondent banks.  In addition, the Federal Reserve Bank required the
subsidiary banks to maintain average balances of $27,232,000 and $23,717,000 for
1996 and 1995, respectively, as a reserve requirement.

C.  SECURITIES
Debt and equity securities have been classified in the consolidated balance
sheets according to management's intent. The amortized cost of securities and
their estimated fair values at December 31 were as follows.
<TABLE>

<CAPTION>
                                                                           GROSS         GROSS       ESTIMATED
                                                              AMORTIZED   UNREALIZED    UNREALIZED     FAIR
                                                                 COST       GAINS         LOSSES      VALUE
                                                              ---------   ----------    ----------  ---------
SECURITIES AVAILABLE FOR SALE:
DECEMBER 31, 1996
-----------------
<S>                                                           <C>            <C>      <C>             <C>
U.S. government and agency securities                         $242,680       $ 4,160  $     (259)     $246,581
Mortgage-backed securities                                      83,505           122      (1,215)       82,412
Marketable equity securities                                    39,996        11,343        (483)       50,856
                                                              --------        -------   ---------     --------
       Totals                                                 $366,181       $15,625     $(1,957)     $379,849

DECEMBER 31, 1995
------------------
U.S. government and agency securities                         $210,976       $ 8,415   $     (86)     $219,305
Mortgage-backed securities                                     109,345           223      (1,031)      108,537
Marketable equity securities                                    30,755         7,193        (296)       37,652
                                                              --------       -------   ----------     --------
       Totals                                                 $351,076       $15,831     $(1,413)     $365,494


SECURITIES HELD TO MATURITY:
DECEMBER 31, 1996
-----------------
U.S. government and agency securities                         $118,840        $1,436       $(236)     $120,040
States and political subdivision securities                     28,747           346         (45)       29,048
Mortgage-backed securities                                     121,738           890        (506)      122,122
Other                                                              687             2         (13)          676
                                                              --------       -------       -------    --------
       Totals                                                 $270,012        $2,674       $(800)     $271,886


DECEMBER 31, 1995
-----------------
U.S. government and agency securities                        $  39,188       $   491   $     (89)    $  39,590
States and political subdivision securities                     32,777           499         (90)       33,186
Mortgage-backed securities                                     126,752           209        (970)      125,991
Other                                                            1,965            23         (16)        1,972
                                                              --------       -------    ---------     --------
       Totals                                                 $200,682        $1,222     $(1,165)     $200,739

</TABLE>
<PAGE>
The amortized cost and estimated fair value of debt securities at December 31,
1996, by contractual maturity are shown below. Expected maturities will differ
from contractual maturities because borrowers may have the right to call or
prepay obligations with or without call or prepayment penalties.
<TABLE>
<CAPTION>
                                                                   HELD TO MATURITY           AVAILABLE FOR SALE
                                                               -----------------------     ------------------------
                                                                             ESTIMATED                   ESTIMATED
                                                               AMORTIZED       FAIR         AMORTIZED        FAIR
                                                                 COST          VALUE          COST          VALUE
                                                             ----------       --------      ---------     --------
<S>                                                          <C>              <C>            <C>         <C>
Due in one year or less                                      $  12,598        $ 12,646       $  31,761   $  31,990
Due after one year through five years                           39,923          40,492         200,918     204,548
Due after five years through ten years                          92,110          92,970          10,001      10,043
Due after ten years                                              3,643           3,656               -           -
                                                               -------         -------         --------   ---------
                                                               148,274         149,764         242,680     246,581
Mortgage-backed securities                                     121,738         122,122          83,505      82,412
                                                               -------         --------        -------     -------
                                                              $270,012        $271,886        $326,185    $328,993
                                                              ========        ========        ========     =======


The following table presents the securities portfolio sales activities for the years ended December 31, 1996, 1995 and 1994.  All
sales of securities held to maturity were within three months of the securities' maturities, or were early calls of the securities.
                                                 1996                      1995                     1994

                                            HELD     AVAILABLE        HELD   AVAILABLE       HELD       AVAILABLE
                                             TO         FOR            TO       FOR           TO           FOR
                                          MATURITY      SALE        MATURITY    SALE       MATURITY        SALE

Proceeds from sales of securities            $502      $8,913        $6,015    $18,706     $21,038       $76,264
Gross gains of sales of securities              2       1,821            20      1,069          73           943
Gross losses on sales of securities             0        (151)           (6)      (502)        (30)         (804)
Income taxes on securities' net gains           1         584             5        198          15            49


                                          First Commerce Bancshares & Subsidiaries  o  36
Securities with a carrying value of $438,547,000 at December 31, 1996, and $437,476,000 at December 31, 1995, were pledged to secure
obligations under repurchase agreements or to secure public or trust deposits in the normal course of business.

At December 31, 1996 and 1995, state and political subdivision securities with an amortized cost of $24,400,000 and $27,667,000,
respectively, and an estimated fair value of $24,549,000 and $27,854,000, respectively, were issued by State of Nebraska political
subdivisions.
</TABLE>

D.  LOANS
<TABLE>
<CAPTION>
Loans at December 31 are summarized as follows:
                                                              1996    1995
                                                        ---------- ---------
<S>                                                     <C>        <C>
Real estate mortgage                                    $  332,913 $  295,268
Consumer                                                   271,906    263,320
Commercial and financial                                   245,873    201,910
Agricultural                                               130,071    126,414
Credit card                                                 98,895    108,641
Real estate construction                                    41,581     21,814
                                                        ---------- ----------
                                                        $1,121,239 $1,017,367
</TABLE>
Although the loan portfolio is well diversified by industry, virtually all of
the Company's loans are to Nebraska-based organizations, except credit card
loans which are concentrated in the Midwest.  The Nebraska economy is dependent
upon the general state of the agricultural economy.  As of December 31, 1996 and
1995, there were $3,429,000 and $1,700,000, respectively, of nonaccruing loans.
The amount of restructured loans as of December 31, 1996 and 1995 was not
significant.


The Company's policy for requiring collateral and guarantees varies with the
creditworthiness of each borrower.  The portfolio is generally secured by
accounts receivable, inventory, property, plant and equipment, income producing
commercial properties, marketable securities or interest-bearing time deposits.

Impaired loans were $2,595,000 and $2,472,000 at December 31, 1996 and 1995,
respectively.  The total allowance for loan losses related to these loans was
$402,000 and $463,000 at December 31, 1996 and 1995, respectively.  Interest
income on impaired loans of $194,000 and $192,000 was recognized for cash
payments received in 1996 and 1995, respectively.  Average impaired loans for
1996 and 1995 were $2,627,000 and $1,844,000, respectively.

E.  ALLOWANCE FOR LOAN LOSSES
Transactions in the allowance for loan losses are summarized as follows:
<TABLE>
<CAPTION>
                                                    1996      1995    1994
                                                   ------- -------   -------
<S>                                                <C>     <C>       <C>
Balance, January 1                                 $19,017 $17,190   $18,461
Provision for loan losses                            6,839   3,495       332
Bank acquisition                                         -     843       326
                                                    ------  ------    ------
     Total                                          25,856  21,528    19,119
Net charge-offs:
 Loans charged-off                                   7,794   4,657     3,723
 Less recoveries                                     2,095   2,146     1,794
                                                    ------  ------    ------
     Net loans charged-off                           5,699   2,511     1,929
                                                   ------- -------   -------
Balance, December 31                               $20,157 $19,017   $17,190
                                                   ======= =======   =======
</TABLE>

F.  PREMISES AND EQUIPMENT
Premises and equipment at December 31 consists of the following:
<TABLE>
<CAPTION>
                                                   1996   1995
                                               --------  ------
<S>                                            <C>      <C>
Land                                           $  7,308 $  6,973
Buildings and leasehold improvements             57,086   53,450
Equipment and furnishings                        32,449   34,420
                                               --------  -------
                                                 96,843   94,843
Less accumulated depreciation                    48,148   46,807
                                               --------  -------   
                                                $48,695  $48,036
                                                =======  =======
</TABLE>
The Company has certain obligations under noncancelable operating leases for
premises and equipment.  Most of these leases have renewal or purchase options.
Rental expense on all leases for the years ended December 31, 1996, 1995 and
1994, was approximately $1,587,000, $1,352,000, and $1,361,000, respectively.
The approximate future minimum rental commitments under noncancelable leases are
as follows:

                                   PREMISES EQUIPMENT   TOTAL
                                  ---------  --------- -------
     1997                         $   611      $888    $1,499
     1998                             461       231       692
     1999                             342        61       403
     2000                             267        48       315
     2001                             217         6       223
     Thereafter                     4,685         -     4,685

G. DEPOSIT MATURITIES
Maturities of time deposits at December 31, 1996 are as follows:

                        1997  $708,030
                        1998    95,083
                        1999    15,669
                        2000     4,841
                        2001       886
                  Thereafter        41

H.  SECURITIES SOLD UNDER AGREEMENT TO REPURCHASE
Amounts and interest rates related to securities sold under agreement to
repurchase are as follows:
<TABLE>
<CAPTION>
                                                             1996      1995
                                                           -------- ---------

<S>                                                        <C>       <C>
Amount outstanding at year-end                             $134,212  $ 92,726
Average interest rate outstanding at year-end                   4.7%       5.0%
Highest amount outstanding as of any
  month-end during the year                                 146,151   101,912
Average amount outstanding during the year                  125,639    85,384
Approximate average interest rate                               4.7%       5.1%

</TABLE>

I.  LONG-TERM DEBT
Long-term debt at December 31 is as follows:
                                                     1996       1995
                                                   -------    -------
Capital notes, 7.50% to 8.70%, due 1997 to 2002    $18,500   $21,000
Federal Home Loan Bank advances, due 1997 and 1998  34,269    34,269
Other                                                  204       250
                                                    ------    ------
                                                   $52,973   $55,519
                                                   =======   ======= 


The capital notes were issued on June 1, 1992, in series pursuant to an
indenture dated May 1, 1992.  Each series of capital notes is payable May 1.
Interest is payable semi-annually on May 1 and November 1.  The capital notes
are subject to redemption at the option of the Company at any time on or after
May 1, 1999, at a redemption price equal to 100% of the principal amount thereof
together with the accrued interest to the redemption date.  The indenture
provides that the Company will not create, assume, incur or suffer to exist any
mortgage or other liens upon the shares of capital stock of any significant bank
subsidiary (of which the National Bank of Commerce is the only one at present)
owned by the Company unless certain conditions are met.  The indenture also
provides that the Company will not permit its debt to tangible equity ratio to
exceed 30%.  The Company's debt to tangible equity ratio was 10% as of December
31, 1996.

The Federal Home Loan Bank (FHLB) advances of $34,269,000 were made to
subsidiary banks. These advances are due in 1997 and 1998. Interest is paid
monthly of which $10,000,000 bears interest based upon the national prime rate,
5.90% at December 31, 1996. The balance bears fixed interest rates of 5.71% to
6.15%. The advances are collateralized by a blanket pledge of mortgage loans and
certain investment securities.

