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

                                   Form 10-K/A

                                 Amendment No. 1
                                       to
                Annual Report Pursuant to Section 13 or 15(d) of
                       The Securities Exchange Act of 1934


 For the fiscal year ended December 31, 1996      Commission File Number 0-13030
                           ------------------                             ------

                              TRANS FINANCIAL, INC.
             (Exact name of registrant as specified in its charter)

    Kentucky                                               61-1048868
(State or other jurisdiction of             (I.R.S. Employer Identification No.)
 incorporation or organization)

500 East Main Street, Bowling Green, Kentucky                   42101
     (Address of principal executive offices)                 (Zip Code)

Registrant's telephone number, including area code: (502)781-5000

Securities  registered  pursuant to Section  12(b) of the Act:  None  Securities
registered pursuant to Section 12(g) of the Act:
                      Common Stock, no par value per share
                                (Title of Class)
                         Preferred Stock Purchase Rights
                                (Title of Class)

Indicate by check mark if disclosure of delinquent  filers  pursuant to Item 405
of Regulation  S-K is not contained  herein,  and will not be contained,  to the
best  of  the  registrant's   knowledge,  in  definitive  proxy  or  information
statements  incorporated  by  reference  in Part  III of this  Form  10-K or any
amendment to this Form 10-K. _

Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the  preceding 12 months (or for such  shorter  period that the  registrant  was
required  to file  such  reports),  and  (2) has  been  subject  to such  filing
requirements for the past 90 days. Yes X No _

The aggregate market value of the voting stock held by nonaffiliates of the 
registrant on February 18, 1997: $240,138,000.

The number of shares outstanding of the issuer's class of common stock on 
February 18, 1997: 11,399,494 shares.

Document Incorporated By Reference
Portions  of  the  registrant's  Proxy  Statement  for  the  Annual  Meeting  of
Shareholders  to be held on April 28, 1997 are  incorporated  by reference  into
Part III of this report.


   
The  registrant's  Annual  Report on Form 10-K is hereby  amended to include the
following:
     (1) Item 1.  Business  is  amended  to provide a  description  of the
         general  demographics  of the area in which the  company operates;
     (2) Item 7.  Management's  Discussion  and  Analysis is revised to provide
         additional  details  regarding  the  provision  and allowance for loan
 losses; and
    (3) Form 11-K of the Trans Financial,  Inc.,  Savings Investment Plan, which
was not  available at the time of the initial  filing of the  registrant's  Form
10-K.
    


<PAGE>



Item 1. Business
The Company and the Banks
     Trans  Financial,  Inc.  ("the  company")  is a bank and  savings  and loan
holding  company  registered  under the Bank Holding Company Act of 1956 and the
Home  Owners'  Loan  Act,  which  has two  commercial  bank  subsidiaries--Trans
Financial  Bank,  National  Association  ("TFB-KY")  and  Trans  Financial  Bank
Tennessee,  National  Association  ("TFB-TN")--and one thrift  subsidiary--Trans
Financial  Bank,  F.S.B.  ("TFB-FSB").  In  addition,  the  company  operates as
subsidiaries of TFB-KY a full-service securities  broker/dealer--Trans Financial
Investment  Services,  Inc.  ("TFIS")--and  a  mortgage  banking  company--Trans
Financial Mortgage Company ("TFMC").
     During 1995, three commercial bank  subsidiaries were merged to form TFB-KY
and two thrift subsidiaries were merged to form TFB-FSB.  Collectively,  TFB-KY,
TFB-TN and TFB-FSB are referred to in this report as "the banks."
     On December 31, 1996, the company had total consolidated  assets of $2.0
billion,  total loans of $1.5 billion,  total deposits of $1.6 billion and 
shareholders' equity of $131 million.
     The portion of Management's  Discussion and Analysis of Financial Condition
and Results of Operations  entitled Mergers and Acquisitions  included in Item 7
is incorporated herein by reference.
     The banks  provide a full range of corporate and retail  banking  services,
including  checking,  savings and time deposit  accounts;  secured and unsecured
loans to corporations, individuals and others; letters of credit; rental of safe
deposit boxes; financial counseling for individuals and institutions;  and trust
and brokerage services.  Interest on domestic commercial,  consumer and mortgage
loans  constitutes  the largest  contribution  to the operating  revenues of the
company and the banks.
     TFB-KY  provides  a wide  variety  of  personal  and  corporate  trust  and
trust-related  services,  including  serving as executor of estates;  as trustee
under testamentary and inter-vivos  trusts; as guardian of the estates of minors
and  incompetents;  as escrow agent under various  agreements;  and as financial
advisor to and custodian for  individuals,  corporations  and others.  Corporate
trust services  include serving as registrar,  transfer agent,  and paying agent
for  corporate  securities  and  as  corporate  trustee  under  corporate  trust
indentures.  At December  31,  1996,  approximately  $421 million in assets were
managed by the trust department of TFB-KY.
     TFMC   originates   and  purchases   mortgage  loans  for  the  purpose  of
constructing,  financing or refinancing one- to four-family dwellings. TFMC also
services  mortgage  loans for the banks and for others.  Generally,  residential
mortgage  loans  originated or purchased are then sold in the secondary  market.
When sold,  servicing may be retained by TFMC or released to the purchaser.  The
portfolio of mortgage loans serviced for others totaled $3.3 billion at December
31, 1996.
     TFIS  offers  to  customers  of the  banks  and to  others a wide  range of
investment products and services,  including  financial planning,  mutual funds,
annuities,  and  individual  stocks  and  bonds.  In  October  of  1995,  TFB-KY
introduced its own family of proprietary  mutual funds, the Trans Adviser Funds,
which added depth to its lineup of investment products.
     TFB-KY has twenty-seven offices in Kentucky:  six located in Bowling Green;
three  located  in  Pikeville;  two  located  in each of  Glasgow,  Scottsville,
Morehead and Maysville;  and one located in each of Augusta,  Cave City,  Dawson
Springs,  Tompkinsville,   Elkhorn  City,  Meta,  Belfry,  Virgie,  Martin,  and
Prestonsburg.  TFB-FSB has twelve offices: two in Columbia,  Tennessee;  and one
each in the  Tennessee  communities  of  Tullahoma,  Mt.  Pleasant,  Manchester,
Rockwood,  Kingston,  Shelbyville,  and Winchester; and one each in the Kentucky
communities of Franklin, Russellville and Auburn. TFMC has a mortgage operations
center in Tullahoma,  Tennessee,  and a loan  production  office in  Greensboro,
North Carolina.  TFB-TN has ten offices in Tennessee: two located in Cookeville;
and one  located  in  each  of  Nashville,  Clarksville,  Crossville,  Franklin,
Lebanon, McMinnville, Murfreesboro, and Sparta. Subsequent to December 31, 1996,
the company  entered  into a contract  to sell the  Lebanon and Sparta  offices,
subject to regulatory approval.

   
Demographics
     As of December  31,  1996,  the company  operated 52 banking  offices in 37
communities  in Kentucky and  Tennessee.  These  communities  are  predominantly
non-urban markets under 100,000 in population.
Population
     Statewide, Tennessee's population is projected by the U.S. Census Bureau to
grow  approximately 4% per year through 2000, while Kentucky's  annual growth is
projected at 2%. Nearly all of the company's primary markets should  participate
in this growth, with South Central and Northeastern Kentucky experiencing growth
rates in the 1.3% to 2.0% range, and most Tennessee markets experiencing 1.5% to
4.5% growth rates. Eastern Kentucky's population growth, however, is expected to
be slower--under 0.5% per year.
Employment and Income
     The 5.0%  unemployment  rate for  Tennessee at the end of 1996 was slightly
below the national average of 5.3%, while Kentucky's 5.5%  unemployment rate was
slightly above the national  average.  Per capita income in 1994 was $19,450 and
$17,721, respectively, for Tennessee and Kentucky--below the national average of
$21,696. The company estimates per capita income levels in the company's markets
to be as follows (1994 data):
           South Central Kentucky                               $17,542
           Northeastern Kentucky                                 14,094
           Eastern Kentucky                                      14,707
           Western Kentucky                                      16,248
           Northern Tennessee                                    15,430
           Middle Tennessee                                      19,732
           South Central Tennessee                               17,733
Industry Trends
     The local economies in the company's markets are diversified,  as discussed
below.
     In South Central and  Northeastern  Kentucky,  the largest  industries  are
durable and non-durable goods manufacturing.  Most of the recent growth in South
Central  Kentucky has occurred in durable goods,  while services and non-durable
goods  manufacturing  have been the  fastest-growing  industries in Northeastern
Kentucky.  Agriculture has been in decline in both areas in recent years. In the
Bowling  Green  area,  where the  company  has its  largest  presence,  services
represent the largest, but slowest-growing industry segment.
     Mining--primarily  coal  mining--is  the largest  industry in the company's
Eastern  Kentucky  market,  but has been  declining over the past several years.
Services and wholesale trade, however, have provided strong growth.
     In the company's Western Kentucky market area, durable goods  manufacturing
and services are the primary  industries,  with durable goods providing the most
growth.  Non-durable goods  manufacturing has shown slow growth in recent years,
while mining has declined in importance in this area.
     In  the   company's   Tennessee   markets,   services  and  durable   goods
manufacturing are the largest industry segments.  Construction,  wholesale trade
and state and local government  represent the primary growth  industries,  while
non-durable goods  manufacturing  provides the least growth to this market area,
and has declined in certain communities.
    

Competition
     The  deregulation of the banking industry and the enactment in Kentucky and
other states of legislation permitting multi-bank holding companies,  as well as
interstate banking, has created a highly competitive  environment for banking in
the company's  market area. The following table displays each of the communities
where the company is currently  located and the respective  percentage of market
share of deposits the company has in each of these  communities.  The table also
shows the ranking by deposit  size of each of the TFB  locations  in their local
markets.

Share of Local Market
                   Banks, savings & loans and credit unions
                                                         Rank in
                                                Market    Local      Subsidiary
                                                Share     Market          Bank
                   South Central Kentucky:
                        Bowling Green              35%       1            TFB-KY
                        Glasgow/Cave City          40%       1            TFB-KY
                        Scottsville                35%       2            TFB-KY
                        Tompkinsville              18%       3            TFB-KY
                        Franklin                   *        NM            TFB-KY
                   Northeastern Kentucky:
                        Maysville                  37%       1            TFB-KY
                        Morehead                   33%       1            TFB-KY
                        Augusta                    30%       2            TFB-KY
                   Eastern Kentucky:
                        Pike County                19%       3            TFB-KY
                        Floyd County               27%       3            TFB-KY
                   Western Kentucky:
                        Dawson Springs              6%       5            TFB-KY
                        Russellville/Auburn        16%       3           TFB-FSB
                   Northern Tennessee:
                        Clarksville                 4%       8            TFB-TN
                   Middle Tennessee:
                        Cookeville                  6%       5            TFB-TN
                        Murfreesboro                1%      10            TFB-TN
                        Nashville                   *       NM            TFB-TN
                        Rockwood/Kingston          14%       4           TFB-FSB
                        McMinnville                 7%       4            TFB-TN
                        Sparta                      3%       4            TFB-TN
                        Franklin                    *       NM            TFB-TN
                        Lebanon                     1%      10            TFB-TN
                        Crossville                  3%       5            TFB-TN
                   South Central Tennessee:
                        Tullahoma                  13%       2           TFB-FSB
                        Shelbyville                 6%       6            TFB-TN
                        Manchester                 13%       2           TFB-FSB
                        Winchester                 13%       4           TFB-FSB
                        Columbia/Mt. Pleasant       7%       5           TFB-FSB
                 NM = not meaningful
                 * = less than 1%

                  

     The company  actively  competes in its markets with other  commercial banks
and financial institutions for all types of deposits, loans, trust accounts, and
other services.  The company also competes  generally with insurance  companies,
savings and loan associations,  credit unions,  brokerage firms, other financial
institutions,  and institutions  which have expanded into the financial  market.
Many of these competitors have resources substantially in excess of those of the
company,  have broader  geographic  markets and higher  lending  limits than the
banks and,  therefore,  are able to make larger  loans,  sell a broader  product
line,  and make more  effective use of  advertising  than can the company or the
banks.

