EXHIBIT 13


<PAGE> 10-26

MANAGEMENT'S DISCUSSION AND ANALYSIS

Financial Performance Summary

    The Company reported record earnings for 1996 of $2.37 per share, compared 
to $2.07 and $1.87 for the years ended 1995 and 1994, respectively.  Net 
income for 1996 of $68.6 million represented a 20% increase over 1995 net 
income of $56.9 million.  Net income for 1994 was $50.3 million.

    The following discussion provides a comparison of profitability, balance 
sheet and asset quality for the past three years.  The consolidated financial 
statements and accompanying notes should be reviewed carefully to provide a 
complete analysis of the Company's financial condition and results of 
operations.  All share and per share data in this report have been 
retroactively adjusted for the following stock dividends: five percent 
declared November 1994, seven percent declared November 1995, and five percent 
declared October 1996.  On November 23, 1996, the Company acquired Security 
national Bank, Nacogdoches, Texas.  The Security National Bank acquisition was 
accounted for as a pooling-of-interests.  The results of Security National 
Bank are included in the consolidated financial statements for 1996; however, 
prior period financial data has not been restated due to immateriality.  These 
factors should be considered when making comparisons to 1995 and 1994.

Profitability

    When evaluating the earnings performance of a banking organization, two 
profitability ratios are important standards of measurement: return on average 
assets and return on average common stockholders' equity.  Return on average 
assets measures net income in relation to total average assets and portrays 
the organization's ability to profitably employ its resources.  Return on 
average assets for 1996 was 1.30% compared to 1.22% in 1995 and 1.19% in 1994.

    The second profitability ratio is return on average common stockholders' 
equity.  This ratio reflects how effectively a company has been able to 
generate earnings on the capital invested by its stockholders.  The Company's 
return on average common stockholders' equity was 15.09% in 1996, 15.02% in 
1995, and 14.87% in 1994.  The improvement is indicative of the Company's 
successful deployment of its capital, combined with strong earnings growth.

    The primary factors contributing to increased earnings during the past 
three years have been a strong interest margin and consistent increases in 
non-interest income accompanied by careful monitoring of non-interest 
expenses, so as to control and minimize these costs.
<PAGE> 10-26

==============================================================================
<TABLE>
<CAPTION>
 Contribution to Earnings Per Common Share
 (Net of Marginal Federal Tax Rate of 35%)
                                                                        For the Years          EPS Increase   
                                                                      Ended December 31,        (Decrease)    
                                                                  -------------------------- -----------------
                                                                                              1995 to  1994 to
                                                                    1996     1995     1994     1996     1995  
                                                                  -------- -------- -------- -------- --------
 <S>                                                              <C>      <C>      <C>      <C>      <C>
 Net interest income.............................................  $  4.88  $  4.36  $  3.85  $   .52  $   .51
 Provision for possible loan and lease losses....................     (.17)    (.07)     .07     (.10)    (.14)
 Trust department income.........................................      .27      .27      .26        -      .01
 Mortgage servicing fee income...................................      .93      .53      .40      .40      .13
 Broker-dealer operations income.................................      .09      .07      .04      .02      .03
 Service charges on deposits.....................................      .58      .52      .49      .06      .03
 Other service charges and fees..................................      .28      .22      .19      .06      .03
 Investment securities gains (losses), net.......................        -     (.01)       -      .01     (.01)
 Other real estate gains (losses), net...........................     (.01)    (.01)     .11        -     (.12)
 Other income....................................................      .17      .16      .17      .01     (.01)
 Salaries, wages and employee benefits...........................    (2.15)   (1.89)   (1.81)    (.26)    (.08)
 Net occupancy...................................................     (.28)    (.26)    (.24)    (.02)    (.02)
 Equipment.......................................................     (.29)    (.25)    (.22)    (.04)    (.03)
 FDIC insurance..................................................     (.04)    (.17)    (.21)     .13      .04
 Amortization of mortgage servicing rights.......................     (.44)    (.18)    (.13)    (.26)    (.05)
 First Commercial Trust Company lawsuit settlement...............        -        -     (.15)       -      .15
 Other expense...................................................    (1.49)   (1.27)   (1.02)    (.22)    (.25)
 Tax-exempt income and credits...................................      .04      .05      .07     (.01)    (.02)
                                                                  -------- -------- -------- -------- --------
 Net income................. ....................................  $  2.37  $  2.07  $  1.87  $   .30  $   .20
                                                                  ======== ======== ======== ======== ========
</TABLE>
==============================================================================

Acquisitions

    The Company's continued growth in earnings, asset and market share during 
1996 resulted from both internal growth and acquisition activity. The Company 
has experienced numerous acquisitions during the past three years, which are 
highlighted below.

    On January 14, 1994, the Company acquired all of the outstanding stock of 
Clinton Bancshares, Inc., Clinton, Arkansas, in exchange for 320,959 Company 
common shares.  This transaction was accounted for as a pooling-of-interests, 
and accordingly, all prior period financial data has been restated to include 
this acquisition.  Clinton Bancshares, Inc., had approximately $63 million in 
assets, $27 million in loans, and $58 million in deposits.

    On March 10, 1994, the Company completed affiliation with State First 
Financial Corporation through an exchange of 5,958,136 Company common shares 
for all outstanding shares of State First Financial Corporation, which had 
assets of approximately $725 million, loans of approximately $350 million, and 
deposits of approximately $650 million.  This transaction was accounted for as 
a pooling-of-interests, and accordingly, all prior period financial data has 
been restated.
<PAGE> 10-26

    On August 5, 1994, the Company acquired United American Bancshares, Inc., 
for $11.1 million.  United American Bancshares, Inc., had total assets of 
approximately $93 million, total loans of approximately $33 million, and total 
deposits of approximately $84 million.  This transaction was accounted for as 
a purchase, and accordingly, the results of operations were consolidated with 
those of the Company from the date of acquisition.  The assets and liabilities 
of United American Bancshares, Inc., were adjusted to fair value at the 
purchase date, resulting in an excess cost over fair value of $3.3 million.

    On September 15, 1994, the Company acquired Kilgore First Bancorp, Inc., 
for $14.8 million.  Kilgore First Bancorp, Inc., had approximately $133 
million in assets, $61 million in loans, and $122 million in deposits.  This 
transaction was accounted for as a purchase, and accordingly, the results of 
operations were consolidated with those of the Company from the date of 
acquisition.  The assets and liabilities of Kilgore First Bancorp, Inc., were 
adjusted to fair value at the purchase date, resulting in an excess cost over 
fair value of $4.1 million.

    On November 30, 1995, the Company acquired all the outstanding common 
stock of FDH Bancshares, Inc., in exchange for 1,416,675 Company common 
shares.  FDH Bancshares, Inc., had approximately $375 million in assets, $206 
million in loans, and $330 million in deposits.  This transaction was 
accounted for as a purchase, and accordingly, the results of operations were 
consolidated with those of the Company from the date of acquisition.  The 
assets and liabilities of FDH Bancshares, Inc., were adjusted to fair value at 
the purchase date, resulting in an excess cost over fair value of $14.7 
million.

    On November 30, 1995, the Company acquired all of the outstanding common 
stock of West-Ark Bancshares, Inc., Clarksville, Arkansas, in exchange for 
723,561 Company common shares.  This transaction was accounted for as a 
pooling-of-interests.  The results of West-Ark Bancshares, Inc., are included 
in the consolidated financial statements for 1995; however, prior period 
financial data has not been restated due to immateriality.  West-Ark 
Bancshares, Inc., had approximately $159 million in assets, $107 million in 
loans, and $146 million in deposits.

    On November 23, 1996, the Company acquired all of the outstanding common 
stock of Security National Bank, Nacogdoches, Texas, in exchange for 253,154 
Company common shares.  This transaction was accounted for as a pooling-of-
interests.  The results of Security National Bank are included in the 
consolidated financial statements for 1996; however, prior period financial 
data has not been restated due to immateriality.  Security National Bank, 
which merged into an existing affiliate of the Company, Stone Fort National 
Bank, Nacogdoches, Texas, had approximately $35 million in assets, $16 million 
in loans, and $31 million in deposits.

    On January 31, 1997, through a joint venture with Arvest Bank Croup of 
Bentonville, Arkansas, the Company purchased a 50% interest in Oklahoma 
National Bank of Duncan, Oklahoma, which has assets of $60 million, loans of 
$43 million, and deposits of $55 million.

    Three affiliations are currently pending, which reflect the Company's 
acquisition strategy of expanding existing markets as well as entering 
additional geographical areas.
<PAGE> 10-26

    On October 4, 1996, the Company announced that it had entered into an 
agreement to acquire W.B.T. Holding Company ("WBT") and its wholly owned 
subsidiary, United American Bank, in Memphis, Tennessee.  United American 
Bank, with assets of $273 million, loans of $180 million and deposits of $251 
million, will be merged into the Company's existing affiliate, First 
Commercial Bank, N.A., of Memphis.  The Company will issue approximately 1.3 
million shares of its common stock in exchange for all of the outstanding 
shares of WBT common stock, subject to adjustments for non-bank assets and 
liabilities of WBT.  The transaction is to be accounted for as a pooling-of-
interests and is expected to close in February 1997.

    On December 20, 1996, the Company entered into a definitive agreement to 
acquire Southwest Bancshares, Inc., of Jonesboro, Arkansas, ("Southwest") and 
its wholly owned subsidiaries: First Bank of Arkansas, Jonesboro; First Bank 
of Arkansas, Russellville; First Bank of Arkansas, Searcy; and First Bank of 
Arkansas, Wynne.  Total assets for Southwest are $820 million; loans are $606 
million; and deposits are $716 million.  The Company will issue approximately 
3.4 million shares of its common stock in exchange for all of the outstanding 
shares of Southwest common stock.  The transaction, which will be accounted 
for as a pooling-of-interests, is expected to close during the second quarter 
of 1997.

    On February 5, 1997, a definitive agreement was entered into whereby the 
Company will acquire First Central Corporation ("First Central") and its 
wholly owned subsidiary, First National Bank, Searcy, Arkansas, which has 
assets of $261 million, loans of $140 million and deposits of $229 million.  
the Company will issue 1.65 million shares of its stock in exchange for all of 
the shares of First Central common stock.  The transaction will be accounted 
for as a pooling-of-interests and is expected to close during the second 
quarter of 1997.

    The affiliations with Southwest and First Central will result in 
overlapping markets in Russellville and Searcy.  Banking regulations prohibit 
a banking organization from exceeding a specified share of a given market 
through acquisition.  The Company is working with regulatory agencies to 
determine the required level of divestiture in these markets.

    During 1997 the Company will continue  to evaluate potential affiliates on 
the basis of the quality of their markets and the ability to negotiate 
transactions without permanent earnings per share or book value dilution.
<PAGE> 10-26

==============================================================================
<TABLE>
<CAPTION>
Six-Year Financial Summary
(In Thousands Except for Per Share Data)                                                             Five-Year
                                                                                                      Compound
                                                                                                       Annual
                                                                                                       Growth
                                                      Year Ended December 31,                           Rate   
                              ---------------------------------------------------------------------- ----------
                                 1996        1995        1994        1993        1992        1991
                              ----------  ----------  ----------  ----------  ----------  ----------
 <S>                          <C>         <C>         <C>         <C>         <C>         <C>        <C>
 Interest income............. $  376,356  $  322,182  $  257,751  $  234,995  $  232,098  $  247,858      9%
 Interest expense............    159,148     137,632      98,306      90,421      98,690     128,802      4%
                              ----------  ----------  ----------  ----------  ----------  ----------
 Net interest income.........    217,208     184,550     159,445     144,574     133,408     119,056     13%
 Provision for possible loan
  and lease losses...........      7,452       3,059      (3,092)      4,416       8,941       9,992     (6%)
                              ----------  ----------  ----------  ----------  ----------  ----------
 Net interest income after
  provision for possible loan
  and lease losses...........    209,756     181,491     162,537     140,158     124,467     109,064     14%

 Other income................    103,529      73,988      68,652      58,957      51,182      46,056     18%
 Other expenses..............    207,940     170,306     156,875     135,191     118,882     108,530     14%
                              ----------  ----------  ----------  ----------  ----------  ----------
 Income before income taxes..    105,345      85,173      74,314      63,924      56,767      46,590     18%
 Income tax provision........     36,783      28,263      24,006      17,959      16,800      12,629     24%
                              ----------  ----------  ----------  ----------  ----------  ----------
 Net income.................. $   68,562  $   56,910  $   50,308  $   45,965  $   39,967  $   33,961     15%
                              ==========  ==========  ==========  ==========  ==========  ==========
 Earnings per common share... $     2.37  $     2.07  $     1.87  $     1.66  $     1.44  $     1.29     14%

 Earnings per common share,
  as originally reported.....       2.37        2.07        1.87        1.75        1.59        1.43     11%

 Cash dividends per share....       0.84        0.74        0.64        0.51        0.40        0.35     22%

 Year End Financial Position
  Total loans and leases..... $3,278,688  $3,215,562  $2,534,793  $2,191,190  $1,798,898  $1,725,957     14%
  Total assets...............  5,530,783   5,360,940   4,374,199   4,199,430   3,368,086   3,322,040     11%
  Total deposits.............  4,815,141   4,630,541   3,825,360   3,756,680   2,997,783   2,972,337     10%
  Long-term debt.............      6,097       7,170       8,243      20,389      23,287      28,625    (27%)
  Stockholders' equity.......    475,132     432,259     343,191     336,845     297,508     267,259     12%
</TABLE>
==============================================================================
<PAGE> 10-26

==============================================================================
<TABLE>
<CAPTION>
Analysis of Selected Financial Statistics
                                                                               For the Years Ended December 31,
                                                                               --------------------------------
                                                                                  1996       1995       1994   
                                                                               ---------- ---------- ----------
 <S>                                                                           <C>        <C>        <C>
 Profitability
  Net interest margin.........................................................      4.66%      4.53%      4.26%
  Efficiency ratio <F1>.......................................................     55.65%     60.42%     62.38%
  Return on average common stockholders' equity...............................     15.09%     15.02%     14.87%
  Return on average assets....................................................      1.30%      1.22%      1.19%
  Earnings per common share...................................................    $ 2.37     $ 2.07     $ 1.87
  Cash dividends paid.........................................................    $  .84     $  .74     $  .64
  Dividend payout ratio.......................................................     35.34%     35.77%     33.97%

 Capital Adequacy
  Total stockholders' equity to assets........................................      8.59%      8.06%      7.85%
  Leverage ratio..............................................................      8.07%      7.31%      7.50%
  Tier I risk-based capital ratio.............................................     11.44%     11.31%     12.56%
  Total risk-based capital ratio..............................................     12.24%     12.14%     13.33%

 Asset Quality
  Net charge-offs to average loans and leases.................................       .20%       .08%       .04%
  Allowance for possible loan and lease losses to total loans and leases......      1.60%      1.60%      1.79%
  Non-performing loans to total loans and leases..............................       .74%       .54%       .52%
  Non-performing assets to total loans and leases and other real estate.......       .62%       .42%       .51%
  Allowance for possible loan and lease losses to non-performing loans........    215.64%    294.42%    340.82%
  Allowance for possible loan and lease losses and other real estate losses
   to non-performing assets...................................................    259.57%    376.30%    347.35%

<FN>
<F1>  Excludes effect of non-recurring income and expenses and intangible amortization.
</FN>
</TABLE>
==============================================================================

Net Interest Income

    In this discussion, net interest income is presented on a fully tax-
equivalent basis.  This permits comparability of data through recognition of 
the tax savings realized on tax-exempt earnings.  Net interest income on a 
tax-equivalent basis was $220.9 million in 1996, versus $188.0 million in 1995 
and $163.1 million in 1994.  The $32.9 million increase in 1996 is due 
principally to the 1995 fourth quarter acquisition of FDH Bancshares, Inc., 
which was accounted for as a purchase, but also reflects increased volumes at 
other affiliate banks.  In addition, there were general repricings of the 
securities and loan portfolios: the average yield on the securities portfolio 
increased to 6.00% in 1996 from 5.80% in 1995; and the average yield on the 
loan portfolio increased to 8.98% from 8.82%.  The $25.0 million increase in 
1995 is due principally to the 1994 third quarter acquisitions of banks in 
Palestine and Kilgore, Texas, and to the 1995 fourth quarter acquisitions of 
FDH Bancshares, Inc., and West-Ark Bancshares, Inc.  In addition, there were 
general repricings of the securities and loan portfolios in excess of
<PAGE> 10-26

increases in liability costs: the average yield on the securities portfolio 
increased to 5.80% in 1995 from 5.11% in 1994; and the average yield on the 
loan portfolio increased to 8.82% from 7.98% in 1994.

    The Company's net interest spread increased from 3.78% for 1995 to 3.90% 
for 1996, while net interest margin increased from 4.53% for 1995 to 4.66% for 
1996.  Net interest spread represents the difference between the rates earned 
on assets and the rates paid on liabilities.  Net interest margin measures the 
net interest income earned as a percentage of earning assets.

    Net interest spread and net interest margin increased in 1996 over 1995 as 
a result of the securities and loan portfolios repricing combined with a 15.5% 
growth in average loans and leases.  The loan growth was due to internal 
growth, 6.9%, and acquisitions, 8.6%.  Net interest spread and net interest 
margin increased in 1995 over 1994 for similar reasons.

