Exhibit 2.1.
                          AGREEMENT AND PLAN OF MERGER


                                     between


                              STAR BANC CORPORATION


                                    as Buyer,


                                       and


                              TRANS FINANCIAL, INC.


                                    as Seller







                               Dated April 9, 1998



<PAGE>




                                TABLE OF CONTENTS






ARTICLE I

         THE MERGER
         1.1  The Merger
         1.2  Closing
         1.3  Effective Time
         1.4  Additional Actions
         1.5  Articles of  Incorporation  and Regulations
         1.6  Boards of Directors and Officers
         1.7  Conversion of Securities 
         1.8  Exchange Procedures
         1.9  Dissenting  Shares 
         1.10 No Fractional Shares 
         1.11 Anti-Dilution Adjustments
         1.12 Reservation of Right to Revise Transaction



ARTICLE II

         REPRESENTATIONS,  WARRANTIES  AND COVENANTS OF SELLER
         2.1  Organization and Authority
         2.2  Subsidiaries 
         2.3  Capitalization
         2.4  Authorization
         2.5  Seller  Financial  Statements  
         2.6  Seller  Reports 
         2.7  Properties  and Leases 
         2.8  Taxes
         2.9  Material  Adverse  Change 
         2.10 Commitments  and Contracts 
         2.11 Litigation and Other  Proceedings 
         2.12 Insurance
         2.13 Compliance  with Laws
         2.14 Labor 
         2.15  Material  Interests  of Certain Persons 
         2.16 Allowance for Loan and Lease Losses;  Nonperforming Assets
         2.17  Employee  Benefit Plans
         2.18 Conduct of Seller to Date
         2.19 Proxy Statement, etc 
         2.20 Registration Obligations
         2.21 State  Takeover  Statutes;  Seller's  Articles  of  Incorporation;
         Seller Rights  Agreement
         2.22 Accounting Tax and Regulatory Matters
         2.23 Brokers and Finders
         2.24 Other Activities
         2.25  Interest  Rate  Risk  Management  Instruments 
         2.26  Accuracy  of Information
         2.27 Year 2000 Compliant

         ARTICLE III

                            REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER
         3.1  Organization  and  Authority
         3.2  Capitalization  of  Buyer
         3.3  Authorization 
         3.4  Buyer  Financial  Statements
         3.5  Buyer  Reports
         3.6  Material  Adverse  Change 
         3.7  Compliance  with Laws
         3.8  Registration Statement
         3.9  Brokers and Finders 
         3.10 Litigation and Other
         3.11 Taxes
         3.12 Accounting,   Tax  and  Regulatory   Matters
         3.13 Accuracy  of Information
         3.14 Year 2000 Compliant



ARTICLE IV

         CONDUCT  OF  BUSINESSES  PRIOR TO THE  EFFECTIVE  TIME
          4.1  Conduct  of Businesses Prior to the Effective Time
          4.2 Forbearances



ARTICLE V

         ADDITIONAL AGREEMENTS
         5.1 Access  and  Information 
         5.2  Registration  Statement;  Regulatory Matters 
         5.3 Stockholder Approval
         5.4 Current Information
         5.5 Agreements of Affiliates
         5.6 Expenses
         5.7 Securities Act and Exchange Act Filings
         5.8  Miscellaneous  Agreements and Consents
         5.9 Employee  Benefits 
         5.10 Seller Stock Options
         5.11 Seller Employee Stock Ownership Plan
         5.12 D&O Indemnification
         5.13 Press Releases
         5.14 State Takeover Statutes; Seller's Articles of Incorporation;
              Seller Rights Agreement
         5.15 Best Efforts
         5.16 Insurance
         5.17 Conforming Entries
         5.18 Charitable Foundation



ARTICLE VI

         CONDITIONS
         6.1  Conditions to Each Party's Obligation To Effect the Merger
         6.2  Conditions to Obligations of Seller To Effect the Merger
         6.3  Conditions to Obligations of Buyer To Effect the Merger



ARTICLE VII

         TERMINATION,  AMENDMENT  AND  WAIVER 
         7.1  Termination  
         7.2  Effect  of Termination
         7.3 Amendment 
         7.4 Severability 7.5 Waiver



ARTICLE VIII

         GENERAL PROVISIONS
         8.1  Non-Survival of Representations, Warranties and Agreements
         8.2  Notices
         8.3  Miscellaneous




<PAGE>


EXHIBITS

Exhibit A.........Form of Stock Option Agreement
Exhibit B.........Form of Affiliate Letter


<PAGE>








                                                   
                          AGREEMENT AND PLAN OF MERGER


                  This AGREEMENT AND PLAN OF MERGER (this  "Agreement")  is made
and entered into on April 9, 1998 by and between Star Banc Corporation,  an Ohio
corporation  ("Buyer"),  and  Trans  Financial,  Inc.,  a  Kentucky  corporation
("Seller").

                              W I T N E S S E T H:

                  WHEREAS,  Buyer is a registered bank holding company under the
Bank Holding Company Act of 1956, as amended (the "Holding Company Act"); and

                  WHEREAS, Seller is a registered bank holding company under 
the Holding Company Act; and

                  WHEREAS,  the Board of Directors  of Seller and the  Executive
Committee  of the Board of  Directors  of Buyer have  approved  the merger  (the
"Merger") of Seller with and into Buyer pursuant to the terms and subject to the
conditions of this Agreement; and

                  WHEREAS,  the  parties  intend the  transactions  contemplated
hereby to qualify as a "reorganization"  within the meaning of Section 368(a) of
the Internal Revenue Code of 1986, as amended (the "Internal Revenue Code"), and
as a "pooling of interests" for accounting and financial reporting purposes; and

                  WHEREAS, as a condition to, and immediately prior to execution
of this  Agreement,  Buyer and Seller will enter into a stock  option  agreement
(the "Stock Option Agreement") in the form attached hereto as Exhibit A; and

                  WHEREAS,   the   parties   desire  to  provide   for   certain
undertakings,   conditions,   representations,   warranties   and  covenants  in
connection with the transactions contemplated by this Agreement.

                  NOW  THEREFORE,  in  consideration  of the  premises  and  the
representations,  warranties and agreements herein contained,  the parties agree
as follows:

                                    ARTICLE I

                                   THE MERGER

1.1 The Merger.  Subject to the terms and conditions of this Agreement, Seller
shall be merged with and into Buyer in  accordance  with the  Kentucky  Business
Corporation  Act (the "KBCA") and the Ohio General  Corporation Law (the "OGCL")
and the separate  corporate  existence of Seller shall cease. Buyer shall be the
surviving  corporation  of the  Merger  (sometimes  referred  to  herein  as the
"Surviving  Corporation")  and shall continue its existence under the name "Star
Banc  Corporation"  and  to be  governed  by the  laws  of the  State  of  Ohio.

1.2 Closing.  The closing (the  "Closing")  of the Merger shall take place at
10:00  a.m.,  local  time,  on the date that the  Effective  Time (as defined in
Section  1.3)  occurs,  or at such other time,  and at such place,  as Buyer and
Seller shall agree (the "Closing Date"). 

1.3 Effective Time.  The Merger shall
become  effective  on the date and at the time (the  "Effective  Time") on which
appropriate documents in respect of the Merger are filed with the Secretaries of
State of the  State of Ohio and the  Commonwealth  of  Kentucky  in such form as
required by, and in  accordance  with,  the relevant  provisions of the KBCA and
OGCL. Subject to the terms and conditions of this Agreement,  the Effective Time
shall  occur on any such  date on or after  July 1, 1998 as Buyer  shall  notify
Seller in writing  (such notice to be at least five  business days in advance of
the Effective Time) but (i) not earlier than the  satisfaction of all conditions
set forth in Section 6.1(a) and 6.1(b) (the "Approval Date") and (ii) subject to
clause (i),  not later than the first  business  day of the first full  calendar
month commencing at least five business days after the Approval Date. As soon as
practicable  following  the  Effective  Time,  Buyer and  Seller  shall  cause a
certificate/articles or plan of merger reflecting the terms of this Agreement to
be delivered for filing and recordation  with other  appropriate  state or local
officials in the State of Ohio and the  Commonwealth  of Kentucky in  accordance
with the OGCL and the KBCA, respectively.  

1.4 Additional Actions.  If, at any
time after the Effective Time, Buyer or the Surviving Corporation shall consider
or be advised that any further  deeds,  assignments  or  assurances or any other
acts are  necessary or desirable to (a) vest,  perfect or confirm,  of record or
otherwise,  in the Surviving  Corporation its right, title or interest in, to or
under  any of the  rights,  properties  or  assets  of  Seller  or  Buyer or (b)
otherwise carry out the purposes of this Agreement, Seller and Buyer and each of
their respective officers and directors,  shall be deemed to have granted to the
Surviving  Corporation an  irrevocable  power of attorney to execute and deliver
all such  deeds,  assignments  or  assurances  and to do all acts  necessary  or
desirable  to vest,  perfect or confirm  title and  possession  to such  rights,
properties or assets in the Surviving Corporation and otherwise to carry out the
purposes of this  Agreement,  and the  officers and  directors of the  Surviving
Corporation  are  authorized  in the name of Seller or otherwise to take any and
all such action.  

1.5 Articles of Incorporation and Regulations. The Articles of
Incorporation  and  Regulations  of Buyer  in  effect  immediately  prior to the
Effective  Time shall be the Articles of  Incorporation  and  Regulations of the
Surviving  Corporation following the Merger until otherwise amended or repealed.

1.6 Boards of Directors and Officers.  At the Effective  Time, the directors and
officers of Buyer immediately prior to the Effective Time shall be directors and
officers,  respectively, of the Surviving Corporation following the Merger; such
directors  and  officers  shall hold  office in  accordance  with the  Surviving
Corporation's  Articles of  Incorporation  and  Regulations  and applicable law.
Promptly  following the Effective Time, one member of Seller's  current Board of
Directors,  to be mutually  agreed upon by the  parties  prior to the  Effective
Time, shall be invited to serve as an additional  member of the Buyer's Board of
Directors.  

1.7 Conversion of Securities.  At the Effective  Time, by virtue of
the Merger and without any action on the part of Buyer,  Seller or the holder of
any of the following securities: Each share of the common stock, par value $5.00
per share,  of Buyer  ("Buyer  Common  Stock")  that is issued  and  outstanding
immediately  prior to the Effective Time shall remain  outstanding  and shall be
unchanged  after the Merger and  thereafter  shall together with shares of Buyer
Common Stock issued in the Merger  constitute all of the issued and  outstanding
capital stock of the Surviving Corporation;  and Each share of the common stock,
no par value per share, of Seller ("Seller Common Stock") issued and outstanding
immediately prior to the Effective Time shall cease to be outstanding and, other
than any Dissenting  Shares (as defined in Section 1.9) and any shares of Seller
Common Stock held by Seller, Buyer or any of their respective  Subsidiaries,  in
each case other than in a fiduciary  capacity or as a result of debts previously
contracted,  shall be converted into and become the right to receive 0.9003 (the
"Exchange Ratio") shares of Buyer Common Stock (the "Per Share  Consideration").

1.8 Exchange Procedures.  (a) At or prior to the Effective  Time,  Buyer shall
deposit with Star Bank, N.A., as exchange agent (the "Exchange Agent"),  for the
benefit of holders of certificates the Merger  Consideration  (as defined below)
(the  Merger  Consideration  so  deposited  with the  Exchange  Agent  being the
"Exchange Fund"). Seller shall deliver to Buyer, in a form reasonably acceptable
to Buyer, a complete list of Seller's  shareholders  (including their respective
names,  addresses and TINs to the extent reflected in the records  maintained by
Seller or its transfer agent) as of the record date for the shareholder  meeting
to be called by Seller  pursuant to Section  5.3 hereof and as of the  Effective
Time, in each case which delivery shall be made as soon as practicable after the
respective date. Holders of record of certificates  formerly representing shares
of Seller Common Stock (the  "Certificates")  shall be instructed to tender such
Certificates  to Buyer  pursuant  to a letter of  transmittal  that Buyer  shall
deliver or cause to be delivered to such  holders.  Such letters of  transmittal
shall specify that risk of loss and title to  Certificates  shall pass only upon
delivery  of such  Certificates  to Buyer.  Subject to Section  1.10,  after the
Effective  Time,  each previous  holder of a Certificate  that  surrenders  such
Certificate  with a duly executed  letter of  transmittal  to the Exchange Agent
will be entitled to a certificate  or  certificates  representing  the number of
full shares of Buyer  Common  Stock into which the  Certificate  so  surrendered
shall  have been  converted  pursuant  to this  Agreement  and any  distribution
theretofore  declared  and not yet paid  with  respect  to such  shares of Buyer
Common  Stock,  without  interest.  Buyer or the  Exchange  Agent  shall  accept
Certificates  upon compliance with such reasonable terms and conditions as Buyer
or the  Exchange  Agent may  impose to effect an  orderly  exchange  thereof  in
accordance   with   customary   exchange   practices.   Certificates   shall  be
appropriately  endorsed or accompanied by such  instruments of transfer as Buyer
or the Exchange Agent may require. Each outstanding Certificate shall until duly
surrendered  to Buyer or the Exchange  Agent be deemed to evidence  ownership of
the  consideration   into  which  the  stock  previously   represented  by  such
Certificate shall have been converted pursuant to this Agreement. Any portion of
the Exchange Fund, including any earnings thereon,  which remains  undistributed
to the holders of Certificates  for six months after the Effective Time shall be
delivered to Buyer,  upon demand,  and any holders of Certificates  who have not
theretofore  complied with this Section 1.8 shall  thereafter look only to Buyer
for payment of their  claim for the Merger  Consideration.  After the  Effective
Time,  holders of  Certificates  shall cease to have rights with  respect to the
stock previously  represented by such Certificates,  and their sole rights shall
be to exchange  such  Certificates  for the  consideration  provided for in this
Agreement.  After the Effective Time,  there shall be no further transfer on the
records of Seller of  Certificates,  and if such  Certificates  are presented to
Seller  for  transfer,   they  shall  be  cancelled   against  delivery  of  the
consideration provided therefor in this Agreement.  Buyer shall not be obligated
to deliver the  consideration  to which any former holder of Seller Common Stock
is  entitled  as a  result  of the  Merger  until  such  holder  surrenders  the
Certificates as provided herein.  No dividends  declared will be remitted to any
person  entitled to receive Buyer Common Stock under this  Agreement  until such
person  surrenders the Certificate  representing the right to receive such Buyer
Common  Stock,  at which time such  dividends  shall be remitted to such person,
without  interest  and  less any  taxes  that may  have  been  imposed  thereon.
Certificates  surrendered for exchange by any person constituting an "affiliate"
of Seller for  purposes of Rule 145 of the  Securities  Act of 1933,  as amended
(together with the rules and  regulations  thereunder,  the  "Securities  Act"),
shall not be exchanged for  certificates  representing  Buyer Common Stock until
Buyer has received a written  agreement from such person in the form attached as
Exhibit B. Neither the Exchange  Agent nor any party to this  Agreement  nor any
affiliate  thereof  shall be liable to any  holder of stock  represented  by any
Certificate  for  any  consideration  paid  to a  public  official  pursuant  to
applicable  abandoned property,  escheat or similar laws. Buyer and the Exchange
Agent  shall be  entitled  to rely  upon the stock  transfer  books of Seller to
establish  the  identity  of those  persons  entitled  to receive  consideration
specified  in this  Agreement,  which books  shall be  conclusive  with  respect
thereto.  In  the  event  of a  dispute  with  respect  to  ownership  of  stock
represented by any  Certificate,  Buyer and the Exchange Agent shall be entitled
to deposit any consideration  represented  thereby in escrow with an independent
third party and  thereafter  be  relieved  with  respect to any claims  thereto.

