<PAGE>

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

                                    FORM 10-K

(Mark One)
[X] Annual Report Pursuant to Section 13 or 15(d) of the Securities Exchange Act
of 1934 For the fiscal year ended December 31, 1998
                                       or
[ ] Transition Report Pursuant to Section 13 or 15(d) of the Securities
Exchange Act of 1934 [No Fee Required]
For the transition period from _______________ to ________________

                         Commission file Number 0-18283

                            PINNACLE BANC GROUP, INC.
             (Exact name of registrant as specified in its charter)

               Illinois                                  36-3190818
               --------                                  ----------
     (State or other jurisdiction of                  (I.R.S. Employer
      incorporation or organization)                 Identification No.)

         2215 YORK ROAD, SUITE 306, OAK BROOK, ILLINOIS        60523
         -----------------------------------------------------------
          (Address of principal executive offices)        (Zip Code)

        Registrant's telephone number, including area code (630) 574-3550

           Securities registered pursuant to Section 12(b) of the Act:

              Title of each class          Name of each exchange on
                                               which registered
                    NONE                             NONE

           Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock, $3.12 par value
                          -----------------------------
                                (Title of class)

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.
                             [X] Yes [ ] No

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 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. [ ]

The aggregate market value of the voting stock held by non-affiliates of the
registrant at March 11, 1999, was approximately $116,075,403.

As of March 11, 1999, the registrant had 7,399,343 shares outstanding of common
stock, $3.12 par value.

Parts of the 1998 Annual Report to Stockholders have been incorporated by
reference into Part II of the Form 10-K.

<PAGE>



                           FORM 10-K TABLE OF CONTENTS


<TABLE>
<S>         <C>                                                                               <C>
PART I
Item 1.     Business....................................................................       1
Item 2.     Properties..................................................................       4
Item 3.     Legal Proceedings...........................................................       5
Item 4.     Submission of Matters to a Vote of Security Holders.........................       5

PART II
Item 5.     Market for Registrant's Common Equity and Related Stockholder Matters.......       5
Item 6.     Selected Financial Data.....................................................       6
Item 7.     Management's Discussion and Analysis of Financial Condition and
             Results of Operations......................................................       6
Item 7A.    Quantitative and Qualitative Disclosures about Market Risk..................       6
Item 8.     Financial Statements and Supplementary Data.................................       6
Item 9.     Disagreements on Accounting and Financial Disclosures.......................       6

PART III
Item 10.   Directors and Executive Officers of the Registrant...........................       6
Item 11.   Executive Compensation.......................................................       8
Item 12.   Security Ownership of Certain Beneficial Owners and Management...............      14
Item 13.   Certain Relationships and Related Transactions...............................      16

PART IV
Item 14.   Exhibits, Financial Statement Schedules and Reports on Form 8-K..............      16

SIGNATURES..............................................................................      24
</TABLE>

                                       i
<PAGE>


                                     PART I


ITEM 1.  BUSINESS

Pinnacle Banc Group, Inc. (the "Corporation") has entered into a definitive 
agreement of merger with Old Kent Financial Corporation ("Old Kent") of Grand 
Rapids, Michigan. The merger is intended to be structured as a 
pooling-of-interests for accounting purposes and as a tax-free exchange of 
shares. The Corporation's shareholders will receive 5.4 million shares of Old 
Kent stock, using an exchange ratio of 0.717. The Corporation has terminated 
the remainder of its 1999 stock repurchase program announced on January 20, 
1999. As of March 19, 1999, the Corporation had repurchased 60,400 shares 
under that program.

The merger is subject to the customary approvals by the Corporation's
shareholders and by the regulatory authorities and is expected to be completed
during the third quarter of 1999.

The Corporation is a multi-bank holding company registered under the Bank
Holding Company Act and is engaged in the business of banking through the
ownership of subsidiary banks. At December 31, 1998 the Corporation had total
consolidated assets of $1,146,065,000, total loans of $541,356,000, total
deposits of $883,806,000, and total stockholders' equity of $117,376,000. The
Corporation's principal office is 2215 York Road, Suite 306, Oak Brook, Illinois
60523. The Corporation has sixteen banking locations in the metropolitan areas
of Chicago and Quad-Cities, Illinois.

The Corporation, formerly First Cicero Banc Corporation ("FCBC"), was organized
under the laws of the State of Illinois on August 24, 1979 for the purpose of
acquiring the First National Bank of Cicero (the "Cicero Bank"). On April 30,
1988, the Corporation merged (the "Merger") with First Harvey Banc Corporation
("FHBC"), parent company of First National Bank in Harvey (the "Harvey Bank"),
and LaGrange Park Banc Corporation ("LPBC"), parent company of Bank of LaGrange
Park (the "LaGrange Park Bank"). FHBC and LPBC were affiliated with FCBC through
common ownership. In connection with the Merger, the name of the Corporation was
changed to Pinnacle Banc Group, Inc.

Since the date of the merger, SBH Corp., parent company of Bank of Silvis (the
"Silvis Bank"), was merged into the Corporation on September 29, 1989. The
Berwyn National Bank (the "Berwyn Bank") was purchased on February 1, 1992. The
Henry County Bank was purchased on March 27, 1992. Batavia Financial
Corporation, parent company of Batavia Savings Bank, F.S.B., was merged into
Pinnacle on December 31, 1992. In 1996, Batavia Savings Bank, F.S.B. changed its
name to Pinnacle Bank, F.S.B. ("FSB"). In April, 1997, FSB was merged into
Pinnacle Bank.

On December 7, 1992, the Silvis Bank merged with the Henry County Bank with the
resultant bank named Pinnacle Bank of the Quad-Cities ("Quad-Cities Bank"). On
July 9, 1993, the Cicero Bank, Harvey Bank and Berwyn Bank were merged with and
into the LaGrange Park Bank with the resultant bank named the Pinnacle Bank. On
January 6, 1995, Acorn Financial Corp ("AFC") and its subsidiary bank, Suburban
Trust & Savings Bank ("STSB") were purchased. AFC was liquidated into the
Corporation and concurrent with the liquidation, STSB was merged into Pinnacle
Bank. On September 30, 1996, Financial Security Corporation ("FinSec") and its
subsidiary thrift, Security Federal Savings and Loan Association of Chicago
("SF"), were purchased. FinSec was liquidated into the Corporation and SF was a
separate subsidiary until it was merged into Pinnacle Bank on January 31, 1997.

The Corporation owns 100% of the common stock of Pinnacle Bank and Pinnacle Bank
of the Quad-Cities.

The Corporation is a legal entity separate and distinct from its subsidiary
banks. The major sources of the Corporation's revenues are dividends from its
subsidiary banks and gains on sales of its equity securities.

SUBSIDIARY BANKS

Pinnacle Bank and Quad-Cities Bank are full service commercial banks
encompassing most of the usual functions of commercial and savings banking
including commercial, consumer, and real estate lending; installment credit



                                       1
<PAGE>

lending; collections; safe deposit operations; and other services tailored for
individual customer needs. The banks also offer a full range of deposit services
to individuals and businesses which include demand, savings and time deposits,
as well as providing trust services to the customers. Pinnacle Bank provides
nondeposit-based products, including mutual funds and annuities through
affiliation with an independent broker.

The Pinnacle Bank, a state banking corporation organized under the laws of
Illinois, was formed on July 9, 1993 through the merger of the Cicero Bank,
Harvey Bank and Berwyn Bank with and into the LaGrange Park Bank. The Cicero
Bank was originally organized in 1921, the Harvey Bank in 1937, the Berwyn Bank
in 1937 and the LaGrange Park Bank in 1962. The Bank's main office is located in
Cicero, Illinois, with full service branches in Harvey, Berwyn, Oak Park,
LaGrange Park, Westmont, Elburn, Batavia, and Chicago (West Town), Warrenville
and limited service facilities in Cicero, Niles and North Riverside. At December
31, 1998, the Bank had total assets of $969 million.

The Quad-Cities Bank was organized as a state banking corporation with the name
Bank of Silvis under the laws of the State of Illinois in 1950. On December 7,
1992, The Henry County Bank, organized as a state banking corporation under the
laws of the State of Illinois in 1968, was merged with and into Bank of Silvis
and the name of the merged entity was changed to Pinnacle Bank of the
Quad-Cities. The Bank's main office is located in Silvis, Illinois, with a full
service branch located in Colona (formerly Green Rock), Illinois. Each community
is part of the Quad-Cities area of Illinois. In the second quarter of 1998, a
full service branch opened in Moline, Illinois. As of December 31, 1998, the
Bank had total assets of $129 million.

COMPETITION

Intense competition exists in all aspects of business in which the Corporation
and its subsidiary banks are presently engaged, not only with other commercial
banks and trust companies but also with thrifts, finance companies, personal
loan companies, credit unions, leasing companies, money market mutual funds,
investment firms, mortgage bankers, and other financial institutions serving the
metropolitan areas of Chicago and the Quad-Cities.

Commercial and savings banks compete on the basis of price, including interest
rates paid on deposits and charged on loans, convenience and quality of service.
This competition includes banks which are many times larger than a banking
subsidiary, including banks in the primary marketing areas of each subsidiary
bank which have become affiliated through parent holding companies owning
significantly larger banking institutions. Each subsidiary bank is encountering
increased competition from non-bank financial institutions. Thrift deposits
constitute a substantial portion of all financial institutions' deposits in
Illinois. Thrifts are able to compete aggressively with commercial banks in the
important area of consumer lending. Credit unions and small loan companies each
are significant factors in the consumer loan market. Insurance companies,
investment firms and retailers are all significant competitors for various types
of business. Many of the competitors of the subsidiary banks are larger and have
greater resources than the subsidiary banks.