Supervision and Regulation
     Bank holding companies,  commercial banks and savings banks are extensively
regulated  under both  federal and state law.  Any change in  applicable  law or
regulation  may have a material  effect on the  business  and  prospects  of the
company and the banks.
     The  company,  as a  registered  bank  holding  company,  is subject to the
supervision  of and  regulation  by the  Federal  Reserve  Board  under the Bank
Holding  Company Act of 1956.  Also,  as a  registered  savings and loan holding
company,  the company is subject to the  supervision  of and  regulation  by the
Office of Thrift Supervision ("OTS").
     TFB-KY  and TFB-TN are  subject  to the  supervision  of, and  regular
 examination  by, the Office of the  Comptroller  of the Currency.  TFB-FSB is
 subject to the supervision of, and regular examination by, the OTS. The Federal
 Deposit Insurance  Corporation insures the deposits of the banks to the current
 maximum of $100,000 per depositor.
     In addition,  the company is subject to the  provisions of  Kentucky's  and
Tennessee's  banking laws regulating bank acquisitions and certain activities of
controlling bank shareholders.
     The  Riegle-Neal  Interstate  Banking and Branching  Efficiency Act of 1994
(the "Act"),  when fully phased in, will remove state law barriers to interstate
bank  acquisitions  and will  permit the  consolidation  of  interstate  banking
operations.  Under the Act, effective September 29, 1995, adequately capitalized
and managed bank holding  companies may acquire  banks in any state,  subject to
(i) Community Reinvestment Act compliance, (ii) federal and state antitrust laws
and  deposit   concentration  limits,  and  (iii)  state  laws  restricting  the
acquisition  of a bank that has been in existence for less than a minimum period
of time (up to five years).  The Act's  interstate  consolidation  and branching
provisions will become operative on June 1, 1997,  although any state can, prior
to that time, adopt legislation to accelerate  interstate  branching or prohibit
it completely.  The Act's interstate consolidation and branching provisions will
permit  banks to merge  across  state  lines and,  if state laws  permit de novo
branching, to establish a new branch as its initial entry into a state.

   
Statistical Information
     Certain statistical  information is included in Management's Discussion and
Analysis of Financial  Condition and Results of Operations included in Item 7 on
pages  5  through  26 of this  Form  10-K/A  and in  note 7 to the  consolidated
financial  statements included in the initially filed Form 10-K. Those pages are
incorporated herein by reference.

     Description of Statistical Information                              Page(s)

     Average Consolidated Balance Sheets and Net Interest Analysis..........9-10
     Analysis of Year-to-Year Changes in Net Interest Income..................11
     Loans Outstanding........................................................14
     Loan Maturities and Interest Rate Sensitivity............................16
     Non-performing Assets (Including Potential Problem Loans)................16
     Summary of Loan Loss Experience..........................................19
     Allocation of Allowance for Loan Losses..................................19
     Allocation of Year-End Allowance for Loan Losses
       and Percentage of Each Type of Loan to Total Loans.....................19
     Carrying Value of Securities.............................................19
     Maturity Distribution of Securities Available for Sale...................20
     Maturity of Time Deposits of $100,000 or More............................21
     Short-Term Borrowings....................................................22

     Consolidated Statistical Information.....................................26

     Impact of Non-accrual Loans on Interest Income (note 7, paragraph 3)
     ............................................page 40 of initially filed 10-K
    


Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

Financial Overview
     Trans  Financial,  Inc.  ("the  company")  is a bank and  savings  and loan
holding  company  registered  under the Bank Holding Company Act of 1956 and the
Home  Owners'  Loan  Act,  which  has two  commercial  bank  subsidiaries--Trans
Financial  Bank,  National  Association  ("TFB-KY")  and  Trans  Financial  Bank
Tennessee,  National  Association  ("TFB-TN")--and one thrift  subsidiary--Trans
Financial Bank, F.S.B. ("TFB-FSB").  Collectively,  these three institutions are
referred to in this report as "the banks."
     In addition,  the company operates as subsidiaries of TFB-KY a full-service
securities  broker/dealer--Trans  Financial  Investment  Services,  Inc.--and  a
mortgage banking company--Trans Financial Mortgage Company ("TFMC"). The company
sold its travel agency, Trans Travel, Inc., during the fourth quarter of 1996.
     At December 31,  1996,  the company had total  consolidated  assets of $2.0
billion,  total  loans of $1.5  billion,  total  deposits  of $1.6  billion  and
shareholders'  equity of $131 million. The company's net income decreased 55% in
1996,  to $6.9  million,  from $15.3  million in 1995,  and  earnings  per share
decreased 56% to $0.60 per common share, from $1.35 in 1995.
     Results for 1996 reflect pre-tax  charges  totaling $5.8 million related to
the company's mid-year commitment to refocus on core financial services,  reduce
operating expenses and exit from less-profitable  initiatives.  Also included in
the  1996  results  is  a  pre-tax   charge  of  $2.6  million   resulting  from
congressional   legislation   enacted  during  the  third  quarter  designed  to
re-capitalize the Savings Association Insurance Fund ("SAIF"). In addition,  the
provision  for loan losses was  increased  in 1996 by $8.6  million  compared to
1995.
     The discussion that follows is intended to provide  additional insight into
the company's financial  condition and results of operations.  It should be read
in conjunction  with the  consolidated  financial  statements  and  accompanying
notes, which follow this discussion.

Mergers and Acquisitions
     Over the past several years,  the company has expanded  through mergers and
acquisitions, which are summarized below.
<TABLE>
<CAPTION> 
                                                                                                                          Asset
                                                                                                           Date            Size
       Acquisition                                             Location                                   Consummated    (millions)

<S>                                                         <C>                                           <C>            <C>

  Mergers (pooling-of-interests accounting):
      Dawson Springs Bancorp, Inc. ........................  South Central & Western Kentucky              December-92   $ 70
      Kentucky Community Bancorp, Inc. ....................  Northeastern Kentucky                         February-94    175
      Peoples Financial Services, Inc. ....................  Middle & Eastern Tennessee                    April-94       123
      FGC Holding Company .................................  Eastern Kentucky                              August-94      127
  Acquisitions (purchase accounting):
      First Federal Savings and Loan Assoc. of Russellville  Southwestern Kentucky                         November-9      41
      Future Federal Savings Bank branches (from RTC) .....  South Central Kentucky                        August-91       75
      First Federal Savings Bank of Tennessee .............  South Central Tennessee                       March-92       224
      Maury Federal Savings Bank ..........................  Middle Tennessee                              March-92        55
      Heritage Federal Bank for Savings branches ..........  Middle Tennessee                              August-92       55
      Trans Kentucky Bancorp, Inc. ........................  Eastern Kentucky                              July-93        189
      Fifth Third Bank of Kentucky, Inc. branches .........  South Central Kentucky                        February-95     41
      AirLanse Travel (sold November-96) ..................  Louisville, Kentucky                          September-95     1
      Correspondents Mortgage Company, L.P. ...............  Greensboro, North Carolina                    November-95      1
</TABLE>

                                                                                
     The  mergers  shown  in the  above  table  were  accounted  for  using  the
pooling-of-interests method of accounting and, accordingly, financial statements
for all periods  were  restated to reflect  the results of  operations  of these
companies on a combined  basis from the earliest  period  presented,  except for
dividends  per share.  The  acquisitions  were  accounted for using the purchase
method of accounting.  Accordingly,  the results of operations of those acquired
entities prior to the acquisition dates have not been included in the results of
operations.  Therefore,  ratios or analyses  for periods  before and after these
purchase acquisitions may not be comparable.
     Three banks were acquired in the Kentucky Community  Bancorp,  Inc. merger.
These three banks were  consolidated  into the operations of TFB-KY on March 31,
1994. The Peoples Financial  Services,  Inc. merger included one commercial bank
and one thrift institution. The commercial bank became TFB-TN and the thrift was
consolidated  into the  operations of TFB-FSB on July 31, 1994.  The  commercial
bank acquired in the FGC Holding  Company ("FGC") merger was  consolidated  into
the  operations  of TFB-KY on March 24,  1995.  In  connection  with  these 1994
mergers,  the company issued a total of 3,727,216 shares of common stock and the
shares of FGC preferred stock were retired.
     In connection  with the February 1995 branch  acquisition  from Fifth Third
Bank of Kentucky,  Inc.,  the two Fifth Third offices  located in Bowling Green,
Kentucky,  were  consolidated  into  existing  Trans  Financial  locations;  the
company's  existing location in Scottsville,  Kentucky was consolidated into the
other purchased  location.  AirLanse Travel was consolidated into the operations
of Trans Travel, Inc. and Correspondents  Mortgage Company was consolidated into
the  operations of TFMC.  (As a part of the  company's  commitment to refocus on
core financial  services,  Trans Travel, Inc. was sold during the fourth quarter
of 1996.) In addition to the deposits assumed,  the company received net cash of
$36.8 million and issued 25,000 shares of common stock in connection  with these
1995 acquisitions.
     See  note  4  to  the  consolidated  financial  statements  for  additional
information regarding business combinations.

Income Statement Review
     Net income was $6.9 million in 1996, compared  with $15.3  million in 1995,
and $14.4  million in 1994. On a per share basis,net income was $0.60, $1.35
and $1.28, respectively.
     As mentioned  previously,  non-interest  expenses for 1996 reflect  pre-tax
charges  totaling $5.8 million related to an initiative to refocus the company's
resources on its core financial  services,  reduce  operating  expenses and exit
from less-profitable  initiatives.  This initiative was undertaken in the second
quarter  of  1996,  when the  Board of  Directors  made a  change  in  executive
management,  with the  expressed  purpose of changing  the  company's  strategic
direction.  As of December 31, 1996, the company has  accomplished the following
goals of the initiative:
         -exited the venture capital and human resources consulting initiatives,
         -closed  the  Louisville,   Kentucky   office,   closed  mortgage  loan
          production offices in Chattanooga,  Jackson and Knoxville,  Tennessee,
         -sold the corporate aircraft, sold the travel agency,
         -sold a  newly-constructed  building  intended  to house the  company's
          corporate headquarters and consolidated office space in Bowling Green,
          Kentucky, and
         -realized additional  cost savings in the  company's  retail  delivery
          system of approximately  $2.5 million on an annualized  pre-tax basis,
          primarily through the reduction of administrative personnel.
     Based on a comparison of  non-interest  expenses for the fourth  quarter of
1996 to the second  quarter  (excluding the $5.8 million of charges to implement
the plan), total operating expenses have been reduced by more than $6 million on
an annualized pre-tax basis.
     In addition  to the charges  associated  with the refocus  initiative,  the
company  increased its 1996  provision for loan losses by $8.6 million  compared
with 1995 and recorded a pre-tax charge of $2.6 million imposed by congressional
legislation   enacted  during  1996  designed  to   re-capitalize   the  Savings
Association  Insurance Fund ("SAIF").  All banks with SAIF-insured  deposits and
all  savings  and loans  were  subject  to the SAIF  assessment.  The  increased
provision for loan losses in 1996 was primarily  due to a  deterioration  in the
quality of certain commercial credits in the second quarter of the year.
     With the major  components  of the refocus  initiative in place by year-end
1996,  management  believes the results of the third and fourth quarters of 1996
are more  representative of the company's ongoing  profitability.  Excluding the
SAIF  assessment,  annualized net income for those periods would have been $20.2
million,  which would have  resulted in a return on assets of 1.06 percent and a
15.85 percent return on equity.
     Following  is a summary of the  components  of income and  expense  and the
changes in those components over the past three years.

<TABLE>

 Condensed Consolidated Statements of Income
 For the years ended December 31
 Dollars in thousands, except per share data


<CAPTION>
                                             Change                           Change
                               1996     Amount       %             1995     Amount       %         1994


<S>                           <C>        <C>        <C>        <C>        <C>           <C>       <C>
Interest income ...........   $147,935   $ 13,707    10.2 %     $134,228   $ 20,246      17.8 %   $113,982
Interest expense ..........     73,066      8,467    13.1         64,599     17,224      36.4       47,375
                              --------   --------    -------    --------   --------    -------    --------
Net interest income .......     74,869      5,240     7.5         69,629      3,022       4.5       66,607
Provision for loan losses .     13,914      8,654   164.5          5,260      3,048     137.8        2,212
                              --------   --------   -------    --------   --------    -------     --------
Net interest income after
  provision for loan losses     60,955     (3,414)   (5.3)        64,369        (26)    (0.0)       64,395
Non-interest income .......     29,689      5,278    21.6         24,411      7,241      42.2       17,170
Non-interest expenses .....     80,642     14,593    22.1         66,049      5,979      10.0       60,070
                              --------   --------    -------    --------   --------    -------    --------
Income before income taxes      10,002    (12,729)  (56.0)        22,731      1,236       5.8       21,495
Income tax expense ........      3,120     (4,296)  (57.9)         7,416        341       4.8        7,075
                              --------   --------    -------    --------   --------    -------    --------
Net income ................   $  6,882   $ (8,433)  (55.1)      $ 15,315    $    895      6.2      $14,420
                                =======    ========  ========    =======    ========  ========    ========
Primary earnings
  per common share ........   $   0.60    $ (0.75)  (55.6)%       $ 1.35    $   0.07      5.5 %    $  1.28
                                =======    ========  ========    =======    ========  =========    =======
</TABLE>
 
     Each of these  components of income and expense is discussed  separately in
the sections that follow.