Scheduled principal payments of long-term debt for the five years following
December 31, 1996 are:
                        1997   $26,807
                        1998    12,541
                        1999     2,545
                        2000     2,048
                        2001     2,032

 J.   INCOME TAXES
Consolidated income tax expense for the years ended December 31 consists of the
following:
<TABLE>
<CAPTION>
                                            1996     1995    1994
                                          -------  ------  ------
Current provision:
 <S>                                      <C>       <C>    <C>
 Federal                                  $11,420   $8,857 $ 8,985
 State                                        700      655     632
                                           ------    -----  ------
                                           12,120    9,512   9,617
Deferred income taxes                        (491)     (81)    512
                                          -------   ------ -------
Total consolidated income tax provision   $11,629   $9,431 $10,129
                                          =======   ====== =======

The effective rate of total tax expense differs from the statutory federal tax
rate as follows:

                                              1996   1995    1994
                                             -----  -----   -----
<S>                                            <C>    <C>     <C>
Tax at federal statutory rate                  35%    35%     35%
Tax-exempt interest on obligations
 of state and political subdivisions           (2)    (2)     (2)
Other                                           2      2       2
                                              ----   ----    ----
Effective tax rate                             35%    35%     35%
                                              ====   ====    ====


Significant items comprising the Company's net deferred tax asset as of December
31, 1996, 1995 and  1994 are as follows:

DEFERRED TAX ASSETS:                          1996   1995    1994
                                              ----   ----   -----

<S>                                        <C>     <C>    <C>
Allowance for loan losses                  $6,929  $6,509 $5,912
Net unrealized gains and losses on
 securities available for sale                  -       -  1,696
Other                                       1,495   1,132  1,213
                                           ------   -----  -----
   Total deferred tax assets                8,424   7,641  8,821

DEFERRED TAX LIABILITIES:
Net unrealized gains and losses on
 securities available for sale              4,783   5,046      -
Premises and equipment                      1,833   2,133  2,175
Other                                         920     328    255
                                            -----   -----  -----
   Total deferred tax liabilities           7,536   7,507  2,430
                                           ------  ------ ------
Net deferred tax asset                     $  888  $  134 $6,391
                                          =======  ====== ======


K.  ADVERTISING COSTS
The Company expenses costs of advertising, except for direct-response
advertising relating to its bankcard joint venture, which is capitalized and
amortized over its expected period of future benefits.  Direct-response
advertising consists primarily of direct-response mailings and telemarketing
costs.  The capitalized costs of the advertising are amortized over the five
year period following completion of the advertising campaign.  At December 31,
1996 and 1995, $1,952,000 and $1,700,000, respectively, of advertising costs are
reported in other assets.

L.  COMMITMENTS AND CONTINGENT LIABILITIES
The Company's consolidated financial statements do not reflect various
commitments and contingent liabilities which arise in the normal course of
business to meet the financing needs of customers.  These include commitments to
extend credit and standby letters of credit.  These instruments involve, in
varying degrees, elements of credit, interest rate and liquidity risk in excess
of the amount recognized in the consolidated balance sheet.  The extent of the
Company's involvement in various commitments or contingent liabilities is
expressed by the contract amount of such instruments.

Commitments to extend credit, excluding mortgage banking operations, amounted to
$360,310,000 and $341,073,000 (exclusive of $799,306,000 and $718,957,000 of
unused approved lines of credit related to credit card loan agreements) at
December 31, 1996 and 1995, respectively.  These commitments are agreements to
lend to a customer as long as all conditions established in the contract are
fulfilled.  Commitments generally have fixed expiration dates or other
termination clauses and may require payment of a fee.  Since many of the
commitments are expected to expire without being drawn upon, the total
commitment amounts do not necessarily represent future cash requirements.  The
Company evaluates each customer's creditworthiness on a case-by-case basis in
conjunction with the normal lending function.  The amount of collateral
obtained, if deemed necessary by the Company upon extension of credit, is based
upon management's credit evaluation of the customer.  Collateral held varies but
may include accounts receivable, inventory, property, plant and equipment,
income-producing commercial properties, marketable securities and interest-
bearing time deposits.

The Company's commitments to extend credit in its mortgage banking operations
amounted to approximately $31,350,000, and $51,800,000 at December 31, 1996 and
1995, respectively. Credit policies in the Company's mortgage banking operations
are designed to satisfy the requirements of the secondary mortgage market.
These requirements, among others, include that the loans which are subject to
these commitments be secured by a first position in the underlying property and
meet certain maximum loan-to-value and insurance requirements.

Mandatory commitments to deliver residential mortgages are binding agreements to
sell mortgage loans to investors at fixed prices and expiration dates.  The
Company could incur pair-off costs should it be unable to fulfill its
obligation, which could occur if an insufficient level of conforming closed
loans is available for delivery by the specified date.  This exposure is less
than the contract amount of the commitment and is determined by the delivery
shortfall and the then current market interest rates. The Company monitors its
position relative to these commitments to deliver on a daily basis.  The Company
had mandatory commitments to deliver residential mortgage loans totaling
approximately $38,425,000 and $54,105,000 as of December 31, 1996 and 1995,
respectively.  The Company has an agreement to sell on a best efforts basis
$1,119,000 as of December 31, 1996.

Standby and commercial letters of credit are conditional commitments issued by
the Company guaranteeing the performance of a customer to a third party.  These
guarantees primarily consist of performance assurances made on behalf of
customers who have a contractual commitment to produce or deliver goods or
services.  Most guarantees are for one year or less.  The risk to the Company
arises from its obligation to make payment in the event of the customers'
contractual default.  The amount of collateral obtained, if deemed necessary by
the Company, is based upon management's credit evaluation of the customer.  The
Company had $22,607,000 and $18,238,000 in letters of credit outstanding at
December 31, 1996 and 1995, respectively.

The Company is involved in various legal actions in the normal course of
business.  Management is of the opinion that none of these legal actions will
result in losses material to the financial position of the Company.

M.  RELATED PARTY TRANSACTIONS
As of December 31, 1996, the subsidiary banks had various loans outstanding to
related parties (executive officers, directors, loans guaranteed by directors
and companies employing a director of the Company and its significant
subsidiaries).  The Company believes these loans have been made under comparable
terms and conditions as loans made to unrelated parties.  An analysis of
aggregate loans to these related parties of the Company and its significant
subsidiaries for the year ended December 31, 1996 is shown below:

               BEGINNING                       ENDING
                BALANCE  ADDITIONS  PAYMENTS  BALANCE
               --------  ---------  --------  -------
                $33,026   $105,606  $115,373  $23,259

N.  EMPLOYEE BENEFIT PLANS
The Company has two employee retirement plans.  The Retirement Accumulation Plan
is a noncontributory defined contribution plan covering substantially all
employees with six months of service.  Annual contributions are based upon
defined compensation of covered employees.  Company cost for this plan was
$1,020,000 in 1996, $968,000 in 1995 and $953,000 in 1994.

The Profit Sharing and Thrift Plan is a contributory, defined contribution plan
covering substantially all employees with six months of service.  Employee
contributions vary from 0 to 12% of compensation.  The Company contribution,
subject to certain limitations, is based upon employee contributions and
profitability.  Company cost for this plan was $1,289,000 in 1996, $1,009,000 in
1995 and $1,016,000 in 1994.

 O.  REGULATORY MATTERS
One of the principal sources of cash of the Company is dividends from its
subsidiary banks. The total dividends that can be declared by the subsidiary
banks without receiving prior approval from regulatory authorities are limited
to a bank's defined net income of that year combined with its retained defined
net income from the previous two years. For the calendar year 1997, the
subsidiary banks have retained defined net income from 1996 and 1995 of
approximately $18,147,000.

The Company and its subsidiaries are subject to various regulatory capital
requirements administered by the federal banking agencies. Failure to meet
minimum capital requirements can initiate certain mandatory -- and possibly
additional discretionary -- actions by regulators that, if undertaken, could
have a direct material effect on the Company's financial statements. The
regulations require the Company to meet specific capital adequacy guidelines
that involve quantitative measures of the Company's assets, liabilities, and
certain off-balance-sheet items as calculated under regulatory accounting
practices. The Company's capital classification is also subject to qualitative
judgments by the regulators about components, risk weightings, and other
factors.

As of December 31, 1996, the most recent notification from the OCC, categorized
the Company's banking subsidiaries as well capitalized under the regulatory
framework for prompt corrective action.  There are no conditions or events since
that notification that management believes have changed the institutions'
categories.  Management believes, as of December 31, 1996, that the Company and
its subsidiary banks meet all capital adequacy requirements to which they are
subject.  The Company's and the National Bank of Commerce's (the Company's most
significant bank subsidiary) actual capital amounts and ratios are presented in
the following table:


</TABLE>
<TABLE>
<CAPTION>

                                                                                               TO BE WELL
                                                                                           CAPITALIZED UNDER
                                                                     FOR CAPITAL           PROMPT CORRECTIVE
                                                     ACTUAL       ADEQUACY PURPOSES        ACTION PROVISIONS
                                               ---------------    -----------------        ------------------    
                                                AMOUNT   RATIO       AMOUNT   RATIO         AMOUNT      RATIO
                                               -------   -----       ------   ------        ------      -----
AS OF DECEMBER 31, 1996:
  Total Capital (to Risk Weighted Assets):
     <S>                                      <C>         <C>      <C>          <C>            <S>
     Consolidated                             $200,441    14.7%    $108,954     8.0%           N/A
     National Bank of Commerce                  99,860    12.3       65,170     8.0        $81,463     10.0%
  Tier I Capital (to Risk Weighted Assets):
     Consolidated                              181,269    13.3       54,477     4.0            N/A
     National Bank of Commerce                  89,677    11.0       32,585     4.0         48,878      6.0
  Tier I Capital  (to Quarterly Average Assets):
     Consolidated                              181,269     9.4       77,167     4.0            N/A
     National Bank of Commerce                  89,677     8.0       45,006     4.0         56,258      5.0

AS OF DECEMBER 31, 1995:
  Total Capital (to Risk Weighted Assets):
     Consolidated                             $178,307    14.8%     $96,236     8.0%           N/A
     National Bank of Commerce                  90,309    12.5       57,994     8.0        $72,492     10.0%
  Tier I Capital (to Risk Weighted Assets):
     Consolidated                              161,128    13.4       48,118     4.0            N/A
     National Bank of Commerce                  81,248    11.2       28,997     4.0         43,495      6.0
  Tier I Capital  (to Quarterly Average Assets):
     Consolidated                              161,128     9.2       70,379     4.0            N/A
     National Bank of Commerce                  81,248     8.0       40,621     4.0         50,776      5.0
</TABLE>

P.  CONDENSED FINANCIAL INFORMATION
<TABLE>
<CAPTION>
CONDENSED BALANCE SHEETS  (Parent Company Only)             DECEMBER 31,
                                                         -----------------
                                                           1996        1995
                                                         -----       -----
                                     ASSETS
<S>                                                <C>         <C>
Cash on deposit with subsidiaries                  $       102 $        56
Securities purchased under agreement to
  resell to subsidiary bank                              4,770       4,130
Short-term investments                                     463       1,375
                                                        ------    --------
 Cash and cash equivalents                               5,335       5,561
Securities available for sale (cost of $36,849,000
 and $29,704,000)                                       47,686      36,568
Investment in subsidiaries:
 Equity in net assets of bank subsidiaries             147,703     142,059
 Equity in net assets of nonbank subsidiaries            1,050       9,202
 Excess cost over fair value of net assets               3,840       3,979
Premises and equipment                                  11,768      12,234
Other assets                                             7,796       3,477
                                                      --------    --------
                                                      $225,178    $213,080
                                                      ========    ========


                      LIABILITIES AND STOCKHOLDERS' EQUITY

Other liabilities                                   $    5,171  $    4,459
Short-term borrowings from non-bank subsidiaries             -       7,350
Commercial paper outstanding                             3,905           -
Long-term debt                                          18,704      21,250
                                                      --------    --------
 Total liabilities                                      27,780      33,059
Stockholders' equity                                   197,398     180,021
                                                      --------    --------
                                                      $225,178    $213,080
                                                      ========    ========
</TABLE>

CONDENSED STATEMENTS OF INCOME  (Parent Company Only)
<TABLE>
<CAPTION>
                                                      YEAR ENDED DECEMBER 31,
                                                     -------------------------
                                                      1996      1995      1994
                                                     -----      ----      ----
Income:
 <S>                                                <C>      <C>       <C>
 Dividends from bank subsidiaries                   $14,186  $11,220   $11,055
 Dividends from nonbank subsidiaries                    150      300     1,200
 Rent:
    Subsidiaries                                      1,291    1,760     1,748
    Other                                             1,678    1,162     1,152
 Interest and dividend income                         1,541    1,335     1,130
 Other                                                1,219      415       259
                                                     ------   ------    ------
                                                     20,065   16,192    16,544