EMPLOYEES

At December 31, 1998, the Corporation and its subsidiary banks employed 385
persons on a full-time equivalent basis.

SUPERVISION AND REGULATION

            GENERAL. At the present time, various bills have been introduced in
the United States Congress and the Illinois state legislature which could result
in additional regulation of the business of the Corporation and any banks which
are now or hereafter become affiliated with the Corporation. Future bills could
also be introduced which could significantly affect the banking industry. It
cannot be predicted whether any such legislation will be adopted or how such
adoption would affect the business of the Corporation or any banks so
affiliated.

The following references to applicable statutes and regulations are brief
summaries thereof which do not purport to be complete and which are qualified in
their entirety by reference to such statutes and regulations.



                                       2
<PAGE>

            BANK HOLDING COMPANY. As a bank holding company, the Corporation is
subject to the supervision of the Federal Reserve Board under the Bank Holding
Company Act of 1956, as amended (the "BHC Act"). Bank holding companies are
required to file with the Federal Reserve Board an annual report and such
additional information as the Federal Reserve Board may require. The Federal
Reserve Board also makes periodic examinations of bank holding companies and
their subsidiaries. The Corporation is required to obtain the prior approval of
the Federal Reserve Board before it could acquire all or substantially all of
the assets of any bank, or acquire ownership or control of any voting shares of
any bank other than a subsidiary bank of the Corporation, if, after such
acquisition, it would own or control more than 5% of the voting shares of such
bank. The BHC Act does not permit the Federal Reserve Board to approve the
acquisition by the Holding Company of any voting shares of, or all or
substantially all of the assets of, any bank located outside of the State of
Illinois, unless such acquisition is specifically authorized by the laws of the
state in which such bank is located.

The BHC Act limits the activities which may be engaged in by any bank holding
company and its subsidiaries to certain specified activities, including those
activities which the Federal Reserve Board may find by order or regulation, to
be so closely related to banking or managing or controlling banks as to be a
proper incident thereto.

Subsidiary banks of a bank holding company (such as the bank subsidiaries of the
Corporation) are subject to certain restrictions imposed by the Federal Reserve
Act on any extensions of credit to the bank holding company or any of its
subsidiaries, on investments in the stock or other securities thereof, and on
the taking of such stock or securities as collateral for loans to any borrower.

            BANKS. The operations of Pinnacle Bank and Quad-Cities Bank are
subject to federal and state statutes and regulations applicable to banks
chartered under the banking laws of the State of Illinois and to regulation by
the Federal Deposit Insurance Corporation ("FDIC"). Pinnacle Bank is a member of
the Federal Home Loan Bank of Chicago.

The Federal Reserve System, the FDIC and the State of Illinois Office of Banks
and Real Estate regularly examine, where applicable, such areas as reserves,
loans, investments, management practices and other aspects of the banks'
operations. These examinations are designed for the protection of the banks'
depositors and not for its stockholders. In addition to these regular
examinations, the banks must furnish periodic reports to the regulatory
authorities containing a full and accurate statement of its affairs. As members
of the FDIC, the banks' deposits are insured as provided by law. Effective
January 1, 1993, a risk-based deposit insurance assessment program was placed
into effect by the FDIC. Insurance premiums are to be determined based on the
level of a bank's capital and supervisory evaluation. As of the current date,
each of the Corporation's subsidiary banks were in the lowest premium assessment
category.

Federal and state banking laws and regulations govern or restrict, among other
things, the scope of a bank's business, the investments a bank may make, the
reserves against deposits a bank must maintain, the loans a bank makes and the
collateral it takes, the activities of a bank with respect to mergers and
consolidations, and the establishment of branches. Each banking regulatory
authority has the authority to prevent a bank from engaging in an unsafe or an
unsound practice in conducting its business. The payment of dividends, depending
upon the financial condition of a bank, could be deemed such a practice.

As subsidiary banks of a bank holding company, the subsidiary banks are subject
to certain restrictions imposed by the Federal Reserve Act on any extensions of
credit to the Corporation or any of its other subsidiaries, on investments in
the stock or other securities of the Corporation or any of its subsidiaries, and
on taking such stock or securities as collateral for loans. Federal statutes and
Federal Reserve Board regulations also place certain limitations and reporting
requirements on extensions of credit by a bank to principal stockholders of its
parent holding company and to related interests of such principal stockholders.
In addition, such legislation and regulations may affect the terms upon which
any person becoming a principal stockholder of a holding company may obtain
credit from banks with which the subsidiary bank maintains a correspondent
relationship.

Furthermore, Federal statutes prohibit acquisition of "control" of a bank or
bank holding company without prior notice to certain Federal bank regulators.
"Control" is defined in certain cases as acquisition of as little as 5% of the
outstanding shares.



                                       3
<PAGE>

In 1991, the Federal Deposit Insurance Corporation Improvement Act ("FDICIA")
was enacted into law. FDICIA provides for, among other things, the
recapitalization of the FDIC Insurance Fund; enhanced federal supervision of
depository institutions, including greater authority for the appointment of a
conservator or receiver for undercapitalized institutions; the adoption of
safety and soundness standards by the Federal banking regulators, on matters
such as loan underwriting and documentation, interest rate risk exposure and
compensation and other employee benefits; the establishment of risk-based
deposit insurance premiums; liberalization of the qualified thrift lender test;
greater restrictions on transactions with affiliates; mandated consumer
protection disclosures with respect to deposit accounts; and expanded reporting
requirements including statements by management regarding internal controls and
regulatory compliance.

GOVERNMENT MONETARY POLICIES

The earnings of banks and bank holding companies are affected by the policies of
regulatory authorities including the Federal Reserve Board which regulates the
money supply. Among the methods employed by the Federal Reserve Board are open
market operations in U. S. Government securities, changes in the discount rate
on member bank borrowings, and changes in reserve requirements against member
bank deposits. These methods are used in varying combinations to influence
overall growth and distribution of bank loans, investments and deposits, and
their use may also affect interest rates charged on loans or paid on deposits.
The monetary policies of the Federal Reserve Board have had a significant effect
on the operating results of commercial and savings banks in the past and are
expected to continue to do so in the future.

FINANCIAL INFORMATION

For financial information regarding the Corporation, see ITEM 8, FINANCIAL
STATEMENTS AND SUPPLEMENTARY DATA, and ITEM 14, EXHIBITS, FINANCIAL STATEMENT
SCHEDULES AND REPORTS ON FORM 8-K.

ITEM 2.  PROPERTIES

The corporate offices of the Corporation are located at 2215 York Road, Suite
306, Oak Brook, Illinois 60523. These offices, consisting of approximately 2,000
square feet, have been leased by the Corporation until 2002.

Pinnacle Bank owns its main banking office located at 6000 West Cermak Road,
Cicero, Illinois 60804. The main office consists of approximately 41,500 square
feet.

Pinnacle Bank has nine other full service banking offices. The Harvey Banking
Center is located at 174 East 154th Street, Harvey, Illinois 60426 with an
adjacent drive-in facility and parking lot. The main building consists of
approximately 33,000 square feet. The Berwyn Banking Center is located at 7112
West Cermak Road, Berwyn, Illinois 60402. The building consists of approximately
15,000 square feet. The Oak Park Banking Center, containing approximately 21,000
square feet, is located at 840 South Oak Park Avenue, Oak Park, Illinois 60304.
The Westmont Banking Center contains approximately 23,000 square feet and is
located at 640 Pasquinelli Drive, Westmont, Illinois 60559. The Batavia Banking
Center consists of 8,640 square feet and is located at 165 West Wilson Street,
Batavia, Illinois 60510. The Elburn Banking Center consists of approximately
2,400 square feet and is located at 415 South Main Street, Elburn, Illinois
60119. The Chicago (West Town) Banking Center consists of approximately 20,000
square feet and is located at 1209 North Milwaukee Avenue, Chicago, Illinois
60622. The Warrenville Banking Center, which opened January 5, 1998, consists of
approximately 4,500 square feet and is located at 3601 Winfield Road,
Warrenville, Illinois 60555. All aforementioned buildings are owned by Pinnacle
Bank. The LaGrange Park Banking Center is located in a leased office at Oak and
Sherwood Streets, LaGrange Park, Illinois 60525. Five years remain on the term
of the lease. The office consists of approximately 11,500 square feet.

Pinnacle Bank has three limited service banking facilities. An owned facility
containing approximately 2,500 square feet is located at 2500 South Cicero
Avenue, Cicero, Illinois 60804. This facility, with certain expanded services,
was constructed in 1995. A leased facility containing approximately 2,000 square
feet is located at 7373



                                       4
<PAGE>

West 25th Street, North Riverside, Illinois 60546. Nine years remain on the term
of the lease. A limited service leased banking facility containing approximately
900 square feet is located at 5697 West Touhy Avenue, Niles, Illinois 60714.
This lease expires in less than one year with the ability to exercise an option
for an additional five years.

Pinnacle Bank has a lease, expiring in 2008, on approximately 26,000 square feet
of office space located at 1144 Lake Street, Oak Park, Illinois 60301. The space
is utilized as an operations center housing all operating departments of
Pinnacle Bank. The move to the leased office space was completed during the
second quarter of 1998.

Pinnacle Bank of the Quad-Cities owns it main banking office located at 1100
First Avenue, Silvis, Illinois 61282. The main office consists of approximately
10,600 square feet. Pinnacle Bank of the Quad-Cities has a full service branch
office located at 107 First Street, Colona, Illinois 61241, which consists of
approximately 4,000 square feet. In the second quarter of 1998, Pinnacle Bank of
the Quad-Cities opened a full service branch office in Moline, Illinois, which
consists of approximately 3,700 square feet.