Net Interest Income
     Net interest income totaled $74.9 million in 1996, a 7.5% increase over the
$69.6  million  recorded in 1995.  In 1995 net interest  income was up 4.5% over
1994's $66.6 million.  On a fully-taxable  equivalent basis, net interest income
was $76.5 million in 1996, compared with $71.3 million in 1995 and $68.2 million
in 1994.  The  increase  in net  interest  income  in 1996 and 1995 was due to a
higher level of interest-earning assets, primarily commercial loans.
     The following  table  summarizes  the changes in the company's net interest
margin (on a  fully-taxable  equivalent  basis) over the past three  years.  Net
interest  margin is net  interest  income  divided  by the  average  balance  of
interest-earning assets for the year.
<TABLE>

 Net Interest Analysis Summary (F1)
 For the years ended December 31


<CAPTION>
                                                                    Basis Point               Basis Point
                                                        1996        Change       1995        Change         1994

<S>                                                     <C>          <C>         <C>          <C>            <C>
 Average yield on interest-earning assets               8.84%         (5)        8.89%         97            7.92%
 Average rate on interest-bearing liabilities           4.89          15         4.74         109            3.65
                                                        ----         -----       -----        ------         -----
 Net interest-rate spread                               3.95         (20)        4.15         (12)           4.27
 Impact of non-interest-bearing sources and other
    changes in balance sheet composition                0.57           5         0.52          12            0.40
                                                        ----         -----       ------       ------         -----
 Net interest margin                                    4.52%        (15)        4.67%          -            4.67%
                                                        ====         ===         ====         =====          ====
<FN>
(F1)Refer to the tables on pages 13 and 14 for additional  data regarding the net
interest analysis.
</FN>
</TABLE>


     The  table  on  pages  13 and 14  show,  for  the  past  three  years,  the
relationship  between  interest  income  and  expense  and the levels of average
interest-earning  assets  and  average  interest-bearing  liabilities.  It  also
reflects  the  general  increase  in  interest  rates on total  interest-bearing
liabilities over the past year, and increased volumes of loans,  certificates of
deposit, and borrowed funds.
     Approximately  $625 million of the company's  commercial and consumer loans
are tied to the prime rate.  Decreases in the prime lending rate, which began in
the third quarter of 1995, had a negative  impact on net interest  margin during
1996 as compared to 1995.  Although the prime rate leveled off in February 1996,
the company's  funding costs  continued to rise, as the company  placed  greater
reliance on  wholesale  funding  sources,  such as brokered  deposits  and other
borrowed  funds.  As a result,  the  company's  net  interest-rate  spread  (the
difference between the gross yield on interest-earning  assets and the rate paid
on  interest-bearing  liabilities)  decreased,   negatively  impacting  the  net
interest margin.
     Although  the net  interest-rate  spread fell by 12 basis points in 1995 as
compared  with 1994,  the net interest  margin was flat,  due to a change in the
composition of the balance sheet.  In 1994,  loans  accounted for 74% of average
earning  assets,  while  securities  represented  24%.  In 1995,  as the company
utilized maturing securities to fund growth in the loan portfolio,  those ratios
had changed to 78% and 20%, respectively. This trend continued in 1996, with the
ratio of loans to total earning assets increasing to 80% and securities dropping
to 17%. The increased proportion of assets invested in relatively higher-earning
loans served to mitigate in 1996--and  fully offset in 1995--the  decline in the
interest-rate spread from the previous year.
     On November 30, 1995, the company  reclassified all securities to available
for sale, as permitted by the Financial  Accounting Standards Board in a special
one-time reassessment.


<PAGE>

<TABLE>

 Average Consolidated Balance Sheets and Net Interest Analysis
 For the years ended December 31
 Fully-taxable equivalent basis
 Dollars in thousands
<CAPTION>

                                                 1996                           1995                          1994
                                       Average              Average     Average             Average     Average             Average
                                      Balance     Interest     Rate     Balance  Interest    Rate      Balance   Interest    Rate
                                          (F1)      (F2)                  (F1)    (F2)                   (F1)        (F2)
 Assets
<S>                                    <C>        <C>         <C>    <C>         <C>          <C>    <C>        <C>        <C>  
 Interest-earning assets:
   Securities held to maturity:
    U.S. Treasury, federal agencies,

    and mortgage-backed securities     $       -  $     -     0.00%  $   24,257  $  1,686     6.95%  $  69,766   $ 3,967    5.69%
    State and municipal obligations            -        -     0.00       46,674     3,622     7.76      50,111     3,972    7.93
    Other securities                           -        -     0.00        4,816       355     7.37       5,723       396    6.92
                                        ---------  -------           ----------  --------           ----------   ------- 
    Total securities held to maturity         -         -     0.00       75,747     5,663     7.48     125,600     8,335    6.64
   Securities available for sale:
    U.S. Treasury, federal agencies,
     and mortgage-backed securities      204,549     11,450   5.60      209,756    11,847     5.65     214,749    11,477    5.34
    State and municipal obligations       53,844      4,023   7.47        5,442       445     8.18           -         -    0.00
    Other securities                      33,460      2,133   6.37       13,727       901     6.56      13,526       708    5.23
                                      ----------     ------           ----------  --------         -----------   -------
   Total securities available
    for sale                             291,853     17,606   6.03     228,925     13,193     5.76     228,275    12,185    5.34
                                      ----------    -------           ----------  --------           ----------   -------
    Total securities                     291,853     17,606   6.03      304,672    18,856     6.19     353,875    20,520    5.80
   Federal funds sold                        898         52   5.79       13,652       804     5.89      13,424       540    4.02
   Interest-bearing deposits
     with banks                              117         14     NM          197        17       NM         235       104      NM
   Mortgage loans held for sale           53,392      3,938   7.38       19,436     1,644     8.46      17,913     1,152    6.43
   Loans, net of unearned income (F3)  1,346,754    127,983   9.50    1,190,101   114,572     9.63   1,073,580    93,263    8.69
                                      ----------    -------           ----------  -------           ----------   -------
 Total interest-earning assets /
   interest income                     1,693,014    149,593   8.84%   1,528,058   135,893     8.89%  1,459,027   115,579    7.92%
 Less allowance for loan losses           16,563                         13,239                         12,742
                                      ----------                      ----------                     ----------
                                       1,676,451                      1,514,819                      1,446,285
 Non-interest-earning assets:
   Cash and due from banks                58,443                         63,726                         65,788
   Premises and equipment                 39,891                         38,307                         35,275
   Other assets                           82,543                         56,080                         40,712
                                      ----------                      ----------                     ----------
 Total assets                         $1,857,328                     $1,672,932                     $1,588,060
                                      ==========                     ==========                     ==========


<PAGE>
                                                  
   Liablilities and                                   
   Shareholders' Equity
 Interest-bearing liabilities:
  Interest-bearing deposits:

   Interest-bearing demand            $  108,325      3,128   2.89%  $  231,224     6,147     2.66% $  243,827     5,896    2.42
   Savings deposits                      113,078      3,027   2.68      131,614     3,778     2.87     155,819     4,351    2.79
   Money market accounts                 178,566      5,571   3.12       47,288     1,514     3.20      55,636     1,485    2.67
   Certificates of deposit               783,386     43,276   5.52      729,269    40,240     5.52     633,608    26,040    4.11
   Individual Retirement Accounts         86,097      4,793   5.57       88,547     4,786     5.41      92,122     3,952    4.29
                                      ----------    -------           ----------   -------           ----------   -------
   Total interest-bearing deposits     1,269,452     59,795   4.71    1,227,942    56,465     4.60   1,181,012    41,724    3.53
  Federal funds purchased
   and repurchase agreements              42,010      1,949   4.64       47,219     2,013     4.26      40,303     1,253    3.11
  Other short-term borrowings             56,136      3,117   5.55       40,652     2,983     7.34      36,669     1,715    4.68
  Long-term debt                         125,593      8,205   6.53       46,840     3,137     6.70      40,756     2,683    6.58
                                      ----------    -------           ----------   -------           ----------   -------
   Total borrowed funds                  223,739     13,271   5.93      134,711     8,133     6.04     117,728     5,651    4.80
                                      ----------    -------           ----------   -------           ----------   -------
 Total interest-bearing
  liabilities/ interest expense        1,493,191     73,066   4.89    1,362,653    64,598     4.74   1,298,740    47,375    3.65
                                                    -------                        -------                        -------
 Non-interest-bearing liabilities:
  Non-interest-bearing deposits          213,332                        172,748                        168,746
  Other liabilities                       21,405                         15,485                          8,687
                                      ----------                      ----------                     ----------
   Total liabilities                   1,727,928                      1,550,886                      1,476,173
 Shareholders' equity                    129,400                        122,046                        111,887
                                      ----------                      ----------                     ----------
 Total liabilities
  and shareholders' equity            $1,857,328                     $1,672,932                     $1,588,060
                                      ==========                     ==========                     ==========

 Net interest-rate spread (F4)                                3.95                            4.15                          4.27
 Impact of non-interest bearing
  sources and other changes in
  balance sheet composition                                   0.57                            0.52                          0.40
 Net interest income /
  margin on interest-earning
  assets (F5)                                       $76,527   4.52 %              $71,295     4.67 %             $68,204    4.67 %
                                                    =======   ====                =======     ====               =======    ====
NM = not meaningful
<FN>

(F1)Average balances are based on daily balances.
(F2)Interest  income on tax-exempt  securities and loans has been increased 47.5%
in  this   analysis  to  reflect   fully-taxable-equivalent   interest. 
(F3)For computational  purposes,   non-accrual  loans  are  included  in  loans.
(F4)Net interest-rate  spread is the  difference  between the  average  rate of
interest earned on  interest-earning  assets and the average rate of interest
expensed on interest-bearing  liabilities.
(F5)Net  interest  margin is net interest income divided by average interest-
earning assets.
</FN>
</TABLE>
<PAGE>

Analysis of Year-to-Year Changes in Net Interest Income
     The following table shows changes in interest  income and interest  expense
resulting from changes in volume  (average  balances) and interest rates for the
years ended  December 31, 1996 and 1995, as compared to the previous  year.  The
change in  interest  income  and  expense  due to both rate and  volume has been
allocated to changes in volume and rate in proportion to the relationship of the
absolute dollar amounts of the change in each.
<TABLE>

<CAPTION>
                                                    1996 vs. 1995                         1995 vs. 1994
                                                  Increase (decrease)                   Increase (decrease)
 Fully-taxable equivalent basis              in interest income and expense        in interest income and expense
 In thousands                                     due to changes in:                    due to changes in:
                                                 Rate     Volume      Total             Rate     Volume      Total
<S>                                            <C>       <C>       <C>               <C>       <C>        <C>
 Interest-earning assets:
   Securities held to maturity:
     U.S. Treasury, federal agencies, and
       mortgage-backed securities               $   -    $(1,686)   $(1,686)          $  736    $(3,017)   $(2,281)
     State and municipal obligations                -     (3,622)    (3,622)             (82)      (268)      (350)
     Other securities                               -       (355)      (355)              25        (66)       (41)
                                               ------    -------    -------           ------    -------    -------
     Total securities held to maturity              -     (5,663)    (5,663)             679     (3,351)    (2,672)
   Securities available for sale:
     U.S. Treasury, federal agencies, and
       mortgage-backed securities                (105)      (292)      (397)             641       (271)       370
     State and municipal obligations              (42)     3,620      3,578                -        445        445
     Other securities                             (27)     1,259      1,232              182         11        193
                                               ------    --------   -------           ------    -------    -------
     Total securities available for sale         (174)     4,587      4,413              823        185      1,008
                                               ------    --------   -------           ------    -------    -------
     Total securities                            (174)    (1,076)    (1,250)           1,502     (3,166)    (1,664)
   Federal funds sold                             (13)      (739)      (752)             255          9        264
   Interest-bearing deposits with banks             5         (8)        (3)             (72)       (15)       (87)
   Mortgage loans held for sale                  (236)     2,530      2,294              387        105        492
   Loans, net of unearned income               (1,493)    14,904     13,411           10,638     10,671     21,309
                                               ------    -------    -------           ------    -------    -------
 Total interest-earning assets                 (1,911)    15,611     13,700           12,710      7,604     20,314
 Interest-bearing liabilities:
   Interest-bearing deposits:
     Interest-bearing demand                      491     (3,510)    (3,019)             566       (315)       251
     Savings deposits                            (243)      (508)      (751)             119       (692)      (573)
     Money market accounts                        (40)     4,097      4,057              271       (242)        29
     Certificates of deposit                       47      2,989      3,036            9,857      4,343     14,200
     Individual Retirement Accounts               141       (134)         7              993       (159)       834
                                               ------    -------    -------           ------    -------    -------
     Total interest-bearing deposits              396      2,934      3,330           11,806      2,935     14,741
   Federal funds purchased
     and repurchase agreements                    169       (233)       (64)             520        240        760
   Other short-term borrowings                   (834)       968        134            1,065        203      1,268
   Long-term debt                                 (79)     5,147      5,068               47        407        454
                                               ------    -------    -------           ------    -------    -------
     Total borrowed funds                        (744)     5,882      5,138            1,632        850      2,482
                                               ------    -------    -------           ------    -------    -------
 Total interest-bearing liabilities              (348)     8,816      8,468           13,438      3,785     17,223
                                               ------    -------    -------           ------    -------    -------
 Increase (decrease) in net interest income   $(1,563)   $ 6,795    $ 5,232           $ (728)   $ 3,819    $ 3,091
                                              =======    =======    =======           ======    =======    =======
</TABLE>

Provision for Loan Losses
     The  provision  for loan  losses  in 1996 was  $13.9  million,  or 1.03% of
average  loans,  an increase of $8.6 million from the $5.3 million,  or 0.44% of
average  loans,  in 1995.  In 1994,  the company  recorded a  provision  of $2.2
million, or 0.21% of average loans.
     Net loan charge-offs were $11.6 million in 1996, compared with $2.0 million
in 1995 and $2.2 million in 1994.  In 1996 the company  charged off $7.0 million
on three non-performing loans which had been placed in non-accrual status during
1995. As a percentage of average loans,  net charge-offs  were 0.86% in 1996, up
from 0.17% in 1995 and 0.20% in 1994. For the five year period from 1992 through
1996, net charge-offs averaged 0.38%.
     The  provision  for loan  losses  and the level of the  allowance  for loan
losses result from  management's  evaluation of the risk in the loan  portfolio.
The increased provision in 1996 and 1995 provides for overall growth in the loan
portfolio as well as a higher level of non-performing loans than in the previous
three  years.  Further  discussion  on loan quality and the  allowance  for loan
losses is included later in this review in the Asset Quality section.