Expenses:
 Salaries and employee benefits                       1,807    1,758     1,782
 Interest                                             1,669    1,811     1,939
 Interest paid to subsidiaries                          204      554       222
 Building expense                                     2,246    2,079     2,188
 Other                                                1,945    1,850     1,703
                                                      -----    -----     -----
                                                      7,871    8,052     7,834
                                                      -----    -----     -----
Income before income tax benefit and equity
  in undistributed earnings of subsidiaries          12,194    8,140     8,710
Income tax benefit                                      706    1,097     1,227
                                                     ------   ------     -----
Income before equity in undistributed
  earnings of subsidiaries                           12,900    9,237     9,937
Equity in undistributed earnings of subsidiaries      8,856    8,183     9,095
                                                    -------  -------   -------
    Net income                                      $21,756  $17,420   $19,032
                                                    =======  =======   ======= 
</TABLE>

CONDENSED STATEMENTS OF CASH FLOWS  (Parent Company Only)
<TABLE>
<CAPTION>
                                                      YEAR ENDED DECEMBER 31,
                                                    ---------------------------
                                                      1996      1995      1994
                                                    -------  -------   -------
<S>                                                 <C>      <C>       <C>
Net income                                          $21,756  $17,420   $19,032
Adjustments to reconcile net income to net cash flows
 from operating activities:
    Depreciation and amortization                       864      728       751
    Equity in undistributed earnings of subsidiaries (8,856)  (8,183)   (9,095)
    Other                                              (530)    (681)      184
                                                     -------   ------   -------
     Total adjustments                               (8,522)  (8,136)   (8,160)

Net cash flows from operating activities             13,234    9,284    10,872

Cash flows from investing activities:
 Proceeds from sales and maturities of securities
  available for sale                                  8,915   12,065    12,181
 Purchase of securities available for sale          (14,277) (13,014)  (22,529)
 Purchase of premises and equipment                    (244)  (1,597)     (119)
    Purchase of loans from subsidiary bank           (4,980)       -         -
 Cash and cash equivalents from nonbank
   subsidiaries merger                                  245        -         -
 Other                                                 (587)  (2,417)      (89)
                                                    --------  -------  --------
Net cash flows from investing activities            (10,928)  (4,963)  (10,556)
                                                    -------- --------  --------
Cash flows from financing activities:
 Changes in short-term borrowings                     3,905      450     6,900
 Repayment of long-term debt                         (2,546)  (2,000)   (2,000)
 Purchase of common stock                              (363)     (82)   (1,088)
 Cash dividends paid                                 (3,528)  (3,062)   (2,823)
                                                     -------  -------   -------
Net cash flows from financing activities             (2,532)  (4,694)      989
                                                     -------  -------   -------

Net change in cash and cash equivalents                (226)    (373)    1,305
Cash and cash equivalents at beginning of year        5,561    5,934     4,629
                                                    -------  -------   -------
Cash and cash equivalents at end of year            $ 5,335  $ 5,561   $ 5,934
                                                    =======  =======   =======

Supplemental disclosures of cash flow information:
 Cash paid during year for:
    Interest                                        $ 2,479   $1,842    $1,940
    Income taxes                                     12,140    8,805     9,521
    Common stock exchanged for acquisition of bank        -    3,869     3,894
    Debt exchanged for other assets                       -      250         -
</TABLE>
Q.  DISCLOSURES ABOUT FAIR VALUES OF FINANCIAL INSTRUMENTS
Statement of Financial Accounting Standards No. 107 (SFAS 107), "Disclosures
about Fair Value of Financial Instruments," requires certain entities to
disclose the estimated fair value of its financial instruments. For the Company,
as with most financial institutions, most of its assets and its liabilities are
considered financial instruments as defined in SFAS 107.  Many of the Company's
financial instruments, however, lack an available trading market as
characterized by a willing buyer and willing seller engaging in an exchange
transaction.  It is also the Company's general practice and intent to hold most
of its financial instruments to maturity and not engage in trading or sales
activities.  Therefore, significant estimations and present value calculations
were used by the Company for purposes of this disclosure.  Changes in
assumptions or estimation methodologies may have a material effect on these
estimated fair values.


The fair value estimates presented herein are based on pertinent information
available to management as of December 31, 1996 and 1995.  Although management
is not aware of any factors that would significantly affect the estimated fair
value amounts, such amounts have not been comprehensively revalued for purposes
of these financial statements since that date and, therefore, current estimates
of fair value may differ significantly from the amounts presented herein.

<TABLE>
<CAPTION>
                                         DECEMBER 31, 1996  DECEMBER 31, 1995
                                       -------------------   -------------------
                                                  ESTIMATED            ESTIMATED
                                           CARRYING  FAIR     CARRYING    FAIR
                                            AMOUNT  VALUE      AMOUNT    VALUE
                                       -----------  ------   --------   --------
ASSETS:
 <S>                                   <C>          <C>       <C>      <C>
 Cash and cash equivalents             $  159,837$  159,837   $135,189 $  135,189
 Mortgages held for sale                   16,293    16,340     25,574   25,731
 Securities available for sale            379,849   379,849    365,494  365,494
 Securities held to maturity              270,012   271,886    200,682  200,739
 Net loans                              1,101,082 1,096,399    998,350 1,000,930
 Other financial instruments               34,630    34,630     25,210   25,210

LIABILITIES:
 Demand deposits with no stated maturities749,674   749,674    668,305  668,305
 Time deposits                            824,870   827,039    794,900  798,283
 Federal funds purchased and
  securities sold under agreement
  to repurchase                           134,212   134,212     92,726   92,726
 Other short-term borrowings               45,980    45,980      5,214    5,214
 Long-term debt                            52,973    53,559     55,519   56,760
 Other financial instruments               19,033    19,033     16,318   16,318

</TABLE>
CASH AND CASH EQUIVALENTS. For cash and cash equivalents, the carrying amount is
considered a reasonable estimate of fair value.

MORTGAGES HELD FOR SALE. The estimated fair value of these instruments is based
upon current quoted prices for the instrument or similar instruments.

SECURITIES. The estimated fair value of securities is based on quoted market
prices, dealer quotes and prices obtained from independent pricing services.

LOANS.  For those loans with floating interest rates, carrying value was used as
approximate fair value.  For all other loans, the estimated fair value is based
on the discounted value of projected cash flows.  When using the discounting
method, loans are gathered by homogeneous groups and discounted at a rate that
would be used for similar loans at December 31, 1996 and 1995. In addition, when
computing the estimated fair value for all loans, general reserves for loan
losses are subtracted from the calculated fair value for consideration of credit
issues.

DEPOSITS.  The estimated fair value of deposits with no stated maturity, such as
noninterest bearing, savings, NOW and money market checking accounts, is the
amount payable on demand.  The estimated fair value of time deposits is based on
the discounted value of projected cash flows. The discount rate is the market
rate currently offered for deposits with similar original maturities.

SHORT-TERM BORROWINGS.  Due to the short-term nature of repricing and maturities
of these instruments, fair value is considered carrying value.

LONG-TERM DEBT.  The estimated fair value of long-term debt is based on rates
currently believed to be available to the Company for debt with similar terms
and maturities.

OTHER FINANCIAL INSTRUMENTS.  All other financial instruments of a material
nature, including both assets and liabilities shown above, fall into the
definition of short-term and fair value is estimated as carrying value.
OFF-BALANCE SHEET FINANCIAL INSTRUMENTS. The estimated fair value of these
instruments such as loan commitments and standby letters of credit approximates
their off-balance sheet carrying value because of repricing ability and other
terms of the contracts.

<PAGE>
INDEPENDENT AUDITORS' REPORT





Board of Directors and Stockholders
First Commerce Bancshares, Inc.
Lincoln, Nebraska

     We have audited the accompanying consolidated balance sheets of First
Commerce Bancshares, Inc., and subsidiaries as of December 31, 1996 and 1995,
and the related consolidated statements of income, stockholders' equity and cash
flows for each of the three years in the period ended December 31, 1996.  These
financial statements are the responsibility of the Company's management.  Our
responsibility 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 statements.  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 First Commerce Bancshares, Inc.
and subsidiaries as of December 31, 1996 and 1995, and the results of their
operations and their cash flows for each of the three years in the period ended
December 31, 1996, in conformity with generally accepted accounting principles.

Deloitte & Touche LLP



Lincoln, Nebraska
February 14, 1997
<PAGE>
SELECTED QUARTERLY FINANCIAL DATA
(In Thousands Except Per Share Data)
<TABLE>
<CAPTION>
                               FIRST   SECOND     THIRD      FOURTH   ANNUAL
                              QUARTER QUARTER    QUARTER    QUARTER   TOTAL
                              ------- -------    -------    -------   -------
                                        (Unaudited)

1996
<S>                          <C>       <C>      <C>        <C>       <C>
Total interest income        $32,997   $33,755  $34,514    $35,233   $136,499
Net interest income           16,686    17,457   17,845     18,118     70,106
Provision for loan losses      1,821     1,355    1,502      2,161      6,839
Noninterest income            11,173    10,816   10,611     11,430     44,030
Noninterest expense           17,555    17,484   18,814     20,059     73,912
Net income                     5,727     6,059    5,225      4,745     21,756

Net income per share              .42      .45       .39        .35      1.60
Common stock trading range *
 Class A voting
     high                       24.00    29.50     29.50      29.50     29.50
     low                        20.00    22.00     26.50      25.00     20.00
 Class B nonvoting
     high                       16.25    16.75     16.75      20.50     20.50
     low                        13.50    13.50     14.75      15.00     13.50
Dividends declared per share      .065     .065      .065       .065      .26


1995
Total interest income        $28,131   $31,286  $32,284    $32,296   $123,997
Net interest income           14,617    15,113   15,430     15,729     60,889
Provision for loan losses        696       686      700      1,413      3,495
Noninterest income             7,985     8,351    8,107      9,407     33,850
Noninterest expense           15,706    15,827   15,530     17,330     64,393
Net income                     4,098     4,467    4,739      4,116     17,420

Net income per share              .31      .33       .35        .30      1.29
Common stock trading range *
 Class A voting
     high                       20.00    18.00     20.00      22.50     22.50
     low                        16.25    16.00     16.00      17.00     16.00
 Class B nonvoting
     high                       14.00    13.00     14.00      16.25     16.25
     low                        10.50    10.75     11.00      12.00     10.50
Dividends declared per share      .054     .054      .054       .065      .227

</TABLE>
* The Company's common stock is traded in the over-the-counter market under the
NASDAQ symbol "FCBIA" for the Class A voting common stock and "FCBIB" for the
Class B nonvoting common stock.  The market value ranges are based upon the high
and low trading prices per share for the calendar quarters indicated as released
by NASDAQ.  As of December 31, 1996, the Company had 549 Class A shareholders of
record and 1,077 Class B shareholders of record.