Each of the subsidiary banks has sufficient space for current banking needs as
well as any foreseeable expansion.

ITEM 3.  LEGAL PROCEEDINGS

The Corporation and the subsidiary banks are subject to other pending and
threatened legal actions which arise in the normal course of business. In the
opinion of management, based upon the consultation of legal counsel, the
disposition of all outstanding matters will not have a material adverse effect
on the consolidated financial statements.

ITEM 4.  SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS

None.


                                     PART II

ITEM 5.  MARKET FOR REGISTRANT'S COMMON EQUITY AND RELATED STOCKHOLDER MATTERS

The common stock of the Corporation is traded in the over-the-counter market and
is quoted on the National Association of Securities Dealers Automated Quotation
System (NASDAQ) on the National Market System with the ticker symbol "PINN".

The following table sets forth the high and low sales prices of the
Corporation's common stock by quarter as reported by NASDAQ.


<TABLE>
<CAPTION>
                                  1998                                                   1997
             ------------------------------------------------     ---------------------------------------------------
                                                    CASH                                                   CASH
    QUARTER        HIGH            LOW            DIVIDENDS           HIGH               LOW            DIVIDENDS
             ------------------------------------------------     ---------------------------------------------------
    <S>           <C>            <C>              <C>                <C>               <C>              <C>
      1st         $35.50         $26.25            $0.23             $23.50            $18.67             $0.22
      2nd          37.00          32.00             0.23              21.75             19.50              0.22
      3rd          34.13          24.50             0.23              24.50             21.00              0.22
      4th          30.25          24.00             0.23              29.38             24.25              0.22
</TABLE>

In 1998, the Corporation purchased 47,780 shares of its common stock at market
prices in privately negotiated and market transactions. In 1997, the Corporation
purchased 173,436 shares of its common stock at market prices in privately
negotiated and market transactions as part of its announced stock repurchase
program.



                                       5
<PAGE>

NUMBER OF SHAREHOLDERS

As of March 11, 1999, the Corporation had approximately 550 shareholders of
record. In addition, the Corporation believes that it has approximately 2,900
additional beneficial shareholders who hold shares in street name.

ITEM 6.  SELECTED FINANCIAL DATA

Selected financial data of the Corporation is incorporated herein by reference
to the 1998 Annual Report to Stockholders included as Exhibit 13. The
information required is contained on page 26 of Exhibit 13, under the title
"Selected Financial Data."

ITEM 7.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF
         FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The Management's Discussion and Analysis of Financial Condition and Results of
Operations is incorporated herein by reference to the 1998 Annual Report to
Stockholders included as Exhibit 13. The information is contained on pages 27
through 42 of Exhibit 13.

ITEM 7A.  QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Information required pursuant to this item is contained on pages 40 through 42
of the 1998 Annual Report to Stockholders included as Exhibit 13 and is
incorporated herein by reference.

ITEM 8.  FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA

The Financial Statements and Supplementary Data are incorporated herein by
reference to the 1998 Annual Report to Stockholders included as Exhibit 13. The
information is contained as follows:

<TABLE>
<CAPTION>
                                                                    PAGE OF
                                                                  EXHIBIT 13
                                                                 ------------
<S>                                                              <C>
Consolidated Balance Sheets...............................            4
Consolidated Statements of Income.........................            5
Consolidated Statements of Comprehensive Income...........            6
Consolidated Statements of Changes in
  Stockholders' Equity....................................            6
Consolidated Statements of Cash Flows.....................            7
Notes to Consolidated Financial Statements................            8
Report of Independent Public Accountants
  Arthur Andersen LLP.....................................           25
</TABLE>

ITEM 9.  DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES

None.


                                    PART III

ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS OF THE REGISTRANT

The following listing of each director and executive officer of the Corporation
contains information including the Director's age, original date elected as a
director of the Corporation, and current positions with the Corporation or its
two subsidiary banks, Pinnacle Bank ("PB") and Pinnacle Bank of the Quad-Cities
("PBQC"). Information is also



                                       6
<PAGE>

included regarding principal occupation for the last five years. None of the
directors currently serves as a Director of any other company with a class of
publicly traded equity securities.

An asterisk (*) denotes that the individual is an executive officer of the
Corporation.

RICHARD W. BURKE*, 65, 1979; is Secretary of the Corporation. He is Chairman and
a Director of the law firm of Burke, Warren, MacKay & Serritella, P.C., Chicago,
Illinois.

MARK P. BURNS, 63, 1983; is Vice Chairman of PB. He previously was the President
of the Corporation through year-end 1995.

WILLIAM J. FINN, JR., 70, 1983; is President of Finn Insurance Agency, Inc.,
North Riverside, Illinois, insurance brokers. He is a Director of PB.

SAMUEL M. GILMAN, 78, 1990; is a Partner in the law firm of Coyle, Gilman &
Stengel, Rock Island, Illinois. He is a Director of PBQC.

ALBERT GIUSFREDI, 70, 1988; is President of Headly Manufacturing Co., Cicero,
Illinois, a custom metal stamping job shop.

JOHN J. GLEASON*, 67, 1979; is Chairman of the Board and a Director of PB. He
also is President of Gleason & Associates, Inc., Oak Brook, Illinois, a bank
consulting firm. He previously was the Chief Executive Officer of the
Corporation through year-end 1995.

JOHN J. GLEASON, JR.*, 43, 1983; is Vice Chairman and Chief Executive Officer of
the Corporation. He is Chairman of the Board of PB.

WILLIAM P. GLEASON*, 37, 1995; is President of the Corporation. He is a Director
and President of PB and a Director and Vice Chairman of PBQC. He previously was
Executive Vice President and Treasurer of the Corporation through year-end 1995.

JAMES L. GREENE, 64, 1983; is a Director of PB. He is President of Jim Greene
Associates, Inc., Decatur, Georgia, a private investment company.

DONALD G. KING, 73, 1983; is a Director of PB. He formerly was Chairman of the
Board of First National Bank in Harvey which was merged into PB in 1993.

JAMES A. MADDOCK, 64, 1988; is President of Maddock Industries, Inc., Chicago,
Illinois, a mechanical engineering firm.

JAMES J. MCDONOUGH, 65, 1988; is President of McDonough Associates, Inc.,
Chicago, Illinois, engineers/architects.

WILLIAM C. NICKELS, 78, 1988; is Chairman of Replogle Globes, Inc., Broadview,
Illinois, a manufacturer of geographical globes.

JOHN E. O'NEILL, 64, 1995; is President of F. C. Pilgrim & Company, Oak Park,
Illinois, a real estate and insurance brokerage firm.

JAMES R. PHILLIP, JR., 46, 1988; is President of Phillip's Flowers and Gifts,
Westmont, Illinois, florists.

KENNETH C. WHITENER, JR.*, 48, 1983; is Executive Vice President and Chief
Investment Officer of the Corporation and of each of the two subsidiary banks.
He is a Director of PB.



                                       7
<PAGE>

John J. Gleason is the father of John J. Gleason, Jr. and William P. Gleason.
John E. O'Neill is the father-in-law of John J. Gleason, Jr.

The Corporation's Board of Directors meets on a quarterly basis, and five
meetings were held during the last fiscal year. All of the Directors of the
Corporation, with the exception of Messrs. Nickels and Phillip, attended at
least three-fourths of the meetings of the Board and Committees of which they
were members during the past year.

The Board has audit and compensation committees. The Board does not have a
nominating committee. Committee members are designated at the annual
Organizational Meeting of the Corporation. The individuals listed below have
served as members of these committees since the last Annual Meeting. The Audit
Committee, which met four times in 1998, consists of Messrs. Burke, Finn, Jr.,
Gilman, Giusfredi, King, Maddock, McDonough, Nickels, O'Neill, and Phillip, Jr.
Mr. Finn, Jr. serves as Chairman. The committee meets on a quarterly basis with
the Corporation's internal auditor and reviews the scope and results of audits
and meets on an annual basis with representatives of the Corporation's
independent public accountants. The Compensation Committee, which met one time
in 1998, consists of Messrs. Burke, Finn, Jr., Gilman, Giusfredi, Greene, King,
Maddock, McDonough, Nickels, O'Neill and Phillip, Jr. Mr. Burke serves as
Chairman. The committee meets on an annual, and as needed basis, to determine
salaries, bonuses and other compensation for the Corporation officers and
principal officers of subsidiary banks.

EXECUTIVE OFFICERS (WHO ARE NOT DIRECTORS):

The following individuals are Executive Officers of the Corporation, but are not
currently Directors of the Corporation.

GLENN M. MAZADE*, 42; is Executive Vice President and Chief Credit Officer of
the Corporation and PB. He is a Director of PB.

SARA J. MIKUTA*, 42; is Chief Financial Officer and Treasurer of the Corporation
and PB. Prior to 1994, Ms. Mikuta was the Senior Vice President and Controller
at the Oak Brook Bank, Oak Brook, Illinois.

ITEM 11.  EXECUTIVE COMPENSATION

The Summary Compensation Table presented below provides for each of the last
three fiscal years the compensation for each executive officer of the
Corporation whose total salary and bonus exceeded $100,000 in 1998.