Non-interest Income
     Non-interest  income for 1996 increased 22% over 1995, after increasing 42%
from 1994 to 1995. The increases in non-interest income were due to:
<TABLE>
<CAPTION>
                                                         Increase (Decrease) in
                                                           Non-Interest Income
 In thousands                                             1996 vs. 1995   1995 vs. 1994
                                                         -----------------------------------

<S>                                                             <C>       <C>
Increase in service charges on deposit accounts ..............  $ 1,069   $ 1,088
Decrease in gains on sale of securities ......................     (180)      (57)
Increase (decrease) in mortgage banking income due to:
      Recognition of MSR's under SFAS 122 ....................      174     1,243
      Increase in gain on sale of mortgage loans held for sale    1,580       845
      Increased mortgage servicing fees ......................    2,618     1,169
      Gain on sale of mortgage servicing rights in 1995 ......   (1,687)    1,687
Increase in trust service fees ...............................      563       145
Increase in brokerage income .................................      473       423
Increase in travel agency fees ...............................      335       203
Increase (decrease) in credit life insurance fees ............      252       (15)
Increase in all other non-interest income ....................       81       510
                                                                -------   -------
      Total increase in non-interest income ..................  $ 5,278   $ 7,241
                                                                =======   =======
</TABLE>

     The  increases  in  non-interest  income  reflect the  company's  expanding
mortgage  banking  business  and  continued  increases  in trust and  investment
services revenues. As previously mentioned, the company sold its travel business
during the fourth quarter of 1996.
     TFMC purchased a $1.0 billion mortgage loan servicing portfolio in 1996 and
a $1.2 billion servicing portfolio in 1995, increasing the size of the servicing
portfolio from $1.3 billion at the end of 1994 to $3.3 billion at year-end 1996.
The significant  increase in mortgage servicing fees in 1996 and 1995 was due to
this growth in the  servicing  portfolio.  In the fourth  quarter of 1995,  TFMC
acquired Correspondents Mortgage Company of Greensboro, North Carolina, doubling
TFMC's wholesale  mortgage lending capacity.  The Greensboro office accounts for
$2.1 million of the $4.4 million  increase in mortgage  banking income from 1995
to 1996,  and $0.3 million of the increase from 1994 to 1995.  Also in 1995, the
company sold a $168 million  mortgage loan servicing  portfolio,  resulting in a
$1.7 million gain on the sale of mortgage servicing rights.
     Effective  January 1, 1995,  the  company  adopted on a  prospective  basis
Statement of Financial  Accounting  Standards No. 122,  Accounting  for Mortgage
Servicing Rights ("SFAS 122"). SFAS 122 requires that rights to service mortgage
loans for others be recognized as assets, without regard to whether those assets
were  acquired  in  purchase   transactions   or  were  acquired   through  loan
originations.  In years prior to 1995, only purchased  mortgage servicing rights
("MSR's")  were  recognized  as assets.  SFAS 122 also  eliminates  the previous
requirement  that  gains on the sale of  mortgage  loans be offset  against  the
related  servicing right asset. As a result of SFAS 122, the company  recognized
$1.2  million in  non-interest  income,  before  amortization,  in 1995 and $1.4
million in 1996.
     During 1994, the company  engaged an outside  consulting firm to review its
banking  products  and  services.  As an outcome  of this  review,  the  company
implemented  a new product and fee  structure in April 1995,  which  resulted in
additional service charges on deposit accounts.


<PAGE>

Non-interest Expenses
     Non-interest  expenses for 1996 increased 22% over 1995,  after  increasing
10% from 1994 to 1995. The increases in non-interest expense were due to:
<TABLE>
<CAPTION>

                                                                                    Increase (Decrease) in
                                                                                     Non-Interest Expenses
In thousands                                                                      1996 vs. 1995   1995 vs. 1994
                                                                                  ------------    -------------
<S>                                                                                    <C>        <C>
      Second quarter initiatives ....................................................  $  5,807   $  --
      Increase in compensation and employee benefits ................................     5,541     4,258
      Increase in occupancy and equipment expense ...................................       449     1,106
      Increase in communications expense ............................................       909       476
      Deposit insurance:
            1996 SAIF assessment, net of fourth quarter refund ......................     2,563      --
            Decrease in deposit insurance premiums ..................................    (1,073)   (1,088)
      Increase (decrease) in advertising and public relations expense ...............      (410)      724
      Decrease in professional fees .................................................      (594)     (318)
      Increase in postage, printing and supplies ....................................       482       127
      Increase (decrease) in educational expense ....................................      (280)      424
      Increase (decrease) in foreclosed asset expense ...............................      (495)      315
      Increase in processing fees ...................................................       931       312
      Increase (decrease) in all other non-interest expenses ........................       763      (357)
                                                                                       --------   -------
                                                                                       $ 14,593   $ 5,979
                                                                                       ========   =======
</TABLE>

     Costs  recognized in the second quarter of 1996 which are  associated  with
the  initiative to refocus the company's  resources on core  financial  services
include  severance and related payroll taxes and benefits,  write-downs of fixed
assets  to be sold or  abandoned,  legal and  accounting  fees  associated  with
discontinuing  certain  activities and various other costs  associated  with the
disposition  of assets.  These charges  provide for the cost of exiting  several
initiatives  which the company entered in recent years,  such as human resources
consulting  and venture  capital.  Also  included  in the  charges are  expenses
associated  with  closing  the  Louisville,   Kentucky  office;   mortgage  loan
production  offices  in  Chattanooga,  Jackson  and  Knoxville,  Tennessee;  and
consolidation of operations in Bowling Green,  Kentucky.  Severance  expense was
also  recognized  related  to  changes  designed  to reduce  costs in the retail
delivery  system and in  investment  management.  The company sold its corporate
jet, with the cost of its disposition  included in second quarter expenses.  The
classification  of these  costs in the  consolidated  statement  of income is as
follows: In thousands
               Compensation and employee benefits                         $1,798
               Net occupancy expense                                         475
               Furniture and equipment expense                               325
               Professional fees                                             340
               Writedowns and losses on sale of fixed assets               1,698
               Other expenses                                              1,171
                                                                         -------
                   Total costs associated with the initiative             $5,807
                                                                          ======

     The increases in non-interest expenses over the past two years also reflect
the  company's   commitment  to  invest  in  new   technology,   product  lines,
distribution  channels and people,  to provide enhanced  customer service and to
support future growth.
     Compensation  and benefits  increased  $5.5 million in 1996  (excluding the
refocus  initiative  charges) as compared to 1995, and increased $4.3 million in
1995 versus 1994--the  result of an expansion of the professional  staff in 1994
and 1995. Of the increase in  compensation  and benefits in 1996 and 1995,  $1.4
million and $0.8 million, respectively,  represent increased payments associated
with the company's implementation of an incentive-based compensation system.
     Advertising and public  relations  expense  decreased $0.4 million in 1996,
after  increasing  $0.7 million in 1995.  During 1995, the company  expanded its
promotion  of the new  products  and  services  added  during  the year,  and an
intensified  sales  training  program  resulted  in a $0.4  million  increase in
educational expense that year.
     In general,  the remaining  increases in both 1996 and 1995 were related to
an ongoing effort to build the company's  infrastructure  to accommodate  future
growth,  requiring  investments in staff as well as in buildings,  equipment and
information systems. Occupancy, furniture and equipment and communications costs
increased  $1.4 million in 1996 and $1.6 million in 1995. In addition,  external
data  processing  costs,  primarily for mortgage loan  servicing and  electronic
delivery of financial services,  increased $0.9 million and $0.3 million in 1996
and 1995, respectively.
     As mentioned  previously, the company recorded in the third quarter of 1996
a pre-tax charge of $2.7 million resulting from legislation enacted during 1996
designed to re-capitalize the SAIF. The $1.1 million decreases in deposit
insurance premiums in both 1996 and 1995 were due to a reduction  from $0.23 to
$0.04 per $100 of deposits insured through the Federal Deposit  Insurance 
Corporation's  ("FDIC") Bank  Insurance  Fund ("BIF"),  effective  June 1, 1995,
and to zero  effective January 1, 1996. Approximately 69% of the company's 
deposits are insured through the BIF. The  remaining 31% of the  company's 
deposits are insured through the SAIF.  Insurance  premiums on the SAIF deposits
remained at $0.23 through 1996, however a refund of $122  thousand  was received
from the SAIF in the  fourth quarter of 1996. For 1997, the company  expects to 
recognize  deposit  insuranceexpense of approximately $0.065 per $100 of SAIF-
insured deposits and $0.013 per $100 of BIF-insured deposits.

Income Taxes
     The company had income tax expense of $3.1 million in 1996,  compared  with
$7.4 million in 1995 and $7.1 million in 1994.  These  represent  effective  tax
rates of 31.2%,  32.6%  and  32.9%,  respectively.  Further  information  on the
company's  income  taxes can be found in note 12 to the  consolidated  financial
statements.

Balance Sheet Review
     Assets at year-end 1996 totaled $2.0 billion, compared with $1.8 billion at
December 31, 1995.  Average  total assets for 1996  increased  $184 million from
1995, after increasing $85 million from 1994 to 1995.  Average  interest-earning
assets  increased $165 million from 1995 to 1996, and increased $69 million from
1994 to 1995.

Loans
     Total loans,  net of unearned  income,  averaged $1.3 billion in 1996,
compared with $1.2 billion in 1995 and $1.1 billion in 1994. At year-end  1996,
loans totaled $1.5 billion, compared with $1.3 billion at December 31, 1995, and
$1.1 billion at the end of 1994.
     The company has experienced  strong loan growth throughout its markets over
the past five years,  with particular  strength in middle market  commercial and
commercial real estate lending products.  The following table presents a summary
of the loan portfolio by category over that period.
<TABLE>

Loans Outstanding
December 31

In thousands
<CAPTION>

                                       1996          1995          1994          1993        1992
<S>                              <C>           <C>           <C>           <C>           <C>
Commercial ....................  $   466,365   $   372,822   $   318,970   $   320,952   $ 235,922
Commercial real estate ........      470,235       397,741       334,567       234,308     140,554
Residential real estate .......      385,894       357,697       339,605       303,283     292,847
Consumer ......................      130,444       132,401       153,754       150,202     114,820
                                 -----------   -----------   -----------   -----------   ---------
   Total loans ................    1,452,938     1,260,661     1,146,896     1,008,745     784,143
Less unearned income ..........       (1,939)       (2,150)       (3,063)       (3,656)     (3,843)
                                 -----------   -----------   -----------   -----------   ---------
   Loans net of unearned income  $ 1,450,999   $ 1,258,511   $ 1,143,833   $ 1,005,089   $ 780,300
                                 ===========   ===========   ===========   ===========   =========
</TABLE>

Loan Concentrations
     Much of the  increase in  commercial  and  commercial  real estate loans is
financing the operations of the company's commercial customers. Although many of
these loans are  structured as mortgages,  the company  relies on the borrower's
cash  flow to  service  the  loan,  rather  than on the  sale of the  underlying
collateral. Commercial real estate loans include financing for industrial parks,
residential  developments,   retail  shopping  centers,  multi-family  apartment
complexes, industrial buildings, fast food and mid-scale restaurants, and hotels
and motels.  The primary  source of  repayment  cannot be traced to any specific
industry group.
     The percentage  distribution of the company's loans, by industry,  is shown
in the following table.