1.9 Dissenting Shares.  (a)  "Dissenting  Shares"  means any  shares of Seller
Common  Stock  held by any holder who  becomes  entitled  to payment of the fair
value of such shares under the KBCA.  Any holders of Dissenting  Shares shall be
entitled  to payment  for such  shares  only to the extent  permitted  by and in
accordance  with the  provisions  of the KBCA;  provided,  however,  that if, in
accordance  with the KBCA,  any holder of  Dissenting  Shares shall forfeit such
right to payment of the fair value of such shares,  such shares shall  thereupon
be deemed to have been converted into and to have become exchangeable for, as of
the  Effective  Time,  the right to receive the  consideration  provided in this
Article I. Seller shall give Buyer (i) prompt  notice of any written  objections
to the Merger and any  written  demands for the payment of the fair value of any
shares,  withdrawals of such demands,  and any other instruments served pursuant
to the  KBCA  received  by  Seller  and  (ii)  the  opportunity  to  direct  all
negotiations and proceedings with respect to such demands under the KBCA. Seller
shall not  voluntarily  make any payment with respect to any demands for payment
of fair value and shall not,  except  with the prior  written  consent of Buyer,
settle  or  offer  to  settle  any  such  demands.   

1.10 No Fractional Shares.
Notwithstanding any other provision of this Agreement,  neither certificates nor
scrip for fractional shares of Buyer Common Stock shall be issued in the Merger.
Each holder who  otherwise  would have been entitled to a fraction of a share of
Buyer Common Stock shall receive in lieu thereof cash  (without  interest) in an
amount  determined by multiplying  the  fractional  share interest to which such
holder  would  otherwise  be entitled  by the closing  price of a share of Buyer
Common Stock on the New York Stock Exchange, Inc. ("NYSE") composite tape on the
last full  trading day prior to the  Effective  Time.  No such  holder  shall be
entitled  to  dividends,  voting  rights or any other  rights in  respect of any
fractional  share.  

1.11 Anti-Dilution Adjustments.  If prior to the Effective
Time  Buyer  shall  declare  a  stock  dividend  or make  distributions  upon or
subdivide,  split up,  reclassify  or combine or make  similar  changes to Buyer
Common Stock or exchange  Buyer  Common Stock for a different  number or kind of
shares or  securities  or declare a  dividend  or make a  distribution  on Buyer
Common  Stock or on any security  convertible  into Buyer  Common  Stock,  or is
involved in any  transaction  resulting in any of the foregoing  (including  any
exchange  of Buyer  Common  Stock  for a  different  number or kind of shares or
securities),  appropriate adjustment or adjustments will be made to the Exchange
Ratio. 

1.12 Reservation of Right to Revise Transaction. Buyer may with  Seller's
consent (which will not be unreasonably  withheld) at any time change the method
of effecting the  acquisition  of Seller or Seller's  Subsidiaries  by Buyer and
Seller  shall  cooperate  in such  efforts  (including  without  limitation  (a)
modifying  the  provisions of this Article I and (b) causing the merger of Trans
Financial  Bank,  National  Association  and/or Trans  Financial Bank Tennessee,
National Association,  each a national association and a wholly owned subsidiary
of Seller  (the  "Seller  Banks")  with any  depository  institution  which is a
Subsidiary  of  Buyer  (any  such  merger  or  other  method  of  effecting  the
acquisition,  together  with  the  Merger,  being  referred  to  herein  as  the
"Transactions"))  if and to the extent Buyer deems such change to be  desirable,
including  without  limitation  to  provide  for  a  merger  of  Seller  into  a
wholly-owned  subsidiary  of  Buyer  in which  such  subsidiary  of Buyer is the
surviving corporation; provided, however, that no such change shall (A) alter or
change  the  amount or kind of  consideration  to be issued to holders of Seller
Common Stock as provided for in this Agreement (the "Merger Consideration"), (B)
adversely  affect the tax  treatment  to  Seller's  stockholders  as a result of
receiving  the  Merger  Consideration,  or (C)  materially  impede  or delay the
consummation of the transactions contemplated by this Agreement.

ARTICLE II

REPRESENTATIONS,  WARRANTIES  AND  COVENANTS  OF  SELLER
Seller  represents and warrants to and covenants with Buyer as follows:

2.1 Organization and Authority. Seller is a corporation duly organized, validly
existing and in good standing under the laws of the Commonwealth of Kentucky, is
duly qualified to do business and is in good standing in all jurisdictions where
its ownership or leasing of property or the conduct of its business  requires it
to be so qualified and has corporate  power and authority to own its  properties
and assets and to carry on its business as it is now being conducted.  Seller is
registered as a bank holding  company with the Board of Governors of the Federal
Reserve  System (the "Board")  under the Holding  Company Act. True and complete
copies of the  Articles  of  Incorporation  and the Bylaws of Seller and, to the
extent  requested  in writing by Buyer,  of the  articles of  incorporation  and
bylaws of the Seller Subsidiaries (as defined in Section 2.2), each as in effect
on the date of this Agreement, have been provided to Buyer.  

2.2 Subsidiaries.
Schedule 2.2 sets forth,  among other things, a complete and correct list of all
of  Seller's  Subsidiaries  (each a "Seller  Subsidiary"  and  collectively  the
"Seller  Subsidiaries"),  all outstanding Equity Securities of each of which are
owned directly or indirectly by Seller.  "Equity  Securities" of an issuer means
capital  stock or other equity  securities  of such issuer,  options,  warrants,
scrip, rights to subscribe to, calls or commitments of any character  whatsoever
relating to, or securities  or rights  convertible  into,  shares of any capital
stock or other Equity  Securities  of such issuer,  or  contracts,  commitments,
understandings  or  arrangements  by which such issuer is or may become bound to
issue additional  shares of its capital stock or other Equity Securities of such
issuer, or options,  warrants, scrip or rights to purchase,  acquire,  subscribe
to, calls on or commitments  for any shares of its capital stock or other Equity
Securities.  All of the  outstanding  shares  of  capital  stock  of the  Seller
Subsidiaries are validly issued, fully paid and nonassessable,  and those shares
owned by Seller are owned  free and clear of any lien,  claim,  charge,  option,
encumbrance,  agreement,  mortgage,  pledge, security interest or restriction (a
"Lien") with respect thereto.  Each of the Seller  Subsidiaries is a corporation
or association duly  incorporated or organized,  validly  existing,  and in good
standing under the laws of its  jurisdiction of  incorporation  or organization,
and has corporate  power and authority to own or lease its properties and assets
and to carry on its  business as it is now being  conducted.  Each of the Seller
Subsidiaries  is duly  qualified to do business in each  jurisdiction  where its
ownership or leasing of property or the conduct of its  business  requires it so
to be  qualified,  except  where  the  failure  to so  qualify  would not have a
material  adverse  effect on the financial  condition,  results of operations or
business (collectively,  the "Condition") of Seller and its Subsidiaries,  taken
as a whole. Except for the Equity Securities of the Seller Banks of which Seller
owns 100%, Seller does not own beneficially,  directly or indirectly,  more than
5% of any class of Equity  Securities or similar  interests of any  corporation,
bank, business trust, association or similar organization.  The Seller Banks are
chartered  by the Office of the  Comptroller  of the  Currency.  The deposits of
Seller Bank are insured by the Federal Deposit Insurance  Corporation  ("FDIC").
Neither Seller nor any Seller  Subsidiary holds any interest in a partnership or
joint venture of any kind.  

2.3 Capitalization.  The authorized capital stock
of Seller consists of (i) 50,000,000 shares of Seller Common Stock, of which, as
of April 8, 1998,  11,718,405  shares were issued and  outstanding,  (ii) 50,000
shares of Class A  Preferred  Stock,  no par value  ("Seller  Class A  Preferred
Stock"),  of which,  as of April 8, 1998, no shares were issued or  outstanding,
and (iii)  5,000,000  shares of Class B Preferred  Stock,  no par value ("Seller
Class B Preferred Stock" and,  together with the Seller Class A Preferred Stock,
the "Seller  Preferred  Stock"),  of which,  as of April 8, 1998, no shares were
issued  and  outstanding.  Seller  has  reserved  the  shares of Seller  Class B
Preferred  Stock for issuance upon exercise of Preferred  Stock Purchase  Rights
under  a  Rights   Agreement,   dated  January  20,  1992  (the  "Seller  Rights
Agreement"), between Seller and Manufacturers Hanover, as Rights Agent. Pursuant
to the Seller  Rights  Agreement,  each  certificate  representing  one share of
Seller Common Stock also  represents  one Right (as defined in the Seller Rights
Agreement).  As of April 8, 1998,  Seller had reserved  173,118 shares of Seller
Common Stock for issuance  under  Seller's  stock option and incentive  plans, a
list of which is set forth on Schedule 2.3 (the "Seller Stock Plans"),  pursuant
to which options  ("Seller  Stock  Options")  covering  839,980 shares of Seller
Common  Stock were  outstanding  as of April 8, 1998.  Since  April 1, 1998,  no
Equity  Securities of Seller have been issued other than shares of Seller Common
Stock  which may have been issued upon the  exercise  of Seller  Stock  Options.
Except as set forth above and except  pursuant to the Seller  Rights  Agreement,
there are no other Equity  Securities of Seller  outstanding.  All of the issued
and outstanding  shares of Seller Common Stock are validly  issued,  fully paid,
and nonassessable, and have not been issued in violation of any preemptive right
of any stockholder of Seller.  Seller maintains a dividend  reinvestment plan or
similar  plan.  

2.4 Authorization.  (a)  Seller has the  corporate  power and
authority  to enter into this  Agreement  and,  subject to the  approval of this
Agreement by the stockholders of Seller, to carry out its obligations hereunder.
The only  stockholder  vote required for Seller to approve this Agreement is the
affirmative  vote of the  holders of at least a majority of the shares of Seller
Common  Stock  entitled  to vote at a  meeting  called  for  such  purpose.  The
execution,  delivery  and  performance  of  this  Agreement  by  Seller  and the
consummation by Seller of the  transactions  contemplated  hereby have been duly
authorized  by the Board of  Directors  of Seller.  Subject to  approval  by the
stockholders  of Seller,  this  Agreement is a valid and binding  obligation  of
Seller  enforceable  against Seller in accordance with its terms.  Except as set
forth on Schedule  2.4B,  neither the execution nor delivery nor  performance by
Seller of this Agreement,  nor the  consummation  by Seller of the  transactions
contemplated hereby, nor compliance by Seller with any of the provisions hereof,
will (i) violate,  conflict with, or result in a breach of any provisions of, or
constitute a default (or an event  which,  with notice or lapse of time or both,
would  constitute  a  default)  under,  or  result  in the  termination  of,  or
accelerate the  performance  required by, or result in a right of termination or
acceleration of, or result in the creation of, any material Lien upon any of the
material  properties or assets of Seller or any Seller  Subsidiary  under any of
the terms,  conditions  or  provisions  of (x) its  articles or  certificate  of
incorporation  or bylaws or (y) any material note,  bond,  mortgage,  indenture,
deed of trust,  license,  lease,  agreement or other instrument or obligation to
which Seller or any Seller Subsidiary is a party or by which it may be bound, or
to which Seller or any Seller  Subsidiary  or any of the material  properties or
assets of Seller or any Seller  Subsidiary  may be subject,  or (ii)  subject to
compliance  with the statutes and  regulations  referred to in paragraph  (c) of
this Section 2.4, to the best knowledge of Seller, violate any judgment, ruling,
order,  writ,  injunction,  decree,  statute,  rule or regulation  applicable to
Seller or any Seller Subsidiary or any of their respective  material  properties
or  assets.  Other  than as set  forth  on  Schedule  2.4C or in  connection  or
compliance  with the provisions of the KBCA,  the OGCL, the Securities  Act, the
Securities  Exchange  Act of 1934,  as  amended,  and the rules and  regulations
thereunder (the "Exchange  Act"), the securities or blue sky laws of the various
states or filings, consents,  reviews,  authorizations,  approvals or exemptions
required  under the Holding  Company  Act, and the  Hart-Scott-Rodino  Antitrust
Improvements  Act of 1976 (the "HSR Act"), or any required  approvals or filings
pursuant to any state  statutes or  regulations  applicable  to the Seller Banks
with respect to the transactions  contemplated by this Agreement,  no notice to,
filing with,  exemption or review by, or authorization,  consent or approval of,
any public body or authority is necessary for the  consummation by Seller of the
transactions  contemplated by this Agreement.  