                                       8
<PAGE>

<TABLE>
<CAPTION>
                                                                                         LONG TERM COMPENSATION
                                                                                  ---------------------------------
                                                       ANNUAL COMPENSATION                AWARDS           PAYOUTS
                                                --------------------------------  ---------------------   ---------
                                                                                                NUMBER
                                                                                  RESTRICTED      OF
                                                                   OTHER ANNUAL     STOCK       OPTIONS/     LTIP       ALL OTHER
       NAME AND PRINCIPAL POSITION     YEAR     SALARY      BONUS  COMPENSATION     AWARDS       SARS       PAYOUTS  COMPENSATION(1)
-------------------------------------------------------------------------------- -----------------------   --------  ---------------
<S>                                    <C>      <C>        <C>     <C>           <C>           <C>         <C>       <C>   
John J. Gleason......................  1998     $200,000   $60,000       -0-          -0-          -0-        -0-        $8,000
  Chairman of the Board                1997      200,000    75,000       -0-          -0-          -0-        -0-         8,000
                                       1996      200,000    25,000       -0-          -0-          -0-        -0-         7,500

John J. Gleason, Jr..................  1998     $270,000   $70,000       -0-          -0-       12,500        -0-        $8,000
  Director, Vice Chairman and          1997      250,000    75,000       -0-          -0-       37,500        -0-         8,000
  Chief Executive Officer              1996      235,000    50,000       -0-          -0-          -0-        -0-         7,500

William P. Gleason...................  1998     $170,000   $60,000       -0-          -0-       10,000        -0-        $8,275
  Director and President               1997      150,000    60,000       -0-          -0-       30,000        -0-         7,500
                                       1996      120,000    35,000       -0-          -0-          -0-        -0-         6,450

Kenneth C. Whitener, Jr..............  1998     $145,000   $35,000       -0-          -0-          -0-        -0-        $8,700
  Director, Executive Vice             1997      140,000    40,000       -0-          -0-          -0-        -0-         8,399
  President and Chief                  1996      140,000    15,000       -0-          -0-          -0-        -0-         8,400
  Investment Officer

Glenn M. Mazade......................  1998     $126,000   $25,000       -0-          -0-        2,500        -0-        $7,050
   Executive Vice President and        1997      117,000    17,000       -0-          -0-        7,500        -0-         6,600
   Chief Credit Officer                1996       97,000    12,000       -0-          -0-          -0-        -0-         5,375
</TABLE>

  -----------------------------------------------------------------------------
(NOTE: SAR's are Stock Appreciation Rights; LTIP is a Long-Term Incentive Plan.)


          (1) Represents an amount contributed to the individual's account in
the Corporation's Profit Sharing Plan. The Profit Sharing Plan is a trusteed,
tax-qualified plan which covers substantially all employees of the Corporation
and its subsidiary banks who have completed age and service requirements. Annual
profit sharing contributions are made to the Plan by the Corporation or the
subsidiary banks in accordance with resolutions adopted annually by the Boards
of Directors of the Corporation and each of the subsidiary banks. A 401(k)
savings plan is offered as part of the profit sharing program. A matching
contribution equal to a percentage, as determined by the Board of Directors on
an annual basis, of the amount of the employee's contribution is made by he
Corporation or its subsidiary banks to the 401(k) savings plan.

INCENTIVE STOCK OPTION PLAN

The Corporation has an incentive stock option plan under which officers and
employees of the Corporation and the subsidiary banks may be granted stock
options by a committee of the Corporation's Board of Directors. The incentive
stock option plan is designed so that options granted thereunder may be treated
as "incentive stock options" as defined in Section 422 of the Internal Revenue
Code of 1986, as amended.

The current plan, the 1990 Incentive Stock Option Plan ("1990 Plan"), was
adopted in April, 1990. Under the provisions of the 1990 Plan, incentive stock
options must be granted at not less than the fair market value of the
Corporation's common stock on the date of the grant. No options granted under
the 1990 Plan may be exercised after the expiration of ten years from the date
of the grant. Options are non-transferable except in the case of death and may
be exercised only while the optionee is employed by the Corporation or a
subsidiary bank or within 30 days after termination of employment, with certain
exceptions in the event of death or disability. No options may be granted to any
employee who owns more than 10% of the total combined voting power of all
classes of the Corporation's stock unless the grant is for a period of no more
than five years and the purchase price of the shares covered by the option is
not less than 110% of its fair market value on the date the option is granted. A
total of



                                       9
<PAGE>

369,999 shares have been authorized for issuance under the plan. At December 31,
1998, total shares subject to option under the 1990 Plan were 118,000.

The following table provides information regarding individual grants of stock
options during 1998 to each of the executive officers named in the Summary
Compensation Table.

                      OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
                                                                                               POTENTIAL REALIZABLE VALUE AT
                                                                                                   ASSUMED ANNUAL RATES OF
                                                                                                STOCK PRICE APPRECIATION FOR
                                          INDIVIDUAL GRANTS                                              OPTION TERM
--------------------------------------------------------------------------------------------   -------------------------------
                                               % OF TOTAL
                                              OPTIONS/SARS
                                               GRANTED TO
                              OPTIONS/SARS      EMPLOYEES     EXERCISE OR   EXPIRATION DATE
NAME                             GRANTED         IN 1998       BASE PRICE                          5%                  10%
----------------------------  ------------   -------------   -------------  ----------------   ------------       ------------
<S>                           <C>            <C>             <C>            <C>                <C>                <C>
John J. Gleason.............       -0-            -0- %          $ -0-           -             $  -0-               $  -0-
John J. Gleason, Jr.........     12,500 (1)        35            31.35       12/21/03            62,800              181,869
William P. Gleason..........     10,000 (2)        28            31.35       12/21/03            50,240              145,495
Glenn M. Mazade.............      2,500             7            28.50       12/21/03            19,685               43,499
Kenneth C. Whitener, Jr.....       -0-            -0-             -0-           -                  -0-                  -0-
                                     --------------------------------------------
</TABLE>



         (1)      Mr. J. Gleason, Jr.'s option contains the following provision:
                  3,189 shares exercisable at any time from December 21, 1998
                  through the expiration date; 3,189 shares are exercisable at
                  any time from December 21, 1999 through the expiration date;
                  3,189 shares are exercisable at any time from December 21,
                  2000 through the expiration date; and 2,933 shares are
                  exercisable at any time from December 21, 2001 through the
                  expiration date. All options are exercisable upon a change in
                  control.

         (2)      Mr. W. Gleason's option contains the following provision:
                  3,189 shares exercisable at any time from December 21, 1998
                  through the expiration date; 3,189 shares are exercisable at
                  any time from December 21, 1999 through the expiration date;
                  3,189 shares are exercisable at any time from December 21,
                  2000 through the expiration date; and 433 shares are
                  exercisable from December 21, 2001 through the expiration
                  date. All options are exercisable upon a change in control.

The following table provides information concerning the financial value of
outstanding and unexercised options at December 31, 1998 for each of the
executive officers named in the Summary Compensation Table. No incentive stock
options were exercised by these executive officers during 1998.



                                       10
<PAGE>

               AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR
                          AND FY-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
                                                                                                             VALUE OF
                                                                                    NUMBER OF               UNEXERCISED
                                                                                   UNEXERCISED             IN-THE-MONEY
                                                                                  OPTIONS/SARS            OPTIONS/SARS AT
                                                                                    AT FY-END                 FY-END
                                                                               --------------------    ----------------------
                                               SHARES
                                              ACQUIRED           VALUE            EXERCISABLE/             EXERCISABLE/
                  NAME                      ON EXERCISE        REALIZED         UNEXERCISABLE(3)           UNEXERCISABLE
  -------------------------------------    ---------------  -----------------  --------------------    ----------------------
  <S>                                      <C>              <C>                <C>                     <C>
  John J. Gleason....................            -0-              -0-                 -0-                     $ -0-

  John J. Gleason, Jr................            -0-              -0-              12,927 (1)                68,494 (1)
                                                                                   37,073 (2)               194,644 (2)

  William P. Gleason.................            -0-              -0-               12,927(1)                68,494 (1)
                                                                                   27,073 (2)               142,016 (2)

  Kenneth C. Whitener, Jr............            -0-              -0-                 -0-                       -0-

  Glenn M. Mazade....................            -0-              -0-              10,000 (1)                73,748 (1)
                                                                                      -0-                       -0-
</TABLE>

   --------------------------
   (1)  Exercisable.
   (2)  Unexercisable.
   (3) All options are exercisable upon a change in control.

COMPENSATION OF DIRECTORS 

Directors of the Corporation, having a primary occupation other than with the
Corporation or its subsidiary banks, receive an annual retainer of $2,500 and a
fee of $500 per meeting attended. Directors attending separate committee
meetings involving audit and compensation receive a fee of $100 per meeting
attended.

EMPLOYMENT AGREEMENTS

The Corporation has entered into Employment Agreements ("Agreements") in regard
to a change of control in The Corporation or all of its subsidiaries with John
J. Gleason, Jr., Vice Chairman and Chief Executive Officer; William P. Gleason,
President; and Glenn M. Mazade, Executive Vice President and Chief Credit
Officer. The Agreements became effective January 21, 1997 upon approval of the
Board of Directors of the Corporation and will continue until terminated upon
thirty (30) days prior written notice by either the Corporation or the
executive. The Agreements provide for employment in the present position or
other senior executive capacity as shall be mutually agreed upon by the
Corporation and the executive. The Agreements also provide for base salary and
incentive compensation as shall be determined from time to time by the Board of
Directors and for participation in all plans and other benefits generally
accorded to employees of the Corporation.