 Loans by Industry
                       December 31, 1996
                       As a percentage of total loans

                       Agriculture                                          2.9%
                       Apartment buildings                                  2.6
                       Construction and land development                    8.4
                       Finance and insurance                                1.9
                       Manufacturing:
                          Durable goods                                     7.1
                          Non-durable goods                                 3.9
                       Mining                                               3.1
                       Services:
                          Health                                            2.7
                          Hotels and  motels                                4.1
                          Other than health and hotels                      4.6
                       Wholesale trade                                      3.1
                       Retail trade:
                          Restaurants                                       4.9
                          Food stores                                       2.3
                          Automotive                                        1.6
                          Other                                             2.2
                       Other commercial real estate                         7.2
                       All other commercial loans                           1.9
                                                                         -------
                       Total commercial and commercial real estate loans   64.5
                       Residential real estate loans                       26.6
                       Consumer loans                                       8.9
                                                                         -------
                             Total loans, net of unearned income          100.0%
                                                                          =====
                     
     Substantially  all of the  company's  loans  are to  customers  located  in
Kentucky and Tennessee, in the immediate market areas of the banks. However, the
company has one $6.3 million  commercial  loan to a Mexican  affiliate of a U.S.
corporation.  The  loan  represents  financing  for  an  essential  part  of the
operations of an established  customer  located in the company's  primary market
area.
     On December 31, 1996, the company's 49 largest credit relationships 
consisted of loans and loan commitments ranging from $5 million to $20 million,
none of which was classified as non-performing. The aggregate amount of these 
credit relationships was $472 million.
     The following table sets forth the maturity  distribution and interest rate
sensitivity of commercial  and  commercial  real estate loans as of December 31,
1996.  Maturities are based upon  contractual  terms. The company's policy is to
specifically  review and approve all loans renewed;  loans are not automatically
rolled over.
<TABLE>

Loan Maturities and Rate Sensitivity
December 31, 1996
In thousands
<CAPTION>

                                                            One Year  One Through   Over       Total
                                                             or Less  Five Years  Five Years   Loans
By maturity date:
<S>                                                           <C>       <C>       <C>       <C>
  Commercial ...............................................  $184,900  $121,031  $160,434  $466,365
  Commercial real estate ...................................   100,581    61,855   307,799   470,235
                                                              --------  --------  --------  --------
    Total ..................................................  $285,481  $182,886  $468,233  $936,600
                                                              ========  ========  ========  ========

  Fixed rate loans .........................................  $ 54,482  $ 73,759  $ 60,079  $188,320
  Floating rate loans ......................................   230,999   109,127   408,154   748,280
                                                              --------  --------  --------  --------
    Total ..................................................  $285,481  $182,886  $468,233  $936,600
                                                              ========  ========  ========  ========


By next repricing opportunity:
  Commercial ...............................................  $401,117  $ 48,912  $ 16,336  $466,365
  Commercial real estate ...................................   386,956    38,719    44,560   470,235
                                                              --------  --------  --------  --------
    Total ..................................................  $788,073  $ 87,631  $ 60,896  $936,600
                                                              ========  ========  ========  ========

  Fixed rate loans .........................................  $ 54,482  $ 73,759  $ 60,079  $188,320
  Floating rate loans ......................................   733,591    13,872       817   748,280
                                                              --------  --------  --------  --------
    Total ..................................................  $788,073  $ 87,631  $ 60,896  $936,600
                                                              ========  ========  ========  ========
</TABLE>

Asset Quality
     Non-performing  loans, which include non-accrual loans, accruing loans past
due over 90 days and  restructured  loans,  totaled  $10.6 million at the end of
1996,  a  decrease  of $6.7  million  from  December  31,  1995.  The  ratio  of
non-performing  loans to  year-end  loans  was  0.73%,  compared  with  1.38% at
year-end  1995 and 0.69% at December 31, 1994.  Non-performing  loans  increased
$4.2  million  in the  fourth  quarter of 1995,  primarily  due to  placing  one
commercial  loan in non-accrual  status.  Non-performing  assets,  which include
non-performing  loans,  foreclosed  real estate and other  foreclosed  property,
totaled $12.4 million at year-end  1996,  and the ratio of total  non-performing
assets to total  assets  decreased  to 0.62% at  year-end  1996,  from  1.24% at
December 31, 1995.
     The following table presents information concerning  non-performing assets,
including non-accrual and restructured loans:
<TABLE>

 Non-performing Assets
 December 31
 Dollars in thousands

<CAPTION>

                                                      1996       1995        1994      1993       1992
<S>                                                 <C>        <C>        <C>        <C>        <C>
Non-accrual loans ...............................   $ 4,717    $12,708    $ 4,375    $ 5,926    $ 3,986
Accruing loans which are contractually
  past due 90 days or more ......................     5,863      4,617      3,514      2,377      4,262
Restructured loans ..............................         4         14         30      1,591        718
                                                    -------    -------    -------    -------    -------
  Total non-performing and restructured loans ...    10,584     17,339      7,919      9,894      8,966
Foreclosed real estate ..........................     1,608      4,329      4,998      5,869      9,036
Other foreclosed property .......................       184        677        199        113       --
                                                    -------    -------    -------    -------    -------
  Total non-performing and restructured loans
    and foreclosed property .....................   $12,376    $22,345    $13,116    $15,876    $18,002
                                                    =======    =======    =======    =======    =======

Non-performing and restructured loans
  as a percentage of loans net of unearned income      0.73%      1.38%      0.69%      0.98%      1.15%
Non-performing and restructured loans and other
  real estate as a percentage of total assets ...      0.62%      1.24%      0.81%      0.99%      1.30%
</TABLE>

   
     Management  classifies  commercial  and  commercial  real  estate  loans as
non-accrual  when principal or interest is past due 90 days or more and the loan
is not adequately  collateralized and in the process of collection,  or when, in
the  opinion of  management,  principal  or interest is not likely to be paid in
accordance  with the terms of the  obligation.  Consumer  loans are  charged off
after 120 days of delinquency  unless  adequately  secured and in the process of
collection.  Non-accrual  loans are not reclassified as accruing until principal
and interest  payments are brought current and future payments appear reasonably
certain.  Loans are categorized as  restructured if the original  interest rate,
repayment  terms,  or  both  were  restructured  due to a  deterioration  in the
financial   condition  of  the  borrower.   However,   restructured  loans  that
demonstrate  performance  under the  restructured  terms and that yield a market
rate of interest may be removed from  restructured  status in the year following
the restructure.
     Two commercial credit  relationships  account for $2.1 million,  or 45%, of
the  company's  non-accrual  loans  at  December  31,  1996,  and  20% of  total
non-performing  and  restructured  loans.  The  larger of these  credits is to a
specialty apparel  manufacturer and the other is to a company in the coal mining
industry.  An allowance  for loan losses in the amount of $164 thousand has been
established  for  these  credits  in  accordance  with  Statement  of  Financial
Accounting  Standards No. 114,  Accounting by Creditors for the  Impairment of a
Loan.  The remaining  non-accrual  balance  consists of various  commercial  and
consumer loans, with no single loan exceeding $350,000.
     The increase over the past two years in accruing  loans past due 90 days or
more  is  principally  related  to  residential  real  estate  loans.   Personal
bankruptcies, particularly Chapter 13 filings, have been rising in Tennessee and
Kentucky over the past two years. This form of bankruptcy forestalls foreclosure
on a wage earner's residence as long as monthly payments are resumed and a small
additional  payment  is made  to the  lender  to be  applied  to the  delinquent
mortgage  payments.  Such a payment  plan may stretch  out to several  years the
period  required to bring  payments  current.  Although  these loans may be well
secured and in the process of collection, most are reported as more than 90 days
past due and accruing interest.
     Foreclosed  real estate at December 31, 1996,  includes one property with a
book value of $340 thousand,  or 21% of the outstanding  balance.  This property
was acquired  through  foreclosure in 1986, with an unsatisfied  loan balance at
the time of $1.8 million.  In order to facilitate  the disposal of the property,
the  company  entered  into a joint  venture  with a real estate  developer  and
developed the land for industrial and other  commercial use.  Subsequently,  the
company dissolved the joint venture and retained title to the property.  Several
parcels  have been  sold to date.  Based on an  appraisal  of the  property  and
previous sales experience,  management does not anticipate a loss to be incurred
on disposition of the remaining parcels. A second property which was included in
foreclosed real estate on December 31, 1995, is a  manufacturing  facility which
was acquired in the fourth  quarter of 1995. The property was sold in the fourth
quarter of 1996.  The remaining  balance of foreclosed  real estate  consists of
several properties, with no single property exceeding $250,000.
      As of December 31, 1996,  the company had $8.4 million of loans which were
not included in the past due,  non-accrual or restructured  categories,  but for
which known information about possible credit problems caused management to have
serious  doubts as to the  ability of the  borrowers  to comply with the present
loan repayment terms. Based on management's evaluation, including current market
conditions, cash flow generated and recent appraisals, no significant losses are
anticipated  in  connection  with  these  loans.  These  loans  are  subject  to
continuing  management  attention and are considered in determining the level of
the allowance for loan losses.
     The allowance for loan losses  represents an amount which,  in management's
judgment,  will be adequate to absorb  probable  losses on existing  loans.  The
adequacy of the allowance is determined on an ongoing basis through  analysis of
the  overall  size and  quality  of the loan  portfolio,  historical  loan  loss
experience,   loan  delinquency  trends,  and  current  and  projected  economic
conditions.  Additional  allocations of the allowance are based on  specifically
identified  potential  loss  situations.   The  potential  loss  situations  are
identified by account officers' evaluations of their own portfolios,  as well as
by an independent loan review function.
     The allowance for loan losses is  established  through a provision for loan
losses  charged to expense.  At  December  31,  1996,  the  allowance  was $18.1
million,  compared with $15.8 million at December 31, 1995, and $12.5 million at
December 31,  1994.  The ratio of the  allowance  for loan losses to total loans
(excluding  mortgage  loans  held for sale) at  December  31,  1996,  was 1.25%,
compared with 1.25% at December 31, 1995, and 1.10% at December 31, 1994.  These
increases  from  December  31, 1994 reflect in part  management's  review of the
growth in the loan portfolio, the continuing  concentrations of credit among the
company's  largest  credit  relationships,   and  anticipated  general  economic
conditions  in  the  company's  markets.   The  allowance  as  a  percentage  of
non-performing  loans was 171% at  December  31,  1996,  as  compared  to 91% at
year-end  1995, and 158% at December 31, 1994. The changes in the allowance as a
percentage of  non-performing  loans from December 31, 1994 to December 31, 1996
are in part the result of the company's  placement of one significant  loan into
non-performing  loans at year-end 1995, thus reducing the ratio of the allowance
to non-performing  loans. That borrower's  financial  condition,  along with the
financial condition of two other significant credits, deteriorated in the second
quarter of 1996, resulting in partial charge-offs totaling $7.0 million of these
loans  in 1996.  As a result  of net loan  charge-offs  of $11.6  million  and a
provision  for loan  losses  of $13.9  million  during  1996,  the  ratio of the
allowance  for loan  losses to  non-performing  loans has  increased  to 171% at
December 31, 1996
    
     Following is a summary of the changes in the  allowance for loan losses for
each of the past five years.
<TABLE>


 Summary of Loan Loss Experience
 For the years ended December 31
 Dollars in thousands
<CAPTION>


                                                       1996         1995        1994        1993        1992
<S>                                              <C>          <C>          <C>          <C>          <C>
Balance at beginning of year .................   $   15,779   $   12,529   $   12,505   $    9,596   $  7,700
Provision for loan losses ....................       13,914        5,260        2,212        2,794      2,618
Balance of allowance for loan losses
  of acquired subsidiaries at acquisition date         --           --           --          2,433      1,016
Amounts charged off:
  Commercial and commercial real estate ......       10,012          993        1,873        2,195      1,623
  Residential real estate ....................          372          106           80          315        138
  Consumer ...................................        2,083        1,426          838          936        738
                                                 ----------   ----------   ----------   ----------   --------
  Total loans charged off ....................       12,467        2,525        2,791        3,446      2,499
Recoveries of amounts previously charged off:
  Commercial and commercial real estate ......          390          228          232          615        323
  Residential real estate ....................           38            8           41          115        106
  Consumer ...................................          411          279          330          398        332
                                                 ----------   ----------   ----------   ----------   --------
  Total recoveries ...........................          839          515          603        1,128        761
                                                 ----------   ----------   ----------   ----------   --------
  Net charge-offs ............................       11,628        2,010        2,188        2,318      1,738
                                                 ----------   ----------   ----------   ----------   --------
Balance at end of year .......................   $   18,065   $   15,779   $   12,529   $   12,505   $  9,596
                                                 ==========   ==========   ==========   ==========   ========

Total loans, net of unearned income:
  Average ....................................   $1,346,754   $1,190,101   $1,073,580   $  898,834   $719,184
  At December 31 .............................    1,450,999    1,258,511    1,143,833    1,006,796    780,846
As a percentage of average loans:
  Net charge-offs ............................       0.86 %       0.17 %       0.20 %       0.26 %     0.24 %
  Provision for loan losses ..................         1.03         0.44         0.21         0.31       0.36
Allowance as a percentage of year-end loans ..         1.25         1.25         1.10         1.24       1.23
Allowance as a percentage of non-performing
  and restructured loans .....................        170.7         91.0        158.2        126.4      107.0
</TABLE>

       

     Management  believes  that the  allowance  for loan losses at December  31,
1996,  is adequate to absorb  losses  inherent in the loan  portfolio as of that
date.  That  determination  is  based  on  the  best  information  available  to
management,  but necessarily involves uncertainties and matters of judgment and,
therefore,  cannot be  determined  with  precision and could be  susceptible  to
significant  change in the  future.  In  addition,  bank and  thrift  regulatory
authorities,  as a part of their periodic  examinations of the banks,  may reach
different  conclusions regarding the quality of the loan portfolio and the level
of the  allowance,  which could result in  additional  provisions  being made in
future periods.
     The tables below  present an allocation of the allowance for loan losses by
category of loan and a percentage  distribution of the allowance allocation.  In
making the allocation,  consideration  was given to such factors as management's
evaluation of risk in each category,  current economic conditions and charge-off
experience. An allocation of the allowance for loan losses is an estimate of the
portion of the allowance which will be used to cover future  charge-offs in each
loan category,  but it does not preclude any portion of the allowance  allocated
to one type of loan from being used to absorb losses of another loan type.