==============================================================================
<TABLE>
<CAPTION>
Analysis of Net Interest Income (FTE = Fully Tax-Equivalent)
(Dollars in Thousands)
                                                                            For the Years Ended December 31,
                                                                          ------------------------------------
                                                                             1996         1995         1994   
                                                                          ----------   ----------   ----------
 <S>                                                                      <C>          <C>          <C>
 Interest income......................................................... $  376,356   $  322,182   $  257,751
 Fully tax-equivalent adjustment.........................................      3,677        3,472        3,618
                                                                          ----------   ----------   ----------
 Interest income - FTE...................................................    380,033      325,654      261,369
 Interest expense........................................................    159,148      137,632       98,306
                                                                          ----------   ----------   ----------
 Net interest income - FTE............................................... $  220,885   $  188,022   $  163,063
                                                                          ==========   ==========   ==========
 Yield on earning assets - FTE............................................      8.01%        7.85%        6.82%
 Cost of interest bearing liabilities.....................................      4.11%        4.07%        3.18%
 Net interest spread - FTE................................................      3.90%        3.78%        3.64%
 Net interest margin - FTE................................................      4.66%        4.53%        4.26%
</TABLE>
==============================================================================
<PAGE> 10-26

==============================================================================
<TABLE>
<CAPTION>
Analysis of Changes in Net Revenue from Earning Assets
(Dollars in Thousands)
                                                        Change from 1995 to 1996     Change from 1994 to 1995
                                                       --------------------------   --------------------------
                                                          Increase (Decrease)          Increase (Decrease)
                                                       --------------------------   --------------------------
                                                                 Due to                       Due to
                                                        Due to   Yield/              Due to   Yield/
                                                        Volume    Cost    Total      Volume    Cost    Total
                                                       -------- -------- --------   -------- -------- --------
 <S>                                                   <C>      <C>      <C>        <C>      <C>      <C>
 Revenue from earning assets
  Short-term investments.............................. $  3,024 $   (667)$  2,357   $ (1.605)$  2.079 $    474
  Trading account securities..........................       19       12       31         (3)     (15)     (18)
  Investment securities...............................    6,031    2,443    8,474     (7,639)   9,801    2,162
  Loans and leases, net of unearned income............   38,985    4,532   43,517     42,166   19,501   61,667
                                                       -------- -------- --------   -------- -------- --------
 Change in revenue from earning assets................   48,059    6,320   54,379     32,919   31,366   64,285
                                                       -------- -------- --------   -------- -------- --------
 Expense for interest bearing liabilities
  Interest bearing transaction and savings accounts...    3,601      781    4,382       (235)   2,137    1,902
  Certificates of deposit $100,000 and over...........    5,619    3,598    9,217      2,716    2,934    5,650
  Other time deposits.................................   13,269   (3,165)  10,104      8,289   16,942   25,231
  Short-term borrowings...............................     (546)  (1,255)  (1,801)     5,222    1,228    6,450
  Long-term debt......................................     (177)    (209)    (386)       (12)     105       93
                                                       -------- -------- --------   -------- -------- --------
 Change in interest expense...........................   21,766     (250)  21,516     15,980   23,346   39,326
                                                       -------- -------- --------   -------- -------- --------
 Change in net revenue from earning assets............ $ 26,293 $  6,570 $ 32,863   $ 16,939 $  8,020 $ 24,959
                                                       ======== ======== ========   ======== ======== ========

<FN>
NOTE:  Interest income on tax-exempt securities, loans and leases is calculated on a tax-equivalent basis, 
using a federal marginal income tax rate of 35%, and is reduced for non-deductible carrying interest.  Loan 
balances include non-performing loans.  See Note 1 of Notes to Consolidated Financial Statements for a 
description of the income recognition policy for such loans.  Changes not solely due to volume or rate changes 
are allocated to rate.
</FN>
</TABLE>
==============================================================================
<PAGE> 10-26
==============================================================================
<TABLE>
<CAPTION>
Average Balances and Interest Rates
(Dollars in Thousands)                 1996                        1995                        1994
                            --------------------------- --------------------------- ---------------------------
                                        Tax Equiv. Int.             Tax Equiv. Int.             Tax Equiv. Int.
                                       ----------------            ----------------            ----------------
                             Average   Revenue/  Yield/  Average   Revenue/  Yield/  Average   Revenue/  Yield/
                             Balance   Expense   Cost    Balance   Expense   Cost    Balance   Expense   Cost
 ASSETS                     ---------- -------- ------- ---------- -------- ------- ---------- -------- -------
 <S>                        <C>        <C>      <C>     <C>        <C>      <C>     <C>        <C>      <C>
 EARNING ASSETS
 Short-term investments.... $  132,035 $  7,023   5.32% $   75,174 $  4,666   6.21% $  101,037 $  4,192   4.15%
 Trading account securities        540       35   6.48         245        4   1.63         431       22   5.10
 Investment securities 
 - taxable.................  1,202,621   70,244   5.84   1,125,656   62,907   5.59   1,264,305   60,582   4.79
 - non-taxable.............    170,235   12,071   7.09     146,613   10,934   7.46     139,579   11,097   7.95
 Loans and leases, net of 
  unearned income..........  3,237,040  290,660   8.98   2,802,874  247,143   8.82   2,234,668  185,476   7.98
                            ---------- --------         ---------- --------         ---------- --------
  Total earning assets.....  4,742,471  380,033   8.01   4,150,562  325,654   7.85   3.830,020  261,369   6.82
                            ---------- --------         ---------- --------         ---------- --------
 Allowance for possible 
  loan and lease losses....    (52,057)                    (47,263)                    (49,020)
 NON-EARNING ASSETS
  Cash and due from banks..    265,349                     307,431                     249,804
  Bank premises and equip..    105,953                      93,663                      81,814
  Other real estate owned..      2,239                       2,542                       6,634
  Other assets.............    219,570                     145,433                     116,334
                            ----------                  ----------                  ----------
 Total assets.............. $5,283,525                  $4,652,368                  $4,235,586
                            ==========                  ==========                  ==========
 LIABILITIES AND STOCKHOLDERS' EQUITY
 INTEREST BEARING LIABILITIES
 Interest bearing transaction
  and savings accounts..... $1,618,249   41,020   2.53  $1.476,193   36,638   2.48  $1.485,680   34,736   2.34
 Certificates of deposit 
  $100,000 and over........    505,953   26,571   5.25     398,962   17,354   4.35     336,528   11,704   3.48
 Other time deposits.......  1,574,657   82,404   5.23   1,321,091   72,300   5.47   1,169,626   47,069   4.02
 Short-term borrowings.....    166,659    8,743   5.25     177,067   10,544   5.95      89,381    4,094   4.58
 Long-term debt............      6,429      410   6.38       9,197      796   8.65       9,332      703   7.53
                            ---------- --------         ---------- --------         ---------- --------
 Total int bearing liab ...  3,871,947  159,148   4.11   3,382,510  137,632   4.07   3,090,547   98,306   3.18
                           ---------- --------         ---------- --------         ---------- --------
 NON-INTEREST BEARING LIABILITIES
 Non-interest bearing 
  transaction accounts.....    900,355                     848,662                     772,060
 Other liabilities.........     56,924                      42,389                      33,735
                            ----------                  ----------                  ----------
  Total liabilities........  4,829,226                   4,273,561                   3,896,342
 Preferred stock...........          -                           -                       1,687
 Common stockholders' equity   454,299                     378,807                     337,557
                            ----------                  ----------                  ----------
 Total liabilities and 
 stockholders' equity...... $5,283,525                  $4,652,368                  $4,235,586
 Net revenue from           ==========                  ==========                  ==========
  earning assets...........            $220,885                    $188,022                    $163,063
 Net yield on earning assets                      4.66%                       4.53%                       4.26%
<PAGE> 10-26

<FN>
NOTE:  Interest income on tax-exempt securities, loans and leases is calculated on a tax-equivalent basis, 
using a federal marginal income tax rate of 35%, and is reduced for non-deductible carrying interest.  Loan 
balances include non-accrual loans.  See Note 1 of Notes to Consolidated Financial Statements for a description 
of the income recognition policy.
</FN>
</TABLE>
==============================================================================

    The Arkansas usury law, which applies to all of the Company's Arkansas 
affiliates, currently limits interest rates on all credit classifications, 
except single-family mortgages, to the St. Louis Federal Reserve Bank's 
discount rate plus 5%.  There is a rate cap of the lesser of 17% or the 
discount rate plus 5% on consumer credit under the current law.

    Management has and will continue to monitor the interest sensitivity 
position of the Company, so as to strategically balance assets and liabilities 
to minimize the effects associated with changes in the interest rate 
environment on the net interest margin and interest spread of the Company.

    One process for achieving this balance is to manage the adjusted interest 
sensitivity gap of the Company.  Due to the large amount of loans subject to 
Arkansas usury statutes and the effect those statutes have on loan terms and 
structures, the Company has traditionally focused on its six month adjusted 
gap ratio with the target range being .90 to 1.10.  The Company may move 
within this range to optimize the tradeoff between the competitive market 
level of loan rates and the statutory cap rates which would be applicable to 
both fixed and variable rate loans.

    The Company has traditionally used net interest revenue simulation 
modeling with a variety of interest rate scenarios for certain of its large 
affiliate banks as well as the entire Company.  During 1996, the Company also 
began to monitor economic valuation risk by measuring the sensitivity of the 
economic value of the Company's equity.

    The data used in the interest rate sensitivity analysis table is based on 
repricing terms, rather than actual contractual maturities.  As the table 
indicates, the Company is liability sensitive on a cumulative basis at both 
the six month and one year time periods.  However, this static gap analysis 
considers only the dollar volumes of assets and liabilities to be repriced, 
while changes in net interest income are determined not only by the volumes 
being repriced, but also by the rates at which the assets and liabilities are 
repriced.  For example, while savings, NOW, and money market accounts are 
shown as being immediately repriceable, the rates paid on these accounts tend 
to have a relatively low sensitivity to market interest rates.  Adjusting 
these and other balance sheet categories for their estimated sensitivity 
results in the Company having a ratio of cumulative rate sensitive assets to 
cumulative rate sensitive liabilities of .96 at the six month period and 1.04 
at the one year time period.  The Company also reviews the gap position for 
periods in excess of one year, comparing certain longer term fixed rate assets 
to certain liabilities and equity.
<PAGE> 10-26

==============================================================================
<TABLE>
<CAPTION>
                                                         Interest Rate Sensitivity Period                      
(Dollars in thousands)             ----------------------------------------------------------------------------
                                     0 - 30    31 - 90    91 - 180  181 - 365    1 to 5     Over 5
                                      Days       Days       Days       Days      Years      Years      Total   
                                   ---------- ---------- ---------- ---------- ---------- ---------- ----------
 <S>                               <C>        <C>        <C>        <C>        <C>        <C>        <C>       
 Earning assets:

 Short-term investments........... $  258,351 $       -- $       -- $       -- $       -- $       -- $  258,351
 Trading account securities.......        196         --         --         --         --         --        196
 Taxable investment securities....    163,277    108,503    137,836    122,143    627,576     26,271  1,185,606
 Tax-exempt investment securities.      2,836     10,887      5,043     11,317     92,376     67,344    189,803
 Loans and leases.................    733,491    240,438    345,823    520,573  1,145,569    292,794  3,278,688
                                   ---------- ---------- ---------- ---------- ---------- ---------- ----------
 Total earning assets.............  1,158,151    359,828    488,702    654,033  1,865,521    386,409  4,912,644

 Interest bearing liabilities:

 Savings and NOW accounts.........  1,150,532         --         --         --         --         --  1,150,532
 Money market accounts............    644,910         --         --         --         --         --    644,910
 Other time deposits..............    292,043    462,492    474,285    442,866    389,597      7,026  2,068,309
 Short-term borrowings............    177,453         --         --         --         --         --    177,453
 Long-term debt...................         --         --      1,071          2          7      5,017      6,097
                    ...            ---------- ---------- ---------- ---------- ---------- ---------- ----------
 Total interest bearing
  liabilities....................   2,264,938    462,492    475,356    442,868    389,604     12,043  4,047,301

 Interest rate
  sensitivity gap................  (1,106,787)  (102,664)    13,346    211,165  1,475,917    374,366

 Cumulative interest rate
  sensitivity gap................  (1,106,787)(1,209,451) (1,196,105  (984,940)   490,977    865,343

 Cumulative rate sensitive assets
  to rate sensitive liabilities..       51.1%      55.7%      62.7%      73.0%     112.2%     121.4%

 Cumulative gap as a percentage
  of earning assets..............      (22.5%)    (24.6%)    (24.3%)    (20.0%)     10.0%      17.6%
</TABLE>
==============================================================================

Non-Interest Income

    In addition to the net interest income increases, the Company has 
continued to expand and develop its sources of non-interest income.  The 
primary sources of sustainable non-interest income are trust services, service 
charges on deposit accounts, mortgage services and bond trading activities.  
During 1996, non-interest income increased 39.9% from $74.0 million for 1995 
to $103.5 million.  Excluding the other real estate and investment securities 
gains and losses in 1996 and 1995, non-interest income increased $29.1 
million, or 38.9%.  the primary contributors to this increase were the bank 
acquisitions in 1995 and 1996, an increased mortgage servicing portfolio, 
service charges from the 1995 purchase of consumer credit card loan 
participations and increased activity from the Company's trust and broker-
<PAGE> 10-26

-dealer operations.  The Company's mortgage banking subsidiary continued its  
strong performance during 1996, with an increase in servicing fees of $19.0 
million due to several acquisitions of loan servicing rights during 1995 and 
1996 and the adoption of Statement of Financial Accounting Standards No. 122 
"Accounting for Mortgage Servicing Rights - an Amendment to FAS65" on January 
1, 1996.  In September 1995, First Commercial Mortgage Company purchased from 
the former National Home Mortgage Company in San Diego, California, loan 
servicing rights on approximately 60,000 mortgages exceeding $5 billion. In 
addition, purchases of servicing rights from the former Brumbaugh and Fulton 
Mortgage Company of Tulsa, Oklahoma, Kislak Mortgage of Miami, Florida, and 
Bailey Mortgage Company of Jackson, Mississippi, were consummated in April 
1995, October 1995, and January 1996, respectively.  The total servicing 
portfolio at December 31, 1996, was $7.3 billion with an unamortized cost of 
mortgage servicing rights of $45.8 million, compared to December 31, 1995, 
levels of $7.6 billion and $55.9 million, respectively.

     During 1995, non-interest income increased 7.8% to $74.0 million from 
$68.7 million for 1994.  Excluding the other real estate and investment 
securities gains and losses in 1995 and 1994, non-interest income increased 
$10.7 million, or 16.6%.  The primary contributors to this increase were the 
bank acquisitions in late 1994 and late 1995, an increased mortgage servicing 
portfolio due to loan servicing rights acquisitions mentioned previously, and 
service charges from the 1995 purchase of consumer credit card loan 
participations.  For a detailed analysis of the dollar and percent changes in 
non-interest income, see the accompanying table.

==============================================================================
<TABLE>
<CAPTION>
Net Interest Income                       For the Years
(Dollars in Thousands)                  Ended December 31,                 1996                  1995
                                  ------------------------------       Change from           Change from
                                    1996       1995       1994             1995                  1994
                                  --------   --------   --------   -------------------   -------------------
 <S>                              <C>        <C>        <C>        <C>       <C>         <C>       <C>      
 Trust department income......... $ 12,286   $ 11,424   $ 10,904   $    862      7.55%   $    520      4.77%
 Mortgage servicing fee income...   41,331     22,312     16,340     19,019     85.24       5,972     36.55 
 Broker-dealer operations income.    4,120      2,982      1,727      1,138     38.16       1,255     72.67
 Service charges on deposits.....   25,922     22,192     20,131      3,730     16.81       2,061     10.24
 Other service charges and fees..   12,505      9,149      7,964      3,356     36.68       1,185     14.88
 Investment securities gains
   (losses), net.................      (37)      (440)       139        403     91.59        (579)  (416.55)
 Other real estate gains
   (losses), net.................     (243)      (330)     4,413         87     26.36      (4,743)  (107.48)
 Other income....................    7,645      6,699      7,034        946     14.12        (335)    (4.76)
                                  --------   --------   --------   --------              --------
 Total non-interest income....... $103,529   $ 73,988   $ 68,652   $ 29,541     39.93%   $  5,336      7.77%
                                  ========   ========   ========   ========              ========
</TABLE>
==============================================================================
<PAGE> 10-26

    First Commercial Mortgage Company's operations are affected by interest 
rate fluctuations and market factors.  Lower long-term interest rates normally 
increase new mortgage loan production volume, which in turn increases fee 
income and  net interest income as a result of the higher average volume of 
mortgages held for sale.  Lower long-term rates also increase prepayment 
speeds of mortgages on which mortgage servicing rights (MSRs) are currently 
held, which lower yields realized on the Company's investment in MSRs. 
Increased prepayment speeds also accelerate paid in full (PIF) interest 
expense owed to certain investors.  PIF interest is the partial monthly 
interest in the month of payoff that is not payable by the mortgagor, but is 
receivable by the mortgage security holder.

    Higher long-term interest rates normally decrease the general volume of 
new mortgage originations, decreasing the volume of mortgages held for sale.  
These conditions result in reduced fee income and reduced net interest income.  
However, the Company's average net yield as a percentage of the balance held 
may increase if short-term rates do not change by a corresponding degree.  
Higher long-term rates also decrease the prepayment speed of mortgages on 
which MSRs are currently held, which in turn would increase the yield on the 
Company's investment in MSRs.  Decreased prepayment speeds will also decrease 
PIF interest expense due to loans which pay off.

    The value of the Company's loan servicing portfolio may be adversely 
affected if mortgage interest rates decline and loan prepayments increase.  
Periods of accelerated prepayments may result in future declines of income 
generated from the Company's loan servicing portfolio.  Conversely, if 
mortgage interest rates increase, the value of the Company's loan servicing 
portfolio may be positively affected.

Non-Interest Expense

    Non-interest expenses consist of salaries and benefits, occupancy, 
equipment and other expenses such as legal fees, postage, etc., necessary for 
the operation of the Company.  Management is committed to controlling and even 
reducing the level of non-interest expenses through improved efficiency and 
consolidation of certain activities to achieve economies of scale without 
sacrificing quality service for our customers.

    Non-interest expense increased $37.6 million in 1996, of which $7.8 
million is a result of the bank acquisitions in late 1995 and in 1996.  The 
primary contributors to the remaining increase were the amortization of 
mortgage servicing rights from First Commercial Mortgage Company's expansion 
of mortgage loan servicing activities, the costs associated with the consumer 
credit card loan participations purchased in late 1995, the expenses 
associated with the Company's investment in new technology , and non-recurring  
expense accruals relating to data processing conversions and legal expenses.  
These increases were offset by a substantial reduction in FDIC premiums due to 
the insurance fund reaching its target level.
<PAGE> 10-26

    Non-interest expense increased $13.4 million in 1995.  Excluding the 1994 
expenses associated with the settlement of the 1994 class action lawsuit by 
First Commercial Trust Company, non-interest expense increased $19.7 million.  
The primary contributors to this increase were costs associated with the 
consumer credit card loan participations purchased in late 1995, and an 
increase in amortization expense in connection with large acquisitions of 
mortgage servicing rights in 1995.  In addition, the bank acquisitions in late 
1994 and late 1995 and non-recurring expense accruals relating to data 
processing conversions, legal expenses and charitable contributions caused 
non-interest expenses to increase.

    An important tool in determining a bank's effectiveness in managing non-
interest expenses is the efficiency ratio, which is calculated by dividing 
non-interest expense by the sum of net interest margin on a tax-equivalent 
basis and non-interest income, excluding investment securities and other real 
estate gains and losses.  The Company's ratio improved from 60.42% in 1995 to 
55.65% in 1996, below its goal of 57%.  The Company, in calculating its 
efficiency ratio has excluded the effect of the non-recurring income and 
expenses noted previously, as well as the effect of the Company's amortization 
of intangible assets.  The decrease in the efficiency ratio shows the 
Company's commitment to controlling non-interest expense and its progress 
toward the new long-term goal set by management of a 54% efficiency ratio.  
For a detailed analysis of the dollar and percent changes in non-interest 
expenses, see the accompanying table.

==============================================================================
<TABLE>
<CAPTION>
Non-Interest Expenses                     For the Years
(Dollars in Thousands)                  Ended December 31,                1996                  1995
                                  ------------------------------       Change from           Change from
                                    1996       1995       1994            1995                  1994
                                  --------   --------   --------   -------------------   -------------------
 <S>                              <C>        <C>        <C>        <C>       <C>         <C>       <C>
 Salaries, wages and employee
  benefits....................... $ 95,531   $ 79,878   $ 74,981   $ 15,653     19.60%   $  4,897      6.53%
 Net occupancy...................   12,441     11,016      9,947      1,425     12.94       1,069     10.75
 Equipment.......................   12,947     10,700      9,149      2,247     21.00       1,551     16.95
 FDIC insurance..................    1,585      7,371      8,639     (5,786)   (78.50)     (1,268)   (14.68)
 Amortization of mortgage
  servicing rights...............   19,515      7,634      5,541     11,881    155.63       2,093     37.77
 First Commercial Trust Company
  lawsuit settlement.............        -          -          -          -         -      (6,257)        -
 Other expenses..................   65,921     53,707     42,361     12,214     22.74      11,346     26.78
                                  --------   --------   --------   --------              --------
 Total non-interest expenses..... $207,940   $170,306   $156,875   $ 37,634     22.10%   $ 13,431      8.56%
                                  ========   ========   ========   ========              ========
</TABLE>
==============================================================================
<PAGE> 10-26

Income Taxes

    The effective income tax rate differs from the statutory rate primarily 
because of tax-exempt income from loans, leases and municipal securities.  The 
effective tax rate was 34.9% for 1996, 33.2% for 1995, and 32.3% for 1994.  
The increase in 1996 and 1995 is due primarily to a decrease in tax-exempt 
investment income as a percent of total net income.  For more information, see 
Note 11 of Notes to Consolidated Financial Statements.