If the executive's employment is terminated by the executive, by the
Corporation, or by the Corporation's successor company within one year of a
change in control, as defined, the executive will be entitled to immediate
receipt from the Corporation of a lump sum payment equal to one dollar less than
the sum of three times the base compensation then payable to the executive plus
three times the average incentive compensation paid to the executive during the
three previous fiscal years of the Corporation plus three times the value of the
contributions that have been made or credited by the Corporation for the benefit
of the executive under all employee retirement plans maintained by the
Corporation for the completed fiscal year of the Corporation immediately
preceding the termination. In addition, the Corporation will continue to provide
coverage for the executive under the health program maintained by the
Corporation for a period of twelve months following termination of the
executive's employment. If such a change in control and termination would have
taken place on December 31, 1998, the amounts payable to John J. Gleason, Jr.,
William P. Gleason and Glenn M. Mazade would have been approximately $1,028,000,
$689,000 and $452,000,



                                       11
<PAGE>

respectively. In the event of a termination payment, the executive agrees that,
except with the express prior written consent of the Corporation, for a period
of one year after the termination of the executive's employment with the
Corporation, he will not directly or indirectly compete with the business of the
Corporation within a ten mile radius of the main office of the Corporation and
any branch office of the Corporation existing at the time of termination.

A change of control is defined in the Agreement as (1) the consummation of the
acquisition or acquisitions by any person or affiliated group, other than any
individual holding 10% or greater of the outstanding voting securities of the
Corporation on January 21, 1997, so that the person or group holds beneficial
ownership of fifty-one percent or more of the combined voting power of the then
outstanding voting securities of the Corporation; (2) approval of the
Corporation's stockholders of a merger, consolidation or other transaction
involving the Corporation in which the persons who are stockholders on the date
the transaction is approved, do not, on the first day following such transaction
own, directly or indirectly, more than 67% of the combined voting power of the
then outstanding securities; (3) a complete liquidation or dissolution or an
agreement for the sale or other disposition of all or substantially all of the
assets of the Corporation or its subsidiaries; or (4) a sale by the Corporation
of all of the stock of all banking subsidiaries of the Corporation and their
affiliates.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

The members of the Compensation Committee of the Board of Directors of the
Corporation during the last fiscal year were Messrs. Burke, Finn, Jr., Gilman,
Giusfredi, Greene, King, Maddock, McDonough, Nickels, O'Neill and Phillip, Jr.
Mr. Burke is Chairman and a Director of a law firm which provides legal services
to the Corporation as disclosed in the section entitled "Certain Relationships,
Related Transactions and Other Information Regarding Management".

REPORT ON EXECUTIVE COMPENSATION BY THE
COMPENSATION COMMITTEE OF THE BOARD OF DIRECTORS

The Compensation Committee views the compensation package offered to executive
officers as consisting of three primary components; base salary, incentive
bonus, and longer term compensation. Each of these components is considered in
achieving the committee's objectives of (1) providing a competitive compensation
package in order to attract and retain a high quality management team; (2)
rewarding individual performance and contributions to the overall performance of
the Corporation; and (3) structuring incentives in order to align management's
goals with maximization of shareholder value.

Base salaries are set consistent with salaries published for comparable
positions in banking industry publications. Primary emphasis is placed on
organizations of a similar size located in a metropolitan area. Comparison is
also made with similarly sized publicly traded banking companies. Base salary
changes are dictated by changes in responsibility such as a promotion and
economic factors such as inflation.

Incentive bonuses are determined strictly based on the performance of the
individual executive officer and that individual's contribution to the overall
profitability of the Corporation during the fiscal year. The incentive bonus
determination is zero based with previous payment history bearing no weight in
the current year's determination. The determination of incentive bonus payments
are subjective in nature and are not the product of calculations of
pre-determined formulas.

Longer term compensation consists of incentive stock options. These options are
awarded based on the individual's contribution to the overall financial
performance of the Corporation and the committee's assessment of potential for
appreciation in common stock value in relation to the base salary of the
executive. Incentive stock options are awarded in order to emphasize the
importance of maximizing shareholder value and to encourage the ownership of the
Corporation's common stock by management.

The Chief Executive Officer's ("CEO") compensation is determined by overall
corporate performance. Corporate performance is measured primarily by the return
on average equity and additionally by the return on average assets.



                                       12
<PAGE>

The performance of the Corporation's common stock price is also considered in
the determination of the CEO's compensation. The Committee recognizes, however,
that factors other than CEO performance may dictate changes in market price such
as general market conditions and, in particular to the Corporation, the thinly
traded nature of the Corporation's stock. The Committee also considers any
specific corporate objectives for the CEO such as the Corporation's stated
objective that calls for the utilization of its equity base through acquisitions
and repurchases of its common stock.

The CEO received a base salary increase of 8% for the 1998 fiscal year. The
increase was based on guidelines set for annual increases for all the
Corporation's officers and employees and published statistics for total base
salaries and percentage increases for CEO's of similarly sized financial
institutions. The CEO's incentive bonus was determined based on the following
factors for 1998. Net income for 1998 resulted in a return on average equity of
14.4% and a return on average assets of 1.43% for the year, each exceeding the
Corporation's profit plan. the Corporation's year end common stock price was
approximately the same as the previous fiscal year. Also, from a financial
perspective, the Corporation continued its stock repurchase program which
enhanced earnings per share and the dividend was increased 5% in fiscal 1998. In
addition to financial performance, the Compensation Committee also considered
the following factors. The Corporation's equity portfolio provided a significant
component of earnings. Expansion was undertaken through the development of two
new banking centers. Marketing efforts continued to be enhanced, personnel was
upgraded in a number of areas and nonperforming assets continued to show
improvement. Incentive stock options amounting to 12,500 shares were awarded to
the CEO to provide an opportunity for value on a longer term perspective with
such potential for appreciation tied directly to shareholder value.

While overall corporate performance is also considered in determining
compensation for other executive officers, primary consideration is given to
performance of the specific areas of responsibility of each of these
individuals. These specific areas include corporate objectives regarding
acquisitions, performance of banking subsidiaries, loan portfolio performance
including the quality of assets, regulatory compliance, management of the
securities portfolio and other specific responsibilities. The Committee took
each of these factors into consideration in determining bonuses for each
executive officer other than the CEO for the previous year.

The Compensation Committee did award incentive stock options to certain
executive officers during fiscal 1998 in order to continue to emphasize the
importance of shareholder value.

PERFORMANCE GRAPH

The following graph provides a comparison of the total return among the
Corporation's common stock, NASDAQ Stocks (U.S.) and NASDAQ Bank Stocks. The
graph assumes that $100 was invested in each category on January 1, 1994. The
Corporation's index is based on the assumption that dividends received on the
Corporation's common stock are reinvested into shares of the Corporation's
common stock.


                                       13
<PAGE>

                 COMPARISON OF FIVE-YEAR CUMULATIVE TOTAL RETURN
                  AMONG PINNACLE BANC GROUP, INC. COMMON STOCK,
                   NASDAQ STOCKS (U.S.) AND NASDAQ BANK STOCKS
<TABLE>
<CAPTION>
                    PINNACLE             NASDAQ            NASDAQ
                  COMMON STOCK        STOCKS (U.S.)     BANK STOCKS
<S>              <C>                 <C>               <C>
1/1/94                    $100.0             $100.0           $100.0
12/31/94                   $84.8              $97.8            $99.6
12/31/95                   $98.4             $138.3           $148.4
12/31/96                   $90.5             $170.0           $195.9
12/31/97                  $144.9             $208.6           $328.0
12/31/98                  $146.7             $293.3           $324.9
</TABLE>


ITEM 12.  SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND
          MANAGEMENT

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS

The following persons beneficially own as of March 11, 1999, directly or
indirectly, more than 5% of the outstanding common stock, $3.12 par value, of
the Corporation.

<TABLE>
<CAPTION>
                       NAME AND ADDRESS        AMOUNT AND NATURE OF         PERCENT
                     OF BENEFICIAL OWNER       BENEFICIAL OWNERSHIP        OF CLASS
      ------------------------------------------------------------------------------
      <S>                                      <C>                         <C>
      John J. Gleason.......................      1,192,453  (1)            16.1%
      2215 York Road, Suite 306
      Oak Brook, Illinois 60523

      Kenneth C. Whitener, Jr...............        405,082                  5.5
      2215 York Road, Suite 306
      Oak Brook, Illinois 60523
</TABLE>

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

         (1) Includes 592,470 shares owned by Gleason & Associates, Inc., of
which Mr. J. Gleason is President and controlling stockholder. Also includes
283,335 shares held by his wife and a child who reside with Mr. J. Gleason, to
which shares Mr. J. Gleason disclaims beneficial ownership.



                                       14
<PAGE>

SECURITY OWNERSHIP OF MANAGEMENT

The following table sets forth with respect to each Director, and executive
officer (denoted by an asterisk) of the Corporation, the amount of common shares
beneficially owned and the percentage of such class of shares as of March 11,
1999:

<TABLE>
<CAPTION>
                                                                          AMOUNT AND 
                                                                          NATURE OF
                                                                          BENEFICIAL             PERCENT OF
                  NAME OF BENEFICIAL OWNER                                OWNERSHIP                 CLASS
-----------------------------------------------------------------------------------------------------------
<S>                                                                       <C>                    <C>
DIRECTORS:
Richard W. Burke*..........................................                   67,196   (1)           0.9%
Mark P. Burns..............................................                   45,018   (2)           0.6
William J. Finn, Jr........................................                  129,531   (3)           1.8
Samuel M. Gilman...........................................                   42,840                 0.6
Albert Giusfredi...........................................                  105,679                 1.4
John J. Gleason*...........................................                1,192,453   (4)          16.1
John J. Gleason, Jr.*......................................                  219,624   (5)           3.0
William P. Gleason*........................................                  137,537   (6)           1.9
James L. Greene............................................                  240,176   (7)           3.2
Donald G. King.............................................                  215,680                 2.9
James A. Maddock...........................................                  101,950   (8)           1.4
James J. McDonough.........................................                   79,825   (9)           1.1
William C. Nickels.........................................                   94,785  (10)           1.3
John E. O'Neill............................................                   30,705                 0.4
James R. Phillip, Jr.......................................                   78,164  (11)           1.1
Kenneth C. Whitener, Jr.*..................................                  405,082                 5.5
EXECUTIVE OFFICERS
   (WHO ARE NOT DIRECTORS):
Glenn M. Mazade*...........................................                   13,949  (12)           0.2
Sara J. Mikuta*............................................                    3,810  (13)           0.1

All Directors and executive officers
  as a group (18 in total).................................                3,204,004               43.3%
</TABLE>

  (1) Includes 38,335 shares owned by Mr. Burke's wife, to which shares Mr.
Burke disclaims beneficial ownership.