2.5 Seller Financial Statements.
The  consolidated  balance sheets of Seller and its  Subsidiaries as of December
31, 1997,  1996 and 1995 and related  consolidated  statements  of income,  cash
flows and  changes in  stockholders'  equity for each of the three  years in the
three-year  period ended  December 31, 1997,  together  with the notes  thereto,
audited by KPMG Peat Marwick LLP and  included in an annual  report on Form 10-K
as filed with the Securities and Exchange Commission (the "SEC")  (collectively,
the  "Seller  Financial  Statements")  have been  prepared  in  accordance  with
generally accepted accounting principles applied on a consistent basis ("GAAP"),
present  fairly  the   consolidated   financial   position  of  Seller  and  its
Subsidiaries at the dates and the consolidated results of operations, cash flows
and  changes  in  stockholders'  equity of Seller and its  Subsidiaries  for the
periods  stated therein and are derived from the books and records of Seller and
its  Subsidiaries,  which are complete and accurate in all material respects and
have been maintained in all material respects in accordance with applicable laws
and  regulations.  Neither Seller nor any of its  Subsidiaries  has any material
contingent  liabilities  that  are not  described  in the  financial  statements
described above.

2.6 Seller Reports. Except as set forth in Schedule 2.6, since January 1, 1995
each of Seller  and the  Seller  Subsidiaries  has filed all  material  reports,
registrations  and statements,  together with any required  material  amendments
thereto,  that it was  required  to file  with (i) the SEC,  including,  but not
limited to, Forms 10-K,  Forms 10-Q,  Forms 8-K and proxy  statements,  (ii) the
Board, (iii) the FDIC, and (iv) any other federal,  state,  municipal,  local or
foreign government,  securities,  banking, savings and loan, insurance and other
governmental  or regulatory  authority and the agencies and staffs  thereof (the
entities in the  foregoing  clauses (i)  through  (iv) being  referred to herein
collectively as the "Regulatory  Authorities"  and individually as a "Regulatory
Authority").  All such  reports and  statements  filed with any such  Regulatory
Authority are collectively referred to herein as the "Seller Reports." As of its
respective  date, each Seller Report complied in all material  respects with all
the rules and regulations promulgated by the applicable Regulatory Authority and
did not  contain  any untrue  statement  of a  material  fact or omit to state a
material  fact  required to be stated  therein or necessary in order to make the
statements  therein,  in light of the circumstances  under which they were made,
not  misleading.  

2.7 Properties and Leases.  Except as may be reflected in the
Seller  Financial  Statements,  except  for any Lien for  current  taxes not yet
delinquent  and except with respect to assets  classified  as real estate owned,
Seller and its Subsidiaries  have good title free and clear of any material Lien
to all the real and personal property reflected in Seller's consolidated balance
sheet as of December 31, 1997  included in the most recent Seller Form 10-K and,
in each case, all real and personal  property  acquired since such date,  except
such real and personal  property as has been disposed of in the ordinary  course
of business.  All leases material to Seller or any Seller Subsidiary pursuant to
which  Seller or any Seller  Subsidiary,  as  lessee,  leases  real or  personal
property, are valid and effective in accordance with their respective terms, and
there is not, under any of such leases,  any material existing default by Seller
or any Seller  Subsidiary  or any event  which,  with notice or lapse of time or
both,  would  constitute  such a material  default.  All of Seller's  and Seller
Subsidiaries' buildings,  structures and equipment in regular use have been well
maintained  and are in good  and  serviceable  condition,  normal  wear and tear
excepted.  

2.8 Taxes.  Seller and each Seller Subsidiary have timely filed or
will timely (including  extensions) file all material tax returns required to be
filed at or prior to the Closing Date ("Seller Returns"). Each of Seller and its
Subsidiaries  has paid,  or set up  adequate  reserves  on the Seller  Financial
Statements  for the payment of, all taxes  required to be paid in respect of the
periods  covered by such  returns and has set up  adequate  reserves on the most
recent  financial  statements  Seller has filed under the  Exchange  Act for the
payment of all taxes  anticipated  to be payable in respect of all periods up to
and including the latest period  covered by such financial  statements.  Neither
Seller nor any Seller  Subsidiary will have any material  liability for any such
taxes in  excess  of the  amounts  so paid or  reserves  so  established  and no
material  deficiencies for any tax,  assessment or governmental charge have been
proposed, asserted or assessed (tentatively or definitely) against any of Seller
or any  Seller  Subsidiary  which  would not be covered  by  existing  reserves.
Neither  Seller nor any Seller  Subsidiary  is  delinquent in the payment of any
material  tax,  assessment or  governmental  charge,  nor,  except as previously
disclosed,  has it requested  any extension of time within which to file any tax
returns in  respect  of any  fiscal  year which have not since been filed and no
requests for waivers of the time to assess any tax are pending.  The federal and
state income tax returns of Seller and the Seller Subsidiaries have been audited
and finally  settled by the Internal  Revenue Service (the "IRS") or appropriate
state tax authorities or the relevant statute of limitations has expired for all
periods  ended  through  December 31,  1993.  There is no  deficiency  or refund
litigation  or matter in  controversy  with respect to Seller  Returns.  Neither
Seller  nor any  Seller  Subsidiary  has  extended  or  waived  any  statute  of
limitations  on the  assessment  of any tax due  that is  currently  in  effect.

2.9 Material Adverse Change.  Since  December  31,  1997,  there  has  been  no
material adverse change in the Condition of Seller and its  Subsidiaries,  taken
as a whole,  except as may have  resulted or may result from changes to laws and
regulations or changes in economic conditions applicable to banking institutions
generally or in general levels of interest rates affecting banking  institutions
generally. 

2.10 Commitments and Contracts.  (a) Except as set forth on Schedule
2.10A,  neither Seller nor any Seller Subsidiary is a party or subject to any of
the  following  (whether  written or oral,  express or  implied):  any  material
agreement,  arrangement  or  commitment  (A) not made in the ordinary  course of
business or (B)  pursuant to which Seller or any of its  Subsidiaries  is or may
become  obligated to invest in or contribute  capital to any Seller  Subsidiary;
any  agreement,  indenture  or other  instrument  not  disclosed  in the  Seller
Financial  Statements relating to the borrowing of money by Seller or any Seller
Subsidiary  or the  guarantee  by Seller or any  Seller  Subsidiary  of any such
obligation  (other than trade  payables or instruments  related to  transactions
entered into in the ordinary course of business by any Seller  Subsidiary,  such
as deposits and Fed Funds or similar  borrowings);  any  contract,  agreement or
understanding with any labor union or collective  bargaining  organization;  any
contract  containing  covenants  which limit the ability of Seller or any Seller
Subsidiary  to  compete  in any line of  business  or with any  person  or which
involve any restriction of the  geographical  area in which, or method by which,
Seller or any Seller  Subsidiary may carry on its business (other than as may be
required by law or any applicable Regulatory  Authority);  any other contract or
agreement which is a "material  contract"  within the meaning of Item 601(b)(10)
of Regulation  S-K  promulgated by the SEC and which is not listed in the Seller
Reports filed with the SEC; or any lease with annual rental payments aggregating
$500,000 or more.  Neither  Seller nor any Seller  Subsidiary is in violation of
its charter  documents  or bylaws or in default  under any  material  agreement,
commitment,  arrangement,  lease, insurance policy, or other instrument, whether
entered into in the ordinary course of business or otherwise and whether written
or oral,  and there has not occurred  any event that,  with the lapse of time or
giving of notice or both, would constitute such a default, except, in all cases,
where such default would not have a material  adverse effect on the Condition of
Seller      and      its      Subsidiaries,      taken      as     a      whole.

2.11 Litigation and Other Proceedings.  Except  as set forth on  Schedule  2.11,
neither  Seller nor any Seller  Subsidiary  is a party to any pending or, to the
best knowledge of Seller,  threatened  claim,  action,  suit,  investigation  or
proceeding,  or is subject to any order,  judgment or decree, except for matters
which, in the aggregate,  will not have, or reasonably  could not be expected to
have, a material adverse effect on the Condition of Seller and its Subsidiaries,
taken as a  whole,  or  which  purports  or seeks  to  enjoin  or  restrain  the
transactions contemplated by this Agreement.  Without limiting the generality of
the foregoing,  there are no actions,  suits, or proceedings  pending or, to the
best knowledge of Seller,  threatened against Seller or any Seller Subsidiary or
any of their  respective  officers or directors by any  stockholder of Seller or
any  Seller  Subsidiary  (or any  former  stockholder  of Seller  or any  Seller
Subsidiary) or involving  claims under the Securities Act, the Exchange Act, the
Community  Reinvestment  Act of 1977,  as  amended,  or the fair  lending  laws.

2.12 Insurance.  Each of Seller and its  Subsidiaries has taken all requisite
action  (including  without  limitation  the  making of claims and the giving of
notices) pursuant to its directors' and officers'  liability insurance policy or
policies in order to preserve all rights  thereunder with respect to all matters
(other  than  matters   arising  in  connection  with  this  Agreement  and  the
transactions contemplated hereby) occurring prior to the Effective Time that are
known  to  Seller,  except  for  such  matters  which,  individually  or in  the
aggregate, will not have and reasonably could not be expected to have a material
adverse  effect on the  Condition  of Seller  and its  Subsidiaries,  taken as a
whole. 

2.13 Compliance with Laws.  (a) Seller and each of its Subsidiaries have
all permits,  licenses,  authorizations,  orders and approvals of, and have made
all filings,  applications and  registrations  with, all Regulatory  Authorities
that are required in order to permit them to own or lease their  properties  and
assets  and to carry on  their  business  as  presently  conducted  and that are
material  to the  business  of Seller and its  Subsidiaries;  all such  permits,
licenses,  certificates of authority, orders and approvals are in full force and
effect and, to the best knowledge of Seller,  no suspension or  cancellation  of
any of them is threatened; and all such filings,  applications and registrations
are current.  Except for failures to comply or defaults which individually or in
the  aggregate  would not have a material  adverse  effect on the  Condition  of
Seller  and its  Subsidiaries,  taken as a whole,  (i)  each of  Seller  and its
Subsidiaries  has  complied  with all laws,  regulations  and orders  (including
without  limitation zoning ordinances,  building codes, the Employee  Retirement
Income  Security  Act of  1974,  as  amended  ("ERISA"),  and  securities,  tax,
environmental,  civil  rights,  and  occupational  health  and  safety  laws and
regulations  and  including  without  limitation  in  the  case  of  any  Seller
Subsidiary that is a bank or savings association, banking organization,  banking
corporation  or trust  company,  all  statutes,  rules,  regulations  and policy
statements  pertaining to the conduct of a banking,  deposit-taking,  lending or
related business,  or to the exercise of trust powers) and governing instruments
applicable to them and to the conduct of their business, and (ii) neither Seller
nor any Seller  Subsidiary is in default under, and no event has occurred which,
with the lapse of time or notice or both, could result in the default under, the
terms of any judgment, order, writ, decree, permit, or license of any Regulatory
Authority or court, whether federal,  state,  municipal, or local and whether at
law or in equity.  Except as set forth in Schedule 2.13B, neither Seller nor any
Seller  Subsidiary is subject to or reasonably  likely to incur a liability as a
result of its ownership, operation, or use of any Property (as defined below) of
Seller (whether  directly or, to the best knowledge of Seller,  as a consequence
of such Property being part of the investment  portfolio of Seller or any Seller
Subsidiary) (A) that is contaminated by or contains any hazardous  waste,  toxic
substance,  or related materials,  including without limitation asbestos,  PCBs,
pesticides,  herbicides,  and any other  substance or waste that is hazardous to
human health or the environment (collectively,  a "Toxic Substance"),  or (B) on
which any Toxic Substance has been stored,  disposed of, placed,  or used in the
construction thereof. "Property" of a person shall include all property (real or
personal,  tangible or intangible) owned or controlled by such person, including
without limitation  property under foreclosure,  property held by such person or
any Subsidiary of such person in its capacity as a trustee and property in which
any venture  capital or similar  unit of such person or any  Subsidiary  of such
person has an interest. Except as set forth in Schedule 2.13B, no claim, action,
suit, or proceeding is pending against Seller or any Seller Subsidiary  relating
to  Property  of  Seller  before  any  court or other  Regulatory  Authority  or
arbitration  tribunal  relating  to  hazardous  substances,  pollution,  or  the
environment,  and there is no outstanding  judgment,  order,  writ,  injunction,
decree,  or award  against or  affecting  Seller or any Seller  Subsidiary  with
respect to the same. Except for statutory or regulatory  restrictions of general
application,  no Regulatory Authority has placed any restriction on the business
of Seller or any Seller  Subsidiary which reasonably could be expected to have a
material adverse effect on the Condition of Seller and its  Subsidiaries,  taken
as a whole.  From and after  January  1,  1995,  neither  Seller  nor any Seller
Subsidiary has received any  notification  or  communication  which has not been
resolved from any  Regulatory  Authority  (i)  asserting  that any Seller or any
Subsidiary of Seller, is not in substantial compliance with any of the statutes,
regulations or ordinances that such Regulatory  Authority enforces,  except with
respect to matters  which (A) are set forth on Schedule  2.13C or in any writing
previously furnished to Buyer and (B) reasonably could not be expected to have a
material adverse effect on the Condition of Seller and its  Subsidiaries,  taken
as a whole,  (ii)  threatening  to  revoke  any  license,  franchise,  permit or
governmental  authorization  that is material to the Condition of Seller and its
Subsidiaries,  taken as a whole,  including  without  limitation  such company's
status as an insured depository  institution under the Federal Deposit Insurance
Act,  or  (iii)  requiring  or  threatening  to  require  Seller  or  any of its
Subsidiaries,  or  indicating  that  Seller  or any of its  Subsidiaries  may be
required,  to enter into a cease and desist  order,  agreement or  memorandum of
understanding  or any other  agreement  restricting or limiting or purporting to
direct,  restrict or limit in any manner the  operations of Seller or any of its
Subsidiaries,  including  without  limitation any  restriction on the payment of
dividends.   No  such  cease  and  desist  order,  agreement  or  memorandum  of
understanding or other agreement is currently in effect.  Neither Seller nor any
Seller Subsidiary is required by Section 32 of the Federal Deposit Insurance Act
to give prior notice to any federal  banking agency of the proposed  addition of
an individual to its board of directors or the  employment of an individual as a
senior executive officer.