 Allocation of Allowance for Loan Losses
 December 31
 In thousands              1996      1995       1994      1993     1992
Commercial ............   $ 9,080   $ 9,133   $ 7,529   $ 6,870   $4,813
Commercial real estate      5,375     4,089     1,883     1,718    1,203
Residential real estate     1,010       640       977     1,358    1,720
Consumer ..............     2,600     1,917     2,140     2,559    1,860
                          -------   -------   -------   -------   ------
   Total ..............   $18,065   $15,779   $12,529   $12,505   $9,596
                          =======   =======   =======   =======   ======

<TABLE>

 Allocation of Year-End Allowance for Loan Losses
   and Percentage of Each Type of Loan to Total Loans
 December 31

<CAPTION>
                                  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 ............       50.2%  32.0%    57.9%    29.5%    60.1%     27.8%    54.9%    31.7%    50.2%    30.1%
Commercial real estate        29.8   32.4     25.9     31.6     15.0      29.2     13.7     23.2     12.5     17.9
Residential real estate        5.6   26.6      4.1     28.4      7.8      29.6     10.9     30.2     17.9     37.4
Consumer ..............       14.4    9.0     12.1     10.5     17.1      13.4     20.5     14.9     19.4     14.6
                              ----   ----     ----     ----     ----      ----     ----     ----     ----     ----


   Total ..............      100.0% 100.0%   100.0%   100.0%   100.0%    100.0%   100.0%   100.0%   100.0%    100.0%
                             ====   =====    =====    =====    =====     ======   =====    =====    =====     =====
</TABLE>
        

Securities, Federal Funds Sold and Resale Agreements
     Securities,  including  those  classified as held to maturity and available
for sale,  averaged $292 million in 1996, compared with $305 million in 1995 and
$354 million in 1994. The decline in the securities  portfolio  throughout  this
period was substantially the result of maturities,  prepayments and calls. Funds
provided by the reduction in securities were utilized to fund growth in the loan
portfolio.
     The company  reclassified  all securities to available for sale on November
30, 1995, as permitted by the Financial  Accounting Standards Board in a special
one-time reassessment.
     The tables below present the carrying value of securities for each of the
 past three years and the maturities and yield characteristics of securities as 
of December 31,1996.

Carrying Value of Securities
 December 31
 In thousands                                1996      1995        1994
 U.S. Treasury and federal agencies:
  Available for sale ..................   $128,296   $142,199   $146,484
  Held to maturity ....................       --         --        3,081
Collateralized mortgage obligations and
 mortgage-backed securities:
  Available for sale ..................     67,626     81,900     70,895
  Held to maturity ....................       --         --       26,372
State and municipal obligations:
  Available for sale ..................     51,311     55,552       --
  Held to maturity ....................       --         --       49,752
Other securities:
  Available for sale ..................     37,922     18,571     12,264
  Held to maturity ....................       --         --        5,553
                                          --------   --------   --------
Total securities:
  Available for sale ..................    285,155    298,222    229,643
  Held to maturity ....................       --         --       84,758
                                          --------   --------   --------
   Total securities ...................   $285,155   $298,222   $314,401
                                          ========   ========   ========

<TABLE>

 Maturity Distribution of Securities
 December 31, 1996
 Dollars in thousands
<CAPTION>


                                                     Over           Over
                                                     One Year     Five Years
                                       One Year      Through       Through      Over        Equity       Total         Market
                                       or Less      Five Years    Ten Years   Ten Years   Securities   Maturities      Value
<S>                                       <C>         <C>         <C>         <C>         <C>           <C>
U.S. Treasury and federal agencies ..     $72,883     $38,779     $17,668     $            $            $129,330     $128,296
Collateralized mortgage obligations
  and mortgage-backed securities:(F1)         839       6,154      18,109      42,950          --         68,052       67,626
State and municipal obligations .....       2,808      13,758      21,911      11,460          --         49,937       51,311
Other securities ....................      11,217       2,063       1,147         103        23,415       37,945       37,922
                                          -------     -------     -------     -------     ---------     --------     --------
  Total securities available for sale     $87,747     $60,754     $58,835     $54,513     $  23,415     $285,264     $285,155
                                          =======     =======     =======     =======     =========     ========     ========

Percent of total ....................     30.76 %     21.30 %     20.62 %     19.11 %         8.21 %     100.00 %
Weighted average yield(F2) ...........     5.41 %      5.03 %      5.49 %      5.92 %         6.51 %       5.53 %
<FN>

(F1)  Collateralized  mortgage  obligations and  mortgage-backed  securities are
grouped into average lives based on December 1996  prepayment  projections.
(F2)  The weighted average yields are based on amortized cost.
</FN>
</TABLE>

Mortgage Servicing Rights
     The  company  adopted on a  prospective  basis  effective  January 1, 1995,
Statement of Financial  Accounting  Standards No. 122,  Accounting  for Mortgage
Servicing Rights ("SFAS 122"). SFAS 122 requires that rights to service mortgage
loans for others be recognized as assets, without regard to whether those assets
were  acquired  in  purchase   transactions   or  were  acquired   through  loan
originations. In prior years, only purchased mortgage servicing rights ("MSR's")
were  recognized  as assets.  MSR's  totaled $41.9 million at December 31, 1996,
compared with $28.3  million at December 31, 1995,  and $9.2 million at year-end
1994.  During 1996 and 1995, the company  purchased  servicing  portfolios  with
mortgage loan principal balances of $1.0 billion and $1.2 billion, respectively.
The company  recognized MSR's of $12.5 million and $21.1 million,  respectively,
on these purchased portfolios.
     The  carrying  value of MSR's and the related  amortization  are  evaluated
quarterly in relation to their fair values.  The company  evaluates the carrying
value of the MSR's by  estimating  the present value of the future net servicing
income  of the  rights,  using  a  discounted  valuation  method  and  based  on
management's  best  estimate  of  remaining  loan  lives.   Serviced  loans  are
stratified  into four interest rate tranches and two loan types.  Impairment and
subsequent  adjustments  in each stratum,  if any, are recognized by a valuation
allowance and a charge against servicing income.
     Prepayments of mortgage  loans can have a considerable  impact on the value
of the MSR  portfolio.  Prepayments  result  from a variety  of  factors,  but a
declining mortgage loan interest rate environment is generally  considered to be
the most significant of these. As of December 31, 1996, approximately 48% of the
MSR recognized on the balance sheet was related to loans which have  contractual
interest rates from 7% to 7.99%,  with a weighted  average rate of 7.48%.  Loans
with contractual  rates from 8% to 8.99%, with a weighted average rate of 8.31%,
account for another 36% of the MSR balance.  If mortgage  rates  should  decline
substantially  from current levels, the carrying value of the MSR's could become
impaired in future periods.
     To  mitigate  this  risk,  in 1996  the  company  purchased  a $75  million
(notional  amount)  interest  rate  "floor"  contract in which the company  will
receive  interest on the notional amount to the extent that the interest rate on
ten-year  constant  maturity U.S.  Treasury Notes falls below 5.50%. The cost of
this  contract was  $548,000  and its fair value as of December  31,  1996,  was
$479,000.  The cost,  which is  included  in other  assets  in the  consolidated
balance sheet, is being  amortized on a  straight-line  basis over the five-year
life of the contract.  In January 1997, the company purchased a second five-year
floor contract,  with a $100 million notional amount and a 5.25% floor rate. The
cost of this  contract was  $455,000.  Management  believes that the increase in
market  value of  these  two  floor  contracts  which  would  result  from a 100
basis-point drop in the interest rate on ten-year Treasuries would substantially
offset the impairment in the MSR likely to occur with such a decline in interest
rates.  Although management believes it is unlikely that ten-year Treasury rates
will drop below 5.25% in the foreseeable  future, and may take additional action
to limit the  company's  exposure if rates begin to decline  significantly,  the
company is currently  exposed to potential  impairment of the MSR asset if rates
should drop by more than 100 basis points.


Deposits
     Total  deposits  averaged  $1.5  billion in 1996,  an $82  million,  or 6%,
increase over 1995.  Approximately  48% of the increase in average  deposits was
due to brokered  certificates of deposit issued during 1996--$55  million in the
second  quarter  and $50  million in the fourth  quarter--in  order to fund loan
growth.  Average  deposits for 1995 were $1.4 billion,  a 4% increase over 1994.
The  company  issued  in the  first  quarter  of 1995 $30  million  of  brokered
certificates   of  deposit  and  purchased  $41  million  of  deposits  from  an
unaffiliated  bank.  Excluding these  transactions,  average deposits would have
grown approximately $10 million from 1994 to 1995.
     During 1996 the company implemented a program that sweeps excess funds from
targeted  interest-bearing  demand  accounts  into money market  accounts.  This
program has significantly  reduced the Federal Reserve Bank reserve requirements
for the banks.
     Time  deposits of $100,000 or more totaled  $336.1  million at December 31,
1996,  compared with $206.9  million at December 31, 1995.  Interest  expense on
time  deposits of $100,000 or more was $16.5  million in 1996,  $11.8 million in
1995 and $6.3 million in 1994. The following  table shows the maturities of time
deposits of $100,000 or more, including brokered  certificates of deposit, as of
December 31, 1996.

 Maturity of Time Deposits of $100,000 or More
 December 31, 1996
 In thousands
 Three months or less                                              $104,351
 Over three through six months                                       29,473
 Over six through twelve months                                      62,399
 Over one year through two years                                     37,165
 Over two years through five years                                  101,966
 Over five years                                                        723
                                                                ------------
    Total                                                          $336,077

     Brokered certificates of deposit, which are included in the above maturity
schedule, mature as follows:

 Maturity of Brokered Certificates of Deposit
 December 31, 1996
 In thousands
 Three months or less                                              $ 30,000
 Over three through six months                                          -
 Over six through twelve months                                      25,000
 Over one year through two years                                     20,000
 Over two years through five years                                   60,000
                                                                 ----------
    Total                                                          $135,000

         Other  information  regarding  time deposits is contained in note 19 to
the consolidated financial statements.


Liquidity, Short-term  Borrowings and Capital  Resources  Information  regarding
         short-term borrowings is presented below.
<TABLE>

 Short-term Borrowings
 Dollars in thousands
<CAPTION>
 <S>                                                 <C>        <C>        <C> 
                                                       1996       1995       1994
Federal funds purchased and repurchase agreements:    
  Balance at year end ............................   $ 71,879   $ 75,594   $ 74,553
  Weighted average rate at year end ..............     6.26 %     4.83 %     3.50 %
  Average balance during the year ................     42,010     47,219     40,303
  Weighted average rate during the year ..........     4.64 %     4.27 %     3.11 %
  Maximum month-end balance ......................     89,640     82,607     74,553
Other short-term borrowings:
  Balance at year end ............................     55,000     45,014     48,033
  Weighted average rate at year end ..............     5.42 %     6.67 %     6.36 %
  Average balance during the year ................     56,136     40,652     36,669
  Weighted average rate during the year ..........     5.55 %     7.34 %     4.68 %
  Maximum month-end balance ......................     70,005     61,831     48,840
Total short-term borrowings:
  Balance at year end ............................    126,879    120,608    122,586
  Weighted average rate at year end ..............     5.90 %     5.52 %     4.62 %
  Average balance during the year ................     98,146     87,871     76,972
  Weighted average rate during the year ..........     5.16 %     5.69 %     3.86 %
  Maximum month-end balance ......................    159,645    120,608    122,586
</TABLE>