Loan and Lease Portfolio

    At December 31, 1996, the Company's loan and lease portfolio, net of 
unearned income, reached $3.3 billion, an increase of 2% from year-end 1995's 
balance of $3.2 billion.  Excluding the 1996 bank acquisition, which loan 
balances are not reflected in 1995, and the decrease of First Commercial 
Mortgage Company's loans held for resale, the loan and lease portfolio 
increased $150 million.  This 5% internal growth in the loan and lease 
portfolio occurred primarily in the commercial and commercial real estate 
sectors.  The Company has continued its policy of conservative lending, 
thereby avoiding significant risk areas, such as out of territory lending and 
highly leveraged transactions.  This has been and will remain the philosophy 
of Company management.

    In keeping with this philosophy, the Company has no foreign loans, no 
loans outstanding to borrowers engaged in highly leveraged transactions, and 
no concentrations of credit to borrowers in any one industry.  A concentration 
generally exists when more than 10% of total loans are outstanding to 
borrowers in the same industry.
<PAGE> 10-26

==============================================================================
<TABLE>
<CAPTION>
Loans and Leases by Type and Non-Performing Status
(Dollars in Thousands)                                                    December 31,                        
                                                 --------------------------------------------------------------
                                                    1996         1995         1994         1993         1992
                                                 ----------   ----------   ----------   ----------   ----------
 <S>                                             <C>          <C>          <C>          <C>          <C>
 Types of loans and leases
  Commercial, financial and agricultural........ $  614,051   $  602,348   $  488,399   $  448,282   $  363,462
  Real estate - construction....................    178,369      140,285      104,259       78,552       64,140
              - 1-4 family......................    927,957      977,024      725,646      655,224      586,226
              - other...........................    736,688      687,849      518,918      453,870      341,810
  Loans for purchasing or carrying securities...      9,497       11,568        9,304       11,277        9,930
  Consumer......................................    801,357      806,945      686,650      542,560      445,092
  Direct lease financing........................     38,914       32,196       30,689       21,981       15,516
  Other.........................................     15,066        9,414       16,793       16,367        8,961
                                                 ----------   ----------   ----------   ----------   ----------
    Total loans and leases...................... $3,321,899   $3,267,629   $2,580,658   $2,228,113   $1,835,137
                                                 ==========   ==========   ==========   ==========   ==========
 Non-performing loans
  Impaired loans................................ $    1,280   $      739   $        -   $        -   $        _
  Other non-accrual loans.......................     14,350        9,610        9,522       11,635       11,635
  Loans past due 90 days or more and
   still accruing...............................      7,906        6,919        3,391        3,544        3,216
  Restructured loans............................        845          170          386          520          709
                                                 ----------   ----------   ----------   ----------   ----------
    Total non-performing loans.................. $   24,381   $   17,438   $   13,299   $   15,699   $   15,560
                                                 ==========   ==========   ==========   ==========   ==========

<FN>
NOTES:
1.  The total interest income that would have been recorded on non-accrual loans if the loans had been current
    in accordance with their terms is $884,386, $872,413 and $1,026,899 for 1995, 1994 and 1993, respectively.
    Interest income actually received on these loans is immaterial.
2.  Loans are placed on non-accrual status when doubt as to collectibility of interest exists. See Note 1 of
    Notes to Consolidated Financial Statements for a description of the income recognition policy for such
    loans.
3.  Presently there are no significant amounts of loans where serious doubts exist as to the ability of the
    borrowers to comply with the current loan payment terms which are not included in the non-performing
    categories as reflected above. Additionally, no concentrations of loans exceeding 10% of total loans
    currently exist which are required to be disclosed as a separate category of loans above.
</FN>
</TABLE>
==============================================================================
<PAGE> 10-26
==============================================================================
<TABLE>
<CAPTION>
Maturity and Interest Rate Sensitivity of Loans
(Dollars in Thousands)                                             Loans at December 31, 1996, maturing in:
                                                              -------------------------------------------------
                                                                            Over One
                                                               One Year     Through        Over
                                                               or Less     Five Years   Five Years     Total   
                                                              ----------   ----------   ----------   ----------
 <S>                                                          <C>          <C>          <C>          <C>
 Commercial, financial and agricultural...................... $  361,720   $  214,207   $   38,124   $  614,051
 Real estate - construction..................................     92,668       68,863       16,838      178,369
                                                              ----------   ----------   ----------   ----------
 Total....................................................... $  454,388   $  283,070   $   54,962   $  792,420
                                                              ==========   ==========   ==========   ==========
 Predetermined rates......................................... $  291,074   $  192,188   $   27,549   $  510,811
 Variable rates..............................................    163,314       90,882       27,413      281,609
</TABLE>
==============================================================================

    The business loan portfolio, totaling $614.1 million and approximately 18% 
of total loans at year end, consists of commercial, financial and agricultural 
loans and is comprised primarily of loans to customers in the regional trade 
area of the bank subsidiaries in Arkansas, East Texas, Northwest Louisiana and 
Memphis, Tennessee.  The bank subsidiaries generally do not participate in 
credits of large, publicly traded companies unless operations are maintained 
in the local communities.  The portfolio is diversified from an industry 
standpoint and includes businesses engaged in manufacturing, wholesale, 
retail, agri-business, insurance, financial services and other service 
businesses.  Emphasis is upon middle-market and small businesses with known 
local management and financial stability.  Continued growth in business loans 
will be based upon strong solicitation efforts in a highly competitive market 
environment for quality loans.  Asset quality is, in part, a function of 
management's consistent application and conservative underwriting standards.  
Risks associated with business loans such as financial performance, 
stability/longevity, loan structure, collateral and economic vulnerability, 
although not all inclusive, are considered in the underwriting process and 
loan monitoring.

    The portfolio of real estate-construction loans amounted to $178.4 million 
and approximately 5% of total loans at December 31, 1996.  Management 
continues to maintain relatively low exposure in this category, being very 
conscious of the potential deterioration in market values of collateral for 
these types of loans.  The portfolio consists of residential construction, 
commercial construction, and land development loans, predominantly in the 
local markets of the Company's banking subsidiaries.  Commercial construction 
loans are for small and medium-sized office buildings, manufacturing and 
warehousing facilities, strip shopping centers, apartment complexes and other 
commercial properties.  Exposure to larger speculative office and rental space 
is minimal.  Residential construction and land development loans are primarily 
located in the state of Arkansas and East Texas.  Management considers the 
risk associated with real estate loans such as cash flows, interest rate 
changes, project completion and lease up, collateral, loan structure, 
regulatory and tax issues, financial structure of the borrower and financial 
stability and longevity of the borrower in the underwriting process.
<PAGE> 10-26

    The mortgage loans in the real estate-mortgage category are extended, 
predominately, for owner-occupied residential properties.  At December 31, 
1996, there were $1.7 billion in loans outstanding, or 50% of total loans. 
Historically, the underwriting terms for real estate-mortgage loans have 
generally limited the borrowing availability such that an outstanding loan to 
a borrower would not exceed a percentage of the appraised value of the real 
estate.  These percentages vary according to the type of real estate securing 
the mortgage loan and range from a low of 65% on mortgage loans secured by 
undeveloped land, to 80% for home equity loans, up to a high of 85% on 1-4 
family residential mortgage loans.  The credit quality or real estate-mortgage 
loans at December 31, 1996, is considered to be above average.

    The consumer loan portfolio, totaling $801.4 million or 24% of total 
loans, consists of both secured and unsecured loans to individuals for various 
personal reasons such as automobile financing, home improvements, recreational 
and educational purposes.  Current delinquency ratios have increased over 
unsustainably low levels experienced in previous years.  However, management 
does not anticipate current ratios to result in significant changes in loss 
trends.

Loan and Lease Risk Management

    The Company, in keeping with its focus on goals of strength, profitability 
and growth, in that order of priority, manages and controls the risk in the 
loan and lease portfolio through various strategies.  The Asset Quality 
Committee, an independent committee of the Company's Board of Directors, 
actively reviews and approves overall corporate loan policies and procedures 
and monitors asset quality trends and concentrations of credit by loan size 
and industry.  A corporate "in-house lending limit" has been set to reduce the 
risk in the event that a borrower fails to perform with any exception 
requiring approval at the corporate level.  The in-house lending limit 
represents only 29% of the combined corporate legal lending limit.  The 
Company has only one credit facility that exceeds the in-house limit at 
December 31, 1996, which represents 33% of the combined corporate legal 
lending limit.  Loans and leases are also monitored for loan quality through 
risk ratings as defined in the Company's credit policy.

    During 1996, Federal and State regulatory agencies completed asset quality 
examinations at all of the Company's subsidiary banks.  The Company's level 
and classification of potential problem loans identified as part of 
management's routine internal risk rating system was not altered significantly 
as a result of this regulatory examination process.

  The Asset Quality Committee has established various lending standards such 
as in-house lending limits, concentrations of credit, collateral requirements, 
loan to value guidelines, exceptions to policies, etc., and monitors each 
affiliate bank as to their performance to these standards.  An asset quality 
index is also used.  This index has seven key ratios of even weight that are 
monitored for each affiliate bank to determine their composite grade.  The 
composite grade is also used by the Company's Loan Review Division to assist 
in establishing the scope and frequency of reviews.

    The Loan Review Division is an independent function of the Asset Quality 
Committee.  Loan Review's function complements and reinforces the risk 
identification and assessment of our lenders, provides the Company with an 
early warning identification system of deteriorating assets, reviews for 
adherence to credit policies and procedures, and provides the Committee and
<PAGE> 10-26

management with reports regarding the overall quality of the loan portfolio 
and other bank assets with credit risk.

Asset Quality

    Management's on-going review of the loan portfolio results in the transfer 
of loans to non-accrual status when doubt as to collectibility of principal or 
interest exists under the original terms.  In addition, the accrual of income 
is discontinued if, in the opinion of management, the borrower will be unable 
to meet future contractual obligations.  Loans may be placed on non-accrual 
status even though the presence of collateral may be sufficient to provide for 
ultimate repayment.  During the first quarter of 1995, the Company adopted 
Statement of Financial Accounting Standard No. 114 ("Statement 114"), 
"Accounting by Creditors for Impairment of a Loan" as amended by Statement of 
Financial Accounting Standard No. 118 ("Statement 118"), "Accounting by 
Creditors for Impairment of a Loan - Income Recognition and Disclosure."  Due 
to the Company's existing stringent loan classification policies, adoption of 
Statement 114 and Statement 118 has had no material impact on the Company's 
results of operations.

    As can be seen in the accompanying table entitled Asset Quality, net 
charge-offs were .20% of average loans and leases in 1996 compared to .08% in 
1995 and .04% in 1994.  The relatively low levels of net charge-offs in 1996, 
1995 and 1994 reflects the favorable asset quality that the Company has 
experienced from the conservative approach applied to its lending policies and 
the generally positive economic environment in the Company's markets.

==============================================================================
<TABLE>
<CAPTION>
Asset Quality                                                     For the Years Ended December 31,            
                                                     ----------------------------------------------------------
                                                        1996        1995        1994        1993        1992
                                                     ----------  ----------  ----------  ----------  ----------
 <S>                                                 <C>         <C>         <C>         <C>         <C>
 Net charge-offs to average loans and leases........       .20%        .08%        .04%        .16%        .52%
 Allowance for possible loan and lease 
  losses to total loans and leases..................      1.60%       1.60%       1.79%       2.19%       2.15%
 Non-performing loans to total loans
  and leases........................................       .74%        .54%        .52%        .72%        .86%
</TABLE>
==============================================================================
<PAGE> 10-26

Provision and Allowance for Possible Loan and Lease Losses

    The allowance for loan and lease losses is the amount deemed by management 
to be adequate to provide for possible losses on loans and leases that may 
become uncollectible.  Reviews of general loss experience and the performance 
of specific credits are conducted in determining reserve adequacy and required 
provision expense.

    The principal areas of risk are in the general real estate loan portion of 
the portfolio, and accordingly, this area has the largest balance of the 
reserve allocated to it.  Management attempts to control these risks by 
maintaining a diverse portfolio with no significant concentrations and through 
an aggressive real estate writedown policy.  Also, the Company has only 32 
loan relationships with aggregate outstanding balances of $5 million or 
greater, which further mitigates the loan loss risk.

    A key indicator of the adequacy of the allowance for possible loan and 
lease losses is the ratio of the allowance to non-performing loans.  The 
Company's ratio has been at or above 100% for the past seven years.  At 
December 31, 1996, the Company's ratio was 215.64%.  This means that for every 
dollar of non-performing loans (impaired loans, other non-accrual loans, loans 
90 days or more past due, and renegotiated loans), $2.16 is set aside in the 
Company's reserve to cover possible losses.  The ratio at December 31, 1996, 
represents a decrease from the December 31, 1995, ratio of 294.42%.

    Another indication of reserve adequacy is the allowance for possible loan 
and lease losses and other real estate losses to non-performing assets 
(defined as impaired loans, other non-accrual loans, renegotiated debt, 
repossessed assets, and other real estate owned).  At December 31, 1996, this 
ratio was 259.57%, down from 376.30% at December 31, 1995, indicating that the 
Company has $2.60 set aside in reserves for every dollar of non-performing 
assets.  Although both of the reserve adequacy ratios have decreased from the 
high levels experienced in previous years, they continue to reflect the 
conservative approach the Company has taken in regard to building reserves for 
possible future losses.

    As of December 31, 1996, the allowance for loan and lease losses equaled 
$52.6 million or 1.60% of total loans and leases.  Comparatively, the 
allowance for loan and lease losses amounted to $51.3 million or 1.60% of 
total loans and leases at December 31, 1995.  The provision for possible loan 
and lease losses was $7.5 million in 1996, as compared to a $3.1 million in 
1995, and a negative $3.1 million in 1994.

    The 1994 provision included a negative $4.1 million recorded in fourth 
quarter which resulted from the following: 1) continuing improvement of asset 
quality during 1994 as reflected in the non-performing loan ratios; 2) 
regulatory guidance to review each affiliate bank's methodology for general 
and historical allocations for consistency within the Company; and 3) internal 
analyses of reserves that were completed in the fourth quarter.
<PAGE> 10-26

==============================================================================
<TABLE>
<CAPTION>
Allocation of Allowance for Possible Loan and Lease Losses
(Dollars in Thousands)                                                     December 31,                        
                                                 --------------------------------------------------------------
                                                    1996         1995         1994         1993         1992
                                                 ----------   ----------   ----------   ----------   ----------
 <S>                                             <C>          <C>          <C>          <C>          <C>
 Commercial, financial and agricultural......... $   10,607   $   10,682   $   10,418   $   12,109   $    9,668
 Real estate....................................     17,419       18,465       15,869       17,588       11,032
 Consumer.......................................      9,462        7,766        5,715        6,215        5,276
 Other..........................................        616          543          801          698        1,825
 General risk...................................     14,471       13,885       12,522       11,470       10,911
                                                 ----------   ----------   ----------   ----------   ----------
 Total allowance for possible
 loan and lease losses.......................... $   52,575   $   51,341   $   45,325   $   48,080   $   38,712
                                                 ==========   ==========   ==========   ==========   ==========
</TABLE>
==============================================================================

==============================================================================
<TABLE>
<CAPTION>
Percentage Distribution of Allowance Allocation
and Categories of Loans as a Percent of Loans
                                                               December 31,                                   
                      -----------------------------------------------------------------------------------------
                            1996              1995              1994              1993              1992
                      ----------------- ----------------- ----------------- ----------------- -----------------
                      Allowance  Loans  Allowance  Loans  Allowance  Loans  Allowance  Loans  Allowance  Loans
                      --------- ------- --------- ------- --------- ------- --------- ------- --------- -------
 <S>                  <C>       <C>     <C>       <C>     <C>       <C>     <C>       <C>     <C>       <C>
 Commercial, financial
  and agricultural....    20.2%   18.5%     20.8%   18.4%     23.0%   18.9%     25.2%   20.1%     25.0%   19.8% 
 Real estate..........    33.1    55.5      36.0    55.2      35.0    52.3      36.6    53.3      28.5    54.1
 Consumer.............    18.0    24.1      15.1    24.7      12.6    26.6      12.9    24.4      13.6    24.2
 Other................     1.2     1.9       1.1     1.7       1.8     2.2       1.5     2.2       4.7     1.9
 General risk.........    27.5       -      27.0       -      27.6       -      23.8       -      28.2       -
                      --------- ------- --------- ------- --------- ------- --------- ------- --------- ------
 Total................   100.0%  100.0%    100.0%  100.0%    100.0%  100.0%    100.0%  100.0%    100.0%  100.0%
                      ========= ======= ========= ======= ========= ======= ========= ======= ========= =======
</TABLE>
==============================================================================
<PAGE> 10-26

==============================================================================
<TABLE>
<CAPTION>
Summary of Loan and Lease Loss Experience
(Dollars in Thousands)                                                    December 31,                        
                                                 --------------------------------------------------------------
                                                    1996         1995         1994         1993         1992
                                                 ----------   ----------   ----------   ----------   ----------
 <S>                                             <C>          <C>          <C>          <C>          <C>
 Beginning balance of allowance for possible
  loan and lease losses......................... $   51,341   $   45,325   $   48,080   $   38,712   $   38,822
   Loans and leases charged off:
    Commercial, financial and agricultural......      1,318          905          710        2,042        2,761
    Real estate - construction..................         30        1,068           11           39           43
    Real estate - mortgage......................      1,340          663          820        2,287        5,978
    Consumer....................................      7,012        3,322        2,604        2,411        2,874
    Other.......................................          2           64           11          129           81
                                                 ----------   ----------   ----------   ----------   ----------
 Total charged off..............................      9,702        6,022        4,156        6,908       11,737
                                                 ----------   ----------   ----------   ----------   ----------
  Recoveries of loans and leases 
   previously charged off:
    Commercial, financial and agricultural......      1,021        2,060        1,501        2,106        1,640
    Real estate - construction..................         34          403           73           52           23
    Real estate - mortgage......................        635          385          658          886          490
    Consumer....................................      1,552        1,034          861          677          519
    Other.......................................        105           31           80           26           14
                                                 ----------   ----------   ----------   ----------   ----------
 Total recoveries...............................      3,347        3,913        3,173        3,747        2,686
                                                 ----------   ----------   ----------   ----------   ----------
 Net loans and leases charged off...............      6,355        2,109          983        3,161        9,051
 Provision for possible loan and lease losses...      7,452        3,059       (3,092)       4,416        8,941
 Balance of allowance of purchased banks........        137        5,066        1,320        8,113            -
                                                 ----------   ----------   ----------   ----------   ----------
 Ending balance of allowance for possible
 loan and lease losses.......................... $   52,575   $   51,341   $   45,325   $   48,080   $   38,712
                                                 ==========   ==========   ==========   ==========   ==========
 Average loans and leases outstanding........... $3,237,040   $2,802,874   $2,324,668   $2,024,062   $1,753,501

<FN>
NOTE: The amount charged to operations and the related balance in the allowance for possible loan and lease 
losses is based upon periodic evaluations of the loan portfolio by management.  These evaluations consider 
several factors including, but not limited to, general economic conditions, loan portfolio composition, prior 
loan loss experience, and management's estimation of future potential losses.
</FN>
</TABLE>
==============================================================================
<PAGE> 10-26

Investment Portfolio

    The book value of investment securities at December 31, for each of the 
last three years and the maturity and yield distribution of investment 
securities at December 31, 1996, are presented in the accompanying tables.  
During the first quarter of 1994, the Company adopted Statement of Financial 
Accounting Standard No. 115 ("Statement 115"), "Accounting for Certain 
Investments in Debt and Equity Securities."  In accordance with Statement 115, 
the securities classified as held-to-maturity are carried at amortized cost 
and those classified as available-for-sale and trading are carried at fair 
value.