<PAGE>

SELECTED FINANCIAL DATA
Three-Year Average Balance Sheets / Yields and Rates
<TABLE>
<CAPTION>
                                                      YEAR ENDED DECEMBER 31,

                                                                1996
                                                  ------------------------------
                                                   AVERAGE               AVERAGE
                                                   BALANCE    INTEREST     RATE
                                                -----------  ----------  -------
                                                       (Amounts in thousands)
                                     ASSETS
Interest-earning assets:
 <S>                                             <C>         <C>           <C>
 Loans, including non-accrual loans              $1,066,896  $  97,228     9.11%
 Taxable investment securities                      517,083     32,885     6.36
 Nontaxable investment securities (non-taxable basis)29,190      1,483     5.08
 Federal funds sold                                  34,863      2,037     5.84
 Mortgages held for sale                             24,860      1,953     7.86
 Equity securities                                   37,269        913     2.45
                                                 ----------    -------    -----
    Total interest-earning assets                 1,710,161    136,499     7.98

 Less allowance for loan losses                     (19,680)
 Cash and due from banks                            102,269
 Premises and equipment                              48,146
 Other assets                                        46,467
                                                 ----------
    Total assets                                 $1,887,363
                                                 ==========


                             LIABILITIES AND EQUITY
Interest-bearing liabilities:
 Interest-bearing demand                        $   325,590      8,332     2.56%
 Savings                                             84,039      2,334     2.78
 Time                                               797,944     44,649     5.60
                                                  ---------     ------    -----
    Total interest-bearing deposits               1,207,573     55,315     4.58

 Federal funds purchased and other
   short-term borrowings                             24,574      1,336     5.44
 Securities sold under agreement to repurchase      128,109      6,005     4.69
 Long-term debt                                      54,879      3,737     6.81
                                                  ---------     ------    -----
    Total interest-bearing liabilities            1,415,135     66,393     4.69


 Noninterest bearing demand deposits                265,013
 Other liabilities                                   20,786
                                                  ---------
    Total liabilities                             1,700,934
                
Total stockholders' equity                          186,429
                                                 ----------
    Total liabilities and stockholders' equity   $1,887,363
                                                 ==========

Net interest income                                          $  70,106

Net interest spread                                                        3.29%

Net yield on interest-earning assets                                       4.10%
</TABLE>


SELECTED FINANCIAL DATA
Three-Year Average Balance Sheets / Yields and Rates
<TABLE>
<CAPTION>
                            YEAR ENDED DECEMBER 31,
                    --------------------------------------
                      1995                          1994
          ---------------------------  ----------------------------     
          AVERAGE             AVERAGE   AVERAGE             AVERAGE
          BALANCE   INTEREST    RATE    BALANCE   INTEREST    RATE
         --------   --------  -------  --------   --------  --------
                             (Amounts in thousands)


        <C>        <C>           <C>  <C>        <C>           <C>
        $  917,742 $  85,494     9.32%$ 797,369  $  68,380     8.58%
           512,193    31,943     6.24   486,918     28,264     5.80
            31,788     1,610     5.06    29,980      1,510     5.04
            47,134     2,966     6.29    50,866      2,161     4.25
            12,533     1,213     9.68     9,435        865     9.17
            29,639       771     2.60    22,197        602     2.71
         ---------   -------    ----- ---------    -------    -----
         1,551,029   123,997     7.99 1,396,765    101,782     7.29

           (18,306)                     (17,988)
            94,107                       98,908
            45,809                       44,475
            37,569                       34,582
        ----------                   ----------
        $1,710,208                   $1,556,742
        ==========                   ==========


         $ 312,994     8,350     2.67%$ 333,987      8,401     2.52%
            80,049     2,269     2.83    82,865      2,270     2.74
           758,347    44,537     5.87   598,918     28,162     4.70
         ---------    ------     ---- ---------    -------   ------
         1,151,390    55,156     4.79 1,015,770     38,833     3.82


            10,231       595     5.82    12,135        534     4.40
            81,992     4,240     5.17    78,651      2,661     3.38
            42,036     3,117     7.42    24,023      1,961     8.16
         ---------    ------     ---- ---------      -----     ----
         1,285,649    63,108     4.91 1,130,579     43,989     3.89


           242,602                      268,053
            16,414                       15,745
         ---------                    ---------
         1,544,665                    1,414,377

           165,543                      142,365
        ----------                    ---------
        $1,710,208                   $1,556,742
        ==========                   ==========

                   $  60,889                     $  57,793


                                 3.08%                         3.40%

                                 3.93%                         4.14%

</TABLE>

<TABLE>
<CAPTION>

SELECTED FINANCIAL DATA
(In Thousands Except Per Share Data)
                                                          1996           1995          1994            1993
                                                     ----------      ----------       ---------    -----------           
At December 31,
  <S>                                                 <C>             <C>             <C>            <C>
  Assets                                              $2,028,012      $1,815,575      $1,624,138     $1,572,298
  Investments                                           649,861         566,176         537,797        520,176
  Loans                                               1,121,239       1,017,367         850,292        777,695
  Deposits                                            1,574,544       1,463,205       1,355,965      1,324,196
  Long-term debt                                         52,973          55,519          33,000         25,000
  Stockholders' equity                                  197,398         180,021         149,354        137,293
Year Ended December 31,
  Net interest income                                   $70,106         $60,889         $57,793        $57,727
  Provision for loan losses                               6,839           3,495             332          1,143
  Total noninterest income                               44,030          33,850          31,363         33,345
  Total noninterest expenses                             73,912          64,393          59,663         60,806
  Net income                                             21,756          17,420          19,032         19,760
Per share data:
  Net income                                              $1.60         $ 1.29          $ 1.46          $ 1.52
  Dividends                                                 .26            .227            .216            .20
  Stockholders' equity before net unrealized gains
     and losses on available for sale securities          13.92          12.58           11.49           10.24
  Total stockholders' equity                              14.57          13.27           11.26           10.53
Selected Ratios:
  Rate of return on average:
     Total assets                                          1.15%          1.02%           1.22%           1.33%
     Stockholders' equity(1)                              12.14          10.52           13.37           15.77
  Average total stockholders' equity
     to average total assets(1)                            9.49           9.46            9.15            8.46
  Common dividends payout ratio                           16.21          17.58           14.83           13.19
  Allowance for loan
     losses to total loans                                 1.80           1.87            2.02            2.37
  Nonaccrual and restructured
     loans as a percentage of total loans                   .45            .29             .30             .34
  Net charge-offs to
     average total loans                                    .53            .27             .24             .16
Capital Ratios:
Core capital (Tier I) (2)                                 13.31%         13.39%          14.78%          13.43%
Total risk based capital (3)                              14.72          14.82           16.26           14.90
Leverage (4)                                               9.40           9.16            9.23            8.31

(1) Stockholders' equity before net unrealized gains and losses on securities available for sale.
(2) Stockholders' equity before net unrealized gains and losses on securities available for sale, plus minority interest, less
goodwill and deposit intangibles to risk-weighted assets (using 1996 requirements).
(3) Tier I capital plus allowance for loan losses (limited to 1.25% of risk-weighted assets) to risk-weighted assets (using 1996
requirements).
(4) Tier I capital to quarterly average assets less goodwill.


            1992              1991             1990              1989             1988              1987
        ----------       ----------       -----------       -----------      -----------        ---------               

        <C>              <C>               <C>              <C>                 <C>              <C>
        $1,452,058       $1,309,613        $1,106,354       $1,019,288          $955,367         $946,037
           495,784          384,951           375,624          354,865           400,485          439,213
           674,352          631,713           538,056          489,537           423,333          384,887
         1,196,111        1,123,728           938,881          864,011           788,962          781,307
            26,500           11,725            10,583           10,757            12,956           14,907
           116,335           99,702            95,576           88,578            83,008           75,134
           $55,303          $47,547           $37,933          $34,648           $35,309          $34,456
             3,152            3,810             1,770            1,630             2,146            6,800
            33,767           27,722            24,293           22,378            20,048           18,230
            57,304           52,239            44,896           40,930            39,698           37,186
            19,150           12,980            10,672           10,025             9,669            6,482

            $1.47            $  .93           $  .75            $  .69           $  .64            $  .43
              .188              .136             .112              .102             .10               .061

             8.93              7.65             6.78              6.13             5.52              4.97
             8.93              7.65             6.78              6.13             5.52              4.97


             1.41%             1.06%            1.02%             1.04%            1.03%              .72%
            17.69             12.84            11.49             11.75            12.08              8.94

             7.96              8.23             8.88              8.82             8.56              8.03
            12.79             14.25            15.05             14.76            15.60             14.29

             2.74              2.68             2.74              2.94             3.37              3.40

              .50               .73              .43               .85              .71              1.50

              .25               .48              .37               .26              .19              1.11

            12.70%            10.05%           11.16%
            13.95             11.30            12.41
             7.98              7.40             8.59
</TABLE>
MANAGEMENT'S DISCUSSION AND ANALYSIS


CORPORATE RESULTS SUMMARY (Columnar amounts are in thousands)

The Company's net income during 1996 was $21,756,000 versus $17,420,000 in 1995
and $19,032,000 during 1994. On a per share basis this equates to $1.60, $1.29,
and $1.46 for 1996, 1995 and 1994, respectively. Additionally, year-end assets
reached $2,028,012,000, versus $1,815,575,000 in 1995.  Average stockholders'
equity to average assets was approximately 9.5% for both 1996 and 1995.  The
cash dividend was $0.26 per share versus $0.227 per share.  In January 1997, the
Company raised its annualized dividend to 30 cents.  This equates to a 15%
increase on a per share basis.

The $4.3 million or 25% increase in net income in 1996 from 1995 can be
primarily attributed to an increase in net interest income.  The net yield on
interest earning assets increased from 3.93% in 1995 to 4.10% in 1996.  This
resulted in a $9.2 million or 15% increase in net interest income.   The
increase in net interest income was partially offset by a $3.3 million increase
in loan loss expense.   Even though overall loan quality remains high in the
organization, significant growth in loans combined with a significant increase
in bank card charge-offs created the need to provide additional expense to keep
reserves at desired levels.

Year-end loans increased almost $104 million in 1996 from 1995, which is on top
of  a $167 million increase during 1995.  The $104 million increase does not
include $56 million of credit card loans which were securitized and sold during
the year.  On a managed loan basis, loans increased $160 million during 1996.
Although average deposit growth was a respectable 5.6%, it did not keep up with
loan growth.  Therefore, the Company utilized other non-traditional methods to
fund some of its loan growth.  Besides the securitization of credit card loans
mentioned above, average securities sold under agreement to repurchase and other
short-term borrowings increased approximately $60 million from 1995.

EARNING ASSETS
Average earning assets in 1996 were $1.71 billion, a 10% increase over 1995
primarily caused by the loan growth referred to above.  Average earning assets
were $1.55 billion in 1995, an 11% increase over 1994.  Average loans  were
$1,067 million, $918 million and $797 million in 1996, 1995 and 1994,
respectively, a 16.3%, 15.1%  and 13.7% increase over each respective previous
year. Loan demand has been strong during the past three years as shown by these
increases in average loans.  Loan demand was led by the real estate mortgage,
commercial and consumer markets. The increase in agricultural loans in 1995 can
primarily be attributed to the Western Bank acquisition.  The increase in credit
card loans can be attributed to a new joint venture with Cabela's, a catalog
sales company, and the issuance of a new Cabela's co-branded credit card.
Average loans accounted for 62% of average earning assets during 1996 and 59% in
1995. Average investment securities were $584 million at December 31, 1996, a
$10 million increase over 1995.  Investment securities accounted for 34% of
average earning assets during 1996 and 37% during 1995.

SECURITY PORTFOLIO
The Company's investment securities portfolio consists of high quality
securities with primarily short to medium maturities. The Company utilized
buying opportunities during the year to extend the average life of its
investment portfolio.  As rates dropped in the latter part of the year, the
Company began buying higher yielding U. S. Government agencies with a 10 year
stated maturity, which are callable within two years. These securities are
presented on the following maturity schedule under the 5 through 10 year column,
but the Company expects that these securities will be called when they reach
their call date, absent significant movements in interest rates which are not
anticipated.

MANAGEMENT'S DISCUSSION AND ANALYSIS


The following table presents the amortized cost of the securities portfolio by
type of security as of December 31, for the years indicated.
<TABLE>
<CAPTION>
                                                             DECEMBER 31,
                                                        ----------------------
                                                        1996    1995      1994
                                                        ----    ----      ----

<S>                                                 <C>       <C>      <C>
U.S. Treasury                                       $172,534  $183,580 $226,075
U.S. Agency                                          188,986    66,584        -
State and municipal                                   28,747    32,777   29,676
Mortgage-backed securities                           205,243   236,097  258,719
Corporate bonds                                            -     1,000      999
Marketable equity securities                          39,996    30,755   25,960
Other securities                                         687       965    1,326
                                                     -------   -------  --------
                                                    $636,193  $551,758 $542,755
                                                    ========  ======== =======

The following tables present the amortized cost of each investment category by
maturity range and the weighted average yield for each range (except for
mortgage-backed securities and marketable equity securities).