  (2) Includes 9,750 shares held by Pinnacle Bank as Custodian.

  (3) Includes 17,780 shares held by Mr. Finn, Jr.'s wife, to which shares Mr.
Finn, Jr. disclaims beneficial ownership.

  (4) Includes 592,470 shares owned by Gleason & Associates, Inc., of which Mr.
J. Gleason is President and controlling stockholder. Also includes 283,335
shares held by his wife and child who reside with Mr. J. Gleason, to which
shares Mr. J. Gleason disclaims beneficial ownership.

  (5) Includes 50,000 shares which Mr. J. Gleason, Jr. has the right to acquire
upon exercise of stock options, and 28,080 shares held by his wife and children,
to which shares Mr. J. Gleason, Jr. disclaims beneficial ownership.

  (6) Includes 40,000 shares which Mr. W. Gleason has the right to acquire upon
exercise of stock options, and 45,114 shares held by his wife and children, to
which shares Mr. W. Gleason disclaims beneficial ownership.


                                       15
<PAGE>


  (7) Includes 18,664 shares held by Mr. Greene's wife and 8,880 shares held by
Mr. Greene's wife as custodian, to which shares Mr. Greene disclaims beneficial
ownership. Also includes 103,471 shares owned by Jim Greene Associates, Inc. Mr.
Greene is President and controlling stockholder of Jim Greene Associates, Inc.

  (8) Includes 77,403 shares owned by Maddock Industries, Inc. including its
profit sharing plan. Mr. Maddock is President and controlling stockholder of
Maddock Industries, Inc. Also includes 1,042 shares held by Mr. Maddock's wife
as custodian, to which shares Mr. Maddock disclaims beneficial ownership.

  (9) Includes 19,931 shares held by a trust of which Mr. McDonough is the
trustee.

  (10) All shares are owned by a company of which Mr. Nickels is a controlling
shareholder.

  (11) Includes 24,753 shares held by a company of which Mr. Phillip, Jr. is a
controlling shareholder and 5,931 shares held by his wife and children, to which
shares Mr. Phillip, Jr. disclaims beneficial ownership.

  (12) Includes 10,000 shares which Mr. Mazade has the right to acquire upon
exercise of stock options.

  (13) Includes 3,750 shares which Ms. Mikuta has the right to acquire upon
exercise of stock options.


ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

Directors and officers of the Corporation and its subsidiary banks are customers
of the banks and have had transactions with such banks in the ordinary course of
business and are expected to do so in the future. Such transactions have been
and will continue to be on the same terms as those prevailing at the time for
comparable transactions with other customers. Total loans outstanding to
Directors and executive officers of the Corporation and its subsidiary banks
totaled $11,283,000 at December 31, 1998. These loans were made by the
subsidiary banks in the ordinary course of business on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with others. Management is of the opinion that these
loans did not involve more than a normal risk of collectibility or other
unfavorable features.

Richard W. Burke, a Director and Secretary of the Corporation, is Chairman and a
Director of the law firm Burke, Warren, MacKay & Serritella, P.C. which provides
legal services to the Corporation and its subsidiary banks. Fees for these
services totaled $225,000 in 1998.

Section 16 of the Securities Exchange Act requires the Corporation's directors,
executive officers or beneficial owners of more than ten percent (10%) of any
class of equity securities of the Corporation ("Insiders") to file with the
Securities and Exchange Commission and the Corporation's reports of ownership of
the Corporation's securities. Based solely upon a review of reports furnished to
the Corporation by Insiders, all Section 16 reporting requirements were met by
Insiders during 1998.


                                     PART IV

ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND
          REPORTS ON FORM 8-K

The following exhibits are filed as part of this Form 10-K.


                                       16
<PAGE>

<TABLE>
<CAPTION>
          EXHIBIT /
       DESIGNATION NO.
      UNDER ITEM 601 OF
       REGULATION S-K                     EXHIBIT DESCRIPTION
--------------------------------------------------------------------------------
<S>                       <C>
             (2)          Plan of Acquisition, reorganization, arrangement, 
                          liquidation or succession. The Agreement and Plan 
                          of Merger, dated as of March 18, 1999, by and 
                          between Old Kent Financial Corporation and Pinnacle 
                          Banc Group, Inc. and the Stock Option Agreement, 
                          dated as of March 18, 1999, by and between Old Kent 
                          Financial Corporation and Pinnacle Banc Group, Inc. 
                          were previously filed as Exhibit 2.1 and Exhibit 
                          2.2 to Old Kent Financial Corporation's Form 8K 
                          Current Report filed on March 22, 1999 and is 
                          herein incorporated by reference.

             (3)          Articles of Incorporation and By-laws. This Exhibit
                          was filed on Form SE on March 18, 1996 and is
                          incorporated herein by reference.

             (4)          Instruments defining the rights of Security Holders
                          Including Debentures. The portions of the
                          Corporation's Articles of Incorporation and By-laws
                          defining the rights of holders of the Corporation's
                          common stock are included as part of the Exhibit filed
                          on Form SE on March 18, 1996 and is incorporated
                          herein by reference.

             (10)         (a) Material Contracts. The Pinnacle Incentive Stock
                          Option Plan originally adopted in 1981 ("Prior Plan")
                          and form of Deferred Compensation agreement entered
                          into with Pinnacle Directors and Officers and related
                          Trust Agreement. These items were filed as Exhibit 10
                          to the Corporation's Form S-1 Registration Statement
                          No. 33-19608 which became effective March 18, 1988 and
                          are hereby incorporated by reference. The 1990
                          Pinnacle Incentive Stock Option Plan ("1990 Plan")
                          adopted by the Corporation's shareholders on April 24,
                          1990 was included as Exhibit 3 to the Corporation's
                          Form 10-K for the fiscal year ended December 31, 1990
                          and is incorporated herein by reference. (b)
                          Employment Contracts. These items were filed as
                          Exhibit 10 to the Corporation's Form 10-Q filed May 8,
                          1997 and are incorporated herein by reference.

             (11)         Statement Re Computation of Per Share Earnings.
                          Footnote 10, Notes to the Consolidated Financial
                          Statements, is included in the 1998 Annual Report to
                          Stockholders and is herein incorporated by reference.

             (13)         Annual Report to Security Holders. The Corporation is
                          including, as an Exhibit, its 1998 Annual Report to
                          Stockholders. Those parts of the Annual Report not
                          specifically incorporated by reference elsewhere
                          herein are not deemed to be part of this filing.

             (21)         Subsidiaries of the Registrant. The information is
                          included in ITEM 1, BUSINESS on page 1.

             (27)         Financial Data Schedule.
</TABLE>

FINANCIAL STATEMENT SCHEDULES

Financial Statement Schedules not included in ITEM 8, FINANCIAL DATA AND
SUPPLEMENTARY DATA are included on the following pages as part of this item in
accordance with Guide 3, Statistical Disclosure by Bank Holding Companies.

REPORTS ON FORM 8-K

None.


                                       17
<PAGE>

                STATISTICAL DISCLOSURE BY BANK HOLDING COMPANIES

I.  DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY;
     INTEREST RATES AND INTEREST DIFFERENTIAL

ANALYSIS OF NET INTEREST INCOME

Information required in this table, including the daily average balance
outstanding for the major categories of interest bearing assets and interest
bearing liabilities, and the average interest rate earned or paid thereon, is
incorporated herein by reference to the 1998 Annual Report to Stockholders
included as Exhibit 13. The information required is contained in Table 1,
"Analysis of Net Interest Income" on page 29 of Exhibit 13, within the section
entitled "Management's Discussion and Analysis of Financial Condition and
Results of Operations."

ANALYSIS OF CHANGE IN INTEREST DIFFERENTIAL

Information required in this table is incorporated herein by reference to the
1998 Annual Report to Stockholders included as Exhibit 13. The information
required is contained in Table 2, "Analysis of Volume/Rate Variance" on page 30
of Exhibit 13, within the section entitled "Management's Discussion and Analysis
of Financial Condition and Results of Operations."

ANALYSIS OF INTEREST RATE SENSITIVITY

Information regarding the interest rate sensitivity position of the Corporation
is incorporated herein by reference to the 1998 Annual Report to Stockholders
included as Exhibit 13. This information is discussed under the subsection
"Market Risk" on pages 40 through 42 of Exhibit 13, within the section entitled
"Management's Discussion and Analysis of Financial Condition and Results of
Operations."