==============================================================================
<TABLE>
<CAPTION>
Investment Securities
(Dollars in Thousands)
                                                                          For the Years Ended December 31,
                                                                        ------------------------------------
                                                                           1996         1995         1994   
                                                                        ----------   ----------   ----------
 <S>                                                                    <C>          <C>          <C>
 Held-to-maturity
  U.S. Treasuries and government agencies.............................. $  227,268   $  195,201   $  567,804
  States and political subdivisions....................................     42,100       60,732      115,093
  Other................................................................     72,763       95,482      217,167
                                                                        ----------   ----------   ----------
      Total............................................................    342,131      351,415      900,064
                                                                        ----------   ----------   ----------
 Available-for-sale
  U.S. Treasuries and government agencies..............................    672,020      636,564      283,847
  States and political subdivisions....................................    151,057      109,819       28,318
  Other................................................................    210,201      226,746       96,964
                                                                        ----------   ----------   ----------
      Total............................................................  1,033,278      973,129      409,129
                                                                        ----------   ----------   ----------
      Total investment securities...................................... $1,375,409   $1,324,544   $1,309,193
                                                                        ==========   ==========   ==========

<FN>
NOTE:  The investment portfolio of the Company is used to generate stable earnings, provide liquidity and serve 
as one of the primary means of interest rate risk management.  Active, aggressive management of the portfolio 
is required to accomplish these goals.  The purchase of held-to-maturity investment securities is made with the 
positive intent and ability to hold these assets to maturity.  Held-to-maturity investment securities are 
therefore carried at amortized cost in the financial statements.  Available-for-sale investment securities are 
carried at fair value.  Changes in the economy, the yield curve, interest rate risk and liquidity are all part 
of the business cycle.  Changes in these areas may necessitate altering the investment portfolio.  Sales of 
securities, when necessary to react to the aforementioned changes, are not materially influenced by unrealized 
losses or gains existing in the portfolio.
</FN>
</TABLE>
==============================================================================
<PAGE> 10-26

==============================================================================
<TABLE>
<CAPTION>
Investment Securities Portfolio Analysis
(Dollars in Thousands)                    Investments at December 31, 1996, maturing in:                     
                     ----------------------------------------------------------------------------------------
                         Less Than        One to Five       Five to Ten      More Than Ten
                          One Year           Years             Years             Years             Total      
                     ----------------- ----------------- ----------------- ----------------- ----------------
                       Amount    Yield   Amount    Yield  Amount    Yield   Amount    Yield   Amount    Yield
                     ----------  ----- ----------  ----- ----------  ----- ----------  ----- ----------  -----
<S>                 <C>         <C>   <C>         <C>   <C>         <C>   <C>         <C>   <C>         <C>
 Held-to-maturity
 U.S. Treasuries
  and government
  agencies.......... $  121,156  5.54% $  106,112  6.04% $        -     -%          -     -% $  227,268  5.77%
 States and political 
  subdivisions......      6,096  4.59      27,061  4.98       7,534  5.08       1,409  5.64      42,100  4.96
 Other..............     22,769  5.77      48,835  5.72         915  6.75         244  8.89      72,763  5.76
                     ----------        ----------        ----------        ----------        ----------
 Total..............    150,021  5.54     182,008  5.80       8,449  5.26       1,653  6.12     342,131  5.67
                     ----------        ----------        ----------        ----------        ----------
 Available-for-sale
 U.S. Treasuries 
  and government 
  agencies..........    322,625  5.41     346,705  6.12       1,975  6.67         715  6.92     672,020  5.78
 States and political 
  subdivisions......     22,906  4.52      88,826  4.86      30,094  5.20       9,231  5.52     151,057  4.91
 Other..............     66,294  5.74     102,413  6.04      12,012  7.01      29,482  6.09     210,201  6.01
                     ----------        ----------        ----------        ----------        ----------
 Total..............    411,825  5.41     537,944  5.90      44,081  5.76      39,428  5.97   1,033,278  5.70
                     ----------        ----------        ----------        ----------        ----------
 Total investment
  securities........ $  561,846  5.44% $  719,952  5.87% $   52,530  5.68% $   41,081  5.98% $1,375,409  5.69%
                     ==========        ==========        ==========        ==========        ==========

<FN>
NOTE:  Interest income on tax-exempt securities is calculated on a tax-equivalent basis, using a federal 
marginal income tax rate of 35%.
</FN>
</TABLE>
==============================================================================
<PAGE> 10-26

Liquidity

    Long-term liquidity is a function of a large core deposit base and a 
strong capital position.  Core deposits, which consist of total deposits less 
certificates of deposit of $100,000 and over, represent the Company's largest 
and most important funding source.  The capital position of the Company is a 
result of internal generation of capital and earnings retention.  The Company 
manages dividends to retain sufficient capital for long-term liquidity and 
growth.  Average total core deposits, excluding 1995 and 1996 bank 
acquisitions, increased $158 million or 4% from December 31, 1995, to December 
31, 1996.  The increase in average core deposits was a result of the Company's 
attempt to provide its customers a wide range of new and competitive deposit 
products.  Presented in the accompanying table are certificates of deposit and 
other time deposits of $100,000 and over, by time remaining to maturity.  Two 
key measures of the Company's long-term liquidity are the ratios of loans and 
leases to total deposits and loans and leases to core deposits.  Lower ratios 
in these two measures correlate to higher liquidity.  As can be seen from the 
table below, the Company's ratios have increased from 1995 to 1996 and 1994 to 
1995, indicating lower liquidity.  The Company's liquidity has decreased 
because the funding of loans has outpaced the growth in the Company's core 
deposit base.  However, the Company's relatively sound deposit base, along 
with its low debt level and common and preferred stock availability, provide 
several alternatives for future financing and long-term liquidity needs.

==============================================================================
<TABLE>
<CAPTION>
Maturity Distribution of Time Deposits $100,000 and Over
(Dollars in Thousands)                                                                   December 31, 1996
                                                                                     --------------------------
                                                                                     Certificates
                                                                                      of Deposit    Other Time
                                                                                     ------------  ------------
 <S>                                                                                 <C>           <C>
 Three months or less............................................................... $    260,725  $     25,516
 Over three months to six months....................................................      125,266         8,580
 Over six months to twelve months...................................................       99,793         3 824
 Over twelve months.................................................................       61,069           662
                                                                                     ------------  ------------
 Total.............................................................................. $    546,853  $     38,582
                                                                                     ============  ============
</TABLE>
==============================================================================

==============================================================================
<TABLE>
<CAPTION>
                                                                           For the Years Ended December 31,    
                                                                       ----------------------------------------
                                                                           1996          1995          1994
                                                                       ------------  ------------  ------------
 <S>                                                                   <C>           <C>           <C>
 Average loans and leases to average deposits.........................       70.38%        69.29%        61.76%
 Average loans and leases to average core deposits....................       79.08%        76.88%        67.83%
</TABLE>
==============================================================================
<PAGE> 10-26

    Short-term liquidity is the ability of the Company to meet the borrowing 
needs and deposit withdrawal requirements of its customers due to growth in 
the customer base and, to a lesser extent, seasonal and cyclical customer 
demands.  Short-term liquidity needs can be met by short-term borrowings in 
state and national money markets.  Short-term borrowings include federal funds 
purchased, securities sold under agreement to repurchase, treasury tax and 
loan accounts, and other borrowings.  Amounts and interest rates related to 
federal funds purchased and securities sold under agreement to repurchase for 
the last three years are presented in the accompanying table.  Average short-
term borrowings exceeded average short-term investments by $34.6 million in 
1996 and $101.9 million in 1995.  Average short-term investments exceeded 
average short-term borrowings by $11.7 million in 1994.  The 1996 and 1995 
decrease in excess short-term investments occurred due to the use of short-
term borrowings by the Company to fund overall loan growth.  Future short-term 
liquidity needs for daily operations are not expected to vary significantly 
and management believes that the Company's level of liquidity is sufficient to 
meet current funding requirements.

==============================================================================
<TABLE>
<CAPTION>
Federal Funds Purchased and Securities Sold
Under Agreements to Repurchase
(Dollars in Thousands)                                                               December 31,              
                                                                       ----------------------------------------
                                                                           1996          1995          1994
                                                                       ------------  ------------  ------------
 <S>                                                                   <C>           <C>           <C>
 Balance at December 31............................................... $    123,858  $    178,563  $    107,461
 Average daily amount outstanding.....................................      121,416       128,281        45,722
 Maximum month-end balance............................................      162,392       200,310       107,461
 Average daily interest rate..........................................         4.8%          5.9%          4.2%
 Weighted average interest rate on balance at December 31.............         4.6%          5.0%          6.0%
</TABLE>
==============================================================================

Capitalization

    The Company maintains its goal of providing a strong capital position 
while earning an acceptable return for its shareholders.  Management will use 
the additional financial leverage provided by internal generation of capital 
and recent acquisitions in pursuit of above average return opportunities.  A 
position of strength is important to the Company's customers, investors and 
regulators.

    At year-end 1996, the Company's equity to asset ratio was 8.59% compared 
to 8.06% at year-end 1995 and 7.85% at year-end 1994.  At December 31, 1996, 
the Company's leverage, tier I and total risk-based capital ratios 
substantially exceeded the required 3%, 4% and 8% levels established by the 
Board of Governors of the Federal Reserve System, as can be seen from the 
accompanying table.
<PAGE> 10-26
==============================================================================
<TABLE>
<CAPTION>
                                                                                     December 31,              
                                                          Regulatory   ----------------------------------------
                                                           Minimum         1996          1995          1994
                                                         ------------  ------------  ------------  ------------
 <S>                                                     <C>           <C>           <C>           <C>
 Leverage ratio ........................................        3.00%         8.07%         7.31%         7.50%
 Tier I risk-based capital ratio .......................        4.00%        11.44%        11.31%        12.56%
 Total risk-based capital ratio ........................        8.00%        12.24%        12.14%        13.33%
</TABLE>
==============================================================================

    While management plans to maintain the Company's strong capital base, it 
recognizes the need to effectively manage capital levels as they relate to 
asset growth.  In order to avoid declining return on equity ratios caused by a 
more rapid rate of growth in capital than in assets, management will continue 
to evaluate options to utilize excess capital thereby improving return on 
equity.

    The Company is not aware of any current recommendations by any regulatory 
authorities which, if they were implemented, are reasonably likely to have a 
material effect on the Company's liquidity, capital resources or operations.

Dividend Policy

    The Company's long-term dividend policy is to pay between 35% and 40% of 
earnings in cash dividends to its stockholders while maintaining adequate 
capital to support growth.  Annual dividends per share have been increased in 
each of the past three years from $.64 in 1994, to $.74 in 1995, and $.84 in 
1996.  In 1996, the Company increased its dividend rate for the tenth 
consecutive year, bringing the annual rate at the end of the year to $.96 per 
share.  In 1996, the Company declared a five percent stock dividend to 
shareholders of record on October 31, 1996; and in 1995, the Company declared 
a seven percent stock dividend to stockholders of record on December 14, 1995.  
In addition, in 1994, the Company declared a five percent stock dividend to 
stockholders of record on December 15, 1994.  Accordingly, all per share data 
has been restated to reflect these increases in shares outstanding.

    The dividend payout ratios for the past three years were 35.34% in 1996, 
35.77% in 1995, and 33.97% in 1994.  The Company's Board of Directors reviews 
the cash dividend policy and payout levels annually in the fourth quarter.

    The Company's common stock is traded in the over-the-counter market under 
the NASDAQ symbol "FCLR" and is quoted on NASDAQ's National Market System.  
The high and low bid prices of the common stock, as reported by NASDAQ, and 
the dividends declared per share can be seen in the quarterly operating 
results table on the following page.  On December 31, 1996, there were 3,566 
shareholders of record.  Additionally, 1,179 persons were holders of record of 
Company common stock on December 31, 1996, through various stock ownership 
plans of the Company.
<PAGE> 10-26
==============================================================================
<TABLE>
<CAPTION>
Selected Quarterly Operating Results
(In Thousands Except for Per Share Data)                                     Years Ended December 31,        
                                                                    ------------------------------------------
                                                                        1996           1995           1994
                                                                    ------------   ------------   ------------
 <S>                                                                <C>            <C>            <C>
 Interest Income:
  First Quarter.................................................... $     92,249   $     73,508   $     60,422
  Second Quarter...................................................       93,343         78,672         62,456
  Third Quarter....................................................       94,540         81,844         64,923
  Fourth Quarter...................................................       96,224         88,158         69,950
--------------------------------------------------------------------------------------------------------------
                                                                    $    376,356   $    322,182   $    257,751
 Net Interest Income:
  First Quarter.................................................... $     52,307   $     42,633   $     37,774
  Second Quarter...................................................       54,150         44,790         39,024
  Third Quarter....................................................       54,979         46,735         39,930
  Fourth Quarter...................................................       55,772         50,392         42,717
--------------------------------------------------------------------------------------------------------------
                                                                    $    217,208   $    184,550   $    159,445
 Provision for Possible Loan and Lease Losses:
  First Quarter.................................................... $      1,529   $        825   $        518
  Second Quarter...................................................        1,539            434            523
  Third Quarter....................................................        1,740            481              8
  Fourth Quarter...................................................        2,644          1,319         (4,141)
--------------------------------------------------------------------------------------------------------------
                                                                    $      7,452   $      3,059   $     (3,092)
 Net Income:
  First Quarter.................................................... $     16,032   $     12,692   $     11,965
  Second Quarter...................................................       16,816         13,725         12,705
  Third Quarter....................................................       17,334         14,827         12,721
  Fourth Quarter...................................................       18,380         15,666         12,917
--------------------------------------------------------------------------------------------------------------
                                                                    $     68,562   $     56,910   $     50,308
 Earnings Per Common Share:
  First Quarter.................................................... $        .55   $        .47   $        .44
  Second Quarter...................................................          .58            .50            .47
  Third Quarter....................................................          .60            .54            .48
  Fourth Quarter...................................................          .64            .56            .48
--------------------------------------------------------------------------------------------------------------
                                                                    $       2.37   $       2.07   $       1.87
 Dividends Per Common Share:
  First Quarter.................................................... $        .20   $        .18   $        .15
  Second Quarter...................................................          .20            .18            .15
  Third Quarter....................................................          .20            .18            .16
  Fourth Quarter...................................................          .24            .20            .18
--------------------------------------------------------------------------------------------------------------
                                                                    $        .84   $        .74   $        .64
</TABLE>
<PAGE> 10-26

<TABLE>
<CAPTION>
Selected Quarterly Operating Results (continued)
(In Thousands Except for Per Share Data)                                     Years Ended December 31,        
                                                                    ------------------------------------------
                                                                        1996           1995           1994
                                                                    ------------   ------------   ------------
 <S>                                                                <C>            <C>            <C>
 Bid Price Per Common Share:
 High for the period
  First Quarter.................................................... $      31.19   $      21.70   $      18.65
  Second Quarter...................................................        29.88          22.81          19.82
  Third Quarter....................................................        32.86          25.14          21.51
  Fourth Quarter...................................................        37.75          30.95          20.25

 Low for the period
  First Quarter.................................................... $      29.76   $      19.37   $      16.95
  Second Quarter...................................................        28.33          21.58          16.53
  Third Quarter....................................................        27.86          22.48          19.82
  Fourth Quarter...................................................        31.55          24.70          18.03
</TABLE>
==============================================================================
<PAGE> 27
Report of Management

    The financial statements and related financial information presented 
herein were prepared by management in accordance with generally accepted 
accounting principles and include amounts that are based on management's best 
estimates and judgments.  The Company maintains an accounting system and 
related controls that are sufficient to provide reasonable assurance that 
assets are safeguarded, and that transactions are properly authorized and 
recorded.  The concept of reasonable assurance is based on the recognition 
that the cost of an accounting and control system must be related to the 
benefits derived.  The accounting system and related controls are monitored by 
an extensive internal audit program and tested by the Company's independent 
auditors in accordance with generally accepted auditing standards.  The 
Company's internal auditor and independent auditors meet regularly with the 
Audit Committee of the Board of Directors to ensure that respective 
responsibilities are being properly discharged and to discuss the results of 
audits. 

Report of Ernst & Young LLP, Independent Auditors
The Board of Directors and Stockholders
First Commercial Corporation

    We have audited the accompanying consolidated balance sheets of First 
Commercial Corporation 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, the financial statements referred to above present fairly, 
in all material respects, the consolidated financial position of First 
Commercial Corporation at December 31, 1996, and 1995, and the consolidated 
results of its operations and its cash flows for each of the three years in 
the period ended December 31, 1996, in conformity with generally accepted 
accounting principles.