</TABLE>
<TABLE>
<CAPTION>
                                                 DECEMBER 31, 1996
                                             -------------------------
                                            AFTER 1   AFTER 5
                                     UNDER  THROUGH   THROUGH   AFTER
                                     1 YEAR 5 YEARS   10 YEARS 10 YEARS   TOTAL
                                    ------- -------  --------- -------   -----
Securities held to maturity:
 <S>                               <C>       <C>     <C>      <C>     <C>
 U.S. Treasury and Agency          $ 5,809   $28,350 $84,681  $    -  $118,840
 State and municipal                 6,634    11,387   7,338   3,388    28,747
 Other securities                      155       186      91     255       687
                                   -------   ------- ------- ------- ---------
                                   $12,598   $39,923 $92,110  $3,643  $148,274
                                   =======   =======  ======  ======  ========
Weighted average yield to maturity:
 U.S. Treasury and Agency              5.4%    6.7%      7.2%      -%      7.0%
 State and municipal (1)               5.0     5.0       5.3     5.4       5.1
 Other securities                      7.2     6.2       6.1     6.7       6.6


Securities available for sale:
 U.S. Treasury and Agency          $31,761  $200,918 $10,001   $   -  $242,680
                                   =======  ======== =======  ======  ========


Weighted average yield to maturity:
 U.S. Treasury and Agency              6.6%    6.9%      7.1%      -%      6.9%
                                      =====    ====      ====    ====      ====
</TABLE>

(1) Not based on taxable equivalents.

The Company owned $205 million in mortgage-backed securities at December 31,
1996. Yields in these securities can be reduced due to early prepayment. The
prepayment risk associated with mortgage-backed securities is monitored
continuously by updating the analytics concerning prepayment speeds. Bond
accounting and asset/liability reports are adjusted accordingly.

A large portion of the mortgage-backed securities are collateralized mortgage
obligations (CMO's) which are planned amortization class (PAC) bonds. Under the
terms of a PAC contract, if the collateral prepays faster or slower than the
defined range, the contract is suspended until the collateral prepayment speed
returns to the defined range.

In addition, high premium CMO's are avoided.  The Company has not experienced
any significant adverse prepayment characteristics in the last two years.
MANAGEMENT'S DISCUSSION AND ANALYSIS


LOANS
As indicated previously, the Company experienced strong internal loan growth in
1996 and 1995, which for 1995 was assisted by the Western Bank acquisition and
the Cabela's joint venture.  The following table presents the amount of loans by
categories and percentage of loans by categories as of December 31, for the year
indicated.
<TABLE>
<CAPTION>
                                                        1996        1995          1994        1993          1992
                                                   ----------    ----------     --------
<S>                                                <C>           <C>            <C>           <C>       <C>
Real estate mortgage                               $  332,913    $  295,268     $270,603      $236,202  $214,264
Consumer                                              271,906       263,320      228,332       187,021   173,920
Commercial and financial                              245,873       201,910      166,682       169,466   124,942
Agricultural (except loans secured by
  real estate; includes loans for household
  and other personal expenditures)                    130,071       126,414       87,758        87,338    72,346
Credit card                                            98,895       108,641       80,135        81,932    73,480
Real estate construction                               41,581        21,814       16,782        15,736    15,400
                                                    ---------     ---------     --------
                                                    1,121,239     1,017,367      850,292       777,695   674,352
Less allowance for loan losses                        (20,157)      (19,017)     (17,190)      (18,461)  (18,470)
                                                    ----------    ---------      --------
                                                   $1,101,082    $  998,350     $833,102      $759,234  $655,882
                                                   ==========    ==========     =========

</TABLE>

The above table does not include $56 million of credit card loans which were
securitized and sold during 1996.  Managed loans at December 31, 1996 were
$1,177,239,000.  Total managed credit card loans were $154,895,000 as of the
same date.
<TABLE>
<CAPTION>
                                                    DECEMBER 31,
                                     -------------------------------------------
                                      1996    1995      1994    1993      1992

As a percentage of total loans:
 <S>                                  <C>     <C>       <C>     <C>       <C>
 Real estate mortgage                 29.7%   29.0%     31.8%   30.4%     31.8%
 Consumer                             24.3    25.9      26.9    24.1      25.7
 Commercial and financial             21.9    19.9      19.6    21.8      18.5
 Agricultural                         11.6    12.4      10.3    11.2      10.7
 Credit card                           8.8    10.7       9.4    10.5      11.0
 Real estate construction              3.7     2.1       2.0     2.0       2.3
                                     -----   -----     -----   ------    ------
                                     100.0%  100.0%    100.0%  100.0%    100.0%
</TABLE>
The Company has no foreign loans.
The following table presents loan maturities by ranges (except for real estate
mortgage loans, credit card loans and consumer loans).  Also included for loans
due after one year are the amounts which have predetermined interest rates and
floating or adjustable rates.
<TABLE>
<CAPTION>
                                              AS OF DECEMBER 31, 1996
                                     -----------------------------------------------             
                                                               DUE AFTER 1 YEAR
                                                             --------------------
                                                                PRE-    FLOATING
                                      DUE    DUE 1      DUE  DETERMINED    OR
                                     WITHIN THROUGH    AFTER  INTEREST ADJUSTABLE
                                     1 YEAR 5 YEARS   5 YEARS   RATE      RATE
                                     ------ -------  -------- -------- ----------
<S>                               <C>        <C>      <C>      <C>     <C>
Commercial and financial          $146,347   $75,553  $23,973  $61,747 $37,779
Agricultural                        96,317    29,620    4,134   25,950   7,804
Real estate construction            18,001     5,736   17,844    3,731  19,849
</TABLE>

MANAGEMENT'S DISCUSSION AND ANALYSIS


RISK MANAGEMENT
Overall  risk management is an essential part of the operation of any financial
services organization.  There are three primary risk exposures: credit quality,
interest rate sensitivity and liquidity risk.  Credit quality risk involves the
risk of either not collecting interest when it is due or not receiving the
principal balance of the loan or investment when it matures or is due.  Interest
rate sensitivity risk is the risk of reduced net interest income because of
differences in the repricing characteristics of assets and liabilities, as well
as the change in the market value of assets and liabilities as interest rates
fluctuate.  Liquidity risk is the risk that the Company will not be able to fund
its obligations.

ASSET QUALITY
The quality of the Company's loan portfolio remains strong.  A key measure of
the effectiveness of credit risk management is the percentage of the loan
portfolio that is classified as nonperforming.  Nonperforming loans include
nonaccrual loans, loans 90 days or more past due and restructured loans. The
Company's nonperforming loans totaled $5.9 million at December 31, 1996, as
compared to $3.6 million at the end of 1995.  As a percentage of total loans,
nonperforming loans represent only .5% and .4% of the loan portfolio at December
31, 1996 and 1995, respectively.

Virtually all of the Company's loans, except credit card loans which are
concentrated in the Midwest, are to Nebraska-based organizations. The Nebraska
economy is somewhat dependent upon the general state of the agricultural
economy, which has been good for the past several years. The agricultural
economy is dependent upon commodity prices, weather and input costs.  Crop
yields were generally excellent throughout the region during 1996. The prices
for crops were generally higher than normal.  Most of the Company's cattle
feeders lost money throughout the year due to high corn prices, but had returned
to profitable operations by the end of 1996.  Loans to cattle feeders represent
the Company's largest loan segment concentration, but the Company has been
applying selective underwriting criteria to this segment.  The Company's direct
agricultural loans grew almost $40 million during 1995, primarily due to the
acquisition of Western Bank in Bridgeport and Alliance.  In addition to the
Company's direct agricultural loans, many of its nonagricultural borrowers are
affected by the overall agricultural economy in Nebraska. The Company's
borrowers are to a lesser extent affected by the overall national economy. Farm
income represents 7% of Nebraska's personal income.

Another area of loan concentration of the Company is in real estate related
activities. This is normally one of the first areas affected by a downturn in
the economy, but the Company applies selective underwriting in evaluating
projects. Another area of significant risk in a downturn of the economy would be
in the consumer and credit card areas. Credit card loans traditionally have a
higher ratio of net charge-offs to loans outstanding than other areas in the
loan portfolio. The credit card portfolio experienced $4.2 million in charge-
offs during 1996, up from $2.6 million in 1995 and  $2.3 million in 1994. The
national trend in credit card charge-offs also increased during 1996. The
Company's credit card charge-offs followed this trend, and are comparable to
industry averages.  Consumer loan charge-offs increased in 1996 and 1995 from
abnormally low levels in the prior years. Consumer loan charge-offs are below
industry levels.

Management reviews loans regularly, placing them on nonaccrual when it considers
the collection of principal or interest questionable. Thereafter, income is not
recorded unless it is received in cash or until such time as the borrower
demonstrates an ability to pay interest and principal. During 1996, 1995 and
1994, the Company received approximately $457,000, $458,000 and $186,000 in
interest on loans which had been previously charged-off or placed on nonaccrual.
This interest was included in interest and fees on loans in the consolidated
statements of income. As a general rule, credit card and consumer loans are
evaluated for charge-off once the delinquency period reaches 90 days.

Management classifies loans as impaired when, based on current information and
events, it is probable that the Company will be unable to collect all amounts
due according to the contractual terms of the loan agreement.  Impaired loans
are measured predominantly using the fair value of the underlying collateral, if
the impaired loan is collateral dependent.  Impaired loans were $2,595,000 and
$2,472,000 at December 31, 1996 and 1995, respectively.  The allowance for loan
losses related to these loans was $402,000 and $463,000 at December 31, 1996 and
1995, respectively.

MANAGEMENT'S DISCUSSION AND ANALYSIS


Management is not aware of any significant risks in the current commercial loan
portfolio due to concentrations within any particular industry other than those
previously discussed. Loans classified as commercial could be affected by
downturns in the real estate, agricultural and consumer economies due to being
directly or indirectly related to these areas.

Management believes that it carries adequate, even reasonably conservative, loan
loss reserves. However, such reserves are estimates and a change in the economy
can quickly affect the financial status of borrowers and loan quality. Such
changes can require significant adjustments in the loan loss reserve on very
short notice and are possible in the future.

The following table presents the amount of nonperforming loans for the periods
indicated:
<TABLE>
<CAPTION>
                                         1996     1995   1994   1993   1992
                                        -----    -----  -----  -----  -----

1.   Nonaccrual, Past Due and
    Restructured Loans
    (a) Loans accounted for on
       <S>                               <C>    <C>    <C>      <C>    <C>
       a nonaccrual basis                $3,429 $1,700 $1,150   $1,315 $1,944

    (b) Accruing loans which are
       contractually past due 90 days
       or more as to principal or
       interest payments                    846    690    384      432    782

    (c) Loans not included above which
       are "troubled debt restructurings" 1,597  1,256  1,377    1,342  1,449

     i.Gross interest income that would
       have been recorded in the period
       then ended if the loans listed in
       categories (a) and (c) had been
       current in accordance with
       their original terms                 628    350    285      305    405

     ii.Amount of interest income on
       loans listed in categories (a) and (c)
       that was included in net income
       for the period.                      395    155    153      140    198

2.   Potential Problem Loans(1)           6,660  7,953  6,265    6,162  8,058
3.   Foreign Outstandings                     -      -      -        -      -
4.   Loan Concentrations                      -      -
</TABLE>
(1)Balances shown are loans in which the primary source of repayment may not be
sufficient to meet the present terms of the loan. The Company believes it has
sufficient security collateral to support the current loan balance.

MANAGEMENT'S DISCUSSION AND ANALYSIS


PROVISION FOR LOAN LOSSES
The Company maintains an allowance for loan losses at a level considered by
management to be adequate to provide for the risk of possible loan losses.  The
amount of the provision charged to operating expense is determined on the basis
of several factors, including reviews of individual loans, past due and
nonaccruing loans outstanding, the level of the allowance for losses in relation
to loans, actual loss experience, appraisals of the loan portfolio conducted by
the Company's internal audit staff and by Federal bank examiners, and
management's estimate of the impact of the current and future economic
conditions.  The Company expensed $6,839,000, $3,495,000 and  $332,000 for
estimated loan losses in 1996, 1995 and 1994, respectively.