II.  INVESTMENT PORTFOLIO

The following table presents the book value of securities in thousands at the
dates indicated:

<TABLE>
<CAPTION>
                                                             DECEMBER 31
                                                 ----------------------------------
                                                    1998        1997         1996
                                                 ----------------------------------
<S>                                              <C>          <C>          <C>     
U. S. Treasury and U. S. Government agencies     $412,272     $355,925     $373,072
State and municipal ........................       19,441       22,242       23,450
Mortgage-backed securities and floating rate
  collateralized mortgage obligations ......       40,562        4,615        5,943
Corporate and other equity securities ......       47,962       51,452       32,093
                                                 ----------------------------------
  Total securities .........................     $520,237     $434,234     $434,558
                                                 ----------------------------------
                                                 ----------------------------------
</TABLE>

The following table shows the maturities of securities in thousands at December
31, 1998 and weighted average fully taxable equivalent yields:


                                       18
<PAGE>


<TABLE>
<CAPTION>
                                                    U. S. TREASURY                                 MORTGAGE-BACKED
                                                         AND                  STATE            SECURITIES AND FLOATING
                                                    FEDERAL AGENCY             AND               RATE COLLATERALIZED
                                                      SECURITIES             MUNICIPAL            MORTGAGE OBLIGATIONS
                                                 --------------------    ------------------       -------------------
<S>                                              <C>           <C>       <C>        <C>         <C>          <C>  
One year or less...............................    $104,192     5.15%    $ 1,591     12.18%         $   0     0.00%
One year to five years.........................     308,080     5.63       9,753     13.03              0     0.00
Five to ten years..............................           0     0.00       6,448     12.50              0     0.00
Over ten years.................................           0     0.00       1,649     14.53              0     0.00
No fixed maturity..............................           0     0.00           0      0.00         40,562     7.15
                                                ---------------------    ------------------       -------------------
                                                   $412,272     5.50%    $19,441     12.91%       $40,562     7.15%
                                                ---------------------    ------------------       -------------------
                                                ---------------------    ------------------       -------------------
</TABLE>

<TABLE>
<CAPTION>
                                                     CORPORATE
                                                     AND OTHER
                                                 EQUITY SECURITIES            TOTAL
                                                --------------------    -------------------
<S>                                              <C>           <C>       <C>          <C>  
One year or less.........................               $ 0     0.00%   $105,783      5.25%
One year to five years...................                 0     0.00     317,833      5.84
Five years to ten years..................                 0     0.00       6,448     12.50
Over ten years...........................                 0     0.00       1,649     14.53
No fixed maturity........................            47,962     4.65      88,524      5.92
                                                --------------------    -------------------
                                                    $47,962     4.65%   $520,237      5.97%
                                                --------------------    -------------------
                                                --------------------    -------------------
</TABLE>

Securities included in the category of no fixed maturity are mortgage-backed
securities and floating rate collateralized mortgage obligations, due to their
ability to prepay, as well as equity securities.

The average tax-equivalent yield by maturity includes the weighted average
yields on tax-exempt obligations which have been computed on a fully taxable
equivalent basis assuming a tax rate of 34% and the average tax equivalent yield
on the equity portfolio assumes a 70% dividend received deduction for December
31, 1998.

III.  LOAN PORTFOLIO

The following table sets forth the outstanding loans, in thousands, at the
following dates:

<TABLE>
<CAPTION>
                                                   DECEMBER 31
                        -------------------------------------------------------------
                           1998         1997         1996          1995         1994
                        -------------------------------------------------------------
<S>                      <C>          <C>          <C>          <C>          <C>     
Commercial and other     $146,588     $111,990     $111,454     $ 83,940     $ 68,788
Consumer ...........       69,250       62,294       54,535       49,464       38,982
Real estate:
  Residential ......      279,418      291,578      307,217      135,085      119,520
  Commercial .......       46,695       45,107       52,628       42,073       22,220
                        -------------------------------------------------------------
  Total gross loans      $541,951      510,969      525,834      310,562      249,510
Unearned income ....          595          762          765          962        1,106
                        -------------------------------------------------------------
  Net loans ........     $541,356     $510,207     $525,069     $309,600     $248,404
                        -------------------------------------------------------------
                        -------------------------------------------------------------
</TABLE>

The following table sets forth the maturity distribution of the following
categories of loans at December 31, 1998 in thousands.

                                       19
<PAGE>


<TABLE>
<CAPTION>
                                                         REMAINING MATURITY
                                  ---------------------------------------------------------
                                    ONE YEAR         ONE TO            OVER
                                     OR LESS       FIVE YEARS       FIVE YEARS      TOTAL
                                  ---------------------------------------------------------
<S>                                <C>             <C>             <C>           <C>      
Commercial and other............   $ 89,432        $ 50,809        $  6,347      $ 146,588
Real estate:
     Residential................     16,939          82,346         180,133        279,418
     Commercial.................      7,988          30,369           8,338         46,695
                                  ---------------------------------------------------------
                                   $114,359        $163,524        $194,818      $ 472,701
                                  ---------------------------------------------------------
                                  ---------------------------------------------------------
</TABLE>

Of the loans listed above in the maturity schedule, a total of $358,342 are due
after one year; $310,213 of these loans have predetermined interest rates and
$48,129 of these loans have floating interest rates.

COLLATERAL AND APPRAISAL GUIDELINES

Subsidiary banks of the Corporation make loans which are collateralized by
different types of assets. A collateral guideline manual is maintained by each
bank which details collateral requirements for any collateralized loan which a
bank may make. The loan operations area has responsibility for monitoring all
compliance with collateral requirements. Collateral requirements for the most
commonly funded loans include an 85% - 95% (depending on maturity) loan-to-value
ratio for loans secured by U. S. Government securities, 70% for NYSE traded
stock, 65% for AMEX and 50% for all other common stocks, with the exception of
control stocks which are not acceptable as collateral. Commercial loans for
working capital can have a maximum loan-to-value ratio of 80% against eligible
accounts if secured by receivables, a maximum of 50% if secured by inventory and
a maximum of 80% if secured by equipment. Real estate loans can have a maximum
loan-to-value ratio of 80% unless private mortgage insurance is provided for
advances over 80%. Commercial real estate loans typically are funded at a lower
loan-to value ratio and require the personal guarantee of the borrower(s). Home
equity loans require a loan-to-value ratio of 80% of the appraised value less
any debt.

Loans made by subsidiary banks of the Corporation which are collateralized by
real estate require an appraisal prior to funding of the loan. These loans are
re-appraised when management believes that the financial condition or resources
of the borrower have deteriorated or when the collectibility of the loan is in
question. Loans collateralized by real estate are not necessarily re-appraised
on an annual or quarterly basis by policy; however, all loans secured by real
estate, are made in the local market area served by the Corporation's
subsidiaries and each of these areas is closely monitored by management for
economic changes. Certain acquisitions, especially the FinSec acquisition, have
added loans to Pinnacle's loan portfolio which are not necessarily made in
Pinnacle's local market area. See "Loan Concentrations" and "Risk Elements" for
further discussion regarding the impact of this acquisition. A new appraisal is
required for any loan which undergoes foreclosure or is transferred into other
real estate owned. Updated appraisals on other real estate owned are completed
as required by regulatory authorities, or if management believes a material
change in the value of a property has taken place.

The current loan policies in effect for collateral and appraisals are similar
and consistent with the policies in place in prior years.


                                       20
<PAGE>

RISK ELEMENTS

         NON-ACCRUAL, PAST DUE, AND RESTRUCTURED LOANS. The following table
represents information regarding the aggregate amount of non-accrual, past due,
and restructured loans in thousands:

<TABLE>
<CAPTION>
                                                                  DECEMBER 31
                                             --------------------------------------------------
                                                1998       1997       1996      1995     1994
                                             --------------------------------------------------
<S>                                             <C>       <C>        <C>       <C>       <C>  
Non-accrual loans...........................    $3,507    $4,392     $7,441    $4,791    $ 748
Past due 90 days or more and
  still accruing............................     1,775     1,064        633     2,293      552
Restructured loans..........................       483     1,223      1,330       931        0
                                             --------------------------------------------------
                                                $5,765    $6,679     $9,404    $8,015   $1,300
                                             --------------------------------------------------
                                             --------------------------------------------------
Other real estate owned.....................     $ 169      $442       $939      $284   $2,416
</TABLE>

A discussion regarding the non-performing assets listed above is contained
within the section entitled "Management's Discussion and Analysis of Financial
Condition and Results of Operations" under the subsection "Provision for Loan
Losses" on pages 30 through 32 of the Corporation's 1998 Annual Report to
Stockholders included as Exhibit 13.

         LOAN CONCENTRATIONS. Loan concentrations are defined as amounts loaned
to a multiple number of borrowers engaged in similar activities, which would
cause them to be similarly impacted by economic or other conditions. Although
the Corporation has a diversified loan portfolio, a substantial natural
geographic concentration of credit risk exists within the Corporation's defined
customer market areas with the exception of loans acquired from the acquisition
of SF. Included in the SF loan portfolio are certain purchased and participated
loans outside Pinnacle's defined customer markets. These loans totaled
approximately $39,256,000, at December 31, 1998, or approximately 7% of the
Corporation's loan portfolio. These loans are located in the following areas:
4.72% in California and 1.34% in the Midwest (excluding the Chicago Metropolitan
area). Certain of these areas, particularly California, are experiencing adverse
economic conditions, which has resulted in increased past due non-accrual loans.
All remaining loans are in the geographic market areas including the Chicago
metropolitan area and the Quad-Cities metropolitan area of Illinois. Management
believes that the portfolio is well diversified and, to a large extent, secured
without undue concentrations in any specific risk area.