                                                        /s/ Ernst & Young LLP

Little Rock, Arkansas
January 30, 1997
<PAGE> 28
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF INCOME                                             Years Ended December 31,        
                                                                    ------------------------------------------
(In Thousands Except for Per Share Data)                                1996           1995           1994
                                                                    ------------   ------------   ------------
 <S>                                                                <C>            <C>            <C>
 Interest income
   Loans and leases, including fees................................ $    290,573   $    247,038   $    185,337
   Short-term investments..........................................        7,023          4,666          4,192
   Investment securities - taxable.................................       70,244         62,907         60,582
                         - non-taxable.............................        8,481          7,567          7,618
   Trading account securities......................................           35              4             22
                                                                    ------------   ------------   ------------
     Total interest income.........................................      376,356        322,182        257,751
 Interest expense
   Interest on deposits............................................      149,995        126,292         93,509
   Short-term borrowings...........................................        8,743         10,544          4,094
   Long-term debt..................................................          410            796            703
                                                                    ------------   ------------   ------------
     Total interest expense........................................      159,148        137,632         98,306
 Net interest income................................................      217,208        184,550        159,445
 Provision for possible loan and lease losses (Note 7).............        7,452          3,059         (3,092)
                                                                    ------------   ------------   ------------
   Net interest income after provision for
     possible loan and lease losses................................      209,756        181,491        162,537
 Other income
   Trust department income.........................................       12,286         11,424         10,904
   Mortgage servicing fee income...................................       41,331         22,312         16,340
   Broker-dealer operations income.................................        4,120          2,982          1,727
   Service charges on deposits.....................................       25,922         22,192         20,131
   Other service charges and fees..................................       12,505          9,149          7,964
   Investment securities gains (losses), net.......................          (37)          (440)           139
   Other real estate gains (losses), net...........................         (243)          (330)         4,413
   Other income....................................................        7,645          6,699          7,034
                                                                    ------------   ------------   ------------
     Total other income............................................      103,529         73,988         68,652
 Other expenses
   Salaries, wages and employee benefits (Note 13).................       95,531         79,878         74,981
   Net occupancy...................................................       12,441         11,016          9,947
   Equipment.......................................................       12,947         10,700          9,149
   FDIC insurance..................................................        1,585          7,371          8,639
   Amortization of mortgage servicing rights.......................       19,515          7,634          5,541
   First Commercial Trust Company lawsuit settlement...............            -              -          6,257
   Other expenses..................................................       65,921         53,707         42,361
                                                                    ------------   ------------   ------------
     Total other expenses..........................................      207,940        170,306        156,875
 Income before income taxes........................................      105,345         85,173         74,314
 Income tax provision (Note 11)....................................       36,783         28,263         24,006
                                                                    ------------   ------------   ------------
 Net income........................................................ $     68,562   $     56,910   $     50,308
                                                                    ============   ============   ============
 Weighted average number of common shares
   outstanding during the period....................................   28,890,130     27,530,791     26,886,990
 Earnings per common share (Note 1)................................. $       2.37   $       2.07   $       1.87

 See accompanying notes.
</TABLE>
<PAGE> 29
<TABLE>
<CAPTION>

CONSOLIDATED BALANCE SHEETS                                                                December 31,       
                                                                                   ---------------------------
(Dollars in Thousands)                                                                 1996           1995
                                                                                   ------------   ------------
 <S>                                                                               <C>            <C>
 Assets
  Cash and due from banks (Note 4)................................................ $    338,022   $    432,117
  Federal funds sold..............................................................      258,351        108,181
                                                                                   ------------   ------------
   Total cash and cash equivalents................................................      596,373        540,298
  Investment securities held-to-maturity, estimated market value
   $342,065 ($352,492 in 1995) (Notes 4 & 5)......................................      342,131        351,415
  Investment securities available-for-sale (Notes 4 & 5)..........................    1,033,278        973,129
  Trading account securities......................................................          196            449
  Loans and leases, net of unearned income (Note 6)...............................    3,278,688      3,215,562
  Allowance for possible loan and lease losses (Note 7)...........................      (52,575)       (51,341)
                                                                                   ------------   ------------
   Net loans and leases...........................................................    3,226,113      3,164,221
  Bank premises and equipment, net (Note 8).......................................      104,500        106,665
  Other real estate owned, net of allow. for poss. losses of $87 ($50 in 1995)....        2,305          2,266
  Other assets (Notes 3 & 13).....................................................      225,887        222,497
                                                                                   ------------   ------------
 Total assets..................................................................... $  5,530,783   $  5,360,940
                                                                                   ============   ============
 Liabilities and Stockholders' Equity
  Deposits
   Non-interest bearing transaction accounts...................................... $    951,390   $  1,018,181
   Interest bearing transaction and savings accounts..............................    1,795,442      1,612,294
   Certificates of deposit $100,000 and over......................................      546,853        505,303
   Other time deposits............................................................    1,521,456      1,494,763
                                                                                   ------------   ------------
    Total deposits................................................................    4,815,141      4,630,541
  Short-term borrowings (Note 9)..................................................      177,453        235,378
  Other liabilities...............................................................       56,960         55,592
  Long-term debt (Note 10)........................................................        6,097          7,170
                                                                                   ------------   ------------
    Total liabilities.............................................................    5,055,651      4,928,681
 Commitments and Contingencies (Note 14)
 Stockholders' equity (Notes 1, 4, 10, & 12)
  Preferred stock, 400,000 shares authorized
   Series 1991 Permanent, $1 par value, 0 shares issued...........................            -              -
  Common stockholders' equity, 50,000,000 shares authorized
   Common stock, $3 par value, 28,810,368 shares issued
    (28,709,151 shares issued in 1995)............................................       86,431         82,030
   Capital surplus................................................................      233,957        195,019
   Retained earnings..............................................................      153,603        154,356
   Net unrealized gains on  available-for-sale securities, net of income tax......        1,141            854
                                                                                   ------------   ------------
    Total common stockholders' equity.............................................      475,132        432,259
                                                                                   ------------   ------------
 Total liabilities and stockholders' equity....................................... $  5,530,783   $  5,360,940
                                                                                   ============   ============

See accompanying notes.
</TABLE>
<PAGE> 30
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF STOCKHOLDERS'                                        Unrealized
EQUITY                                   Preferred  Common             Retained  Gains and  Treasury
(In Thousands Except for Per Share Data)   Stock     Stock    Surplus  Earnings  (Losses)    Stock     Total
                                         --------- --------- --------- --------- --------- --------- ---------
 <S>                                     <C>       <C>       <C>       <C>       <C>       <C>       <C>
 Balance - January 1, 1994.............. $  10,620 $  68,841 $  96,619 $ 160,870 $       - $    (105)$ 336,845
  Adjustment to beginning balance for
   change in accounting method, net of
   income taxes of $986 (Note 1)........                                             1,832               1,832
  Change in unrealized gains (losses),
   net of income taxes of $4,975........                                            (9,265)             (9,265)
  Net income............................                                  50,308                        50,308
  Cash dividends - $.64 per common share                                 (17,092)                      (17,092)
  Preferred stock dividends.............                                    (129)                         (129)
  Preferred stock redemption............   (10,620)               (710)                                (11,330)
  Stock dividend, 5%....................               2,362    13,415   (23,825)              8,023       (25)
  Stock options exercised (Note 12).....                 122      (183)                          951       890
  Purchase of treasury stock, 467,038 shares                                                  (9,566)   (9,566)
  Sale of treasury stock, 3,864 shares..                                                          63        63
  Purchase of remaining interest
   in subsidiary, 30,333 shares.........                            26                           634       660
                                         --------- --------- --------- --------- --------- --------- ---------
 Balance - December 31, 1994............         -    71,325   109,167   170,132    (7,433)        -   343,191
  Change in unrealized gains (losses),
   net of income taxes of $4,592........                                             8,547               8,547
  Net income............................                                  56,910                        56,910
  Cash dividends - $.74 per common share                                 (20,356)                      (20,356)
  Stock dividend, 7%....................               5,362    52,345   (57,751)                          (44)
  Stock options exercised (Note 12).....                 177       958                                   1,135
  Purchase of treasury stock, 208,580 shares                                                  (5,245)   (5,245)
  Common stock issued, 2,868 shares.....                   8        53                                      61
  Acquisition of FDH Bancshares,
   Inc., 1,416,675 shares (Note 2)......               3,226    32,116                         5,245    40,587
  Acquisition of equity interest of
   West-Ark Bancshares, Inc.,
   723,561 shares (Note 2)..............               1,932       380     5,421      (260)              7,473
                                         --------- --------- --------- --------- --------- --------- ---------
 Balance - December 31, 1995............         -    82,030   195,019   154,356       854         -   432,259
  Change in unrealized gains (losses),
   net of income taxes of $81...........                                               299                 299
  Net income............................                                  68,562                        68,562
  Cash dividends - $.84 per common share                                 (24,228)                      (24,228)
  Stock dividend, 5%....................               3,476    36,735   (46,354)             6,099        (44)
  Stock options exercised (Note 12).....                 158       548                            6        712
  Purchase of treasury stock, 219,511 shares                                                  (6,368)   (6,368)
  Sale of treasury stock, 7,350 shares..                                                        223        223
  Common stock issued, 2,878 shares.....                   8        99                                     107
  Purchase of minority shares of
   subsidiary, 1,793 shares.............                            15                           40         55
  Acquisition of Security National
   Bank, 253,154 shares (Note 2)........                 759     1,541     1,267       (12)              3,555
                                         --------- --------- --------- --------- --------- --------- ---------
 Balance - December 31, 1996............ $       - $  86,431 $ 233,957 $ 153,603 $   1,141 $       - $ 475,132
                                         ========= ========= ========= ========= ========= ========= =========
 See accompanying notes.
</TABLE>
<PAGE> 31
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS                                        Years Ended December 31,        
                                                                   ------------------------------------------
(Dollars in Thousands)                                                 1996           1995           1994
                                                                   ------------   ------------   ------------
 <S>                                                               <C>            <C>            <C>
 OPERATING ACTIVITIES
 Net income....................................................... $     68,562   $     56,910   $     50,308
 Adjustments to reconcile net income to net cash provided by
  (used in) operating activities:
  Depreciation....................................................       10,856          8,995          7,519
  Amortization....................................................       23,180         10,034          7,776
  Provision for possible loan and lease losses....................        7,452          3,059         (3,092)
  Deferred income taxes...........................................       (4,584)        (1,197)         3,838
  Loss (gain) on sale of investment securities available-for-sale.           37            440           (139)
  Gain on sale of equipment.......................................           (9)          (146)          (135)
  Gain on sale of other real estate...............................         (940)          (950)        (4,791)
  Writedowns of other real estate.................................          106             75            706
  Equity in undistributed earnings of unconsolidated subsidiary...       (1,440)        (1,777)        (1,461)
  Decrease (increase) in trading securities.......................          255           (435)           689
  Net unrealized losses (gains) on trading securities.............           (2)            (1)             1
  Decrease (increase) in mortgage loans held for resale...........      104,891       (105,385)        17,084
  Increase (decrease) in income taxes payable.....................           23          7,204         (8,598)
  Increase in interest and other receivables......................          235         (5,198)        (1,861)
  Increase (decrease) in interest payable.........................         (458)         3,115          1,240
  Increase (decrease) in accrued expenses.........................        1,871          9,034         (2,212)
  Increase in prepaid expenses....................................       (2,317)        (2,484)        (1,590)
                                                                   ------------   ------------   ------------
 Net cash provided by (used in) operating activities..............      207,718        (18,707)        65,282

 INVESTING ACTIVITIES
  Proceeds from sales of investment securities available-for-sale.       55,902         83,175          9,226
  Proceeds from maturing investment securities held-to-maturity...      417,805        544,505        675,466
  Proceeds from maturing investment securities available-for-sale.      902,577        308,671        115,915
  Purchases of investment securities held-to-maturity.............     (433,888)      (234,079)      (422,965)
  Purchases of investment securities available-for-sale...........     (979,839)      (547,598)      (125,694)
  Purchases of institutions, net of funds acquired (Notes 1 and 2)        7,259         38,380         (5,872)
  Net increase in loans and leases................................     (159,922)      (293,804)      (270,834)
  Capital expenditures............................................       (9,749)       (15,164)       (21,560)
  Proceeds from sale of bank premises and equipment...............        3,040          2,731         10,861
  Additions to purchased mortgage servicing rights and other assets      (18,551)       (71,705)        (4,801)
  Proceeds from sales of other real estate........................        3,241          4,277         17,209
                                                                  ------------   ------------   ------------
 Net cash used in investing activities............................     (212,125)      (180,611)       (23,049)
</TABLE>
<PAGE>31
<TABLE>
<CAPTION>

CONSOLIDATED STATEMENTS OF CASH FLOWS                                        Years Ended December 31,        
                                                                   ------------------------------------------
(Dollars in Thousands)                                                 1996           1995           1994
                                                                   ------------   ------------   ------------
 <S>                                                               <C>            <C>            <C>
 FINANCING ACTIVITIES
  Net increase (decrease) in demand deposits, NOW accounts,
   and savings accounts...........................................      109,645        145,913        (75,038)
  Net increase (decrease) in time deposits........................       39,433        208,506        (59,612)
  Net increase (decrease) in short-term borrowings................      (57,925)        51,439        116,284
  Repayment of long-term debt.....................................       (1,073)        (1,148)       (17,176)
  Proceeds from long-term borrowings..............................            -              -          5,030
  Payment to redeem preferred stock...............................            -              -        (11,330)
  Proceeds from issuance of common stock..........................          107             61              -
  Purchases of treasury stock.....................................       (6,368)        (5,245)        (9,566)
  Sales of treasury stock.........................................          223              -             63
  Purchase of partial shares resulting from stock splits/stock
   dividends......................................................          (44)           (44)           (25)
  Stock options exercised.........................................          712          1,135            890
  Preferred stock dividends.......................................            -              -           (129)
  Cash dividends paid on common stock.............................      (24,228)       (20,356)       (17,092)
                                                                   ------------   ------------   ------------
 Net cash provided by (used in) financing activities..............       60,482        380,261        (67,701)

 Net increase (decrease) in cash and cash equivalents.............       56,075        180,943        (25,468)
 Cash and cash equivalents at beginning of year...................      540,298        359,355        384,823
                                                                   ------------   ------------   ------------
 Cash and cash equivalents at end of year......................... $    596,373   $    540,298   $    359,355
                                                                   ============   ============   ============
 See accompanying notes.
</TABLE>
<PAGE> 32-49

NOTE 1:
SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization

    First Commercial Corporation ("Company") is a multi-bank holding company 
headquartered in Little Rock, Arkansas, which owns twenty-four affiliate banks 
and 50% of a twenty-fifth affiliate bank.  The Company's affiliate banks 
provide traditional commercial, retail and corespondent banking services and 
offer a broad range of specialized services.  The Company's principal markets 
include the state of Arkansas, East Texas, Northwest Louisiana and Memphis, 
Tennessee.  The Company's non-bank subsidiaries include a mortgage company, 
trust company, investment banking company, factoring company and leasing 
company that serve principally the same markets as the banking affiliates.

Use of Estimates

    The preparation of financial statements in conformity with generally 
accepted accounting principles requires management to make estimates and 
assumptions that affect the amounts reported in the financial statements and 
the accompanying notes.  Actual results could differ from those estimates.

Principles of Consolidation

    The consolidated financial statements include the accounts of the Company 
and its wholly-owned subsidiaries.  All significant intercompany accounts and 
transactions have been eliminated. 

Investment and Trading Account Securities

    In May 1993, the Financial Accounting Standards Board issued Statement of 
Financial Accounting Standards No. 115 ("Statement 115"), "Accounting for 
Certain Investments in Debt and Equity Securities."  The Company adopted the 
provisions of the new standard for investments held as of January 1, 1994.  In 
accordance with Statement 115, prior period financial statements have not been 
restated to reflect the change in accounting principle.  The cumulative effect 
as of January 1, 1994, of adopting Statement 115 was an adjustment to 
stockholders' equity of $1,832,000 net of $986,000 in deferred income taxes.  
Under this statement, securities that the Company has both the positive intent 
and ability to hold to maturity are carried at amortized cost.  Securities 
that the Company does not have the positive intent and ability to hold to 
maturity and all marketable equity securities are classified as available-for-
sale or trading and carried at fair value.  Unrealized holding gains and 
losses on securities classified as available-for-sale are carried as a 
separate component of stockholders' equity.  Accordingly, stockholders' equity 
at December 31, 1996, has been increased by $299,000 (net of $81,000 in 
deferred income taxes) to reflect the net unrealized holding gain on 
securities classified as available-for-sale.  Also, stockholders' equity at 
December 31, 1995, has been increased by $8,547,000 (net of $4,592,000 in 
deferred income taxes) to reflect the net unrealized holding gain on 
securities classified as available-for-sale.  Unrealized holding gains and 
losses on securities classified as trading are reported in earnings.

    Gains and losses on the sale of investment securities are computed using 
the specific identification method.  The income tax provision (benefit) 
related to such gains and losses was ($12,950), ($154,000) and $48,700 for the 
years ended December 31, 1996, 1995, and 1994, respectively.
<PAGE> 32-49

Broker-Dealer Company

    One of the Company's banking subsidiaries operates First Commercial 
Investments, Inc. ("FCII"), a broker-dealer company which has a customer base 
principally located within the states of Arkansas and Texas.

    FCII is a party to financial instruments with off-balance-sheet risk in 
its normal course of business. FCII is required, in the event of the non-
delivery of customers' securities owed FCII by other broker-dealers, or by its 
customers, to purchase identical securities in the open market.  Such 
purchases might result in losses not reflected in the accompanying 
consolidated financial statements.  The market values of securities owed FCII 
approximate the amounts payable.

    Receivables and payables to customers arise from cash transactions 
executed by FCII on their behalf.  Receivables are collateralized by 
securities with market values in excess of the amounts due.  The Company's 
policy is to monitor the market value of collateral and request additional 
collateral when required.  Such collateral is not reflected in the 
accompanying consolidated financial statements.  At December 31, 1996, and 
1995, receivables from and payables to securities customers amounted to 
$649,068 and ($24,446), respectively. 

    In accordance with industry practice, FCII records securities transactions 
executed on behalf of its customers on the settlement date, which is generally 
three business days or the next business day after the trade date.  The risk 
of loss on unsettled transactions is the same as settled transactions and 
relates to the customer's or broker's inability to meet the terms of their 
contracts.

Loans

    Loans generally are stated at their outstanding unpaid principal balances 
net of any deferred fees or costs on originated loans, or unamortized premiums 
or discounts on purchased loans.  Interest income is accrued on the unpaid 
principal balance.  Discounts and premiums are amortized to income using the 
interest method.  Loan origination fees net of certain direct origination 
costs are deferred and recognized as an adjustment of the yield (interest 
income) of the related loans.

    NONACCRUAL LOANS.  Generally, a loan (including a loan impaired under 
Statement of Financial Accounting Standards No. 114 ("Statement 114"), 
"Accounting by Creditors for Impairment of a Loan") is classified as 
nonaccrual and the accrual of interest on such loan is discontinued when the 
contractual payment of principal or interest has become 90 days past due or 
management has serious doubts about further collectibility of principal or 
interest, even though the loan currently is performing.  A loan may remain on 
accrual status if it is in the process of collection and is either guaranteed 
or well secured.  When a loan is placed on nonaccrual status, unpaid interest 
credited to income in the current year is reversed and unpaid interest accrued 
in prior years is charged against the allowance for credit losses.  Interest 
received on nonaccrual loans generally is either applied against principal or 
reported as interest income, according to management's judgment as to the 
collectibility of principal.  Generally, loans are restored to accrual status 
when the obligation is brought current, has performed in accordance with the 
contractual terms for a reasonable period of time and the ultimate 
collectibility of the total contractual principal and interest is no longer in 
doubt.
<PAGE> 32-49

    ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES.  The allowance for possible 
loan and lease losses is established through provisions for credit losses 
charged against income.  Loans deemed to be uncollectible are charged against 
the allowance for possible loan and lease losses, and subsequent recoveries, 
if any, are credited to the allowance.

    The Company adopted Statement 114, as amended by Statement of Financial 
Accounting Standards No. 118 ("Statement 118"), "Accounting by Creditors for 
Impairment of a Loan - Income Recognition and Disclosure," effective January 
1, 1995.  Statements 114 and 118 prescribe how the allowance for possible loan 
and lease losses related to impaired loans should be determined.  A loan is 
considered impaired when, based on current information and events, it is 
probable that a creditor will be unable to collect principal or interest due 
according to the contractual terms of the loan.  Under the new Statements, the 
amount of the allowance for possible loan and lease losses related to 
individual loans that are identified for evaluation in accordance with 
Statement 114 is determined based on estimates of expected cash flows on each 
such loan which are then discounted using that loan's effective interest rate.  
Alternatively, the fair value of the collateral is used to determine the 
allowance for credit losses related to identified collateral dependent loans.
The determination of the allowance for possible loan and lease losses for the 
remainder of the loan portfolio takes into consideration the risk 
classification of loans and application of loss estimates to these 
classifications.  Statement 114 specifically excludes from the definition of 
impaired loans large groups of smaller balance homogenous loans.  In 
accordance with these Statements, the Company considers all non-accrual loans 
risk-rated as doubtful (i.e. loans for which collection or liquidation in full 
on the basis of currently existing facts, conditions and values is highly 
questionable and improbable), excluding credit card loans, residential 
mortgage loans, consumer installment loans and loans held for resale by the 
Company's mortgage banking subsidiary, as impaired loans.  The adoption of 
these Statements had no significant impact on the level of the allowance.