Average loans increased $120.4 million or 15.1% during 1995 from 1994 and
increased another $149.2 million or 16.3% during 1996.  Net charge-offs were
$5.7 million, $2.5 million and $1.9 million during 1996, 1995 and 1994,
respectively.  The increase in net charge-offs over the past three years is
primarily in credit card charge-offs, although the Company's charge-off ratios
remain comparable to national averages. Consumer loan charge-offs have also
increased which can be primarily attributed to higher levels of consumer
bankruptcies.  In 1996, Nebraska bankruptcy filings rose by over 40%.
Management feels the overall credit quality of the Company's loan portfolio
remains good.   The increase in loan loss expense during 1996 and 1995 is
primarily due to the increase in charge-offs, combined with the significant
growth in loans in order to keep the loan loss reserve at desired levels.   The
loan loss reserve as a percentage of loans was 1.80%, 1.87% and 2.02% at
December 31, 1996, 1995 and 1994, respectively.

The following table presents an analysis of loan loss experience.
<TABLE>
<CAPTION>
                                   1996      1995      1994    1993      1992
                               ---------- -------- --------- -------- --------

Average loans and leases
  <S>                          <C>         <C>      <C>       <C>      <C>
  for the year                 $1,066,896  $917,742 $797,369  $701,305 $649,167
                               ========== ========= ======== ========= ========

Reserve for loan losses:
 <S>                              <C>       <C>      <C>       <C>     <C>
 Balance, beginning of year       $19,017   $17,190  $18,461   $18,470 $16,912
 Provision charged to expense       6,839     3,495      332     1,143   3,152
 Bank acquisitions                      -       843      326         -       -
Loans charged off:
 Real estate construction               -         -        -      (332)   (300)
 Real estate mortgage                 (43)      (66)     (27)     (102)    (70)
 Agricultural                         (73)      (98)    (120)     (142)   (101)
 Commercial and financial            (734)      (70)     (64)     (135)   (279)
 Consumer                          (2,117)   (1,168)    (631)     (502) (1,048)
 Credit card                       (4,827)   (3,255)  (2,881)   (1,913) (1,579)
Loan recoveries:
 Real estate construction               -         -        -       632       -
 Real estate mortgage                 282       185      245        41     196
 Agricultural                          77       186      176       223      64
 Commercial and financial             193       438      397       340     665
 Consumer                             897       636      431       370     481
 Credit card                          646       701      545       368     377
                                   -------  -------   -------   ------- -------
 Net loans charged off             (5,699)   (2,511)  (1,929)   (1,152) (1,594)
                                   -------  --------  -------   ------- -------
Balance, end of year              $20,157   $19,017  $17,190   $18,461 $18,470
                                  =======   =======  =======   ======= =======
Ratio of net charge-offs to
  average loans                      .53%     .27%     .24%     .16%     .25%
</TABLE>

MANAGEMENT'S DISCUSSION AND ANALYSIS


This table presents an allocation for loan losses by loan categories; however,
the breakdown is based on a number of qualitative factors, and the amounts as
such are not necessarily indicative of actual future charge-offs in any
particular category.
<TABLE>
<CAPTION>
                                      1996     1995     1994     1993     1992
                                   -------   ------   ------  -------  --------
<S>                                <C>       <C>     <C>      <C>     <C>
Real estate construction           $   628   $   419 $   331  $    221 $   121
Real estate mortgage                 2,493     2,902   2,927     2,476   2,073
Agricultural                         3,169     3,941   2,658     2,468   1,501
Commercial and financial             4,896     3,781   3,887     4,790   4,931
Consumer                             3,302     3,152   2,472     2,162   1,791
Credit card                          5,398     4,623   3,511     2,712   1,638
Unallocated                            271       199   1,404     3,632   6,415
                                   -------   ------- -------   ------- --------
                                   $20,157   $19,017 $17,190   $18,461 $18,470
</TABLE>

INTEREST RATE RISK
The Company's principal objective for interest rate risk management is to
control exposure of net interest income to risks associated with interest rate
movements.  The Company trys to limit this exposure by matching the maturities
of its assets and liabilities, along with the use of floating rate assets which
will move with interest rate movements.

Interest rate risk is measured and reported to each of the Company's subsidiary
banks' Asset and Liability Management Committees (ALCO) through the use of
traditional gap analysis which measures the difference between assets and
liabilities that reprice in a given time period, simulation modeling which
produces projections of net interest income under various interest rate
scenarios and balance sheet strategies, and valuation  modeling which measures
the sensitivity of various components to the balance sheet under various rate
scenarios.  Significant assumptions include rate sensitivities, prepayment
risks, and the timing of changes in prime and deposit rates compared with
changes in money market rates.

Below is a table showing the Company's interest rate-sensitive assets (excluding
assets on nonaccrual and overdrafts) and liabilities for various time periods in
which they either mature or are repriceable (in thousands):
<TABLE>
<CAPTION>
                                          1 TO         91 TO       181 TO        1 TO 5       OVER
                                        90 DAYS       180 DAYS    360 DAYS       YEARS      5 YEARS        TOTAL
                                        ---------   ----------    ---------     -------     --------   -----------
Assets:
  <S>                                   <C>          <C>          <C>           <C>           <C>       <C>
  Investments                           $  68,524    $ 23,375     $  41,233     $375,083      $141,646  $  649,861
  Loans                                   490,961      66,070        98,983      422,728        37,651   1,116,393
  Mortgages held for sale                  16,293           -             -            -             -      16,293
  Federal funds sold                       28,528           -             -            -             -      28,528
                                         --------     --------     --------      --------     ---------  ---------                 
                                          604,306      89,445       140,216      797,811       179,297   1,811,075
Liabilities:
  Interest-bearing
     demand deposits                       34,626           -        76,587      223,151             -     334,364
  Savings deposits                              -           -             -       86,804             -      86,804
  Time deposits                           254,628     169,531       283,871      116,479            41     824,550
  Short-term
     borrowings                           180,192           -             -            -             -     180,192
  Long-term debt                           23,769       3,038             -       19,166         7,000      52,973
                                          -------     -------       --------     -------         -----   ---------
                                          493,215     172,569       360,458      445,600         7,041   1,478,883
                                         ---------   ---------    ----------   ----------      --------  ---------
Repricing gap                            $111,091    $(83,124)    $(220,242)    $352,211      $172,256  $  332,192
                                         ========    =========    ==========    ========      ========   =========

Cumulative repricing gap                 $111,091     $27,967     $(192,275)    $159,936      $332,192  $  332,192

GAP as a % of earning assets                 6.1%          1.5%      (10.6)%         8.8%       18.3%         18.3%
</TABLE>

This table estimates the repricing maturities of the Company's interest
sensitive assets and liabilities based upon the company's interest rate-
sensitive assets and liabilities, based upon the Company's assessment of the
repricing characteristics of contractual and non-contractual instruments.  Non-
contractual deposit liabilities are allocated among the various maturity ranges.
MANAGEMENT'S DISCUSSION AND ANALYSIS


LIQUIDITY AND CAPITAL RESOURCES
The Company's primary business is ownership of banks.  The assets of any
commercial bank are primarily funded through the use of borrowings in the form
of demand and time deposits, negotiable certificates of deposit, and short-term
funds.  The Banks have demonstrated the ability to acquire short-term funds when
needed and rely primarily upon negotiable certificates of deposit, brokered
certificates of deposit, federal funds acquired from correspondent banks,
securities sold under agreement to repurchase, and borrowed funds from the
Federal Home Loan Bank. These sources should remain accessible as long as the
Banks offer competitive rates.  In addition, the Company has utilized the
securitization of credit card receivables to provide liquidity and fund the
receivable growth in the Cabela's LLC credit cards.

The Company relies primarily on the Banks for its source of cash needs. The cash
flow from the Banks to the Company comes in the form of dividends, tax benefits
and rental payments. Total dividends that can be declared by the subsidiary
banks without receiving prior approval from regulatory authorities are limited
to each Bank's defined net income of that year combined with its retained
defined net income from the previous two years subject to minimum regulatory
capital requirements.  For the calendar year 1997, the Banks have retained
defined net income from the previous two years of approximately $18.1 million.
The parent company holds approximately $53.0 million in cash,  short-term
investments and marketable securities as of December 31, 1996.  The Company has
the ability to issue commercial paper which could be used to provide liquidity
to subsidiary banks. The Company has issued $4 million in commercial paper as of
December 31, 1996.  Long-term debt at December 31, 1996 includes $18.5 million
of capital notes which have a payment of $2.5 million due in 1997 and $34.3
million of FHLB borrowings (at subsidiary banks) which have $24.3 million
principal due in 1997.

The Company's risk-based capital ratios, which take into account the different
credit risks among banking organizations' assets, have remained strong over the
past three years.  Tier 1 and total risk-based capital ratios were 13.3% and
14.7%, respectively, at December 31, 1996.  These ratios are down slightly from
the 13.4% and the 14.8%, respectively, at December 31, 1995, and the 14.8% and
the 16.3%, respectively, at December 31, 1994, due to the significant loan
growth the Company incurred during 1996 and 1995.  Loans typically carry a
higher risk rating than other earning assets.  In accordance with the regulatory
guidelines, unrealized gains and losses on the available for sale securities
portfolio are excluded from the risk-based capital calculations.

The Company's leverage ratio, the ratio of Tier 1 capital to total quarterly
average assets, was 9.4% at December 31, 1996 and 9.2% at December 31, 1995.

The Federal Deposit Insurance Corporation typically defines a bank to be "well
capitalized" if it maintains a Tier 1 capital ratio of a least 6.0%, a total
risk-based capital ratio of at least 10.0% and a leverage ratio of at least
5.0%.  It is the Company's intention to maintain sufficient capital in each of
its subsidiary banks to permit them to maintain a "well-capitalized"
designation.  All of the Company's bank subsidiaries met the "well-capitalized"
designation at December 31, 1996.

LEVERAGE RATIOS
These ratios measure the extent to which the Company has been financed by long-
term debt (before net unrealized gains and losses on securities available for
sale).
                                               1996  1995  1994

Long-term debt to long-term debt plus equity   21.9% 24.5% 17.8%
Total long-term debt to equity                 28.1  32.5  21.6
Long-term debt to equity (parent only)          9.9  12.4  15.1

FUNDING SOURCES
Average deposits were $1.47 billion in 1996 as compared to $1.39 billion during
1995 as compared to $1.28 billion in 1994, a 5.7% and 8.6% increase,
respectively.  Average interest-bearing deposits increased from $1,016 million
in 1994 to $1,151 million in 1995, to $1,208 million in 1996, a 13.3% and 4.9%
increase, respectively.  Noninterest-bearing demand deposits decreased $25.4
million or 9.5% in 1995 from 1994 but increased 9.2% or $22.4 million in 1996.
The increase or decrease in noninterest-bearing demand deposits can be primarily
attributed to the fluctuation in short-term interest rates.   The Company's
largest subsidiary bank, the National Bank of Commerce, provides many services
to nonaffiliated banks which are paid for by maintaining balances in the
National Bank of Commerce.  As interest rates increase or decrease, the National
Bank of Commerce requires the nonaffiliated banks to maintain higher or lower
balances to pay for the services being provided. If interest rates rise the
amount of deposits required to be maintained will go down.  If interest rates
decrease, then the amount of deposits required to be maintained will increase.