2.14 Labor.  No work stoppage involving Seller or any Seller  Subsidiary,  is
pending or, to the best knowledge of Seller, threatened.  Neither Seller nor any
Seller  Subsidiary  is  involved  in,  or,  to the  best  knowledge  of  Seller,
threatened  with or  affected  by, any labor  dispute,  arbitration,  lawsuit or
administrative  proceeding which reasonably could be expected to have a material
adverse  affect on the  Condition  of Seller  and its  Subsidiaries,  taken as a
whole.  Employees of neither Seller nor any Seller Subsidiary are represented by
any labor union or any collective bargaining organization.

2.15 Material Interests of Certain Persons. (a) Except as set forth in  Seller's
Proxy  Statement  for its  1998  Annual  Meeting  of  Stockholders,  to the best
knowledge  of Seller,  no officer or  director  of Seller or any  Subsidiary  of
Seller,  or any  "associate"  (as such term is defined  in Rule 14a-1  under the
Exchange Act) of any such officer or director,  has any material interest in any
material contract or property (real or personal,  tangible or intangible),  used
in, or pertaining to the business of, Seller or any Subsidiary of Seller,  which
in the case of Seller is required to be disclosed by Item 404 of Regulation  S-K
promulgated by the SEC or in the case of any such  Subsidiary  would be required
to be so disclosed if such Subsidiary had a class of securities registered under
Section 12 of the Exchange Act. Each  outstanding loan from Seller or any Seller
Subsidiary  to any  present  officer,  director,  employee or any  associate  or
related  interest  of any such person  which was or would be required  under any
rule  or  regulation  to be  approved  by or  reported  to  Seller's  or  Seller
Subsidiary's Board of Directors ("Insider Loans") was approved by or reported to
the  appropriate  board of  directors  in  accordance  with  applicable  law and
regulations.  Except as set  forth on  Schedule  2.15B,  no  Insider  Loan has a
principal  balance  as of the date  hereof in excess  of  $250,000  or a line of
credit in excess of $100,000.

2.16 Allowance for Loan and Lease Losses; Nonperforming Assets.(a)The allowances
for loan and lease losses  contained  in the Seller  Financial  Statements  were
established in accordance  with the past practices and experiences of Seller and
its  Subsidiaries,  and the allowance for loan losses shown on the  consolidated
condensed  balance  sheet of Seller and its  Subsidiaries  contained in the most
recent  Seller  Report filed with the SEC is adequate in all  material  respects
under  the  requirements  of  GAAP to  provide  for  possible  losses  on  loans
(including   without   limitation   accrued  interest   receivable)  and  credit
commitments   (including   without   limitation   stand-by  letters  of  credit)
outstanding  as of the date of such balance sheet.  The aggregate  amount of all
Nonperforming  Assets  (as  defined  below)  on the  books  of  Seller  and  its
Subsidiaries did not exceed $25,543,000 as of December 31, 1997.  "Nonperforming
Assets" shall mean (i) all loans and leases (A) that are contractually  past due
90 days or more in the payment of  principal  and/or  interest,  (B) that are on
nonaccrual  status,  and (C) where the  interest  rate terms  have been  reduced
and/or the maturity dates have been extended  and/or  otherwise  restructured by
Seller's  Subsidiary  subsequent  to the  agreement  under  which  the  loan was
originally  created due to concerns  regarding the borrower's  ability to pay in
accordance  with such  initial  terms,  and (ii) all assets  classified  as real
estate acquired  through  foreclosure or repossession  and other assets acquired
through foreclosure or repossession. 

2.17 Employee Benefit Plans. (a) Except as
set forth in Schedule 2.17A, neither Seller nor any Seller Subsidiary is a party
to any  existing  employment,  management,  consulting,  deferred  compensation,
change-in-control  or other similar contract.  Schedule 2.17A lists all pension,
retirement,  supplemental  retirement,  savings,  profit sharing,  stock option,
stock  purchase,   stock   ownership,   stock   appreciation   right,   deferred
compensation,  consulting,  bonus, medical,  disability,  workers' compensation,
vacation,  group  insurance,  severance  and other  material  employee  benefit,
incentive and welfare policies, contracts, plans and arrangements, and all trust
agreements  related  thereto,  maintained  (currently or at any time in the last
five years) by or contributed  to by Seller or any Seller  Subsidiary in respect
of any of the  present or former  directors,  officers,  or other  employees  of
and/or  consultants to Seller or any Seller  Subsidiary  (collectively,  "Seller
Employee Plans").  Seller has furnished or made available to Buyer the following
documents  with respect to each Seller  Employee  Plan:  (i) a true and complete
copy of all written  documents  comprising  such Seller Employee Plan (including
amendments and individual  agreements  relating thereto) or, if there is no such
written  document,  an accurate and complete  description of the Seller Employee
Plan;  (ii) the most recent Form 5500 or Form 5500-C  (including  all  schedules
thereto),  if  applicable;  (iii)  the  most  recent  financial  statements  and
actuarial reports, if any; (iv) the summary plan description currently in effect
and all material modifications thereof, if any; and (v) the most recent Internal
Revenue Service determination letter, if any. Without limiting the generality of
the foregoing, Seller has furnished or made available to Buyer true and complete
copies of each form of stock  option  grant or stock  option  agreement  that is
outstanding under any stock option plan of Seller or any Seller Subsidiary.  All
Seller Employee Plans have been maintained and operated materially in accordance
with their terms and with the material  requirements of all applicable statutes,
orders, rules and final regulations,  including without limitation ERISA and the
Internal Revenue Code. All contributions  required to be made to Seller Employee
Plans have been made. With respect to each of the Seller Employee Plans which is
a pension plan (as defined in Section 3(2) of ERISA) (the "Pension Plans"):  (i)
each  Pension  Plan which is  intended to be  "qualified"  within the meaning of
Section  401(a)  of the  Internal  Revenue  Code  has been  determined  to be so
qualified by the Internal Revenue Service and, to the knowledge of Seller,  such
determination  letter may still be relied upon,  except as disclosed in Schedule
2.17A,  and each related trust is exempt from taxation  under Section  501(a) of
the Internal Revenue Code; (ii) the present value of all benefits vested and all
benefits  accrued under each Pension Plan which is subject to Title IV of ERISA,
valued using the assumptions in the most recent  actuarial  report,  did not, in
each case, as of the last applicable  annual valuation date, exceed the value of
the assets of the Pension  Plan  allocable  to such vested or accrued  benefits;
(iii)  to  the  best  knowledge  of  Seller,   there  has  been  no  "prohibited
transaction,"  as such term is defined in Section 4975 of the  Internal  Revenue
Code or Section 406 of ERISA, which could subject any Pension Plan or associated
trust, or the Seller or any Seller  Subsidiary,  to any material tax or penalty;
(iv) except as set forth on Schedule 2.17C, no Pension Plan or any trust created
thereunder has been terminated, nor have there been any "reportable events" with
respect to any Pension Plan, as that term is defined in Section 4043 of ERISA on
or  after  January  1,  1985;  and  (v) no  Pension  Plan or any  trust  created
thereunder has incurred any  "accumulated  funding  deficiency," as such term is
defined in Section 302 of ERISA (whether or not waived),  except as disclosed in
Schedule  2.17A.  No  Pension  Plan is a  "multiemployer  plan" as that  term is
defined in Section 3(37) of ERISA.  Seller has no Pension Plan that is described
in Section 4063(a) of ERISA (a "Multiple Employer Plan"). Except as disclosed in
Schedule 2.17D,  neither Seller nor any Seller  Subsidiary has any liability for
any post-retirement  health,  medical or similar benefit of any kind whatsoever,
except as  required  by statute  or  regulation.  Neither  Seller nor any Seller
Subsidiary has any material  liability under ERISA or the Internal  Revenue Code
as a result of its being a member of a group described in Sections 414(b),  (c),
(m) or (o) of the Internal Revenue Code.  Except as set forth on Schedule 2.17F,
neither the execution nor delivery of this  Agreement,  nor the  consummation of
any of the  transactions  contemplated  hereby,  will (i) result in any material
payment (including without limitation  severance,  unemployment  compensation or
golden parachute  payment) becoming due to any director or employee of Seller or
any Seller  Subsidiary from any of such entities,  (ii) materially  increase any
benefit otherwise payable under any of the Seller Employee Plans or (iii) result
in the  acceleration  of the time of payment of any such benefit.  Except as set
forth in Schedule  2.17F,  no holder of an option to acquire stock of Seller has
or will have at any time  through  the  Effective  Time the right to receive any
cash or other  payment  (other than the issuance of stock of Seller) in exchange
for or with respect to all or any portion of such  option.  Seller shall use its
best  efforts  to insure  that no amounts  paid or  payable  by  Seller,  Seller
Subsidiaries  or Buyer to or with respect to any employee or former  employee of
Seller or any Seller  Subsidiary  will fail to be deductible  for federal income
tax purposes by reason of Section 280G of the Internal  Revenue  Code. No Seller
Stock Option has an associated  "additional  option right" or similar  "re-load"
feature.  

2.18 Conduct of Seller to Date.  From and after January 1, 1998 through
the date of this Agreement, except as set forth on Schedule 2.18 or reflected in
Seller  Financial  Statements:  (i)  Seller  and the  Seller  Subsidiaries  have
conducted  their  respective   businesses  in  the  ordinary  and  usual  course
consistent  with past  practices;  (ii)  Seller has not issued,  sold,  granted,
conferred  or awarded  any of its  Equity  Securities  (except  shares of Seller
Common  Stock upon  exercise of Seller Stock  Options),  or any  corporate  debt
securities which would be classified under GAAP as long-term debt on the balance
sheets of Seller;  (iii)  Seller has not  effected  any stock split or adjusted,
combined, reclassified or otherwise changed its capitalization;  (iv) Seller has
not declared,  set aside or paid any dividend (other than its regular  quarterly
or regular semi-annual common dividends) or other distribution in respect of its
capital stock, or purchased,  redeemed,  retired,  repurchased, or exchanged, or
otherwise  acquired or disposed of,  directly or  indirectly,  any of its Equity
Securities,  whether  pursuant  to  the  terms  of  such  Equity  Securities  or
otherwise;  (v)  neither  Seller  nor any Seller  Subsidiary  has  incurred  any
material obligation or liability  (absolute or contingent),  except normal trade
or  business  obligations  or  liabilities  incurred in the  ordinary  course of
business, or subjected to Lien any of its assets or properties other than in the
ordinary course of business  consistent with past practice;  (vi) neither Seller
nor any Seller  Subsidiary has discharged or satisfied any material Lien or paid
any material obligation or liability (absolute or contingent), other than in the
ordinary course of business;  (vii) neither Seller nor any Seller Subsidiary has
sold, assigned, transferred,  leased, exchanged, or otherwise disposed of any of
its  properties  or assets other than for a fair  consideration  in the ordinary
course of business; (viii) except as required by contract or law, neither Seller
nor any Seller Subsidiary has (A) increased the rate of compensation of, or paid
any bonus to, any of its directors,  officers, or other employees,  except merit
or promotion  increases in accordance with existing policy, (B) entered into any
new,  or  amended  or  supplemented   any  existing,   employment,   management,
consulting,  deferred  compensation,  severance,  or other similar contract, (C)
entered into,  terminated,  or substantially modified any of the Seller Employee
Plans or (D)  agreed to do any of the  foregoing;  (ix)  neither  Seller nor any
Seller  Subsidiary  has  suffered  any material  damage,  destruction,  or loss,
whether as the result of fire, explosion,  earthquake, accident, casualty, labor
trouble,  requisition, or taking of property by any Regulatory Authority, flood,
windstorm,  embargo,  riot, act of God or the enemy, or other casualty or event,
and  whether or not  covered by  insurance;  (x)  neither  Seller nor any Seller
Subsidiary has cancelled or compromised  any debt,  except for debts charged off
or  compromised  in  accordance  with  the  past  practice  of  Seller  and  its
Subsidiaries; and (xi) neither Seller nor any Seller Subsidiary has entered into
any material transaction,  contract or commitment outside the ordinary course of
its business.  