    The allowance for possible loan and lease losses is maintained at a level 
believed adequate by management to absorb estimated probable credit losses.  
Management's periodic evaluation of the adequacy of the allowance is based on 
the Company's past loan loss experience, known and inherent risks in the 
portfolio, adverse situations that may affect the borrower's ability to repay 
(including the timing of future payments), the estimated value of any 
underlying collateral, composition of the loan portfolio, current economic 
conditions and other relevant factors.  This evaluation is inherently 
subjective as it requires material estimates including the amounts and timing 
of future cash flows expected to be received on impaired loans that may be 
susceptible to significant change.

Mortgage Loan Servicing

    Mortgage loans serviced by the Company's mortgage banking subsidiary are 
not included in the accompanying consolidated balance sheets.  The unpaid 
principal balances of these mortgage loans were $7.3 billion and $7.6 billion 
at December 31, 1996 and 1995, respectively.  Loan servicing fees are included 
in income as related loan payments from mortgagees are collected.

    The Company has determined that the book value of the mortgage servicing 
rights does not exceed the estimated future servicing revenue less estimated 
future servicing costs.  Management estimates the value of the servicing 
rights originated by the Company's mortgage banking subsidiary and the 
servicing rights acquired from third parties at December 31, 1996, to be 
<PAGE> 32-49

approximately $79.9 million based on an independent impairment analysis.  For 
purposes of measuring impairment, mortgage servicing rights are stratified on 
the basis of interest rates and investor types.

Derivative Financial Instruments

    The Company's investment policies do not allow the purchase of derivative 
financial instruments for trading purposes.  The only derivative financial 
instruments owned by the Company have been issued for purposes other than 
trading and include mortgages held for sale, unfunded loan commitments and 
unsettled security purchase or sale agreements (see Broker-Dealer Company).

    Real estate loans of approximately $40.0 million and $144.9 million at 
December 31, 1996, and 1995, respectively, held for resale by the Company's 
mortgage banking subsidiary, are valued at the lower of cost or market on an 
aggregate basis.  To manage the interest rate risk exposure related to these 
real estate loans, the Company's mortgage banking subsidiary pre-sells these 
loans to third parties.  At December 31, 1996, all but $8.7 million of these 
real estate loans had been pre-sold.

    Interest rate risk related to unfunded loan commitments (see Note 15) is 
managed by only issuing such instruments with short repricing terms.

Bank Premises and Equipment and Depreciation

    Bank premises and equipment are stated at cost less accumulated 
depreciation.  Depreciation is provided for financial statement purposes by 
the straight-line method over an estimated useful life of 1 to 50 years for 
building and improvements, 3 to 30 years for leasehold improvements, and 1 to 
20 years for equipment.  Accelerated depreciation methods are used for income 
tax purposes.

Foreclosed Assets

    Foreclosed assets are comprised of property acquired through a foreclosure 
proceeding or acceptance of a deed-in-lieu of foreclosure and loans classified 
as in-substance foreclosure.  In accordance with Statement 114, a loan is 
classified as in-substance foreclosure when the Company has taken possession 
of the collateral regardless of whether formal foreclosure proceedings take 
place.

    Foreclosed assets initially are recorded at fair value at the date of 
foreclosure establishing a new cost basis.  After foreclosure, valuations are 
periodically performed by management and the real estate is carried at the 
lower of (1) cost or (2) fair value minus estimated costs to sell.  Revenue 
and expenses from operations and changes in the valuation allowance are 
included in loss on foreclosed real estate.

Income Taxes

    The liability method is used in accounting for income taxes.  Under this 
method, deferred tax assets and liabilities are determined based on 
differences between financial reporting and tax bases of assets and 
liabilities and are measured using the enacted tax rates and laws that will be 
in effect when the differences are expected to reverse.
<PAGE> 32-49

Investments - Security National Bank and Trust Company and Real Estate

    The Company's fifty percent investment in Security National Bank and Trust 
Company of Norman, Oklahoma, is accounted for using the equity method.  The 
Company, through one of its subsidiaries, owns an interest in three real 
estate partnerships.  These investments are also accounted for using the 
equity method of accounting since they represent significant influence but not 
control for the Company.

Earnings Per Common Share

    Earnings per common share is calculated by dividing net income less the 
preferred stock dividend by the weighted average number of common shares 
outstanding.  The dilutive effect of stock options is insignificant.  The 
preferred stock was issued in 1991, and dividends for 1996 and 1995 were $0, 
and for 1994 were $129 thousand.

Preferred Stock

    On February 8, 1991, the Company issued $11 million of cumulative 
permanent non-voting preferred stock with a dividend rate of 11% in years one 
through three, 11.75% in year four, and 12% in year five and later.  The stock 
was non-callable in years one through three, callable at 103% of par in year 
four, and callable at par in year five and later.  The Company called the 
preferred stock at 103% of par on February 8, 1994.  The transaction resulted 
in a decrease of approximately $11.3 million to total stockholders' equity.

Stock Option Plan

    The Company has elected to follow Accounting Principles Board Opinion No. 
25, "Accounting for Stock Issued to Employees," (APB 25) and related 
Interpretations in accounting for its employee stock options because, as 
discussed in Note 12 to the Consolidated Financial Statements, the alternative 
fair value accounting provided for under Statement of Financial Accounting 
Standards No. 123 ("Statement 123"), "Accounting for Stock-Based 
Compensation," requires use of option valuation models that were not developed 
for use in valuing employee stock options.  Under APB 25, because the exercise 
price of the Company's employee stock options equals the market price of the 
underlying stock on the date of grant, no compensation expense is recognized 
(see Note 12).

Stock Dividend/Stock Split

    All share and per share amounts for 1996, 1995, and 1994, set forth in the 
consolidated financial statements and notes thereto have been retroactively 
adjusted for a five percent stock dividend declared October 1996, and payable 
November 15, 1996, a seven percent stock dividend declared November 1995, and 
payable January 2, 1996, a five percent stock dividend declared November 1994, 
and payable January 3, 1995.

Financial Statement Presentation

    Statement of Financial Accounting Standards No. 125 ("Statement 125"), 
"Accounting for Transfers and Servicing of Financial Assets and 
Extinguishments of Liabilities," provides new accounting and disclosure rules 
for the sale, securitization. and servicing of receivable and other financial 
assets.  Statement 125 provides guidance for establishing whether a transfer 
of financial assets is a sale or a financing.  Under Statement 125, the seller
<PAGE> 32-49

would be required to use the "financial components" approach to measure gain 
or loss on the transaction.  Under this approach, the seller would record at 
fair value whatever new instruments it obtains and would derecognize financial 
assets for which control has been surrendered based on the relative fair value 
of the components transferred and those retained.  Statement 125 is effective 
for transactions occurring after December 31, 1996, regardless of the 
Company's fiscal year end or when securitization was originally established.  
The Company plans to adopt Statement 125 effective January 1, 1997.  Statement 
125 will be applied prospectively from the date of adoption and, based on 
current circumstances, management does not believe the adoption will be 
material to the Company's financial position or results of operations.

Supplemental Cash Flow Disclosures

    For purposes of the statement of cash flows, the Company includes cash and 
due from banks, Federal funds sold and securities purchased under agreements 
to resell as cash equivalents.  Cash payments for interest were approximately 
$159.6 million, $134.5 million and $97.1 million for 1996, 1995, and 1994, 
respectively.  Transfers from loans to other real estate owned were $2.4 
million, $2.3 million and $1.9 million during 1996, 1995, and 1994, 
respectively.  Purchases of institutions consisted of loans of $17 million; 
investment securities of $13 million; deposits of $36 million for 253,154 
shares of the Company's common stock. 

Reclassification

    Certain reclassifications of 1995 and 1994 amounts have been made to 
conform with the 1996 presentation.

Note 2:
ACQUISITIONS


    On November 23, 1996, the Company acquired all of the outstanding common 
stock of Security National Bank, Nacogdoches, Texas, in exchange for 253,154 
Company common shares.  This transaction was accounted for as a pooling-of-
interests.  The results of Security National Bank are included in the 
consolidated financial statements for 1996, however, prior period financial 
data has not been restated due to immateriality. Security National Bank had 
approximately $35 million in assets, $16 million in loans, and $31 million in 
deposits.

Note 3:
INTANGIBLE ASSETS

    Intangible assets are included in other assets and consist of goodwill, 
debt issuance costs, core deposit intangibles and mortgage servicing rights.  
These assets are being amortized over periods ranging from one to twenty-five 
years.  Goodwill and identifiable intangibles at December 31, 1996, and 1995, 
had an original cost of $51.6 million and are amortized using the straight 
line method.  The original cost of mortgage servicing rights originated by the 
Company's mortgage banking subsidiary and acquired from third parties, which 
are not included in the previous totals as they have resale value, totaled 
$88.3 million and $80.8 million at December 31, 1996, and 1995, respectively.  
During 1996 and 1995, mortgage servicing rights of $9.5 million and $54.5 
million, respectively, were capitalized.  Accumulated amortization of 
intangible assets totaled $54.8 million and $33.7 million at December 31, 
1996, and 1995, respectively.  The Company's equity capital, excluding all
<PAGE> 32-49

intangible assets except mortgage servicing rights, was $435.8 million and 
$389.4 million at December 31, 1996, and 1995, respectively.

Note 4:
PLEDGED ASSETS AND REGULATORY RESTRICTIONS

    Investment securities having a carrying value of $755,683,000 and 
$691,519,000 at December 31, 1996, and 1995, respectively, were pledged to 
secure public and trust deposits and certain borrowed funds.

    The Company and its subsidiary banks are subject to various regulatory 
capital requirements administered by the Federal Reserve Bank, the Office of 
the Comptroller of the Currency, the Federal Deposit Insurance Corporation and 
the Arkansas State Bank Department.  Failure to meet minimum capital 
requirements can initiate certain mandatory - and possibly additional 
discretionary - actions by the regulators that, if undertaken, could have a 
material effect on the Company's financial statements.  Under capital adequacy 
guidelines and the regulatory framework for prompt corrective action, the 
Company and its subsidiary banks must meet specific capital guidelines that 
involve quantitative measures of assets, liabilities and certain off-balance-
sheet items as calculated under regulatory accounting practices.  The 
Company's and its subsidiary banks' capital amounts and classification are 
also subject to qualitative judgments by the regulators about components, risk 
weightings and other factors.
    Quantitative measures established by regulation to ensure capital adequacy 
require the Company to maintain minimum ratios as set forth in the 
accompanying table.  Management believes, as of December 31, 1996 and 1995, 
that the Company and its subsidiary banks meet all capital adequacy 
requirements to which they are subject.
    As of December 31, 1996 and 1995, the most recent notification from the 
regulators categorized the Company and its subsidiary banks 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 Company's or its subsidiary banks category.
    The Company's actual capital ratios along with the Company's significant 
subsidiary, First Commercial Bank, N.A., of Little Rock, Arkansas, as shown 
below.

<TABLE>
<CAPTION>
                                                                        First Commercial     First Commercial
                                                                          Corporation           Bank, N.A.
                                                                       As of December 31,   As of December 31,
                                                         Regulatory    ------------------   ------------------
                                                          Minimum        1996      1995       1996      1995
                                                        ------------   --------  --------   --------  --------
  <S>                                                   <C>            <C>       <C>        <C>       <C>
  Leverage ratio .......................................     3.00%        8.07%     7.31%      7.32%     7.27%
  Tier I risk-based capital ratio ......................     4.00%       11.44%    11.31%      9.63%     8.84%
  Total risk-based capital ratio .......................     8.00%       12.24%    12.14%     10.70%    10.02%

</TABLE>

    Subsidiary banks are restricted by banking regulatory agencies from making 
dividend payments above prescribed limits and are limited in making loans and 
advances to the Company.  At December 31, 1996, approximately $38 million was 
available for payment of dividends by the Company's subsidiary banks without 
the approval of regulatory authorities.
<PAGE> 32-49

    Under Federal Reserve regulation, the subsidiary banks are also limited as 
to the amount they may loan to their affiliates, including the Company, unless 
such loans are collateralized by specific obligations.  At December 31, 1996, 
the maximum amount available for transfer from the subsidiary banks to the 
Company in the form of loans approximated $45 million.

    Subsidiary banks are required by bank regulatory agencies to maintain 
certain minimum balances of non-interest bearing deposits primarily with the 
Federal Reserve.  At December 31, 1996, these required balances aggregated 
approximately $24 million.
<PAGE> 32-49

Note 5:
INVESTMENT SECURITIES

The amortized cost and estimated market values of investment securities at 
December 31, 1996, are as follows:
<TABLE>
<CAPTION>
                                                                     Held-to-maturity                
                                                     ------------------------------------------------
                                                                    Gross        Gross     Estimated
                                                     Amortized   Unrealized   Unrealized     Market  
          (Dollars in Thousands)                        Cost        Gains        Losses       Value  
                                                     ----------  -----------  -----------  ----------
          <S>                                        <C>         <C>          <C>          <C>
          U.S. Treasury securities and 
               obligations of U.S. government
               corporations and agencies............ $  227,268  $       644  $      (439) $  227,473

          Obligations of states and
               political subdivisions...............     42,100          637         (160)     42,577

          Corporate securities......................      2,010           18           (3)      2,025

          Mortgage-backed securities................     70,742          317       (1,069)     69,990

          Other debt securities.....................         11            -          (11)          -
                                                     ----------  -----------  -----------  ----------
                     Totals......................... $  342,131  $     1,616  $    (1,682) $  342,065
                                                     ==========  ===========  ===========  ==========
</TABLE>

<TABLE>
<CAPTION>
                                                                    Available-for-sale              
                                                     -----------------------------------------------
                                                                    Gross        Gross     Estimated
                                                     Amortized   Unrealized   Unrealized     Market  
          (Dollars in Thousands)                        Cost        Gains        Losses       Value  
                                                     ----------  -----------  -----------  ----------
          <S>                                        <C>         <C>          <C>          <C>
          U.S. Treasury securities and 
               obligations of U.S. government
               corporations and agencies............ $  670,919  $     2,428  $    (1,327) $  672,020

          Obligations of states and
               political subdivisions...............    149,540        2,017         (500)    151,057

          Corporate securities......................      7,088           67          (20)      7,135

          Mortgage-backed securities................    182,955        1,781       (2,467)    182,269

          Other debt securities.....................     21,021           14         (238)     20,797
                                                     ----------  -----------  -----------  ----------
                     Totals......................... $1,031,523  $     6,307  $    (4,552) $1,033,278
                                                     ==========  ===========  ===========  ==========
</TABLE>
<PAGE> 32-49

The amortized cost and estimated market values of investment securities at 
December 31, 1995, are as follows:
<TABLE>
<CAPTION>
                                                                    Held-to-maturity                
                                                     -----------------------------------------------
                                                                   Gross        Gross      Estimated
                                                     Amortized   Unrealized   Unrealized    Market  
          (Dollars in Thousands)                       Cost        Gains        Losses       Value  
                                                     ---------   ----------   ----------   ---------
          <S>                                        <C>         <C>          <C>          <C>
          U.S. Treasury securities and 
               obligations of U.S. government
               corporations and agencies............ $ 195,201   $    1,385   $     (687)  $ 195,899

          Obligations of states and
               political subdivisions...............    60,732        1,254         (295)     61,691

          Corporate securities......................     4,503           44          (62)      4,485

          Mortgage-backed securities................    90,975          927       (1,489)     90,413

          Other debt securities.....................         4            -            -           4
                                                     ---------   ----------   ----------   ---------
                     Totals......................... $ 351,415   $    3,610   $   (2,533)  $ 352,492
                                                     =========   ==========   ==========   =========
</TABLE>

<TABLE>
<CAPTION>
                                                                    Available-for-sale              
                                                     -----------------------------------------------
                                                                   Gross        Gross      Estimated
                                                     Amortized   Unrealized   Unrealized    Market  
          (Dollars in Thousands)                       Cost        Gains        Losses       Value  
                                                     ---------   ----------   ----------   ---------
          <S>                                        <C>         <C>          <C>          <C>
          U.S. Treasury securities and 
               obligations of U.S. government
               corporations and agencies............ $ 635,948   $    3,228   $   (2,612)  $ 636,564

          Obligations of states and
               political subdivisions...............   107,906        2,338         (425)    109,819

          Corporate securities......................     7,238          137          (42)      7,333

          Mortgage-backed securities................   203,784        1,964       (3,042)    202,706

          Other debt securities.....................    16,713           19          (25)     16,707
                                                     ---------   ----------   ----------   ---------
                     Totals......................... $ 971,589   $    7,686   $   (6,146)  $ 973,129
                                                     =========   ==========   ==========   =========
</TABLE>

    On November 15, 1995, the FASB staff issued a Special Report, "A Guide to 
Implementation of Statement 115 on Accounting for Certain Investments in Debt 
and Equity Securities."  In accordance with provisions in that Special Report, 
the Company chose to reclassify securities from held-to-maturity to available-
<PAGE> 32-49

for-sale.  At the date of transfer the amortized cost of those securities was 
$370.0 million and the unrealized loss on those securities was $3.5 million, 
which is included in stockholders' equity.

    During the years ended December 31, 1996, 1995 and 1994, investment 
securities available-for-sale with a fair value at the date of sale of $55.9 
million, $83.2 million and $9.2 million, respectively were sold.  The gross 
realized gains on such sales totaled $167,383, $149,688 and $149, 957, 
respectively.  The gross realized losses totaled $204,487, $530,205 and 
$10,558, respectively.  Additionally, recognized losses of $59,469 were 
recorded on other debt securities in the Company's portfolio at December 31, 
1995.