MANAGEMENT'S DISCUSSION AND ANALYSIS


Average time deposits increased 5.2% during 1996 as compared to 1995, while
interest-bearing demand and savings deposits increased 4.2%.  The Company uses
time deposits of $100,000 or more as a significant funding source.  The
following table presents time deposits of $100,000 or more by time remaining
until maturity.
                                           AS OF DECEMBER 31, 1996
                              -------------------------------------------------
                                        OVER 3      OVER 6
                               3 MONTHS THROUGH    THROUGH      OVER
                               OR LESS 6 MONTHS   12 MONTHS  12 MONTHS   TOTAL
                              -------- --------   --------- ---------- --------
                              $111,917   $60,474   $44,418   $12,832    $229,641

During 1996, the Company used a funding source it has not previously used
before, securitization and sale of credit card loans.  On July 18, 1996 the
Company completed the establishment of the National Bank of Commerce Master
Credit Card Trust (trust). The initial pooling and servicing agreement will
allow the National Bank of Commerce (Bank) to sell up to $100,000,000 of credit
card receivables to the trust.  As these loan receivables are securitized, the
Company's on-balance sheet funding needs are reduced by the amount of loans
securitized.  As of December 31, 1996, the Company had sold $56 million of
credit card receivables to the trust.

The securitization involved the sale of a group of credit card receivables.
These credit card receivables arise from accounts whose ownership is retained by
the Company.  In addition to selling the existing receivables, rights to new
receivables, including most income generated by and payments made from these
accounts, were sold.  Certificates representing undivided interests in the trust
were issued.  The Investor Certificates are sold by the trust to investors who
are financing the purchase through the issuance of commercial paper.  Interest
is paid to the Investor Certificate holders during the life of the transaction.
The Seller Certificate is retained by the Company.  The Company continues to
service the accounts and receives a servicing fee for doing so.

During the revolving period, which is 36 months on the first series issued by
the Company, no principal payments are made to the Investor Certificate holders.
Payments received on the accounts are used to pay interest to the Investor
Certificate holders and to purchase new receivables generated by the accounts,
so that the principal dollar amount of the Investor Certificate remains
unchanged.  Once the revolving period begins, principal payments will be
allocated for distribution to the Investor Certificate holders according to the
terms of the transaction.  As principal payments are allocated to the Investor
Certificate holders, the Company's credit card receivables will increase by the
amount of the principal allocation.

Distribution of principal to the Investor Certificate holders may begin sooner
if the average annualized yield (generally this includes interest income,
interchange income, and other fees) for three consecutive months falls below a
base rate (generally equal to the sum of the certificate rate payable to
investors and contractual servicing fees) or other certain events occur.  For
the three month period ended December 31, 1996, the average annualized yield
exceeded the base minimum yield by approximately 14.5%.  This yield is
calculated on a cash basis.

The securitization did not have a material impact on earnings reported for the
Company.


EARNINGS PERFORMANCE

The Company's net income was $21,756,000, up 25% or $4,336,000 from 1995.  The
Company's net income for 1995 was $17,420,000, down $1,612,000 from 1994's net
income of $19,032,000. The increase in net income in 1996 from 1995 can be
primarily attributed to an increase in net interest income.  The net yield on
interest earning assets increased from 3.93% in 1995 to 4.10% in 1996.  This
resulted in a $9.2 million or 15% increase in net interest income.   The
increase in net interest income was partially offset by a $3.3 million increase
in loan loss expense.  Even though overall loan quality remains high in the
organization, significant growth in loans combined with a significant increase
in bank card charge-offs created the need to provide additional expense to keep
reserves at desired levels.

The decline in income in 1995 was due to an increase in loan loss expense of
over $3 million in order to keep reserves at desired levels given the loan
growth experienced by the Company.  Increases in noninterest expenses offset
increases in net interest income.

MANAGEMENT'S DISCUSSION AND ANALYSIS

NET INTEREST INCOME
Net interest income, the principal source of earnings, is the difference between
the interest income generated by earning assets and the total cost of the
liabilities obtained to fund the earning assets.  Net interest income in 1996
was $70.1 million as compared to $60.9 million and $57.8 million in the prior
two years.

The Company's net yield on interest-earning assets (net interest income as a
percent of average earning assets) decreased from 4.14% in 1994 to 3.93% in 1995
but recovered to 4.10% in 1996.  A flat yield curve and stiff competition for
deposits contributed to the decline in spreads and the net yield on earning
assets in 1995.  The Company's growth in earning assets forced it to run deposit
specials at rates higher than it would normally pay on deposits with comparable
length maturities.  These specials were run early in the year and by the end of
1995 most of these specials had matured with the deposits retained at more
normal rates.  This resulted in the increase in the net yield on earning assets
to 4.10% in 1996.  However, in both years, the increase in volume created by the
loan growth previously discussed was the predominant factor in the increase in
net interest income.

The following tables attribute changes in net interest income either to changes
in average balances or to changes in average rates for earning assets and
interest-bearing liabilities.  The change in interest due jointly to volume and
rate has been allocated to volume and rate in proportion to the relationship of
the absolute dollar amount of change in each.

<TABLE>
<CAPTION>
                                                  1996/95                                   1995/94
                                      ------------------------------         --------------------------------------
                                          AMOUNTS                                   AMOUNTS
                                        ATTRIBUTABLE                              ATTRIBUTABLE
                                       TO CHANGES IN                             TO CHANGES IN
                                    ----------------------                    ------------------------      
                                                                TOTAL                                      TOTAL
                                     VOLUME        RATE         CHANGE        VOLUME          RATE         CHANGE
                                    --------      ---------    --------       --------        --------     -------
<S>                                  <C>           <C>         <C>             <C>              <C>        <C>
Interest and fees on loans           $13,628       $(1,894)    $11,734         $10,890          $6,224     $17,114
Interest on taxable
  investment securities                  307           635         942           1,513           2,166       3,679
Interest on state
  and municipal obligations             (131)            5        (126)             92               8         100
Equity securities                        189           (47)        142             192             (23)        169
Interest on mortgages held for sale      994          (254)        740            (169)            974         805
Interest on short-term investments      (730)         (200)       (930)            298              50         348
                                      ------        -------     -------         -------          ------     -------
Total interest income                 14,257        (1,755)     12,502          12,816           9,399      22,215

Interest on deposits:
  Interest-bearing demand                329          (347)        (18)           (544)            493         (51)
  Savings deposits                       111           (46)         65             (78)             77          (1)
  Other time deposits                  2,268        (2,156)        112           8,461           7,914      16,375
Interest on federal funds purchased      782           (41)        741             (93)            154          61
Interest on short-term borrowings      2,194          (429)      1,765             117           1,462       1,579
Interest on long-term debt               891          (271)        620           1,350            (194)      1,156
                                       -----        -------      -----           ------          ------      ------
Total interest expense                 6,575        (3,290)      3,285           9,213           9,906      19,119
                                     -------       --------    -------          -------          ------     -------
Net interest income                  $ 7,682       $ 1,535     $ 9,217         $ 3,603          $ (507)    $ 3,096
</TABLE>

Nonaccruing loans have been included in average total loans.  Loan fees on new
loans have been included in interest income, but the amounts of such fees are
not deemed material to total interest income.  Tax-exempt interest is not on a
tax-equivalent basis.

MANAGEMENT'S DISCUSSION AND ANALYSIS


NONINTEREST INCOME
Noninterest income continues to be a significant source of revenues.  Management
has stressed the importance of growth of noninterest income to enhance the
Company's profitability.  As a percentage of net revenues (net interest income
plus noninterest income), noninterest income was 39%, 36%, and 35% during 1996,
1995 and 1994, respectively.  The following table shows the breakdown of
noninterest income and the percentage change for 1996, 1995 and 1994.
<TABLE>
<CAPTION>
                                                              PERCENT INCREASE
                                                                 (DECREASE)
                                                             -----------------
                                       1996   1995   1994    1996/95 1995/94
                                      -----   ----   ----    ------- --------
<S>                                <C>        <C>    <C>       <C>    <C>
Computer services                  $  8,491   $8,147 $ 8,293     4.2%   (1.8)%
Credit card                          10,591    4,965   4,289   113.3    15.8
Mortgage banking                      4,868    3,571   2,997    36.3    19.2
Service charges on deposits           5,231    4,893   4,849     6.9      .9
Other service charges and fees        6,217    5,293   5,007    17.5     5.7
Trust services                        5,840    5,272   5,007    10.8     5.3
Gains on securities sales             1,672      581     182   187.8   219.2
Other income                          1,120    1,128     739     (.7)   52.6
                                    -------  ------- -------  
 Total noninterest income           $44,030  $33,850 $31,363    30.1     7.9
</TABLE>
The increase in noninterest income in 1996 from 1995 can be primarily attributed
to an increase in activity.  Credit card income increased $5,626,000 due to an
increase in merchant discount income, combined with an increase in interchange
income from the joint venture initiated in 1995 with a large catalog sales
organization to issue a co-branded credit card to its customer base.  Mortgage
banking revenues increased due to an increase in servicing income, origination
fees and underwriting fee income, all due to an increase in activity.  The
increase in other service charges and fees can be primarily related to a volume
increase in discount brokerage sales which resulted in an increase in fee income
and fee income from sales of bonds to correspondent banks.  Trust services
income increased due to an increase in activity and managed assets.  Gains on
securities sales are attributable to sales of equity securities out of the
Company's Global fund.  Included in other income is interest on an income tax
refund.

The increase in noninterest income in 1995 from 1994 can be primarily attributed
to an increase in activity and rates charged.  Credit card income increased
$676,000 primarily due to an increase in merchant discount income.  As discussed
previously, during 1995 the Company joined in a joint venture with a large
catalog sales organization to issue a co-branded credit card to its customer
base.  During the year the Company issued almost 75,000 cards from this activity
which caused an increase in bank card fee income.  During the year the Company's
mortgage banking subsidiary adopted SFAS 122.  The Company estimates this caused
an increase in pre-tax profits of approximately $550,000.  The increase in other
income can be attributed to a $371,000 settlement from a class action lawsuit
related to a loss on bonds in 1990.

MANAGEMENT'S DISCUSSION AND ANALYSIS


NONINTEREST EXPENSE
The emphasis on growth in fee-based services income requires significant
investments in staff, training and technology.  The following table shows the
breakdown of noninterest expense and the percentage change for 1996, 1995 and
1994.
<TABLE>
<CAPTION>
                                                              PERCENT INCREASE
                                                                 (DECREASE)
                                                             -----------------
                                    1996    1995     1994    1996/95 1995/94
                                   -----    ----     ----    ------- -------
<S>                               <C>      <C>      <C>         <C>    <C>
Salaries and employee benefits    $35,808  $33,101  $29,647     8.2%   11.7%
Net occupancy expense               3,980    3,815    3,552     4.3     7.4
Equipment expense                   5,523    4,770    4,900    15.8    (2.7)
Fees and insurance                 10,825    8,868    9,366    22.1    (5.3)
Communications                      4,159    3,647    3,215    14.0    13.4
Supplies                            2,404    2,395    1,911      .4    25.3
Business development                3,990    2,649    2,624    50.6     1.0
Other expenses                      7,223    5,148    4,448    40.3    15.7
                                  -------  -------  -------
    Total noninterest expense     $73,912  $64,393  $59,663    14.8     7.9

Efficiency ratio *                    64.8%   68.0%    66.9%
Average number of full-time
 equivalent employees               1,035    1,015      966
Personnel expense per
  employee (in dollars)           $34,597  $32,612  $30,690
</TABLE>
* Computed as noninterest expense divided by the sum of net interest income and
noninterest income.

Noninterest expenses were $73.9 million in 1996 as compared to $64.4 million in
1995.  Salaries and employee benefits increased $2.7 million or 8.2% due
primarily to increases in the level of pay, combined with an increase in the
number of employees.  The increase in equipment expense was due primarily to a
write-down taken during the year on computer equipment which will have to be
upgraded during 1997 to handle software upgrades.  Fees and insurance increased
primarily due to an increase in bankcard processing fees.  The increase in
bankcard processing fees of $3.3 million was partially offset by a decrease in
FDIC fees of $1.5 million.  Communications expense increased 14% due to First
Commerce Technologies currently processing for several Florida banks, combined
with an increase in postage costs related to the Cabela's joint-venture started
in 1995.  Business development costs increased over $1.3 million.  A
contribution to the NBC Foundation during 1996 accounted for $463,000 of this
increase.  Bankcard advertising costs in both the National Bank of Commerce and
the Cabela's joint-venture accounted for the balance of the increase.  The
increase in other expenses is due primarily to an increase in amortization costs
related to purchased mortgage service costs of $790,000,  an increase in travel
costs of $200,000 and an increase in minority interest expense because of the
Cabela's joint-venture of $764,000.