     Substantially all federal funds purchased and repurchase  agreements mature
in one business day. Due to an unusually high demand in the market for overnight
funds on  December  31,  1996,  the rate the  company  paid for  federal  funds,
excluding repurchase  agreements,  on that date was also unusually high (7.12%).
The weighted average rate on the company's  federal funds purchased was 5.61% on
December 30, 1996, and was 6.02% on the first business day after year end. Other
short-term  borrowings  principally  represent  Federal Home Loan Bank  ("FHLB")
advances to TFB-FSB and TFB-KY (with varying maturity dates),  which are funding
residential mortgage and commercial loans.
     Long-term debt averaged $125.6 million in 1996, compared with $46.8 million
in 1995 and $40.8  million in 1994.  The increase in 1996 is due to the issuance
by TFB-KY in the fourth quarter of 1995 of $20 million of two-year notes and $30
million of three-year  notes under a $250 million  senior bank note program;  in
the second  quarter of 1996  another  $25 million of  four-year  bank notes were
issued.  These notes were issued to support growth in the loan portfolio.  Notes
issued  to date  bear  interest  at  fixed  rates of  6.32%,  6.48%  and  7.13%,
respectively.  The  notes  issued in 1995 have  been  effectively  converted  to
floating rate  instruments  through the use of interest rate swap  transactions.
Interest rate swaps are discussed more fully in the  Asset/Liability  Management
section which follows and in note 14 to the consolidated financial statements.
     In addition, TFB-KY borrowed on a long-term basis $30 million from the FHLB
in the first quarter of 1996 to fund residential  mortgage and commercial loans.
Long-term debt also includes financing from an unaffiliated  commercial bank for
the company's  leveraged ESOP.  Total ESOP debt was $2.5 million at December 31,
1996, and $3.0 million at December 31, 1995.
     The company  has a $5 million  unsecured  operating  line of credit with an
unaffiliated  commercial  bank that is used from time to time to supplement  the
company's  cash  requirements.  The line was not in use at December  31, 1996 or
1995. Also, under the book-entry  senior bank note program,  TFB-KY may issue up
to an additional $175 million of bank notes from time to time in maturities from
30 days to 30 years.
     See  note  9  to  the  consolidated  financial  statements  for  a  further
     description of the terms of these borrowings.  The company's capital ratios
     at December 31, 1996 and 1995  (calculated  in accordance  with  regulatory
     guidelines) were as follows:

December 31                                       1996                  1995

Tier 1 risk based                                 7.68%                 8.64%
   Regulatory minimum                             4.00                  4.00
Total risk based                                 10.87                 12.15
   Regulatory minimum                             8.00                  8.00
Leverage                                          6.12                  6.70
   Regulatory minimum                             3.00                  3.00


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

     Capital  ratios  of all of the  company's  subsidiaries  are in  excess  of
applicable  minimum  regulatory capital ratio requirements at December 31, 1996.
The   decrease   in  these   ratios   over  the  past   year  is  due  to  asset
growth--particularly  commercial and commercial real estate loans--combined with
minimal growth in shareholders'  equity as a result of the decline in net income
in 1996.  Notwithstanding  the 1996 decline in net income,  primarily due to the
loss incurred in the second  quarter,  the Board of Directors  chose to maintain
the  quarterly  dividend  at $0.16.  As a result,  the  company  paid  dividends
slightly in excess of earnings  for 1996.  Although  there can be no  assurance,
management  expects the company will pay dividends in 1997 of approximately  30%
to 40% of net income.
     Approximately half of the $18.1 million increase in equity capital during
1995 was provided by retained  earnings.  Most of the remaining portion was due
to a $7.7 million decline in the net unrealized loss on securities available for
sale.
     To maintain a desired level of liquidity,  the company has several  sources
of funds available.  The company  primarily relies upon net inflows of cash from
financing  activities,  supplemented  by net  inflows  of  cash  from  operating
activities,  to provide cash used in its investing activities.  As is typical of
most banking  companies,  significant  financing  activities include issuance of
common stock and long-term debt,  deposit  gathering,  and the use of short-term
borrowing facilities,  such as federal funds purchased,  repurchase  agreements,
FHLB advances and lines of credit.  The company's primary  investing  activities
include purchases of securities and loan originations, offset
by  maturities,  prepayments  and sales of  securities,  and loan  payments.  At
December 31, 1996, the retained earnings of the banks totaled $69.7 million,  of
which $24.0  million was  available  for the payment of  dividends to the parent
company.

Asset/Liability Management
     Managing  interest  rate  risk is  fundamental  to the  financial  services
industry. The company's policies are designed to manage the inherently different
maturity and repricing  characteristics  of the lending and  deposit-acquisition
lines of  business  to achieve a desired  interest-sensitivity  position  and to
limit exposure to interest rate risk. The maturity and repricing characteristics
of  the   company's   lending   and  deposit   activities   create  a  naturally
asset-sensitive  structure.  By using a combination of on-and  off-balance-sheet
financial  instruments,  the company  manages  interest rate  sensitivity  while
optimizing  net  interest  income  within the  constraints  of  prudent  capital
adequacy,  liquidity  needs,  the  interest  rate and economic  outlook,  market
opportunities and customer requirements.
     The company uses an earnings  simulation  model to monitor and evaluate the
impact of changing interest rates on earnings.  The simulation model used by the
company is  designed to reflect the  dynamics  of all  interest-earning  assets,
interest-bearing   liabilities  and  off-balance-sheet   financial  instruments,
combining  the  various  factors  affecting  rate  sensitivity  into a  two-year
earnings  outlook.  Among the  factors  the model  utilizes  are  rate-of-change
differentials,  such as  federal  funds  rates  versus  savings  account  rates;
maturity effects, such as calls on securities; and rate barrier effects, such as
caps or floors on loans.  It also  captures  changing  balance  sheet levels and
floating-rate  loans that may be tied or related to prime,  Treasury  Notes,  CD
rates or other rate indices,  which do not necessarily move identically as rates
change.  In addition,  it captures  leads and lags that occur as rates move away
from current levels,  and the effects of prepayments on various assets,  such as
residential mortgages, mortgage-backed securities and consumer loans.
     The  model  is  updated  monthly  for  multiple  interest  rate  scenarios,
projected changes in balance sheet categories and other relevant assumptions. In
developing multiple rate scenarios, an econometric model is employed to forecast
key rates, based on the cyclical nature and historic  volatility of those rates.
A stochastic view of net interest income is derived once probabilities have been
assigned to those key rates.
     By forecasting a most likely rate environment,  the effects on net interest
income of adjusting those rates up or down can reveal the company's  approximate
interest rate risk exposure  level.  As of December 31, 1996, the company's most
likely rate environment assumed the federal funds rate and prime lending rate at
5.25% and  8.25%,  respectively,  rising to 5.75% and  8.75%,  respectively,  by
December of 1997. The following  illustrates  the effects on net interest income
of an immediate  shift in market interest rates compared to the most likely rate
assumptions used in the company's model:
-------------------------------------------------------------------------------
Basis-point change                           +200 bp  +100 bp  -100 bp  -200 bp
-------------------------------------------------------------------------------
-------------------------------------------------------------------------------
Increase (decrease) in net interest income    3.3%     1.9%    - 0 -%    (0.2)%
-------------------------------------------------------------------------------

     As of December 31, 1996,  management  believes the company's  balance sheet
was in an  asset-sensitive  position,  as the repricing  characteristics  of the
balance sheet were such that an increase in interest rates would have a positive
effect on earnings and a decrease in interest rates would have a negative effect
on earnings.  It should be noted that some of the assumptions made in the use of
the simulation  model will inevitably not materialize and  unanticipated  events
and  circumstances  will occur; in addition,  the simulation model does not take
into account any future  actions  which could be undertaken to reduce an adverse
impact if there were a change in  interest  rate  expectations  or in the actual
level of interest rates.
     A second  interest  rate  sensitivity  tool  utilized by the company is the
quantification of market value changes for all assets and liabilities,  given an
increase or decrease in interest  rates.  This  approach  provides a longer-term
view of interest rate risk, capturing all expected future cash flows. Assets and
liabilities with option  characteristics  are valued based on numerous  interest
rate path valuations using statistical rate simulation techniques.
     To assist in achieving a desired  level of interest  rate  sensitivity  the
company has entered into off-balance-sheet interest rate swap transactions which
partially  neutralize  the asset  sensitive  position  which is  inherent in the
balance  sheet.  The  company  pays a  variable  interest  rate on each swap and
receives a fixed rate.  In a higher  interest-rate  environment,  the  increased
contribution   to  net  interest  income  from   on-balance-sheet   assets  will
substantially  offset any negative  impact on net interest  income from interest
rate swap transactions.  Conversely,  if interest rates decline,  the swaps will
mitigate the company's exposure to reduced net interest income.
     See also the Mortgage Servicing Rights section of this discussion regarding
the use of  interest  rate  floor  contracts  to  hedge  against  the  potential
impairment of the MSR asset  resulting  from a  significant  decline in interest
rates.  Interest rate swap  transactions  are described more fully in note 14 to
the consolidated financial statements.

Quarterly Results
         Following  is a summary of  quarterly  operating  results  for 1996 and
1995:
<TABLE>

 Quarterly Results of Operations
 In thousands, except per share data
<CAPTION>

                                              1996                                     1995
                            4th Qtr.  3rd Qtr.  2nd Qtr.  1st Qtr.   4th Qtr.  3rd Qtr.  2nd Qtr.  1st Qtr.

<S>                         <C>       <C>       <C>       <C>        <C>       <C>       <C>       <C>    
 Interest income            $38,995   $37,896   $36,215   $34,829    $35,097   $34,222   $33,236   $31,673
 Interest expense            19,215    18,626    17,940    17,285     17,244    16,686    16,039    14,630
                            -------  --------   -------   -------    -------   -------   -------   -------
 Net interest income         19,780    19,270    18,275    17,544     17,853    17,536    17,197    17,043
 Provision for loan losses    2,651     1,621     8,421     1,221      3,180       780       780       520
                            -------  --------   -------   -------    -------   -------   -------   -------
 Net interest income after
      provision              17,129    17,649     9,854    16,323     14,673    16,756    16,417    16,523
 Non-interest income          7,756     7,394     7,304     7,235      7,062     5,764     6,925     4,660
 Non-interest expenses       17,286    20,472    24,765    18,119     17,500    15,801    17,185    15,563
                            -------  --------   -------   -------    -------   -------   -------   -------
 Income before income taxes   7,599     4,571    (7,607)    5,439      4,235     6,719     6,157     5,620
 Income tax expense           2,284     1,557    (2,424)    1,703      1,378     2,175     2,038     1,825
                            -------  --------   -------   -------    -------   -------   -------   -------
 Net income                 $ 5,315   $ 3,014   $(5,183)  $ 3,736    $ 2,857   $ 4,544   $ 4,119   $ 3,795
                            =======   =======   =======   =======    =======   =======   =======   =======

 Earnings per common share  $  0.46   $  0.26   $ (0.45)  $  0.33    $  0.25   $  0.40   $  0.36   $  0.34
                            =======   =======   =======   =======    =======   =======   =======   =======
</TABLE>

   
     Significant  factors  affecting the  comparability of quarterly results for
1996 include the second  quarter  pretax  charge of $5.8 million  related to the
commitment to refocus on core financial services,  reduce operating expenses and
exit  from  less-profitable  initiatives,  and a $7.2  million  increase  in the
quarterly  loan loss  provision  in the second  quarter as compared to the first
quarter.  These second quarter charges resulted in a net loss for the first half
of 1996.  The $8.4 million loan loss provision in the second quarter of 1996 was
due to several factors:
    1) The  charge-off  of $7.0  million on three  problem  loans.  Prior to the
    second quarter of 1996,  management expected two of these three borrowers to
    be sold as  going  concerns  and the  loans  to be  repaid  from  the  sales
    proceeds.  As a result, the company had previously allocated $4.2 million in
    the  allowance  for loan  losses  for these  three  loans.  Due to the rapid
    deterioration  in the financial  condition of those  borrowers in the second
    quarter of 1996 and the  resulting  loss of  interest  by several  potential
    buyers, sale prospects became unlikely. As the possibility of sales as going
    concerns grew less likely, management concluded that the collateral securing
    the loans  would  likely  have to be  liquidated,  resulting  in larger than
    anticipated  losses on the loans. 2) Recent adverse loss trends for consumer
    loans  resulting from  unprecedented  levels of  bankruptcies,  particularly
    personal  bankruptcies in Kentucky and Tennessee.  3) Three additional loans
    over $1 million (totaling $6.6 million) for which  information  became known
    to the company  during the quarter  which caused  management to have serious
    doubts as to the ability of the borrowers to comply with the loan  repayment
    terms, but which were not included in non-performing loans at June 30, 1996.
    4) Continued  strong  growth in the loan  portfolio,  particularly  in large
    commercial relationships (over $5 million).
Deposit insurance expense for the third quarter of 1996 was impacted by the $2.7
million (pretax) SAIF assessment. Due to a decline in deposit insurance premiums
following the  re-capitalization of the SAIF, the company received in the fourth
quarter of 1996 a $122 thousand refund of deposit insurance premiums.
     Non-interest  income in the second  quarter of 1995 included a $1.7 million
pre-tax gain from the sale of mortgage  servicing rights.  For the third quarter
of 1995, deposit insurance expense was reduced by a $585 thousand refund of FDIC
premiums  paid  in the  second  quarter.  The  refund  was  associated  with  an
over-capitalization of the Bank Insurance Fund.
    