2.19 Proxy Statement,etc.  None of the  information  regarding
Seller or any  Seller  Subsidiary  supplied  or to be  supplied  by  Seller  for
inclusion in (i) the registration statement on Form S-4 to be filed with the SEC
by Buyer for the purpose of  registering  the shares of Buyer Common Stock to be
exchanged for shares of Seller Common Stock  pursuant to the  provisions of this
Agreement  (the  "Registration  Statement"),   (ii)  the  proxy  or  information
statement  (the  "Proxy  Statement")  to be mailed to Seller's  stockholders  in
connection  with the  transactions  contemplated  by this Agreement or (iii) any
other documents to be filed with any Regulatory Authority in connection with the
transactions  contemplated  hereby will, at the respective  times such documents
are filed with any  Regulatory  Authority  and, in the case of the  Registration
Statement,  when it becomes  effective and, with respect to the Proxy Statement,
when mailed,  be false or misleading  with respect to any material fact, or omit
to state any material fact necessary in order to make the statements therein not
misleading  or, in the case of the Proxy  Statement or any amendment  thereof or
supplement thereto, at the time of the meeting of Seller's stockholders referred
to in Section 5.3 (the  "Meeting")  (or, if no Meeting is held,  at the time the
Proxy  Statement  is first  furnished  to  Seller's  stockholders),  be false or
misleading with respect to any material fact, or omit to state any material fact
necessary to correct any statement in any earlier  communication with respect to
the solicitation of any proxy for the Meeting. All documents which Seller or any
Seller  Subsidiary is responsible  for filing with any  Regulatory  Authority in
connection with the Merger will comply as to form in all material  respects with
the  provisions  of  applicable  law.  

2.20 Registration Obligations.  Neither
Seller  nor any  Seller  Subsidiary  is  under  any  obligation,  contingent  or
otherwise  to  register  any  of  its  securities   under  the  Securities  Act.

2.21 State Takeover Statutes; Seller's Articles of Incorporation;
     Seller Rights Agreement.
(a) The transactions  contemplated by this Agreement are not subject to, or have
been exempted from, any applicable state law which purports to limit or restrict
business  combinations  or  the  ability  to  acquire  or to  vote  shares.  The
transactions  contemplated  by this  Agreement and the  agreements  contemplated
hereby are not,  and will not be,  prohibited  by, or  subject  to, or have been
exempted from,  Article X of the Seller's Articles of Incorporation.  Seller has
taken all necessary steps to render the Seller Rights Agreement  inapplicable to
the Merger and the transactions  contemplated by this Agreement and by the Stock
Option  Agreement  (including,  such that the Rights related thereto will not be
distributed,  become  exercisable  or be triggered in any way as a result of the
execution of this Agreement or the Stock Option Agreement or the consummation of
the transactions contemplated hereby or thereby).

2.22 Accounting, Tax and Regulatory Matters.  Neither  Seller  nor  any  Seller
Subsidiary  has taken or agreed to take any action or has any  knowledge  of any
fact or circumstance that would (i) prevent the transactions contemplated hereby
from qualifying as a reorganization  within the meaning of Section 368(a) of the
Internal  Revenue Code or as a pooling of interests for accounting and financial
reporting  purposes or (ii)  materially  impede or delay receipt of any approval
referred  to  in  Section  6.1(b)  or  the   consummation  of  the  transactions
contemplated by this Agreement. 

2.23 Brokers and Finders. Except for Donaldson,
Lufkin & Jenrette ("DLJ") and Chartwell Capital Limited ("CCL"),  neither Seller
nor any Seller  Subsidiary nor any of their  respective  officers,  directors or
employees  has employed any broker or finder or incurred any  liability  for any
financial  advisory fees,  brokerage fees,  commissions or finder's fees, and no
broker or finder  has acted  directly  or  indirectly  for  Seller or any Seller
Subsidiary in connection  with this Agreement or the  transactions  contemplated
hereby.  Seller  has  furnished  Buyer  with a copy of any  written  contractual
arrangement with DLJ and CCL.  

2.24 Other Activities.  (a) Except as disclosed
in Schedule  2.24A,  neither Seller nor any of its  Subsidiaries  engages in any
insurance  activities  other  than  acting as a  principal,  agent or broker for
insurance that is directly related to an extension of credit by Seller or any of
its Subsidiaries and limited to assuring the repayment of the balance due on the
extension  of  credit  in the  event of the  death,  disability  or  involuntary
unemployment  of the  debtor.  To the  knowledge  of Seller's  management:  each
Subsidiary that is a national bank that performs personal trust, corporate trust
and other fiduciary  activities ("Trust  Activities") is doing so with requisite
authority  under  applicable  law of  Regulatory  Authorities  and  in  material
accordance with the agreements and instruments  governing such Trust Activities,
sound  fiduciary  principles and  applicable  law and  regulation  (specifically
including  but not  limited  to  Section  9 of Title  12 of the Code of  Federal
Regulations);  there is no investigation  or inquiry by any governmental  entity
pending or threatened against Seller or any of its Subsidiaries thereof relating
to the  compliance  by Seller or any of its  Subsidiaries  with sound  fiduciary
principles  and applicable  law and  regulations;  and each employee of any such
bank had the authority to act in the capacity in which such employee  acted with
respect to Trust  Activities in each case in which such employee was held out as
a  representative  of such  bank;  and such bank has  established  policies  and
procedures for the purpose of complying  with  applicable  laws of  governmental
entities relating to Trust Activities, has followed such policies and procedures
in all material respects and has performed appropriate internal audit reviews of
Trust  Activities,  which  audits  have  disclosed  no  material  violations  of
applicable  laws of  governmental  entities  or such  policies  and  procedures.

2.25 Interest Rate Risk Management Instruments. (a) Set forth on Schedule  2.25A
is a list of all interest rate swaps,  caps,  floors,  and option  agreements to
which  Seller  or any of its  Subsidiaries  is a party or by which  any of their
properties  or assets may be bound.  All interest rate swaps,  caps,  floors and
option agreements and other interest rate risk management  arrangements to which
Seller or any of its Subsidiaries is a party or by which any of their properties
or assets may be bound were entered into in the ordinary  course of business and
in accordance with prudent banking  practice and applicable  rules,  regulations
and policies of Regulatory  Authorities and with  counterparties  believed to be
financially responsible at the time and are legal, valid and binding obligations
and are in full force and effect.  Seller and each of its  Subsidiaries has duly
performed in all  material  respects all of its  obligations  thereunder  to the
extent that such obligations to perform have accrued,  and there are no material
breaches,  violations  or defaults or  allegations  or assertions of such by any
party  thereunder.  

2.26 Accuracy of Information.   The  statements  of  Seller
contained  in this  Agreement,  the  Schedules  and any other  written  document
executed and  delivered by or on behalf of Seller  pursuant to the terms of this
Agreement are true and correct in all material respects, and such statements and
documents  do not omit  any  material  fact  necessary  to make  the  statements
contained  therein  not  misleading.  

2.27 Year 2000 Compliant.  None  of  Seller  or any of the  Seller
Subsidiaries  has  received,  or  reasonably  expects to  receive,  a "Year 2000
Deficiency  Notification  Letter"  (as  such  term is  employed  in the  Federal
Reserve's  Supervision  and Regulation  Letter No. SR 98-3(SUP),  dated March 4,
1998).  Seller has  disclosed to Buyer a complete and accurate  copy of Seller's
plan for  addressing  the  issues  set forth in the  statements  of the  Federal
Financial  Institutions  Examination Council,  dated May 5, 1997, entitled "Year
2000 Project  Management  Awareness,"  and December 1997,  entitled  "Safety and
Soundness  Guidelines  Concerning  the Year 2000 Business  Risk," as such issues
affect Seller and its  Subsidiaries.  Between the date of this Agreement and the
Effective Time, Seller shall use commercially  practicable  efforts to implement
such plan.

ARTICLE III

REPRESENTATIONS, WARRANTIES AND COVENANTS OF BUYER

Buyer  represents and warrants to and covenants with Seller as follows:

3.1 Organization and Authority.  Buyer  and  each  of  its  Subsidiaries  is  a
corporation,  bank,  trust  company  or other  entity  duly  organized,  validly
existing  and  in  good  standing  under  the  laws  of  the   jurisdiction   of
organization,  is duly  qualified to do business and is in good  standing in all
jurisdictions  where its  ownership or leasing of property or the conduct of its
business requires it to be so qualified and has corporate power and authority to
own its  properties  and assets and to carry on its  business as it is now being
conducted,  except, in the case of the Buyer Subsidiaries,  where the failure to
be so qualified  would not have a material  adverse  effect on the  Condition of
Buyer and its  Subsidiaries,  taken as a whole.  Buyer is  registered  as a bank
holding  company with the Board under the Holding Company Act. True and complete
copies of the Articles of Incorporation and Regulations of Buyer, each in effect
on   the   date   of   this   Agreement,   have   been   provided   to   Seller.

3.2 Capitalization of Buyer.  The authorized capital stock of Buyer consists of
(i)  200,000,000  shares of Buyer Common Stock,  of which,  as of April 1, 1998,
95,567,122  shares  were issued and  outstanding  and (ii)  1,000,000  shares of
preferred  stock, no par value ("Buyer  Preferred  Stock"),  issuable in series,
none of  which,  as of April 1,  1998,  is  issued  or  outstanding.  Buyer  has
designated  (i) 500,000 shares of Buyer  Preferred  Stock as "Series A Preferred
Stock" and has  reserved  such shares for  issuance  upon  exercise of Preferred
Stock  Purchase  Rights  under a Rights  Agreement  dated  October 27, 1989 (the
"Buyer Rights  Agreement"),  between Buyer and Star Bank,  N.A., as Rights Agent
and (ii)  218,000  shares  of Buyer  Preferred  Stock as  "Series  B  Cumulative
Preferred  Stock."  Pursuant to the Buyer  Rights  Agreement,  each  certificate
representing  one share of Buyer  Common  Stock also  represents  one Rights (as
defined  in the Buyer  Rights  Agreement).  As of  December  31,  1997 Buyer had
options  outstanding  for  6,586,501  shares of Buyer  Common Stock for issuance
under various employee stock option and incentive plans ("Buyer Stock Options").
From April 1, 1998 through the date of this Agreement, no shares of Buyer Common
Stock or other Equity  Securities  of Buyer have been issued  excluding any such
shares which may have been issued  pursuant to stock-based  employee  benefit or
incentive plans and programs.  Buyer continually evaluates possible acquisitions
and may prior to the Effective Time enter into one or more agreements  providing
for, and may  consummate,  the  acquisition by it of another bank,  association,
bank holding company,  savings and loan holding company or other company (or the
assets  thereof)  for  consideration  that may  include  Equity  Securities.  In
addition, prior to the Effective Time, Buyer may, depending on market conditions
and other factors,  otherwise determine to issue equity,  equity-linked or other
securities for financing purposes. Notwithstanding the foregoing, Buyer will not
take any action that would (i) prevent the transactions contemplated hereby from
qualifying  as a  reorganization  within the  meaning  of Section  368(a) of the
Internal  Revenue Code or as a pooling of interests for accounting and financial
reporting  purposes or (ii)  materially  impede or delay receipt of any approval
referred  to  in  Section  6.1(b)  or  the   consummation  of  the  transactions
contemplated by this Agreement. Except as set forth above and except pursuant to
the Buyer  Rights  Agreement,  there  are no other  Equity  Securities  of Buyer
outstanding.  All of the issued and outstanding shares of Buyer Common Stock are
validly  issued,  fully  paid,  and  nonassessable,  and have not been issued in
violation of any preemptive  right of any stockholder of Buyer. At the Effective
Time, the Buyer Common Stock,  including  associated Rights, to be issued in the
Merger will be duly authorized,  validly issued,  fully paid and non-assessable,
and will not be issued in violation of any preemptive  right of any  stockholder
of Buyer. 

3.3 Authorization.  (a) Buyer has the corporate power and authority
to enter into this  Agreement  and to carry out its  obligations  hereunder.  No
stockholder vote is required for Buyer to approve this Agreement. The execution,
delivery and  performance  of this  Agreement by Buyer and the  consummation  by
Buyer of the transactions  contemplated  hereby have been duly authorized by all
requisite  corporate  action of Buyer.  This  Agreement  is a valid and  binding
obligation of Buyer  enforceable  against  Buyer in  accordance  with its terms.
Neither the execution,  delivery and performance by Buyer of this Agreement, nor
the  consummation  by  Buyer  of  the  transactions   contemplated  hereby,  nor
compliance  by  Buyer  with any of the  provisions  hereof,  will  (i)  violate,
conflict  with or result  in a breach of any  provisions  of,  or  constitute  a
default  (or an event  which,  with  notice  or  lapse  of time or  both,  would
constitute  a  default)  or result in the  termination  of,  or  accelerate  the
performance required by, or result in a right of termination or acceleration of,
or result in the creation of, any Lien upon any of the  material  properties  or
assets of Buyer or any Buyer  Subsidiary  under any of the terms,  conditions or
provisions of (x) its articles or certificate of incorporation or bylaws, or (y)
any material note, bond, mortgage,  indenture,  deed of trust,  license,  lease,
agreement  or  other  instrument  or  obligation  to  which  Buyer or any of the
material  properties  or assets of Buyer is a party or by which it may be bound,
or to which  Buyer  may be  subject,  or (ii)  subject  to  compliance  with the
statutes and  regulations  referred to in paragraph  (c) of this Section 3.3, to
the best  knowledge  of  Buyer,  violate  any  judgment,  ruling,  order,  writ,
injunction,  decree,  statute,  rule or regulation applicable to Buyer or any of
its Subsidiaries or any of their respective material properties or assets. Other
than in connection  with or in compliance  with the  provisions of the KBCA, the
OGCL, the  Securities  Act, the Exchange Act, the securities or blue sky laws of
the various states or filings, consents, reviews,  authorizations,  approvals or
exemptions  required  under the  Holding  Company  Act,  and the HSR Act, or any
required approvals of any other Regulatory Authority, no notice to, filing with,
exemption  or review by, or  authorization,  consent or approval  of, any public
body or authority is necessary for the consummation by Buyer of the transactions
contemplated   by   this   Agreement.    