Noninterest expenses were $64.4 million in 1995 versus $59.7 million in 1994.
The increase in salary costs is due to an increase in the number of employees
and normal year-to-year increases in the levels of pay.  The increase in the
number of employees can be primarily attributed to the Western Bank acquisition
and the Cabela's joint venture which required the Company to increase its
bankcard staff to service this increase in bankcard activity.  The increase in
communications is due to a general increase in telephone and courier expenses
due to normal business expansion and price inflation.  The decrease in equipment
expense is due primarily to the State of Nebraska L.B. 775 agreement which
refunds sales tax based on qualified investment property purchased by the
Company. These refunds impact equipment expense through a reduction in basis and
subsequent lowering of depreciation expense. Fees and insurance expenses
included bankcard processing fees of $3.8 million in 1995, up from $3.1 million
in 1994 and $2.9 million in 1993.  The increase in bankcard processing fees is
primarily due to the Cabela's joint venture initiated in 1995.  The increase in
bankcard processing fees was offset by decreases in FDIC assessments
due to a decrease in the amount assessed per $100 of deposits from 23 cents to
4.4 cents in May 1995.  The decrease in FDIC expense in 1995 from 1994 was $1.3
million.  Supplies increased primarily due to the Company implementing check
imaging on statements during the year and the related up front costs associated
with this change, combined with a significant increase in paper costs during
1995.  The increase in occupancy expense can be attributed to the Western Bank
acquisition and the NBC Superior Street branch being open for a full year.

MANAGEMENT'S DISCUSSION AND ANALYSIS


INCOME TAXES
The provision for income taxes was $11,629,000 in 1996, $9,431,000 in 1995 and
$10,129,000 in 1994. The changes from year to year can be primarily attributed
to the increase or decrease in income before income taxes.  The income tax
provision for 1996 was reduced by a $238,000 income tax refund from prior years.

IMPACT OF INFLATION
The assets and liabilities of a financial institution are primarily monetary in
nature.  As such, future changes in prices do not affect the obligations to pay
or receive fixed and determinable amounts of money.  During periods of
inflation, monetary assets lose value in terms of purchasing power while
monetary liabilities have corresponding purchasing power gains.  Since banks
generally have an excess of monetary assets over monetary liabilities, inflation
will, in theory, cause a loss of purchasing power in the value of shareholders'
equity.  However, the concept of purchasing power is not an adequate indicator
of the effect of inflation on banks because it does not take into account
changes in interest rates, which are a more important determinant of bank
earnings.  Other sections of the Management's Discussion and Analysis discuss
how the Company monitors the effect of changing interest rates on the Company's
earnings.

Noninterest related expenses are also influenced by the current rate of
inflation since they represent the Company's purchase of goods and services from
others.  It is difficult to assess the true effect of inflation on the Company.
The Company believes, however, that based on past history, it has and will
continue to react to minimize any adverse effects of inflation.

MANAGEMENT'S DISCUSSION AND ANALYSIS


TRENDS AND UNCERTAINTIES
ECONOMY.  The projected outlook for the Nebraska economy over the next couple of
years is for growth in employment (1.8% growth), personal income (6.5% annual
growth), and retail sales (6.4% growth).  Construction activity has been solid,
while  retail sales growth has been favorable. The manufacturing base in the
state continues to operate at expanding levels.  Motor vehicle and farm
equipment sales have been strong.  The state's fiscal position appears to be
favorable from the standpoint of the amount of excess tax receipts being
received over budgeted expenditures.  The U. S. economy should realize moderate
growth as the Federal Reserve Board attempts to maintain balance between growth
and inflation.

The results of the 1996 Nebraska farm sector have been favorable. Crop prices
were much higher relative to last year, and crop yields were good.  Cattle
feeders realized improved profitability in the latter part of the year, while
ranch operations have been reflecting losses (reduced cow inventories should
improve future prospects). Agricultural real estate values have risen, but ranch
land values may come under some pressure.  Personal bankruptcy filings have
increased significantly (up 40% in Nebraska during 1996) during the past few
months due to overextended credit.

ENVIRONMENTAL.  Many environmental issues are being discussed on the national
and local level. In Nebraska, water is used to irrigate nearly six million acres
of semi-arid cropland. The state is now discussing issues relating to domestic,
agricultural, and environmental uses of water.  Legislation has been implemented
to recognize the inter-relationship between ground and surface water.
Discussions and regulations have also focused on water quality and preserving
wildlife habitat. These discussions may ultimately have an impact on current
agricultural practices.

EXPANSION ACTIVITIES.  The Company is making efforts to expand activities and to
grow in order to increase net income.  The Company has the capacity to expand
its computer processing business and continues to pursue and obtain additional
customers.  The Company has obtained additional data processing business from
Florida banks, and the acquisition of additional data processing centers is
possible.   The Company has actively attempted to increase its mortgage banking
and mortgage servicing business and is considering possible geographic
expansion. The Company may also attempt to acquire servicing from other
servicing companies in the future.  The Western Nebraska National Bank will open
a new main bank facility in North Platte in April, 1997, two other banking
subsidiaries are expanding existing facilities and the National Bank of Commerce
will be opening a new branch facility.  The National Bank of Commerce and
Cabela's, a catalog sales company, created a joint company in 1995 for the
purpose of issuing a "co-branded" credit card.  This joint company has been
successful in obtaining 66,000 active accounts from Cabela's clients and will
continue to solicit new cardholders.  The Company expects to make further
acquisitions in the future although there are no identified opportunities at
this time.  In 1996, subsidiary banks opened four loan/deposit production
offices, and four additional offices are planned in 1997 (including two outside
of Nebraska).  These offices are attracting new customers and allowing the
Company to expand geographically.

REGULATORY.  During 1992, the FDIC (Federal Deposit Insurance Corporation)
implemented a new risk-based assessment system where each insured depository
institution pays an assessment rate based on the combination of its capital and
supervisory condition.  The FDIC Board intends to review the rate schedules
every six months to ensure that the assigned rates are consistent with economic
conditions and allow the funds to maintain the statutory-mandated 1.25 percent
reserve ratio.  All of the Company's subsidiary banks presently meet the
conditions required under the new system to pay the lowest possible rate. The
banking industry has been assessed a portion of the FICO bond debt service
costs.  The plethora of recent bank regulations has resulted in the employment
of greater company resources to ensure regulatory compliance.  Risk-based
capital guidelines established by regulatory agencies set minimum capital
standards based on the level of risk associated with a financial institution's
assets.  As of December 31, 1996, the Company and all of its bank subsidiaries
exceed the minimum capital requirements as mandated by regulatory agencies (See
Footnote O).

STOCK REPURCHASE PROGRAM.  During 1994, the Board of Directors announced its
intentions of purchasing shares of its common stock when appropriate and at a
price management believes advantageous to the Company.  During 1996, the Company
acquired 22,682 shares of its Class B stock at an average price of $16.00.
<PAGE>
                                SENIOR OFFICERS

                       * JAMES STUART JR.
                         Chairman and Chief Executive Officer
                       * STUART BARTRUFF
                         Executive Vice President and Secretary
                       * BRAD KORELL
                         Executive Vice President
                       * MARK HANSEN
                         Senior Vice President
                         THOMAS L. ALEXANDER
                         Senior Vice President, Human Resources
                         JOAN CROMWELL
                         Senior Vice President and Senior Auditor
                         MARY GERDES
                         Senior Vice President and Loan Services Manager
                         DONALD D. KINLEY
                         Vice President and Treasurer
                         KAREN KUHN
                         Vice President, Marketing

                         * Executive Officer



                                   DIRECTORS


          David Calhoun                Kenneth W. Staab
          Chairman   and   Chief       Staab         Restaurant
          Executive Officer            Management
          Jacob North Printing
                                       James Stuart
          Connie Lapaseotes            Chairman, Stuart
          Lapaseotes, Ltd.             Management Co.
          Cattle Feeding,              Managing of Outdoor
          Ranching and Farming         Advertising Companies

          John G. Lowe, III            James Stuart, Jr.
          Owner, Lowe Investment       Chairman    and    Chief
          Co., Investment Firm         Executive Officer
                                       First Commerce
                                       Bancshares, Inc.
          Jack Osborne
          President,  Industrial       Scott Stuart
          Irrigation Services          Managing Partner
                                       KJS Partnership, Outdoor Advertising
          Richard C. Schmoker
          Attorney and Partner,        Advisory Director:
          Faegre and Benson            Harold Wimmer


                       SUBSIDIARY SENIOR OFFICERS

                       Brad Korell, President
                       National Bank of Commerce
                       Lincoln, Nebraska

                       PATRIC J. JERGE, President
                       First Commerce Technologies
                       Lincoln, Nebraska

                       DOUGLAS G. ALFORD, President
                       First Commerce Mortgage Company
                       Lincoln, Nebraska

                       ROBERT MORRIS, President
                         and Chief Executive Officer
                       City National Bank
                       Hastings, Nebraska

                       LARRY L. JEPSON, Chairman
                         and Chief Executive Officer
                       JOHN CANNON, President
                       First National Bank
                       Kearney, Nebraska

                       RICK HARBAUGH, President
                         and Chief Executive Officer
                       The Overland National Bank
                       Grand Island, Nebraska

                       KENNETH W. FOSTER, Chairman
                       MARK JEPSON, President
                         and Chief Executive Officer
                       First National  Bank
                       McCook, Nebraska

                       MICHAEL B. JACOBSON, President
                         and Chief Executive Officer
                       Western Nebraska National Bank
                       North Platte - Alliance - Bridgeport, Nebraska

                       ALLAN MCCLURE, President
                         and Chief Executive Officer
                       First National Bank
                       West Point, Nebraska

                       JAMES STUART, III, Chairman
                         and Chief Executive Officer
                       H. CAMERON HINDS, President
                       First Commerce Investors
                       Lincoln, Nebraska

                                CORPORATE FACTS


                       CORPORATE OFFICE:
                         NBC Center
                         1248 O Street
                         Lincoln, NE 68508
                         Telephone:  (402) 434-4110
                         Fax: (402) 434-4181
                         E-mail Address:  fcbi@navix.net
                         Website:  www.fcbi.com


                       TRANSFER AGENT:
                         Chemical Mellon Shareholder Services
                         Mellon Bank, N.A.
                         P. O. Box 444
                         Pittsburgh, PA 15230
                         Telephone:  (412) 236-8173


                       STOCK:
                         The Company's common stock is traded
                         on the over-the-counter market. Quotations
                         are furnished by NASDAQ Symbol FCBIA
                         and FCBIB.


                       FORM 10-K AVAILABLE:
                         A copy of the Company's Annual Report on
                         Form 10-K for the year ended December 31,
                         1996, as filed with the Securities and
                         Exchange Commission may be obtained
                         without charge by any shareholder requesting
                         it in writing. Please direct your request
                         to Donald Kinley, Vice President and
                         Treasurer, at the Corporate office.


                       ANNUAL SHAREHOLDERS MEETING:
                         April 15, 1997
                         Country Club of Lincoln
                         Lincoln, Nebraska


                       DIVIDEND REINVESTMENT PLAN:
                         The Company offers a dividend reinvestment
                         plan as a convenient method of investing cash
                         dividends paid and to make optional cash
                         contributions in additional shares of Class B
                         non-voting stock. For information on enrolling,
                         contact the plan administrator at the following
                         address:
                              ATTN.: Dividend Reinvestment
                              Plan Administration
                              Mellon Bank, N.A.
                              P.O. Box 750
                              Pittsburgh, PA 15230
























                First Commerce Bancshares & Subsidiaries  o  125