================================================================================
This discussion contains forward-looking statements under the Private Securities
Litigation Reform Act of 1995 that involve risks and uncertainties. Although the
company believes that the assumptions underlying the forward-looking  statements
contained herein are reasonable, any of the assumptions could be inaccurate, and
therefore,  there  can  be no  assurance  that  the  forward-looking  statements
included  herein will prove to be  accurate.  Factors  that could  cause  actual
results to differ from the results discussed in the  forward-looking  statements
include,  but are not limited to: economic  conditions  (both generally and more
specifically  in the  markets  in which  the  company  and its  banks  operate);
competition  for the  company's  customers  from other  providers  of  financial
services; government legislation and regulation (which changes from time to time
and over which the company has no control);  changes in interest rates; material
unforeseen  changes  in the  liquidity,  results  of  operations,  or  financial
condition of the  company's  customers;  delays in,  customer  reactions to, and
other unforeseen  complications  with respect to, the implementation of the cost
containment measures; and other risks detailed in the company's filings with the
Securities  and Exchange  Commission,  all of which are difficult to predict and
many of which are beyond the control of the company.
================================================================================

<TABLE>
                        

 Consolidated Statistical Information (F1)(F2)
 For the years ended December 31
 Dollars in thousands, except per share data

<CAPTION>

                                                         1996          1995          1994          1993           1992

<S>                                                   <C>           <C>           <C>          <C>           <C>    
 Interest income                                        $147,935      $134,228      $113,982     $102,819        $95,343
 Interest expense                                         73,066        64,599        47,375       44,250         46,763
                                                        --------      --------      --------      -------        -------
 Net interest income                                      74,869        69,629        66,607       58,569         48,580
 Provision for loan losses                                13,914         5,260         2,212        2,794          2,618
                                                        --------      --------      --------      -------        -------
 Net interest income after provision for loan losses      60,955        64,369        64,395       55,775         45,962
 Non-interest income                                      29,689        24,411        17,170       17,032         13,793
 Non-interest expenses                                    80,642        66,049        60,070       52,830         39,890
                                                        --------      --------      --------      -------        -------
 Income before income taxes and cumulative
   effect of change in accounting principle               10,002        22,731        21,495       19,977         19,865
 Income tax expense                                        3,120         7,416         7,075        6,223          6,400
                                                        --------      --------      --------      -------        -------
 Income before cumulative effect
   of change in accounting principle                       6,882        15,315        14,420        13,754        13,465
 Cumulative effect of change in accounting principle           -             -             -           296             -
                                                        --------      --------      --------      --------       -------
 Net income                                             $  6,882      $ 15,315      $ 14,420      $ 14,050       $13,465
                                                        ========      ========      ========      ========       =======
 Net income applicable to common stock                  $  6,882      $ 15,315      $ 14,366      $ 13,969       $13,328
                                                        ========      ========      ========      ========       =======

 Per common share:
   Primary earnings per share                           $   0.60    $     1.35     $    1.28     $    1.24     $    1.25
   Fully-diluted earnings per share                         0.59          1.34          1.28          1.24          1.25
   Common shareholders' equity at year end                 11.55         11.49          9.96          9.96          9.01
   Cash dividends declared                                  0.64          0.60          0.56          0.51          0.44
   Year-end common stock price                             23.00         17.88        1 3.00         16.50         15.19
 At year end:
   Total assets                                       $2,003,952    $1,795,649    $1,617,835    $1,597,453    $1,380,626
   Total loans, net of unearned income                 1,450,999     1,258,511     1,143,833     1,005,089       780,300
   Total deposits                                      1,579,217     1,444,483     1,335,509     1,376,227     1,222,050
   Long-term debt                                        140,903        86,605        37,334        54,217        21,957
   Total shareholders' equity                            131,316       129,767       111,632       112,036        99,406
   Common shareholders' equity                           131,316       129,767       111,632       111,026        98,396
   Allowance for loan losses                              18,065        15,779        12,529        12,505         9,596
 Selected ratios:
   Return on average assets                                 0.37%         0.92%         0.91%         0.96%         1.10%
   Return on average shareholders' equity                   5.32         12.55         12.89         13.24         14.56
   Return on average common shareholders' equity            5.32         12.55         12.92         13.29         14.57
   Average shareholders' equity to average 
     total assets                                           6.97          7.30          7.05          7.25          7.58
   Leverage ratio                                           6.12          6.70          6.95          6.47          6.57
   Tier 1 risk-based capital ratio                          7.68          8.64          9.47          9.36         11.05
   Total risk-based capital ratio                          10.87         12.15         13.31         13.50         12.51
   Common dividend payout ratio                           106.52         44.49         43.88         41.05         35.10
   Allowance for loan losses as a percentage
     of year-end loans                                      1.25          1.25          1.10          1.24          1.23
   Allowance for loan losses as a percentage
     of non-performing loans                              170.68         91.00        158.21        126.39        107.03
   Non-performing loans as a percentage
     of year-end loans                                      0.73          1.38          0.69          0.98          1.15
   Net charge-offs as a percentage of 
     average loans                                          0.86          0.17          0.20          0.26          0.24
   Net interest margin                                      4.42          4.56          4.57          4.32          4.31
 Other data:
   Number of full-time-equivalent employees at 
     year end                                                881           932           836           829           672
   Number of common shareholders of record at 
     year end (F2)                                         1,706         1,810         1,907         1,273         1,031
   Common share trading volume                         9,275,700     4,520,000     3,404,400     4,992,300     5,598,900
<FN>

(F1) During 1995, 1993 and 1992, the company  acquired one commercial bank, three
thrift  institutions  and certain  branches  of another  thrift  institution  in
transactions  accounted for using the purchase  method of accounting.  Financial
information  pertaining to the acquired entities since the acquisition dates has
been  included  in the  consolidated  financial  statements.  See  note 4 to the
consolidated financial statements.
(F2) In 1994 and 1992, the company merged with four bank holding companies in 
transactions   accounted   for  using  the pooling-of-interests method of
accounting.  Accordingly,  all financial data has been restated as if the 
entities were  combined for all periods  presented.  See note 4 to the
consolidated financial statements. Shareholders of record for 1993
and 1992  have not  been  restated  to  reflect  holders  of  shares  issued  in
connection with these business combinations.

</FN>
</TABLE>
<PAGE>



   
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K
   (a) (1) Financial statements filed
           The list of  consolidated  financial  statements  together with the
           report thereon of KPMG Peat Marwick LLP, as set forth in Part II, 
           Item 8 of this report is incorporated herein by reference.
       (2) Financial statement schedules
           Schedules to the consolidated financial statements are omitted, as 
           the required information is not applicable.
       (3) List of exhibits
           The list of exhibits  listed on the Exhibit  Index on pages 27 and 28
           of this Form 10-K/A is incorporated herein by reference.

           The management  contracts and  compensatory  plans or arrangements
           required to be filed as exhibits to this Form 10-K/A pursuant to Item
           14(c) are noted by asterisk (*) in the Exhibit Index.

   (b) Reports on Form 8-K
       No reports on Form 8-K were filed during the fourth quarter of 1996.

   (c) Exhibits
       The exhibits  listed on the Exhibit Index on pages 27 and 28 of this Form
10-K/A are filed as a part of this report.

   (d) Financial statement schedules
       No financial  statement  schedules  are required to be filed as a part of
this report.




<PAGE>






                                    SIGNATURE

   Pursuant to the  requirements  of Section 13 or 15(d) of the  Securities
Exchange Act of 1934,  the registrant has duly caused this report to be signed
on its behalf by the undersigned, thereunto duly authorized.

                                                          Trans Financial, Inc.
                                                                 (Registrant)




                                                      By: /s/ Edward R. Matthews
                                                              Edward R. Matthews
                                                         Chief Financial Officer
                                                             Date: June 25, 1997



<PAGE>


                                  Exhibits


   3(a)  Restated Articles of Incorporation of the registrant are incorporated
           by reference to Exhibit 4(a) of the registrant's report on Form 10-Q
           for the quarter ended March 31, 1995.

   3(b)  Articles of Amendment to the Restated  Articles of  Incorporation  of
           the registrant are  incorporated  by reference to Exhibit 4(b) of the
           registrant's  report on Form  10-Q for the  quarter  ended  March 31,
           1995.

   3(c)  Restated Bylaws of the registrant are incorporated by reference to
           Exhibit 4(b) of the registrant's report on Form 10-K for the year
           ended December 31, 1993.

   4(a)  Rights  Agreement  dated January 20, 1992 between  Manufacturers
           Hanover Trust Company and Trans Financial, Inc. is incorporated by
           reference to Exhibit 1 to the registrant's report on Form 8-K dated
           January 24, 1992.

   4(b)  Form of Indenture  (including Form of Subordinated  Note) dated as of
           September 1, 1993, between the registrant and First Tennessee Bank
           National Association as Trustee,  relating to the issuance of 7.25%
           Subordinated Notes due 2003, is incorporated by reference to Exhibit
           4 of Registration Statement on Form S-2 of the registrant  (File No.
           33-67686).

   4(c)  Subordinated  Note dated as of September 16, 1993, by Trans Financial,
           Inc. is incorporated by reference to Exhibit 1 to Registration
           Statement on Form S-2 of the registrant (File No. 33-67686).

   10(a) Trans Financial, Inc. 1987 Stock Option Plan is incorporated by
           reference to Exhibit 4(a) of Registration Statement on Form S-8 of
           the registrant (File No. 33-43046).*

   10(b) Trans  Financial, Inc. 1990 Stock Option Plan is incorporated by
           reference to Exhibit 10(d) of the registrant's Report on Form 10-K
           for the year ended December 31, 1990.*

   10(c) Trans Financial, Inc. 1992 Stock Option Plan is incorporated by
           reference to Exhibit 28 of the registrant's Report on Form 10-Q for
           the quarter ended March 31, 1992.*

   10(d) Trans Financial, Inc. 1994 Stock Option Plan is incorporated by
           reference to the registrant's Proxy Statement dated March 18, 1994,
           for the April 25, 1994 Annual Meeting of Shareholders.*

   10(e) Employment Agreement between Douglas M. Lester and Trans Financial,
           Inc. is incorporated by reference to Exhibit 10(e) of the
           registrant's Report on Form 10-K for the year ended December 31,
           1995.*

   10(f) Description of the registrant's Performance Incentive Plan.*

   10(g) Form of Deferred  Compensation  Agreement between registrant and Vince
           A. Berta, Barry D. Bray, James G. Campbell,  Tommy W. Cole, Roger E.
           Lundin,  Michael L. Norris, Jay B. Simmons and certain other officers
           of the registrant is incorporated by reference to Exhibit 10(g) of
           the registrant's Report on Form 10-K for the year ended December 31,
           1992.*  

   10(h) Trans Financial,  Inc.  Dividend  Reinvestment  and Stock Purchase Plan
           is incorporated by reference to Registration Statement on Form S-3 of
           the registrant dated May 15, 1991 (File No. 33-40606).

   10(i) Warrant dated as of February 13, 1992 between  Morgan Keegan & Company,
           Inc. and Trans Financial, Inc. incorporated by reference to Exhibit
           10(m) of Registration Statement on Form S-2 of the registrant
           (File No. 33-45483).

   10(j) Loan Agreement dated as of July 6, 1993 between First Tennessee Bank
           National Association and Trans Financial, Inc. is incorporated by
           reference to Exhibit 10(p) to the Registration Statement on Form S-2
           of the registrant (File No. 33-67686).

   10(k)   Distribution  Agreement dated September 28, 1995 between  Registrant,
           Trans  Financial   Bank,  N.A.  and  Donaldson,   Lufkin  &  Jenrette
           Securities  Corporation is incorporated by reference to Exhibit 10(a)
           of the  registrant's  report  on  Form  10-Q  for the  quarter  ended
           September 30, 1995.

   10(l) Fiscal and Paying Agency  Agreement  dated  September 28, 1995 between
           Trans Financial Bank, N.A. and First Fidelity Bank, N.A. is
           incorporated by reference to Exhibit 10(b) of the registrant's report
           on Form 10-Q for the quarter ended September 30, 1995.

   10(m) 1995 Executive Stock Option Plan is incorporated by reference to the
           registrant's Proxy Statement dated March 9, 1995, for the April 24,
           1995, Annual Meeting of Shareholders.*

   10(n) Investment and Financial Advisory Services Agreement between Trans
           Financial Bank, National Association, and Mastrapasqua & Associates,
           Inc.*   **

   10(o) Form of Retention Agreements between Registrant and Vince A. Berta,
           James G. Campbell, Tommy W. Cole, Ronald Szejner, and certain other
           officers.*   **

   10(p) 1996 Directors Stock  Compensation Plan is incorporated by reference to
           Exhiibt 10(n) of the registrant's report on Form 10-Q for the quarter
           ended March 31, 1996.*

   11    Statement of Computation of Per Share Earnings**

   21    List of Subsidiaries of the Registrant**

   23    Consent of Independent Auditors**

   23(a) Consent of Independent Auditors                                   

   27    Financial Data Schedule (for SEC use only)**

   99     Annual Report on Form 11-K for the Trans Financial, Inc. Savings 
          Investment Plan 
 
   * Denotes a management  contract or  compensatory  plan or arrangement of the
registrant required to be filed as an exhibit pursuant to Item 601 (10) (iii) of
Regulation S-K.


**Previously filed.