3.4 Buyer Financial Statements. 
The supplementalconsolidated and parent company only balance sheets of Buyer and
its Subsidiaries as of December 31, 1997, 1996 and 1995 and related supplemental
consolidated  and parent  company  only  statements  of  income,  cash flows and
changes in  stockholders'  equity for each of the three years in the  three-year
period ended  December 31, 1997,  together  with the notes  thereto,  audited by
Arthur  Andersen  LLP ("Buyer  Auditors")  (collectively,  the "Buyer  Financial
Statements"),  have been prepared in accordance  with GAAP,  present  fairly the
consolidated  financial  position of Buyer and its Subsidiaries at the dates and
the consolidated results of operations, changes in stockholders' equity and cash
flows of Buyer and its  Subsidiaries  for the  periods  stated  therein  and are
derived  from the books and  records  of Buyer and its  Subsidiaries,  which are
complete and accurate in all material  respects and have been  maintained in all
material  respects in accordance with applicable laws and  regulations.  Neither
Buyer nor any of its Subsidiaries has any material  contingent  liabilities that
are   not   described   in   the   financial    statements    described   above.

3.5 Buyer Reports.  Since  January  1,  1995,  each of  Buyer  and  the  Buyer
Subsidiaries  has filed all  material  reports,  registrations  and  statements,
together with any required material amendments thereto,  that it was required to
file with any Regulatory  Authority.  All such reports and statements filed with
any such Regulatory Authority are collectively  referred to herein as the "Buyer
Reports." As of its respective  date, each Buyer Report complied in all material
respects  with all the  rules  and  regulations  promulgated  by the  applicable
Regulatory Authority and did not contain any untrue statement of a material fact
or omit to state a material fact  required to be stated  therein or necessary in
order to make the statements  therein, in light of the circumstances under which
they were made, not misleading. 

3.6 Material Adverse Change. Since December 31,
1997,  there has been no material  adverse  change in the Condition of Buyer and
its  Subsidiaries,  taken as a whole,  except as may have resulted or may result
from  changes  to  laws  and  regulations  or  changes  in  economic  conditions
applicable to banking  institutions  generally or in general  levels of interest
rates affecting banking institutions generally. 

3.7 Compliance with Laws.  Each
of Buyer and its  Subsidiaries  has  complied  with all laws,  regulations,  and
orders (including without limitation zoning ordinances,  building codes,  ERISA,
and securities,  tax,  environmental,  civil rights, and occupational health and
safety laws and regulations and including without  limitation in the case of any
Buyer Subsidiary that is a bank, banking  organization,  banking  corporation or
trust company, all statutes, rules and regulations, pertaining to the conduct of
a banking,  deposit-taking  or lending or related business or to the exercise of
trust powers) and governing instruments applicable to them and to the conduct of
their  business,   and  to  the  knowledge  of  Buyer  all  applicable   listing
requirements and policies of the NYSE, except where such failure to comply would
not  have  a  material  adverse  effect  on  the  Condition  of  Buyer  and  its
Subsidiaries,  taken as a whole, and (ii) neither Buyer nor any Buyer Subsidiary
is in default under, and no event has occurred which,  with the lapse of time or
notice or both,  could result in the default  under,  the terms of any judgment,
order,  writ, decree,  permit, or license of any Regulatory  Authority or court,
whether  federal,  state,  municipal,  or local and whether at law or in equity,
except  where  such  default  would not have a  material  adverse  effect on the
Condition of Buyer and its Subsidiaries, taken as a whole. Neither Buyer nor any
Buyer  Subsidiary is subject to or  reasonably  likely to incur a liability as a
result of its  ownership,  operation,  or use of any Property of Buyer  (whether
directly or, to the best  knowledge of Buyer,  as a consequence of such Property
being part of the  investment  portfolio of Buyer or any Buyer  Subsidiary)  (A)
that is  contaminated  by or contains any Toxic  Substance,  or (B) on which any
Toxic  Substance  has  been  stored,   disposed  of,  placed,  or  used  in  the
construction  thereof; and which, in each case,  reasonably could be expected to
have a material  adverse effect on the Condition of Buyer and its  Subsidiaries,
taken as a whole.  Except for  statutory or regulatory  restrictions  of general
application,  no Regulatory Authority has placed any restriction on the business
of Buyer or any Buyer  Subsidiary  which  reasonably could be expected to have a
material adverse effect on the Condition of Buyer and its Subsidiaries, taken as
a whole.  

3.8 Registration Statement,etc.  None of the information  regarding
Buyer  or any of its  Subsidiaries  supplied  or to be  supplied  by  Buyer  for
inclusion  or  included  in (i)  the  Registration  Statement,  (ii)  the  Proxy
Statement,  or  (iii)  any  other  documents  to be filed  with  any  Regulatory
Authority in connection with the transactions  contemplated  hereby will, at the
respective times such documents are filed with any Regulatory  Authority and, in
the case of the  Registration  Statement,  when it becomes  effective  and, with
respect to the Proxy  Statement,  when mailed (or furnished to  stockholders  of
Seller),  be false or misleading  with respect to any material  fact, or omit to
state any material fact  necessary in order to make the  statements  therein not
misleading  or, in the case of the Proxy  Statement or any amendment  thereof or
supplement  thereto,  at the time of the Meeting,  be false or  misleading  with
respect to any material  fact, or omit to state any material  fact  necessary to
correct  any  statement  in  any  earlier  communication  with  respect  to  the
solicitation  of any proxy for the Meeting.  All documents which Buyer or any of
its  Subsidiaries  are responsible  for filing with any Regulatory  Authority in
connection with the Merger will comply as to form in all material  respects with
the provisions of applicable  law.  

3.9 Brokers and Finders.  Except for Credit
Suisse First Boston,  neither Buyer nor any of its Subsidiaries nor any of their
respective officers, directors or employees has employed any broker or finder or
incurred  any  liability  for  any  financial  advisory  fees,  brokerage  fees,
commissions  or  finder's  fees,  and no broker or finder has acted  directly or
indirectly  for  Buyer  or any of  its  Subsidiaries  in  connection  with  this
Agreement or the transactions contemplated hereby.

3.10 Litigation and Other Proceedings. Neither Buyer nor any Buyer Subsidiary is
a party to any pending or, to the best  knowledge  of Buyer,  threatened  claim,
action, suit, investigation or proceeding,  or is subject to any order, judgment
or  decree,  except for  matters  which,  in the  aggregate,  will not have,  or
reasonably  could not be  expected  to have,  a material  adverse  effect on the
Condition of Buyer and its Subsidiaries,  taken as a whole. Without limiting the
generality  of the  foregoing,  as of the date of this  Agreement,  there are no
actions,  suits,  or  proceedings  pending or, to the best  knowledge  of Buyer,
threatened  against  Buyer or any Buyer  Subsidiary  or any of their  respective
officers or directors by any  stockholder  of Buyer or any Buyer  Subsidiary (or
any former  stockholder of Buyer or any Buyer  Subsidiary)  or involving  claims
under the Securities  Act, the Exchange Act, the Community  Reinvestment  Act of
1977, as amended, or the fair lending laws or which purport or seek to enjoin or
restrain the transactions contemplated by this Agreement.  

3.11 Taxes.  Buyer
and each Buyer  Subsidiary  have timely  filed or will  timely  file  (including
extensions)  all  material  tax returns  required to be filed at or prior to the
Closing Date ("Buyer Returns").  Each of Buyer and its Subsidiaries has paid, or
set up adequate  reserves on the Buyer Financial  Statements for the payment of,
all taxes  required  to be paid in respect of the  periods  covered by the Buyer
Financial Statements and has paid or set up adequate reserves on the most recent
financial  statements Buyer has filed under the Exchange Act for the payment of,
all taxes  anticipated  to be payable in respect of the periods  covered by such
financial  statements.  No  material  deficiencies  for any tax,  assessment  or
governmental  charge have been proposed,  asserted or assessed in writing by any
governmental or taxing  authority  against any of Buyer or any Buyer  Subsidiary
which have not been settled or would not be covered by existing reserves. To the
knowledge of Buyer,  neither Buyer nor any Buyer Subsidiary is delinquent in the
payment of any material tax,  assessment or governmental  charge shown to be due
on any Buyer Return (taking into account extensions properly  obtained),  and no
waiver of the time to assess  any tax  granted  in writing by Buyer or any Buyer
Subsidiary is pending. The federal and state income tax returns of Buyer and the
Buyer  Subsidiaries  have  been  audited  and  finally  settled  by  the  IRS or
appropriate  state tax  authorities or the relevant  statute of limitations  has
expired for all periods  ended  through  December  31,  1994,  or the period for
assessment    of   taxes   in   respect   of   such    periods   has    expired.

3.12 Accounting, Tax and Regulatory Matters.  Neither   Buyer   nor  any   Buyer
Subsidiary  has taken or agreed to take any action or has any  knowledge  of any
fact or circumstance that would (i) prevent the transactions contemplated hereby
from qualifying as a reorganization  within the meaning of Section 368(a) of the
Internal  Revenue Code or as a pooling of interests for accounting and financial
reporting  purposes or (ii)  materially  impede or delay receipt of any approval
referred  to  in  Section  6.1(b)  or  the   consummation  of  the  transactions
contemplated by this Agreement. 

3.13 Accuracy of Information. The statements of
Buyer  contained  in this  Agreement,  the  Schedules  and in any other  written
document  executed and delivered by or on behalf of Buyer  pursuant to the terms
of this  Agreement  are true and  correct  in all  material  respects,  and such
statements  and  documents do not omit any material  fact  necessary to make the
statements contained herein or therein not misleading. 

3.14 Year 2000 Compliant. None of Buyer or any of
the Buyer  Subsidiaries has received,  or reasonably expects to receive, a "Year
2000  Deficiency  Notification  Letter" (as such term is employed in the Federal
Reserve's  Supervision  and Regulation  Letter No. SR 98-3(SUP),  dated March 4,
1998).  Buyer has  disclosed to Seller a complete  and accurate  copy of Buyer's
plan for  addressing  the  issues  set forth in the  statements  of the  Federal
Financial  Institutions  Examination Council,  dated May 5, 1997, entitled "Year
2000 Project  Management  Awareness,"  and December 1997,  entitled  "Safety and
Soundness  Guidelines  Concerning  the Year 2000 Business  Risk," as such issues
affect Buyer and its  Subsidiaries.  Between the date of this  Agreement and the
Effective Time, Buyer shall use commercial practicable efforts to implement such
plan.
                                   ARTICLE IV

                CONDUCT OF BUSINESSES PRIOR TO THE EFFECTIVE TIME

4.1 Conduct of Businesses Prior to the Effective Time.
During the period from the date of this  Agreement to the Effective  Time,  each
of Buyer and Seller shall, and shall cause each of their respective Subsidiaries
to, conduct its business according to the ordinary and usual course  consistent 
with past  practices and shall,  and shall cause each such Subsidiary to, use 
its reasonable best efforts to maintain and preserve its business  organization,
employees and advantageous business  relationships  and  retain  the  services 
of  its  officers  and  key employees. 