         POTENTIAL PROBLEM LOANS. Currently, there are no known problem loans
which have not already been identified by Pinnacle's system of review of the
credit quality of the loan portfolio. This process, which is detailed in the
following Section IV, "Summary of Loan Loss Experience", includes an independent
credit review system as well as an internal process in which management reports
to the Board of Directors via a report ("Watch List") which includes other
potential problem loans identified by management prior to the independent credit
review process or below the scope of the independent review. The process of both
independent and internal credit review was incorporated at SF and the
integration of the process actually began prior to the acquisition as part of
Pinnacle's due diligence.

The Watch List includes credits which are rated by management and the
independent review process as "5" or worse. A credit rating of "5" would
indicate that the loan is considered a "special mention" loan by regulatory
examiners. Currently, approximately $3,980,000 of loans in Pinnacle's portfolio
are classified as a "5" and included in the Watch List, but are not considered
non-performing by management. These, as discussed further, are monitored monthly
by both management and the Board of Directors of each subsidiary bank.

         IMPAIRED LOANS. Loans considered impaired under SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan", includes non-accrual loans
greater than $100,000, restructured loans, and loans classified as



                                       21
<PAGE>

at least doubtful under the Corporation's credit risk classification system. All
of the Corporation's impaired loans are included in the non-performing category.

         NON-ACCRUAL LOAN POLICY. The Corporation follows banking regulatory
guidelines with respect to classifying loans on a non-accrual basis. Loans are
placed on non-accrual when the loan becomes past due over 90 days with no
intervening activity or when the collection in full of interest and principal is
doubtful. Thereafter, no interest is taken into income unless received in cash
or until such time as the borrower demonstrates the ability to pay interest and
principal.

IV.  SUMMARY OF LOAN LOSS EXPERIENCE

Information required in this table is incorporated herein by reference to the
1998 Annual Report to Stockholders included as Exhibit 13. The information
required is contained in Table 3, "Analysis of the Allowance for Loan Losses" on
page 32 of Exhibit 13, within the section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations".

ALLOCATION OF ALLOWANCE FOR LOAN LOSSES

Except for any reserves which would be required under SFAS No. 114 ,"Accounting
by Creditors for Impairment of a Loan", the subsidiary banks do not allocate the
allowance for loan losses by specific loan categories. The Corporation's
subsidiary banks have not allocated any specific reserves for loans considered
impaired under SFAS No. 114. However, bank disclosure guidelines issued by the
Securities and Exchange Commission request management to allocate the total
allowance for loan losses into certain categories. Accordingly, management has
allocated the allowance for loan losses by loan category based on several
factors, including the risk rating assigned via the independent loan review; a
risk rating assigned to watch list credits which have not yet been rated by loan
review or are below the threshold of the loan review; growth in the loan
portfolio; and historical charge-off experience for loans which are not rated.
This process results in the specific allocation of the reserve included in the
following table. The remaining unallocated portion provides for the inherent
loss component in the loan portfolio which has not yet been specifically
identified. The resulting allocation is not necessarily indicative of both the
identified and inherent losses not yet identified in the portfolio as of each
reporting date.

The percent of loans in each category to total loans and the allocation of the
allowance for loan losses based on the above allocation method at December 31 of
each year, in thousands, is as follows:


<TABLE>
<CAPTION>
                                            1998                            1997                         1996
                         -----------------------------------------------------------------------------------------------
                                                PERCENT OF                      PERCENT OF                     PERCENT OF
                                                 LOANS IN                        LOANS IN                       LOANS IN
LOAN CATEGORY                    ALLOCATION      CATEGORY         ALLOCATION     CATEGORY       ALLOCATION      CATEGORY
------------------------------------------------------------------------------------------------------------------------
<S>                              <C>            <C>               <C>           <C>             <C>            <C>  
Commercial and other.....         $1,685            27.1%           $1,328          21.9%          $2,293          21.1%
Consumer.................            153            12.7               115          12.1              244          10.4
Real estate..............          1,150            60.2             1,207          66.0            1,564          68.5
Unallocated..............          3,947             0.0             4,870           0.0            4,263           0.0
                         -----------------------------------------------------------------------------------------------
                                  $6,935           100.0%           $7,520         100.0%          $8,364         100.0%
                         -----------------------------------------------------------------------------------------------
                         -----------------------------------------------------------------------------------------------
</TABLE>



                                       22
<PAGE>


<TABLE>
<CAPTION>
                                                       1995                             1994
                                       -------------------------------------------------------------------
                                                              PERCENT OF                       PERCENT OF
                                                               LOANS IN                          LOANS IN
LOAN CATEGORY                             ALLOCATION           CATEGORY      ALLOCATION          CATEGORY
----------------------------------------------------------------------------------------------------------
<S>                                      <C>                  <C>            <C>               <C>  
Commercial and other...................     $1,366                27.1%          $1,051               27.7%
Consumer...............................         36                15.7              147               15.4
Real estate............................        858                57.2              826               56.9
Unallocated............................      3,763                 0.0            2,205                0.0
                                       -------------------------------------------------------------------
                                            $6,023               100.0%          $4,229              100.0%
                                       -------------------------------------------------------------------
                                       -------------------------------------------------------------------
</TABLE>

V.  DEPOSITS

Reference is made to (I.) Distribution of Assets, Liabilities and Stockholders'
Equity for data regarding average daily deposits and rates paid thereon for the
years ended December 31, 1998, 1997 and 1996. The aggregate amount of
certificates of deposit, in denominations of $100,000 or more, by maturity, as
of December 31, 1998 are shown below, in thousands.

<TABLE>
<S>                                                            <C>    
Three months or less..................................         $30,139
Over three months through six months..................          13,939
Over six months through twelve months.................          12,368
Over twelve months....................................           6,647
                                                              --------
     Total............................................         $63,093
                                                              --------
                                                              --------
</TABLE>


VI.  RETURN ON EQUITY AND ASSETS

The following table shows consolidated operating and capital ratios for years
ended December 31, 1998, 1997, and 1996. The return on average assets and the
return on average stockholders' equity is calculated by dividing net income for
the period by average assets or average stockholders' equity, respectively. The
dividend pay out ratio is calculated by dividing total dividends paid by net
income.

<TABLE>
<CAPTION>
                                                                             DECEMBER 31
                                                        ------------------------------------------------------
                                                               1998              1997              1996
                                                        ------------------------------------------------------
<S>                                                            <C>               <C>              <C>  
Return on average assets..............................         1.43%             1.43%            0.82%
Return on average stockholders' equity................         14.41             15.36             9.02
Dividend pay out ratio................................         47.05             46.14            79.12
Average stockholders' equity to average assets........          9.90              9.28             9.05
</TABLE>

VII. SHORT-TERM BORROWINGS

Information required in this table is incorporated herein by reference to the
1998 Annual Report to Stockholders included as Exhibit 13. The information
required is contained in Table 6, "Short-term Borrowings and FHLB Advances" on
page 38 of Exhibit 13, within the section titled "Management's Discussion and
Analysis of Financial Condition and Results of Operations."


                                       23
<PAGE>

                                   SIGNATURES

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 on March 24, 1999.

PINNACLE BANC GROUP, INC.


By: /S/ JOHN J. GLEASON                     By: /S/ WILLIAM P. GLEASON
    ------------------------------              -------------------------------
    John J. Gleason                             William P. Gleason
    Chairman                                    President


By: /S/ JOHN J. GLEASON, JR.                By: /S/ SARA J. MIKUTA
    ------------------------------              -------------------------------
    John J. Gleason, Jr.                        Sara J. Mikuta
    Vice Chairman and Chief Executive           Chief Financial Officer and
    Officer                                     Treasurer

Pursuant to the requirements of the Securities Exchange Act of 1934, this report
has been signed below by the following Directors on behalf of the registrant on
March 24, 1999.


/S/ RICHARD W. BURKE                        /S/ JAMES L. GREENE
------------------------------              ----------------------------------
Richard W. Burke                            James L. Greene


/S/ MARK P. BURNS
------------------------------              ----------------------------------
Mark P. Burns                               Donald G. King


/S/ WILLIAM J. FINN, JR.                    /S/ JAMES A. MADDOCK
------------------------------              ----------------------------------
William J. Finn, Jr.                        James A. Maddock


/S/ SAMUEL M. GILMAN
------------------------------              ----------------------------------
Samuel M. Gilman                            James J. McDonough


                                            /S/ WILLIAM C.NICKELS
------------------------------              ----------------------------------
Albert Giusfredi                            William C. Nickels


/S/ JOHN J. GLEASON                         /S/ JOHN E. O'NEILL
------------------------------              ----------------------------------
John J. Gleason                             John E. O'Neill


/S/ JOHN J. GLEASON, JR.                    /S/ JAMES R. PHILLIP, JR.
------------------------------              ----------------------------------
John J. Gleason, Jr.                        James R. Phillip, Jr.


/S/ WILLIAM P. GLEASON                      /S/ KENNETH C. WHITENER, JR.
------------------------------              ----------------------------------
William P. Gleason                          Kenneth C. Whitener, Jr.



                                       24
<PAGE>



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

                                  UNITED STATES
                       SECURITIES AND EXCHANGE COMMISSION

                             Washington, D.C. 20549
                             ----------------------


                                    EXHIBITS
                                       TO
                                    FORM 10-K

              Annual Report Pursuant to Section 13 or 15(d) of the
                         Securities Exchange Act of 1934


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


                            PINNACLE BANC GROUP, INC.

             (Exact name of registrant as specified in its charter)





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



<PAGE>






EXHIBIT 13 - ANNUAL REPORT TO SECURITY HOLDERS.