    The amortized cost and estimated market value of securities at December 
31, 1996, by contractual maturity, are shown in the accompanying table.  
Expected maturities may 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     
                                                       ---------------------------
                                                        Amortized      Estimated
          (Dollars in Thousands)                           Cost       Market Value
                                                       ------------   ------------
          <S>                                          <C>            <C>
          Due in one year or less..................... $    126,152   $    126,176
          Due after one year through five years.......      136,294        136,746
          Due after five years through ten years......        7,534          7,669
          Due after ten years.........................        1,409          1,484
                                                       ------------   ------------
                                                            271,389        272,075
          Mortgage-backed securities..................       70,742         69,990
                                                       ------------   ------------
                                                       $    342,131   $    342,065
                                                       ============   ============
</TABLE>

<TABLE>
<CAPTION>
                                                            Available-for-sale    
                                                       ---------------------------
                                                        Amortized      Estimated
          (Dollars in Thousands)                           Cost       Market Value
                                                       ------------   ------------
          <S>                                          <C>            <C>
          Due in one year or less..................... $    350,031   $    349,942
          Due after one year through five years.......      415,149        416,613
          Due after five years through ten years......       48,523         49,214
          Due after ten years.........................       34,865         35,240
                                                       ------------   ------------
                                                            848,568        851,009
          Mortgage-backed securities..................      182,955        182,269
                                                       ------------   ------------
                                                       $  1,031,523   $  1,033,278
                                                       ============   ============
</TABLE>
<PAGE> 32-49

Note 6:
LOANS AND LEASES

    Loans and leases consist of the following

<TABLE>
<CAPTION>
          (Dollars in Thousands)                                1996            1995    
                                                            ------------    ------------
          <S>                                               <C>             <C>
          Commercial and financial......................... $    554,293    $    545,444
          Agricultural.....................................       59,758          56,904
          Real estate - construction.......................      178,369         140,285
                      - mortgage...........................    1,664,645       1,664,873
          Loans for purchasing or carrying securities......        9,497          11,568
          Consumer.........................................      801,357         806,945
          Direct lease financing...........................       38,914          32,196
          Other............................................       15,066           9,414
                                                            ------------    ------------
                                                               3,321,899       3,267,629

          Unearned income..................................      (43,211)        (52,067)
                                                            ------------    ------------
          Loans and leases, net of unearned income......... $  3,278,688    $  3,215,562
                                                            ============    ============
</TABLE>

    At December 31, 1996 and 1995, the recorded investment in loans that are 
considered to be impaired under Statement 114 was $1.3 million and $739 
thousand, respectively, all of which were on a nonaccrual basis.  These loans 
had a related allowance for credit losses of $659 thousand and $446 thousand, 
respectively.  At December 31, 1996 and 1995, there were no impaired loans 
that, as a result of writedowns, did not have an allowance for credit losses.  
The average recorded investment in impaired loans during the year ended 
December 31, 1996 and 1995, was approximately $1.2 million and $852 thousand, 
respectively.  For the years ended December 31, 1996 and 1995, the interest 
income recognized using the cash basis method of income recognition on 
impaired loans was immaterial.

    Most of the Company's business activity is with customers located in the 
state of Arkansas, East Texas, Northwest Louisiana and Memphis, Tennessee.  
The Company's subsidiary banks grant commercial and financial, agribusiness, 
real estate construction and mortgage, and consumer loans.  The loan portfolio 
is diversified with no industry comprising greater than 10 percent of the 
total outstandings.

    Certain of the directors and officers of the Company, its subsidiaries, 
and companies in which they have a 10% or more interest, are customers of, and 
have transactions with, the Company's subsidiary banks in the ordinary course 
of business.  In the opinion of management, all loans and commitments to loan 
included in such transactions were made on substantially the same terms, 
including interest rates and collateral, as those prevailing at the time for 
comparable transactions with other persons.  These loans do not include more 
than a normal risk of collectibility and do not involve any unfavorable 
features.  The aggregate balance of such loans at December 31, 1996 and 1995, 
was $119,885,888 and $134,934,049, respectively.  Transactions during 1996 
included new loans amounting to $109,758,703 and repayments amounting to 
$124,806,864.
<PAGE> 32-49

Note 7:
ALLOWANCE FOR POSSIBLE LOAN AND LEASE LOSSES

    Transactions in the allowance for possible loan and lease losses are as 
follows:

<TABLE>
<CAPTION>
          (Dollars in Thousands)                           1996        1995        1994  
                                                         --------    --------    --------
          <S>                                            <C>         <C>         <C>
          Balance - January 1........................... $ 51,341    $ 45,325    $ 48,080
          Recoveries credited to allowance..............    3,347       3,913       3,173
          Provision charged to operating expense........    7,452       3,059      (3,092)
          Loans and leases charged off..................   (9,702)     (6,022)     (4,156)
          Allowance resulting from acquisitions.........      137       5,066       1,320
                                                         --------    --------    --------
          Balance - December 31......................... $ 52,575    $ 51,341    $ 45,325
                                                         ========    ========    ========
</TABLE>

Note 8:
BANK PREMISES AND EQUIPMENT

    Bank premises and equipment consist of the following:

<TABLE>
<CAPTION>
          (Dollars in Thousands)                                       1996        1995  
                                                                     --------    --------
          <S>                                                        <C>         <C>
          Land...................................................... $ 17,334    $ 16,976
          Building and improvements.................................  106,798     104,299
          Leasehold improvements....................................    9,175       8,900
          Equipment.................................................   83,666      77,515
                                                                     --------    --------
                                                                      216,973     207,690
          Less accumulated depreciation
            and amortization........................................  112,473     101,025
                                                                     --------    --------
                                                                     $104,500    $106,665
                                                                     ========    ========
</TABLE>
<PAGE> 32-49

Note 9:
Short-Term Borrowings

    Short-term borrowings consist of the following:

<TABLE>
<CAPTION>
          (Dollars in Thousands)                                       1996        1995  
                                                                     --------    --------
          <S>                                                        <C>         <C>
          Federal funds purchased................................... $  7,874    $ 88,452
          Securities sold under agreements to repurchase............  115,984      90,111
          Committed lines of credit.................................   31,750      38,596
          Other.....................................................   21,845      18,219
                                                                     --------    --------
                                                                     $177,453    $235,378
                                                                     ========    ========
</TABLE>

    The maximum amount of outstanding repurchase agreements at any month-end 
during the year ended December 31, 1996, was $116.2 million.  The average 
daily amount of outstanding repurchase agreements for the year ended December 
31, 1996, was $96.4 million.  The investment securities underlying the 
repurchase agreements were held under the Company's control.

    The Company has a $30.0 million and a $50.0 million committed line of 
credit from two unaffiliated banks.  Amounts borrowed under the $30.0 million 
agreement are subject to a variable interest rate that is based on the London 
InterBank Offered Rate plus 3/4 of 1% (6.25% at December 31, 1996).  Amounts 
borrowed under the $50.0 million agreement are subject to an interest rate 
which is set monthly by the lender on a floating basis (6.21% at December 31, 
1996).  As of December 31, 1996, the Company had borrowings of $6.8 million 
and $25.0 million, respectively, under these agreements.

Note 10:
LONG-TERM DEBT

    Long-term debt consists of the following:

<TABLE>
<CAPTION>
          (Dollars in Thousands)                                       1996        1995
                                                                     --------    --------
          <S>                                                        <C>         <C>
          8.85% note - payable $1,071,428 annually to 1997.......... $  1,071    $  2,143
          Note payable to Federal Home Loan Bank, interest
            at London InterBank Offered Rate plus .10%, due
            2001 (5.48% at December 31, 1996).......................    5,000       5,000
          Other.....................................................       26          27
                                                                     --------    --------
                                                                     $  6,097    $  7,170
                                                                     ========    ========
</TABLE>
<PAGE> 32-49

    Maturities of long-term debt for years subsequent to December 31, 1995, 
are as follows:

<TABLE>
<CAPTION>
               (Dollars in Thousands)              Consolidated   Parent Company
                                                  --------------  --------------
               <S>                                <C>             <C>
                     1997........................  $      1,073    $      1,071
                     1998........................             2               -
                     1999........................             3               -
                     2000........................             3               -
                     2001........................         5,003               -
                     Later years.................            13               -
</TABLE>

    Under certain loan covenants, the Company has restrictions on incurring 
additional indebtedness or lease commitments and is prohibited from pre-paying 
such debt for a certain amount of time.  Also, the Company cannot pay 
dividends (other than stock dividends) or retire capital stock if the amount 
of such payments would exceed prescribed limits.  Retained earnings in excess 
of earnings so restricted by these covenants and available for distribution 
total $239 million at December 31, 1996.

Note 11:
INCOME TAXES

    Deferred income taxes reflect the net tax effects of temporary differences 
between the carrying amounts of assets and liabilities for financial reporting 
purposes and the amounts used for income tax purposes.  Significant components 
of the company's deferred tax assets and liabilities as of December 31, 1996, 
and 1995, are as follows:
<PAGE> 32-49

<TABLE>
<CAPTION>
          (Dollars in Thousands)                                       1996        1995  
                                                                     --------    --------
          <S>                                                        <C>         <C>
           Deferred tax assets:
            Loan loss reserve....................................... $ 17,072    $ 15,866
            Cost of purchased mortgage servicing....................    5,113       2,552
            Other - net.............................................    6,268       7,201
                                                                     --------    --------
              Total deferred tax assets.............................   28,453      25,619
                                                                     --------    --------
            Valuation allowance.....................................     (696)       (815)
                                                                     --------    --------
            Net deferred tax assets.................................   27,757      24,804
                                                                     --------    --------
           Deferred tax liabilities:
            Operating leases........................................    4,660       3,630
            Net pension benefit.....................................    5,543       5,102
            Basis adjustment - purchase accounting..................    2,515       2,481
            Property, plant and equipment...........................    2,257       1,912
            Other - net.............................................    3,005       5,610
                                                                     --------    --------
              Total deferred tax liabilities........................   17,980      18,735
                                                                     --------    --------
              Net deferred tax assets............................... $  9,777    $  6,069
                                                                     ========    ========
</TABLE>

    A valuation allowance is provided when it is more likely than not that 
some portion of the deferred tax asset will not be realized.  Due to the lack 
of historical earnings trends for acquired subsidiaries, the Company has 
established a valuation allowance equal to approximately the amount of 
acquired tax operating loss carryforwards in excess of the subsidiaries' 
future taxable items in the carryforward periods.  The valuation allowance 
relates solely to the State First National Bank, Texarkana, Texas, and Kilgore 
First National Bank, Kilgore, Texas, net operating loss carryforwards.

    At December 31, 1996, State First National Bank and Kilgore First National 
Bank had net operating loss carryforwards of approximately $1,047,000 and 
$1,204,000, respectively, for Federal income tax purposes.  The carryforwards 
can only be used against taxable income of State First National Bank and 
Kilgore First National Bank and expire in 2005, and 2004, respectively.  
Additionally, provisions of the Internal Revenue Code limit the annual 
utilization of the net operating loss carryforwards.  As the valuation 
allowance is reduced, the amounts will be applied to reduce goodwill recorded 
in connection with the purchase of both State First National Bank and Kilgore 
First National Bank.
<PAGE> 32-49

    Significant components of the provision for income taxes attributable to 
continuing operations are as follows:

<TABLE>
<CAPTION>
          (Dollars in Thousands)                           1996        1995        1994  
                                                         --------    --------    --------
          <S>                                            <C>         <C>         <C>
          Current:
           Federal...................................... $ 37,629    $ 27,398    $ 19,182
           State........................................    3,738       2,062         986
                                                         --------    --------    --------
           Total current................................   41,367      29,460      20,168
                                                         --------    --------    --------
          Deferred:
           Federal......................................   (3,966)     (1,066)      3,296
           State........................................     (618)       (131)        542
                                                         --------    --------    --------
           Total deferred...............................   (4,584)     (1,197)      3,838
                                                         --------    --------    --------
          Provision for income taxes.................... $ 36,783    $ 28,263    $ 24,006
                                                         ========    ========    ========
</TABLE>

    The components of the provision for deferred income taxes for the years 
ended December 31, 1996, 1995, and 1994, are as follows:

<TABLE>
<CAPTION>
          (Dollars in Thousands)                           1996        1995        1994
                                                         --------    --------    --------
          <S>                                            <C>         <C>         <C>
          Provision for possible loan and lease
            losses...................................... $ (1,219)   $   (912)   $  1,165
          Net pension benefit...........................      528         763         828
          Operating lease...............................      545         916       1,270
          Cost of mortgage servicing rights.............   (4,406)          -           -
          Other.........................................      (32)     (1,964)        575
                                                         --------    --------    --------
          Provision for deferred income taxes........... $ (4,584)   $ (1,197)   $  3,838
                                                         ========    ========    ========
</TABLE>
<PAGE> 32-49

    The reconciliation of income tax attributable to continuing operations 
computed at the U.S. Federal statutory tax rates to income tax expense is:

<TABLE>
<CAPTION>
          (Dollars in Thousands)                           1996        1995        1994
                                                         --------    --------    --------
          <S>                                            <C>         <C>         <C>
          Current:
          Tax at U.S. statutory rate....................    35.0%       35.0%       35.0%
          Non-taxable interest income...................    (2.6)       (2.8)       (3.3)
          State income tax expense,
            net of Federal income tax benefit...........     1.9         1.5         1.3
          Equity in earnings of unconsolidated
            subsidiary..................................     (.4)        (.6)        (.5)
          Other, net....................................     1.0          .1         (.2)
                                                         --------    --------    --------
          Effective income tax rate.....................    34.9%       33.2%       32.3%
                                                         ========    ========    ========
</TABLE>

    Cash income taxes paid during 1996, 1995 and 1994, were $40.4 million, 
$25.2 million and $18.3 million, respectively.

Note 12:
STOCK OPTION PLAN

    Executives and other key officers have been granted options to purchase 
the Company's common shares under the Company's 1987 Incentive and 
Nonqualified Stock Option Plan.  The Company has authorized 1,622,755 shares 
for issuance under the plan.  All options granted have ten-year terms and vest 
ratably over a five-year period.

    Pro forma information regarding net income and earnings per share is 
required by Statement 123, and has been determined as if the Company had 
accounted for its employee stock options under the fair value method of that 
Statement.  The fair value for these options was estimated at the date of 
grant using a Black-Scholes option pricing model.  For the two grants during 
1995 the weighted average assumptions were: risk-free interest rates of 7.1% 
and 5.6%; dividends yields of 3.4% and 3.1%; volatility factors of the 
expected market price of the Company's common stock of .20 and .19; and a 
weighted average expected life of the option of 7 years.  For the grant during 
1996, the weighted average assumptions were: risk-free interest rate of 6.3%; 
dividend yield of 2.7%; volatility factor of the expected market price of the 
Company's common stock of .18; and a weighted average expected life of the 
option of 7 years.  The weighted average fair value of options granted during 
1995 and 1996 is estimated at $5.97 and $9.13 per share, respectively.

    The Black-Scholes option valuation model was developed for use in 
estimating the fair value of traded options which have no vesting restrictions 
and are fully transferable.  In addition, option valuation models require the 
input of highly subjective assumptions including the expected stock price 
volatility.  Because the Company's employee stock options have characteristics 
significantly different form those of traded options, and because changes in 
the subjective input assumptions can materially affect the fair value 
estimate, in management's opinion, the existing models do not necessarily 
provide a reliable single measure of the fair value of its employee stock 
options.
<PAGE> 32-49

    For purposes of pro forma disclosure, the estimated fair vale of the 
options is amortized to expense over the option's vesting period.  the pro 
forma effect on net income for 1996 and 1995 is not indicative of the pro 
forma effect on net income in future years because it does not take into 
consideration pro forma compensation expense related to grants made prior to 
1995.  The Company's pro forma information follows:

<TABLE>
<CAPTION>
          (In Thousands Except for Per Share Data)                     1996        1995  
                                                                     --------    --------
          <S>                                                        <C>         <C>
          Pro forma net income...................................... $ 68,377    $ 56,840
          Pro forma earnings per share.............................. $   2.37    $   2.06
</TABLE>

    Presented below is the activity in the plan for the three years in the 
period ended December 31, 1996, and certain other information concerning the 
plan.

<TABLE>
<CAPTION>
                                       Number of Shares
                                         Under Option                  Option Price       
                                -------------------------------  -------------------------
                                             Non-
                                Incentive  Qualified    Total      Per Share      Total
                                ---------  ---------  ---------  ------------  -----------
          <S>                   <C>        <C>        <C>        <C>           <C>
          Outstanding at
            January 1, 1994....    92,693    679,312    772,005      $ 11.72   $ 9,048,031
          Granted..............         -     22,414     22,414      $ 17.80       398,969
          Exercised............   (25,880)   (78,457)  (104,337)     $  7.07      (737,142)
          Forfeited............         -    (11,008)   (11,008)     $ 16.40      (180,519)
                                ---------  ---------  ---------                -----------
          Outstanding at
            December 31, 1994..    66,813    612,261    679,074      $ 12.56   $ 8,529,339
          Granted..............         -    260,744    260,744      $ 26.06     6,793,751
          Exercised............   (21,775)   (44,245)   (66,020)     $ 10.06      (663,906)
          Forfeited............         -    (14,542)   (14,542)     $ 18.58      (270,248)
                                ---------  ---------  ---------                -----------
          Outstanding at
            December 31, 1995..    45,038    814,218    859,256      $ 16.75   $14,388,937
          Granted..............         -    131,612    131,612      $ 37.25     4,902,547
          Exercised............    (4,870)   (50,371)   (55,241)     $ 10.53      (581,827)
          Forfeited............         -    (21,670)   (21,670)     $ 19.81      (429,372)
                                ---------  ---------  ---------                -----------
          Outstanding at
            December 31, 1996..    40,168    873,789    913,957      $ 20.00   $18,280,284
                                =========  =========  =========                ===========
</TABLE>
<PAGE> 32-49

    The information concerning current outstanding and exercisable options at 
December 31, 1996, is as follows:

<TABLE>
<CAPTION>
                                    Options Outstanding                          Options Exercisable      
                      -------------------------------------------------    --------------------------------
                                          Weighted
                                           Average
                                          Remaining        Weighted                            Weighted   
        Range of          Options        Contractual        Average            Options          Average    
     Exercise Prices    Outstanding    Life (in years)  Exercise Price       Exercisable    Exercise Price
     ---------------  ---------------  ---------------  ---------------    ---------------  ---------------
     <S>              <C>              <C>              <C>                <C>              <C>
          < $10             240,699            1.7            $  6.82            240,699          $  6.82
        $10 - $20           291,441            6.7              17.78            184,313            17.62
        $20 - $30           125,399            8.2              21.81             24,484            21.81
        $30 - $40           256,418            9.5              34.01             24,976            30.60
                      ---------------                                      ---------------
                            913,957                                              474,472 
                      ===============                                      ===============
</TABLE>

    There was no material dilutive effect on earnings per share from 
outstanding stock options for the three years in the period ended December 31, 
1996.

Note 13:
EMPLOYEE BENEFIT PLANS

    The Company has a salary deferral retirement savings plan qualified under 
section 401(k) of the Internal Revenue Code for the benefit of all qualifying 
employees who have completed one year of service.  Participants in the plan 
may make deferral contributions to the Plan which are 100% vested at all 
times.  The Company matches a minimum of 30% of the employee's contributions 
up to 6% of salary.  After five years of service, the Company matches 40% of 
the employee's contributions up to 6% of salary.  Company-matching 
contributions are fully vested after five years of service.  In 1996, 1995, 
and 1994, the Company made contributions of $1,333,000, $999,000 and $943,000, 
respectively, to the 401(k) Thrift plan.