4.2 Forbearances.  Except  as set  forth  on  Schedule  4.2 or as
otherwise  contemplated  by this  Agreement,  during the period from the date of
this Agreement to the Effective Time,  Seller shall not and shall not permit any
of its Subsidiaries to, without the prior written consent of Buyer: declare, set
aside or pay any dividends or other  distributions,  directly or indirectly,  in
respect of its capital stock (other than  dividends  from a Subsidiary of Seller
to Seller or another  Subsidiary of Seller),  except that Seller may declare and
pay cash  dividends  on the Seller  Common Stock of not more than $.18 per share
per quarterly period;  provided,  that Seller shall not declare any dividends on
Seller  Common Stock or Seller  Preferred  Stock during any quarter in which its
stockholders will be entitled to receive any regular  quarterly  dividend on the
shares of Buyer Common Stock to be issued in the Merger;  or enter into or amend
any employment,  severance or similar agreement or arrangement with any director
or officer or employee, or materially modify any of the Seller Employee Plans or
grant any salary or wage  increase or materially  increase any employee  benefit
(including  incentive or bonus payments),  except normal individual increases in
compensation to employees  consistent with past practice,  or as required by law
or  contract;  or  authorize,  recommend,  propose or announce an  intention  to
authorize, so recommend or propose, or enter into an agreement in principle with
respect to, any merger,  consolidation or business  combination  (other than the
Transactions),  any  acquisition or  disposition of a material  amount of assets
(except  in the  usual  course of  business  consistent  with  past  practices),
including mortgage servicing rights,  loans or securities as well as any release
or  relinquishment  of any  material  contract  rights;  or propose or adopt any
amendments  to its  articles  of  incorporation,  association  or other  charter
document or bylaws;  or issue,  sell,  grant,  confer or award any of its Equity
Securities  (except shares of Seller Common Stock issued upon exercise of Seller
Stock Options  outstanding  on the date of this  Agreement  (Seller  agreeing to
promptly  notify Buyer of any such issuance of treasury or  previously  unissued
shares)) or effect any stock split or adjust,  combine,  reclassify or otherwise
change  its  capitalization  as it  existed  on the date of this  Agreement;  or
purchase,  redeem,  retire,  repurchase,  or exchange,  or otherwise  acquire or
dispose  of,  directly  or  indirectly,  any of its Equity  Securities,  whether
pursuant to the terms of such Equity  Securities  or  otherwise;  or directly or
indirectly  (including  through  its  officers,  directors,  employees  or other
representatives)  initiate,  solicit,  engage in or encourage  any  discussions,
inquiries or proposals with any third party  relating to the  disposition of any
significant portion of the business or assets of Seller or any Seller Subsidiary
or the  acquisition of Equity  Securities of Seller or any Seller  Subsidiary or
the merger of Seller or any Seller Subsidiary with any person (other than Buyer)
or any similar transaction (each such transaction being referred to herein as an
"Acquisition  Transaction"),  or provide  any such person  with  information  or
assistance  or  negotiate  with any such person with  respect to an  Acquisition
Transaction,  and Seller shall  notify Buyer orally of all the relevant  details
relating to all inquiries,  indications  of interest and proposals  which it may
receive  with  respect  to any  Acquisition  Transaction  within 24 hours of the
receipt of any such inquiry,  indication,  or proposal;  or take any action that
would  (A)  materially  impede  or delay the  consummation  of the  transactions
contemplated  by this  Agreement or the ability of Buyer or Seller to obtain any
approval of any Regulatory Authority required for the transactions  contemplated
by this  Agreement  or to  perform  its  covenants  and  agreements  under  this
Agreement or (B) prevent the transactions contemplated hereby from qualifying as
a  reorganization  within the meaning of Section 368(a) of the Internal  Revenue
Code or as a  pooling  of  interests  for  accounting  and  financial  reporting
purposes;  or other than in the ordinary course of business consistent with past
practice  (but not  pursuant to any  outstanding  letters of credit),  incur any
indebtedness for borrowed money, assume,  guarantee,  endorse or otherwise as an
accommodation  become  responsible  or liable for the  obligations  of any other
individual, corporation or other entity; or materially restructure or materially
change  its  investment  securities  portfolio,   through  purchases,  sales  or
otherwise,  or the manner in which the portfolio is classified or reported as of
the date of the  Agreement;  or agree in writing or otherwise to take any of the
foregoing actions or engage in any activity,  enter into any transaction or take
or omit to take any other act which  would make any of the  representations  and
warranties in Article II of this  Agreement  untrue or incorrect in any material
respect  if made  anew  after  engaging  in such  activity,  entering  into such
transaction, or taking or omitting such other act.
                                    ARTICLE V

                              ADDITIONAL AGREEMENTS

5.1 Access and Information.  Buyer and its  Subsidiaries,  on the one hand, and
Seller and its Subsidiaries, on the other hand, shall each afford to each other,
and to the other's accountants,  counsel and other representatives,  full access
during normal business hours,  during the period prior to the Effective Time, to
all their respective properties, books, contracts,  commitments and records and,
during such period,  each shall furnish promptly to the other (i) a copy of each
report,  schedule and other  document filed or received by it during such period
pursuant to the  requirements of federal and state  securities laws and (ii) all
other  existing or  regularly  produced  information  concerning  its  business,
properties and personnel as such other party may reasonably request.  Each party
hereto  shall,  and shall cause its  advisors and  representatives  to, (A) hold
confidential  all  information  obtained  in  connection  with  any  transaction
contemplated  hereby  with  respect to the other  party  which is not  otherwise
public knowledge,  (B) return all documents  (including copies thereof) obtained
hereunder  from the other party to such other  party and (C) use its  reasonable
best efforts to cause all information  obtained pursuant to this Agreement or in
connection  with the negotiation of this Agreement to be treated as confidential
and not use, or knowingly permit others to use, any such information unless such
information  becomes generally  available to the public without breach of either
party's confidentiality obligation.

5.2 Registration Statement; Regulatory Matters.  (a) Buyer  shall  prepare  and,
subject to the review and consent of Seller with respect to matters  relating to
Seller, file with the SEC as soon as is reasonably  practicable the Registration
Statement (or the  equivalent in the form of  preliminary  proxy  material) with
respect to the shares of Buyer Common Stock to be issued in the Merger and shall
apply to the NYSE to list the  shares  of Buyer  Common  Stock to be  issued  in
connection with the  transactions  contemplated  by this Agreement.  Buyer shall
prepare  and file a notice  with the  Board as soon as  reasonably  practicable.
Buyer shall use all reasonable  efforts to cause the  Registration  Statement to
become  effective.  Buyer shall also take any action  required to be taken under
any applicable state blue sky or securities laws in connection with the issuance
of such  shares,  and  Seller  and its  Subsidiaries  shall  furnish  Buyer  all
information  concerning Seller and its Subsidiaries and the stockholders thereof
as Buyer may reasonably  request in connection with any such action.  Seller and
Buyer  shall  cooperate  and use their  respective  best  efforts to prepare all
documentation,  to effect  all  filings  and to obtain  all  permits,  consents,
approvals and  authorizations  of all third parties and  Regulatory  Authorities
necessary to consummate the transactions  contemplated by this Agreement and, as
and if directed by Buyer,  to consummate such other mergers,  consolidations  or
asset  transfers or other  transactions  by and among Buyer's  Subsidiaries  and
Seller's  Subsidiaries  concurrently  with  or  following  the  Effective  Time.

5.3 Stockholder Approval.  Seller shall call a meeting of its  stockholders to
be held as soon as  practicable  after the  Registration  Statement  is declared
effective  for the  purpose of voting  upon the Merger or take other  action for
stockholders  to authorize  the Merger.  In  connection  therewith,  Buyer shall
prepare the Proxy  Statement and, with the approval of each of Buyer and Seller,
the Proxy Statement  shall be filed with the SEC and mailed to the  stockholders
of  Seller.  The Board of  Directors  of Seller  shall  submit for  approval  of
Seller's  stockholders  the matters to be voted upon in order to  authorize  the
Merger.  The  Board of  Directors  of Seller  hereby  does and  (subject  to the
fiduciary duty of Seller's Board of Directors,  as advised in writing by outside
counsel) will recommend this Agreement and the transactions  contemplated hereby
to  stockholders  of Seller and will use its best  efforts to obtain any vote of
Seller's  stockholders  that is necessary  for the approval and adoption of this
Agreement   and   consummation   of  the   transactions   contemplated   hereby.

5.4 Current Information.  During the period from the date of this Agreement to
the Effective Time,  each party shall promptly  furnish the other with copies of
all monthly and other interim financial  statements as the same become available
and shall  cause one or more of its  designated  representatives  to confer on a
regular and frequent basis with  representatives  of the other party. Each party
shall promptly  notify the other party of any material change in its business or
operations and of any governmental  complaints,  investigations  or hearings (or
communications indicating that the same may be contemplated), or the institution
or the threat of material  litigation  involving such party,  and shall keep the
other party fully  informed of such  events.

5.5 Agreements of Affiliates. 
As soon as practicable after the date of this Agreement, Seller shall deliver to
Buyer a letter  identifying  all persons whom Seller believes to be, at the time
this  Agreement  is  submitted  to  a  vote  of  the   stockholders  of  Seller,
"affiliates"  of Seller for purposes of Rule 145 under the Securities Act or for
determining  the  qualification  of the  Merger as a pooling  of  interests  for
accounting  and financial  reporting  purposes.  Seller shall use its reasonable
best efforts to cause each person who is so identified as such an "affiliate" to
deliver to Buyer as soon as  practicable  thereafter,  and in any event no later
than the publication of notice in the Federal  Register of Buyer's notice to the
Board  referred  to in Section  5.2, a written  agreement  in the form  attached
hereto as  Exhibit  B.  Prior to the  Effective  Time,  Seller  shall  amend and
supplement  such  letter  and use its  reasonable  best  efforts  to cause  each
additional  person  who is  identified  as an  "affiliate"  to execute a written
agreement as set forth in this Section 5.5.

5.6 Expenses.  Each party hereto shall bear its own expenses  incident to 
preparing,  entering into and carrying out this Agreement and to consummating
the Merger.

5.7 Securities Act and Exchange Act Filings.
Buyer shall make all filings with the SEC that are described in Section (c) of 
Rule 144 under the Securities Act for a
period of two years  following  the Effective  Time.  Buyer shall within 30 days
after the Effective Time file a registration  statement on Form S-3 or Form S-8,
as the case may be (or any successor or other appropriate  forms),  with respect
to the shares of Buyer Common Stock  subject to the options  issued  pursuant to
Section 5.10 and shall use its reasonable  efforts to maintain the effectiveness
of  such  registration  statements  (and  maintain  the  current  status  of the
prospectus or prospectuses contained therein) for so long as such options remain
outstanding.

5.8 Miscellaneous Agreement and Consents. (a) Subject to the terms
and  conditions  herein  provided,  each of the parties hereto agrees to use its
respective  reasonable  best efforts to take, or cause to be taken,  all action,
and to do, or cause to be done, all things necessary,  proper or advisable under
applicable   laws  and   regulations   to  consummate  and  make  effective  the
transactions  contemplated  by this  Agreement  as  expeditiously  as  possible,
including  without  limitation  using its respective  reasonable best efforts to
lift or rescind any  injunction or  restraining  order or other order  adversely
affecting the ability of the parties to consummate the transactions contemplated
hereby.  Each party shall,  and shall cause each of its respective  Subsidiaries
to, use its reasonable  best efforts to obtain consents of all third parties and
Regulatory  Authorities necessary or, in the opinion of Buyer, desirable for the
consummation of the transactions  contemplated by this Agreement.  Seller, prior
to the Effective Time,  shall (i) consult and cooperate with Buyer regarding the
implementation  of those  policies and  procedures  established by Buyer for its
governance and that of its Subsidiaries and not otherwise  referenced in Section
5.17 hereof, including,  without limitation,  policies and procedures pertaining
to the accounting,  asset/liability management,  audit, credit, human resources,
treasury and legal  functions,  and (ii) at the request of Buyer,  effective not
later than the Effective Time conform Seller's  existing policies and procedures
in respect of such matters to Buyer's policies and procedures or, in the absence
of any  existing  Seller  policy  or  procedure  regarding  any  such  function,
introduce  Buyer's  policies or procedures in respect  thereof,  unless to do so
would cause Seller or any of the Seller  Subsidiaries  to be in violation of any
law, rule or regulation of any Regulatory  Authority  having  jurisdiction  over
Seller and/or the Seller Subsidiary  affected thereby. 

5.9 Employee Benefits.
(a) Subject to Section 5.10, the provisions of the Seller Stock Plans and of any
other plan,  program or  arrangement  providing for the issuance or grant of any
other  interest  in  respect  of the  capital  stock  of  Seller  or any  Seller
Subsidiary  shall be deleted and terminated as of the Effective Time, and Seller
shall ensure that following the Effective Time no holder of Seller Stock Options
or any  participant in any Seller Stock Plan shall have any right  thereunder to
acquire any securities of Seller or any Seller Subsidiary. Buyer shall take such
steps as are  necessary or required to integrate the employees of Seller and the
Seller  Subsidiaries  in Buyer's  employee  benefit plans available to similarly
situated  employees of Buyer and Buyer Subsidiaries as soon as practicable after
the Effective Time, (i) with full credit for prior service with Seller or any of
the Seller Subsidiaries for all purposes other than determining benefit accruals
under any tax-qualified  defined benefit plan, (ii) without any waiting periods,
evidence  of   insurability  or  application  of  any   pre-existing   condition
limitation, and (iii) with full credit for claims arising prior to the Effective
Time for purposes of deductibles,  out-of-pocket maximums,  benefit maximums and
all other  similar  limitations  for the  applicable  plan year during which the
Merger is consummated. Each of Buyer and Seller shall use all reasonable efforts
to insure  that no amounts  paid or payable by Seller,  Seller  Subsidiaries  or
Buyer to or with  respect to any  employee  or former  employee of Seller or any
Seller  Subsidiary will fail to be deductible for federal income tax purposes by
reason of Section  280G of the Internal  Revenue  Code.  Prior to the  Effective
Time,  Buyer and Seller agree to  establish a  supplemental  employee  severance
program  in  accordance  with the terms  outlined  in  Schedule  5.9C to provide
supplemental  severance for the employees of Seller.  Buyer agrees to enter into
Employment  Agreements with the  individuals  identified in Schedule 5.9D in the
forms previously provided to Seller. For a period of one (1) year from and after
the Effective  Time,  the Buyer will continue the Seller's  severance  plans and
policies with respect to the employees of the Seller and the Seller Subsidiaries
immediately  prior to the Effective  Time, as such severance  plans and policies
are in  effect  immediately  prior to the  Effective  Time,  and will  honor all
obligations  of  the  Seller  thereunder.