    The Company has defined benefit pension plans which provide benefits to 
substantially all employees. Benefits under these plans generally are based on 
the employee's years of service and compensation during the years immediately 
preceding retirement.  The Company's general funding policy is to contribute 
amounts deductible for Federal income tax purposes.  Pension (cost) benefit is 
summarized as follows:
<PAGE> 32-49
<TABLE>
<CAPTION>
          (Dollars in Thousands)                           1996        1995        1994
                                                         --------    --------    --------
          <S>                                            <C>         <C>         <C>
          Service cost.................................. $ (2,121)   $ (1,649)   $ (1,716)
          Interest cost.................................   (2,567)     (2,148)     (2,139)
          Actual return on plan assets..................    6,293      10,114        (906)
          Net amortization and deferral.................     (966)     (5,062)      5,896
                                                         --------    --------    --------
          Total pension benefit......................... $    639    $  1,255    $  1,135
                                                         ========    ========    ========
</TABLE>

    The status of the defined benefit plans at December 31, 1996, 1995, and 
1994, is as follows:

<TABLE>
<CAPTION>
          (Dollars in Thousands)                           1996        1995        1994  
                                                         --------    --------    --------
          <S>                                            <C>         <C>         <C>
          Actuarial present value of benefit
            obligations:
              Approximate accumulated benefit
              obligation, including vested benefits
              of approximately $31,349, $25,940
              and $22,768, at December 31, 1996,
              1995, and 1994, respectively.............. $ 33,434    $ 28,377    $ 23,807
                                                         ========    ========    ========
          Fair value of plan assets..................... $ 56,511    $ 51,049    $ 42,436
          Projected benefit obligation..................  (39,013)    (32,500)    (27,476)
                                                         --------    --------    --------
          Plan assets in excess of 
            projected benefit obligation................   17,498      18,549      14,960
          Unrecognized net (gain) loss..................    1,017        (440)      2,284
          Unrecognized net transition
            asset at December 31........................   (3,381)     (4,101)     (4,821)
                                                         --------    --------    --------
          Prepaid pension costs......................... $ 15,134    $ 14,008    $ 12,423
                                                         ========    ========    ========
</TABLE>

    The expected long-term rate of return on the plans' assets was in the 
range of 9.0% to 9.5% for 1996, 1995, and 1994.  The discount rate and rate of 
increase in future compensation levels used in determining the actuarial 
present value of the projected benefit obligation were 8.0% and 4.5%, 
respectively, at December 31, 1996, and December 31, 1995, and December 31, 
1994.  The plans' assets are invested in diversified portfolios that primarily 
consist of equity and debt securities of which 218,629 shares, 249,856 shares,  
and 170,019 shares at December 31, 1996, 1995, and 1994, respectively, were in 
the Company's common stock.  The fair value of these shares at December 31, 
1996, was $8.1 million and the cash dividends paid on these shares during 1996 
were $214 thousand.  Also included in these securities were investments in 
various common trust funds administered by First Commercial Trust Company, a 
subsidiary of the Company, of 799,484 shares, 568,308 shares, and 457,650 
shares at December 31, 1996, 1995, and 1994, respectively.
<PAGE> 32-49

Note 14:
FAIR VALUES OF FINANCIAL INSTRUMENTS

    Statement of Financial Accounting Standards No. 107 ("Statement 107"), 
"Disclosures about Fair Value of Financial Instruments," requires disclosure 
of fair value information about financial instruments, whether or not 
recognized in the balance sheet, for which it is practicable to estimate that 
value.  Whenever possible, quoted market prices were used to develop fair 
values.  In cases where quoted market prices are not available, fair values 
are based on estimates using present value or other valuation techniques.  
Those techniques are significantly affected by the assumptions used, including 
the discount rate and estimates of future cash flows.  In that regard, the 
derived fair value estimates cannot be substantiated by comparison to 
independent markets and, in many cases, could not be realized in immediate 
settlement of the instrument.  Statement 107 excludes certain financial 
instruments and all nonfinancial instruments from its disclosure requirements.  
Accordingly, the aggregate fair value amounts presented do not represent the 
underlying value of the Company.

    The following methods and assumptions were used by the Company in 
estimating its fair value disclosures for financial instruments as of December 
31, 1996, and as of December 31, 1995.

CASH AND CASH EQUIVALENTS - The carrying amounts reported in the balance sheet 
for cash and short-term investments approximate those assets' fair values.

INVESTMENT SECURITIES AND TRADING ACCOUNT SECURITIES - Fair values for 
investment securities are based on quoted market prices.  Investment 
securities available-for-sale and trading account securities are carried at 
fair value.

LOANS, NET OF UNEARNED INCOME - Fair values for loans with variable rates are 
considered to be carrying value, adjusted for changes in credit risk since 
origination of the loans.  Fair values for loans with fixed rates are based 
upon the discounting of the estimated future cash flows of the instrument.  
The future cash flows were estimated using the actual yield for each specific 
loan category after adjustment to allocate the expenses of origination and 
servicing of the loans.  The discount rate to bring the future cash flows to 
present value was estimated based upon a risk free rate derived from the 
Treasury yield curve, adjusted for the credit risk of the loan portfolio, 
allocation of expenses and a prepayment fee premium.

NON-INTEREST BEARING DEPOSITS AND INTEREST BEARING TRANSACTION ACCOUNTS AND 
SAVINGS ACCOUNTS WITH VARIABLE RATES - The carrying amounts of these 
liabilities approximate market.  Accordingly, carrying value is the disclosed 
fair value for these deposit liabilities.  Statement 107 defines the fair 
value of demand deposits as the amount payable on demand, and prohibits 
adjusting fair value for any value derived from retaining those deposits for 
an expected future period of time.  That component, commonly referred to as a 
deposit base intangible, is estimated to be approximately $155.8 million at 
December 31, 1996, and $153.2 million at December 31, 1995.  This component is 
estimated using the method described for interest bearing deposits with the 
addition of certain retention and profitability projections.
<PAGE> 32-49

INTEREST BEARING DEPOSITS - The fair value of these liabilities has been 
estimated based upon the projected future cash flows for these accounts.  The 
future cash flows were estimated using the actual interest expense for these 
deposit accounts plus adjustments for the estimated expenses incurred in the 
carrying of these accounts less estimated service charges.  The future cash 
flows are discounted at a risk free rate derived from the Treasury yield curve 
plus allocated expenses less estimated service charge income.  The fair value 
of these accounts is included in the total fair value of deposit liabilities 
disclosed above.

SHORT-TERM BORROWINGS - The carrying amounts reported in the balance sheet for 
short-term borrowings approximate those liabilities' fair values.

LONG-TERM DEBT - The fair value of these liabilities has been estimated based 
upon the discounted future cash flows.  The discount rate used included a risk 
free rate derived from the Treasury yield curve plus a risk weighting 
commensurate with the Company's borrowing position.

OFF-BALANCE-SHEET ITEMS - The estimated fair value of loan commitments and 
letters of credit is determined based upon the Company's current fee structure 
and is considered immaterial at December 31, 1996, and December 31, 1995.

<TABLE>
<CAPTION>
          (Dollars in Thousands)                  December 31, 1996           December 31, 1995  
                                               ------------------------    ------------------------
                                                Carrying     Estimated      Carrying     Estimated 
                                                 Amount      Fair Value      Amount      Fair Value
                                               ----------    ----------    ----------    ----------
          <S>                                  <C>           <C>           <C>           <C>
          Financial assets:
            Cash and cash equivalents......... $  596,373    $  596,373    $  540,298    $  540,298
            Investment securities
              held-to-maturity................    342,131       342,065       351,415       352,492
            Investment securities
              available-for-sale..............  1,033,278     1,033,278       973,129       973,129
            Trading account securities .......        196           196           449           449
            Loans, net of allowance
              for loan losses.................  3,187,844     3,189,997     3,132,577     3,178,829

          Financial liabilities:
            Non-interest bearing deposits.....    951,390       951,390     1,018,181     1,018,181
            Interest bearing transaction
              and savings accounts............  1,795,442     1,795,442     1,612,294     1,612,294
            Time Deposits.....................  2,068,309     2,077,148     2,000,066     2,027,125
            Short-term borrowings.............    177,453       177,453       235,378       235,378
            Long-term debt....................      6,097         5,335         7,170         7,348
</TABLE>

    These fair value estimates are as of December 31, 1996, and December 31, 
1995, and may not be relevant in predicting the Company's future earnings or 
cash flows.  This is due primarily to the Company's intention and ability to 
hold its investment securities and loans to maturity.  Additionally, it is the 
Company's policy to balance rate sensitive assets and rate sensitive 
liabilities so as to minimize the effect of rate changes on net interest 
margin.  Because the Company follows this policy, the unrealized gains and 
losses on the asset side of the balance sheet are substantially offset by 
unrealized gains and losses on the liability side of the balance sheet.
<PAGE> 32-49

Note 15:
COMMITMENTS AND CONTINGENCIES

    In the normal course of business there are various commitments outstanding 
and contingent liabilities, such as guarantees and commitments to extend 
credit, including letters of credit to facilitate commercial trade and standby 
letters of credit to assure performance or to support debt obligations, which 
are not reflected in the accompanying consolidated financial statements.  
These arrangements have credit risk essentially the same as that involved in 
extending loans to customers.  At December 31, 1996, and 1995, the 
subsidiaries of the Company had outstanding standby letters of credit of 
$39,170,000 and $42,669,000, respectively.  The majority of the standby 
letters of credit outstanding at December 31, 1996, are related to debts of 
others, primarily corporations, including industrial revenue bonds of 
approximately $5.2 million.

    The terms of these standby letters of credit are generally less than five 
years. Potential losses on standby letters of credit are considered in the 
allowance for possible loan and lease losses.  Fee income on standby letters 
of credit is recognized in accordance with Statement of Financial Accounting 
Standards No. 91.

    The Company's exposure to credit loss in the event of nonperformance by 
the other party to the financial instrument for commitments to extend credit 
and standby letters of credit is represented by the contractual amount of 
those instruments.  The Company uses the same credit policies in making 
commitments and conditional obligations as it does for on-balance sheet 
instruments.  Financial instruments whose contract amounts represent credit 
risk at December 31, 1996, are as follows:

                                                    Contractual Amount
                                                    ------------------
Commitments to extend credit.......................    $   662,374,000
Standby letters of credit..........................    $    39,170,000

    Commitments to extend credit are agreements to lend to a customer as long 
as there is no violation of any condition established in the contract.  
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.  The amount of collateral 
obtained if deemed necessary by the Company upon extension of credit is based 
on management's credit evaluation of the counterparty.  Collateral held varies 
but may include accounts receivable, inventory, property, plant and equipment, 
and income-producing commercial properties.

    Two real estate partnerships owned by the Company through one of its 
subsidiaries have $1,445,000 and $1,515,000, respectively, at December 31, 
1996, of long-term indebtedness in which the creditors' recourse to the 
Company is limited to the Company's interest in the specific partnership's 
collateral pledged under the related obligation.

    Land, buildings, and equipment are leased under contracts through various 
dates to 2070, with renewal options generally available.  Total rent expense 
of the leased premises and equipment was $4,355,000 in 1996, $4,005,000 in 
1995, and $3,469,000 in 1994.  Rental income received under sub-leases 
amounted to $304,000 in 1996, $432,000 in 1995, and $284,000 in 1994.
<PAGE> 32-49

    Minimum annual rentals under non-cancelable operating leases totaling 
$11,902,000, are as follows: 1997 - $2,216,000, 1998 - $2,034,000, 1999 - 
$1,603,000, 2000 - $1,029,000, 2001 - $896,000, and remaining years - 
$4,124,000.  Minimum annual rental income under non-cancelable operating sub-
leases amounts to $70,000 each year from 1997 through 2001, and $35,000 in 
2002.  The annual rent for certain of the leases varies according to changes 
in the Consumer Price Index.

Aearth Development, Inc. v. First Commercial Bank, N.A.
-------------------------------------------------------
First Commercial Bank, N.A., a wholly owned subsidiary of the Company, is the 
defendant in litigation initiated in 1989 seeking approximately $200,000,000 
in compensatory damages plus punitive damages.  Plaintiffs in the litigation 
allege fraudulent conspiracy, fraudulent misrepresentation, tortious 
interference with a business expectancy, breach of contract, willful breach of 
fiduciary duty, interference with performance of contract, securities law 
violations, conversion, prima facie tort and violations of the Federal 
Racketeer Influenced and Corrupt Organizations Act as a basis for trebled 
damages.  In June of 1991, the matter was tried before a chancery judge in 
Chancery Court in Pulaski County, Arkansas, and on June 5, 1992, the complaint 
was dismissed and no damages were assessed against First Commercial Bank, N.A.  
Plaintiffs appealed this decision to the Supreme Court of Arkansas in July of 
1992, alleging error for failure to try the case before a jury in Circuit 
Court.  On July 18, 1994, the Supreme Court of Arkansas remanded the case to 
Circuit Court in Pulaski County, Arkansas, for jury trial.  A jury trial was 
held, which concluded March 13, 1996, with the jury awarding plaintiffs a 
total of $12.5 million compensatory damages and $10.0 million punitive 
damages.  On April 30, 1996, the trial court approved a $7.3 million set off 
to the March 13, 1996, $22.5 million jury verdict.  The set off pertained to 
monies owed by Aearth Development, Inc., and related interests, to First 
Commercial Bank, N.A.  On May 20, 1996, the Court entered a judgment against 
First Commercial Bank, N.A., in the amount of $15.2 million.  Thereafter, on 
June 21, 1996, the Court granted a Motion for Remittitur and reduced the 
punitive damages awarded in the judgment by $7.0 million.  Therefore, the 
final award was $8.2 million.  On June 27, 1996, First Commercial Bank, N.A., 
filed a Notice of Appeal to the Supreme Court of Arkansas.  Management intends 
to vigorously pursue the appeal.  The ultimate legal and financial liability 
of the Company in connection with this matter cannot be estimated with 
certainty, but management, based on the advice of legal counsel that the 
judgment entered on the verdict will be reversed and dismissed in whole or in 
part or a new trial ordered in whole or in part, believes that the impact of 
this matter will not have a materially adverse effect on the Company's 
financial position.  However, if any substantial loss were to occur as a 
result of this litigation it could have a material adverse impact upon results 
of operations in the fiscal quarter or year in which it were to be incurred, 
but the Company cannot estimate the range of any reasonably possible loss.

    The Company is involved in various lawsuits and litigation matters on an 
ongoing basis as a result of its day-to-day operations.  However, the Company 
does not believe that any of these or any threatened lawsuits and litigation 
matters will have a materially adverse effect on the Company's financial 
position or results of operations.
<PAGE> 32-49

Note 16:
PARENT COMPANY FINANCIAL INFORMATION

    Presented below are the condensed balance sheets, and statements of income 
and cash flows for the parent company, First Commercial Corporation:

<TABLE>
<CAPTION>
          Balance Sheets (In Thousands)                      December 31,   
                                                         --------------------
                                                           1996        1995  
                                                         --------    --------
          <S>                                            <C>         <C>
          Assets
            Cash........................................ $  4,884    $  8,246
            Short-term investments......................        -       2,500
                                                         --------    --------
            Cash and cash equivalents...................    4,884      10,746
            Loans.......................................   17,955       1,233
            Investment in and advances
              to subsidiaries...........................  482,324     456,475
            Investment securities, estimated market
              value $772 ($429 in 1995).................      772         429
            Bank premises and equipment.................    8,379      10,294
            Other assets................................    9,015       8,030
                                                         --------    --------
                                                         $523,329    $487,207
                                                         ========    ========
          Liabilities and Stockholders' Equity
            Long-term debt.............................. $  1,071    $  2,143
            Short-term borrowings.......................   31,750      38,596
            Other liabilities...........................   15,376      14,209
            Preferred stock.............................        -           -
            Common stockholders' equity.................  475,132     432,259
                                                         --------    --------
                                                         $523,329    $487,207
                                                         ========    ========
</TABLE>
<PAGE> 32-49

<TABLE>
<CAPTION>
          Statements of Income (In Thousands)                Years Ended December 31,  
                                                         --------------------------------
                                                           1996        1995        1994
                                                         --------    --------    --------
          <S>                                            <C>         <C>         <C>
          Income
            Dividends from subsidiaries................. $ 60,340    $ 46,700    $ 33,095
            Interest....................................      476         213         226
            Other income................................      412         395       1,038
                                                         --------    --------    --------
          Total income..................................   61,228      47,308      34,359
                                                         --------    --------    --------
          Expenses
            Interest....................................    2,083       2,273       2,174
            Other expenses..............................   12,650      11,062       9,778
                                                         --------    --------    --------
          Total expenses................................   14,733      13,335      11,952
                                                         --------    --------    --------
          Income from operations........................   46,495      33,973      22,407
          Income tax benefit............................    5,234       4,686       4,088
          Equity in undistributed 
            earnings of subsidiaries....................   16,833      18,251      23,813
                                                         --------    --------    --------
          Net income.................................... $ 68,562    $ 56,910    $ 50,308
                                                         ========    ========    ========
</TABLE>
<PAGE> 32-49

<TABLE>
<CAPTION>
          Statements of Cash Flows (In Thousands)                                 Years Ended December 31,  
                                                                              --------------------------------
                                                                                1996        1995        1994  
                                                                              --------    --------    --------
          <S>                                                                 <C>         <C>         <C>
          OPERATING ACTIVITIES
          Net income......................................................... $ 68,562    $ 56,910    $ 50,308
          Adjustments to reconcile net income to net
            cash provided by operating activities:
             Depreciation and amortization...................................    2,904       2,351       2,318
             Undistributed earnings of subsidiaries..........................  (16,833)    (18,251)    (23,813)
             Writedown of other real estate..................................        -           -          79
             Gain on sale of equipment.......................................        -          (3)          -
             Increase (decrease) in taxes payable............................   (2,033)      3,380         782
             Decrease (increase) in interest receivable......................      (61)          -          10
             Increase (decrease) in interest payable.........................       33        (669)        694
             Increase in dividends payable...................................    1,168         993       1,411
             Decrease (increase) in other receivables........................   (1,196)      1,896      (2,262)
             Decrease (increase) in prepaid assets...........................       23          47         (58)
             Increase (decrease) in accrued expenses.........................    2,216      (1,678)      3,333
                                                                              --------    --------    --------
          Net cash provided by operating activities..........................   54,783      44,976      32,802

          INVESTING ACTIVITIES
          Proceeds from maturing investment securities available-for-sale....        -           -       1,061
          Purchases of investment securities available-for-sale..............     (100)       (200)       (100)
          Net decrease (increase) in loans...................................  (16,722)         63        (324)
          Purchase of subsidiary.............................................    3,610      (6,122)          -
          Decrease (increase) in investments in subsidiaries.................  (12,408)        130     (15,216)
          Decrease (increase) in advances to subsidiaries....................    2,400      (1,891)     (2,048)
          Fixed asset purchases..............................................      (94)     (3,207)     (6,308)
          Proceeds from sale of fixed assets.................................      185         107       2,103
          Proceeds from sale of other real estate............................        -           -         141
                                                                              --------    --------    --------
          Net cash used in investing activities..............................  (23,129)    (11,120)    (20,691)

          FINANCING ACTIVITIES
          Net increase (decrease) in short-term borrowings...................   (6,846)     (3,104)     41,700
          Repayment of long-term debt........................................   (1,072)     (1,071)    (15,972)
          Dividends paid on preferred stock..................................        -           -        (129)
          Dividends paid on common stock.....................................  (24,228)    (20,356)    (17,092)
          Payment to redeem preferred stock..................................        -           -     (11,330)
          Proceeds from issuance of common stock.............................      107          61           -
          Purchases of treasury stock........................................   (6,368)     (5,245)     (9,566)
          Sales of treasury stock............................................      223           -          63
          Purchase of partial shares resulting
            from stock splits/stock dividends................................      (44)        (44)        (25)
          Stock options exercised............................................      712       1,135         890
                                                                              --------    --------    --------
          Net cash provided by (used in) financing activities................  (37,516)    (28,624)    (11,461)
          Net increase (decrease) in cash and cash equivalents...............   (5,862)      5,232         650
          Cash and cash equivalents at beginning of year.....................   10,746       5,514       4,864
                                                                              --------    --------    --------
          Cash and cash equivalents at end of year........................... $  4,884    $ 10,746    $  5,514
                                                                              ========    ========    ========
</TABLE>