5.10 Seller Stock Options.   At  the Effective  Time,  all rights with  respect
to Seller  Common  Stock  pursuant to
Seller Stock Options that are outstanding at the Effective Time,  whether or not
then  exercisable,  shall be  converted  into and become  rights with respect to
Buyer  Common  Stock,  and  Buyer  shall  assume  each  Seller  Stock  Option in
accordance with the terms of the stock option plan governing  outstanding Seller
Stock Options.  From and after the Effective  Time, (i) each Seller Stock Option
assumed by Buyer shall be  exercised  solely for shares of Buyer  Common  Stock,
(ii) the number of shares of Buyer  Common  Stock  subject to each Seller  Stock
Option shall be equal to the number of shares of Seller  Common Stock subject to
such Seller Stock Option  immediately  prior to the Effective Time multiplied by
the  Exchange  Ratio,  rounded  down to the nearest  whole share of Buyer Common
Stock and (iii) the per share  exercise  price  under each Seller  Stock  Option
shall be  adjusted by dividing  the per share  exercise  price under such Seller
Stock  Option  by the  Exchange  Ratio  and  rounding  up to the  nearest  cent;
provided,  however,  that the  terms  of each  Seller  Stock  Option  shall,  in
accordance  with its terms,  be subject to further  adjustment as appropriate to
reflect any stock  split,  stock  dividend,  recapitalization  or other  similar
transaction  subsequent to the Effective Time. The foregoing assumption shall be
undertaken  by Buyer in a manner  that will comply  with  Section  424(a) of the
Internal Revenue Code, as to any Seller Stock Option that is an "incentive stock
option." 

5.11 Seller Employee Stock Ownership Plan. Seller may cause the Employee
Stock Ownership Plan of the Seller Banks (the "Seller ESOP") to allocate,  prior
to the Effective  Time, to participants in the Seller ESOP the maximum number of
currently  unallocated shares of Seller Common Stock allowable under Section 415
of the Internal  Revenue Code.  Except as provided in the  following  paragraph,
Seller  shall  not take any  action  which  would  cause the  Seller  ESOP to be
disqualified  under Section  401(a) of the Internal  Revenue Code or to lose its
status as an employee  stock  ownership  plan under Section 4975 of the Internal
Revenue Code.
                  On or before  the  Effective  Time,  Seller  will  take  steps
reasonably  necessary  to  cause  the  Seller  ESOP to be  terminated  as of the
Effective  Time.  Any  indebtedness  of the ESOP shall be repaid  from the Trust
associated  with the Seller ESOP.  A final  allocation  will be prepared,  and a
request for a favorable  determination  letter on the  termination of the Seller
ESOP will be filed with the  Internal  Revenue  Service.  To the maximum  extent
permitted by the rules and  regulations of the Internal  Revenue  Service,  upon
receipt of the  favorable  determination  letter,  the assets of the Seller ESOP
will  be  distributed  to the  participants  in due  course.  At and  after  the
Effective  Time, no additional  employees will become eligible to participate in
the Seller ESOP and the assets of the Seller ESOP will be applied in  accordance
with its terms and the rules and regulations of the Internal Revenue Service and
the Department of Labor.

5.12 D & O Indemnification.  Buyer  agrees  that the Merger  shall not affect or
diminish any of Seller's duties and obligations of  indemnification  existing as
of the Effective  Time in favor of employees,  agents,  directors or officers of
Seller or its Subsidiaries arising by virtue of its Certificate of Incorporation
or  Bylaws in the form in effect at the date of this  Agreement  or  arising  by
operation  of law or  arising  by virtue of any  contract,  resolution  or other
agreement or document  existing at the date of this  Agreement,  and such duties
and obligations  shall continue in full force and effect and be honored by Buyer
for so long as they would (but for the Merger) otherwise survive and continue in
full force and effect. Buyer will provide, or cause to be provided, for a period
of not less than two years  from the  Effective  Time,  a "tail"  insurance  and
indemnification  policy that  provides  the  officers  and  directors  of Seller
Subsidiaries immediately prior to the Effective Time coverage no less favorable,
in the  aggregate,  than as  currently  provided  by Buyer to its  officers  and
directors. 

5.13 Press Releases.  Except as may be required by law, Seller and
Buyer  shall  consult  and agree with each other as to the form,  substance  and
timing of any proposed  press release  relating to this  Agreement or any of the
transactions contemplated hereby.

5.14 State Takeover Statutes; Seller's Articles of Incorporation; Seller Rights
Agreement.
(a) Seller will take all steps necessary to exempt the transactions contemplated
by this Agreement and any agreement  contemplated  hereby from, and if necessary
challenge the validity of, any applicable  state takeover law.  Seller will take
all steps  necessary to exempt the  transactions  contemplated by this Agreement
and any  agreement  contemplated  hereby  from the  provisions  of  Article X of
Seller's Articles of Incorporation.  Seller shall take all action (including, if
required,  redeeming all of the outstanding  Rights related to the Seller Rights
Agreement or amending or  terminating  the Seller Rights  Agreement) so that the
entering  into  of  this  Agreement  and  the  Stock  Option  Agreement  and the
consummation  of the  transactions  contemplated  hereby and  thereby  shall not
result  in the  grant of any  rights  to any  person  under  the  Seller  Rights
Agreement to purchase or receive  additional  shares of capital stock of Seller,
Buyer or any affiliate of the foregoing or enable or require the Rights  related
thereto   to   be   exercised,    distributed   or   triggered   in   any   way.

5.15 Best Efforts.  Each of Buyer and Seller  undertakes and agrees to use its
best efforts to cause the Merger (i) to qualify as a  reorganization  within the
meaning  of  Section  368(a) of the  Internal  Revenue  Code and as a pooling of
interests  for  accounting  and  financial  reporting  purposes  (in each  case,
including,   if  necessary,   to  take  reasonable   steps  to  restructure  the
transactions  contemplated by this Agreement to so qualify) and (ii) to occur as
soon as practicable. Each of Buyer and Seller agrees to not take any action that
would   materially   impede  or  delay  the  consummation  of  the  transactions
contemplated  by this  Agreement or the ability of Buyer or Seller to obtain any
approval of any Regulatory Authority required for the transactions  contemplated
by this  Agreement  or to  perform  its  covenants  and  agreements  under  this
Agreement.
  
5.16 Insurance.   Seller  shall, and  Seller shall  cause  its
Subsidiaries  to,  use its best  efforts to  maintain  its  existing  insurance.

5.17 Conforming Entries.  (a) Notwithstanding that Seller believes that Seller
and the  Seller  Subsidiaries  have  established  all  reserves  and  taken  all
provisions for possible loan losses required by GAAP and applicable  laws, rules
and regulations,  Seller  recognizes that Buyer may have adopted different loan,
accrual and  reserve  policies  (including  loan  classifications  and levels of
reserves for possible loan losses).  From and after the date of this  Agreement,
Seller and Buyer shall  consult and  cooperate  with each other with  respect to
conforming  the loan,  accrual  and  reserve  policies  of Seller and the Seller
Subsidiaries to those policies of Buyer, as specified in each case in writing to
Seller, based upon such consultation and as hereinafter  provided.  In addition,
from and after the date of this  Agreement  to the  Effective  Time,  Seller and
Buyer shall  consult and cooperate  with each other with respect to  determining
appropriate  Seller  accruals,  reserves  and charges to  establish  and take in
respect of excess equipment  write-off or write-down of various assets and other
appropriate charges and accounting  adjustments taking into account the parties'
business  plans  following  the Merger,  as specified in each case in writing to
Seller,  based upon such  consultation and as hereinafter  provided.  Seller and
Buyer shall consult and cooperate  with each other with respect to  determining,
as  specified  in a  written  notice  from  Buyer to  Seller,  based  upon  such
consultation  and as  hereinafter  provided,  the  amount  and  the  timing  for
recognizing for financial  accounting  purposes  Seller's expenses of the Merger
and the  restructuring  charges relating to or to be incurred in connection with
the Merger. To the extent  permissible under applicable laws,  regulations,  and
requirements of Regulatory Authorities,  and provided further, that Seller shall
not be  required  to take any such  action  that,  in the  opinion  of  Seller's
independent  auditors,  is not consistent  with GAAP and  regulatory  accounting
principles,  Seller shall (i)  establish  and take such reserves and accruals at
such time as Buyer shall reasonably  request to conform  Seller's loan,  accrual
and  reserve  policies to Buyer's  policies,  and (ii)  establish  and take such
accruals, reserves and charges in order to implement such policies in respect of
excess facilities and equipment capacity,  severance costs,  litigation matters,
write-off  or  write-down  of various  assets and other  appropriate  accounting
adjustments, and to recognize for financial accounting purposes such expenses of
the Merger and restructuring  charges related to or to be incurred in connection
with the  Merger,  in each case at such  times as are  reasonably  requested  by
Buyer; provided,  however, that on the date such reserves,  accruals and charges
are to be taken, Buyer shall certify to Seller that Buyer's  representations and
warranties are true and correct as of such date, that the approval conditions to
its  obligations  contemplated  by Section  6.1(b) have been satisfied or waived
(except to the extent that any waiting period associated therewith may then have
commenced but not expired) and that Buyer is otherwise in  compliance  with this
Agreement and is prepared to proceed with the Closing;  and  provided,  further,
that Seller shall not be required to take any such action that is not consistent
with GAAP and regulatory  accounting  principles. 

5.18 Charitable Foundation. 
Promptly  following  the  Effective  Time,  Buyer shall  establish a  charitable
foundation for the benefit of the communities served by Seller as of immediately
prior to the  Effective  Time,  which  charitable  foundation  will be initially
funded with a $300,000 contribution by Buyer and thereafter funded annually with
such  amounts  determined  by Buyer as will  aggregate  no less than  $3,000,000
during the six years immediately following the Effective Time.

                                   ARTICLE VI
                                    CONDITIONS

6.1  Conditions to Each Party's Obligation To Effect the Merger. The  respective
obligations  of each  party  to  effect  the  Merger  shall  be  subject  to the
fulfillment  or  waiver  at or  prior  to the  Effective  Time of the  following
conditions:  This  Agreement  shall have  received  the  requisite  approval  of
stockholders  of Seller.  All  requisite  approvals  of this  Agreement  and the
transactions contemplated hereby shall have been received from the Board and any
other  Regulatory  Authority,  and all  applicable  waiting  periods  shall have
expired  under  applicable  law.  The  Registration  Statement  shall  have been
declared  effective  and shall not be subject to a stop order or any  threatened
stop order.  Neither  Seller nor Buyer shall be subject to any order,  decree or
injunction,  and  there  shall be no  pending  or  threatened  order,  decree or
injunction,  of a court or agency of  competent  jurisdiction  which  enjoins or
prohibits,  or seeks to  enjoin  or  prohibit,  the  consummation  of any of the
Transactions.  There shall be no  legislative,  statutory or  regulatory  action
(whether  federal or state)  pending  which  prohibits  or threatens to prohibit
consummation of the  Transactions or which otherwise  materially  adverse affect
the  Transactions.  Each of Buyer and Seller shall have  received,  from counsel
reasonably  satisfactory to it, an opinion  reasonably  satisfactory in form and
substance to it to the effect that the Merger will  constitute a  reorganization
within the meaning of Section  368(a) of the  Internal  Revenue Code and that no
gain or loss will be recognized by the stockholders of Seller who receive solely
Buyer Common Stock in exchange for shares of Seller  Common  Stock,  except with
respect to cash received in lieu of fractional shares of Buyer Common Stock. The
shares of Buyer  Common  Stock  which  shall be issued to the  holders of Seller
Common Stock (and where  applicable,  Seller Stock Options) upon consummation of
the  Merger  shall have been  authorized  for  listing  on the NYSE,  subject to
official notice of issuance.  Buyer and Seller shall have received a letter,  in
form and substance  reasonably  satisfactory  to each,  from the Buyer Auditors,
dated the date of the Proxy  Statement and confirmed in writing at the Effective
Time, stating that the Merger will qualify as a pooling of interests transaction
under Opinion 16 of the Accounting  Principles Board, the interpretive  releases
issued   pursuant   thereto  and  the   pronouncements   of  the  SEC   thereon.

6.2 Conditions to Obligations of Seller To Effect the Merger. The obligations of
Seller to effect the Merger shall be subject to the  fulfillment or waiver at or
prior  to  the   Effective   Time  of  the  following   additional   conditions:
Representations and Warranties.  The representations and warranties of Buyer set
forth in Article III of this Agreement shall be true and correct in all material
respects  as of the  date of this  Agreement  and as of the  Effective  Time (as
though  made on and as of the  Effective  Time  except  (i) to the  extent  such
representations  and  warranties  are by their express  provisions  made as of a
specified date or period and (ii) for the effect of transactions contemplated by
this  Agreement)  and Seller  shall have  received  a  certificate  of the chief
financial  officer of Buyer to that effect.  Performance of  Obligations.  Buyer
shall have  performed in all material  respects all  obligations  required to be
performed by it under this  Agreement  prior to the Effective  Time,  and Seller
shall have received a  certificate  of the chief  financial  officer of Buyer to
that  effect. 

6.3 Conditions to Obligations of Buyer To Effect the Merger.    The
obligations of Buyer to effect the Merger shall be subject to the fulfillment or
waiver at or prior to the Effective Time of the following additional conditions:
Representations and Warranties. The representations and warranties of Seller set
forth in Article II of this Agreement  shall be true and correct in all material
respects  as of the  date of this  Agreement  and as of the  Effective  Time (as
though  made on and as of the  Effective  Time  except  (i) to the  extent  such
representations  and  warranties  are by their express  provisions  made as of a
specific date or period and (ii) for the effect of transactions  contemplated by
this  Agreement)  and Buyer shall have received a certificate of the chairman or
president of Seller to that effect.  Performance  of  Obligations.  Seller shall
have performed in all material respects all obligations required to be performed
by it under this  Agreement  prior to the Effective  Time,  and Buyer shall have
received a certificate of the chairman or president of Seller to that effect.

ARTICLE VII

                        TERMINATION, AMENDMENT AND WAIVER

7.1 Termination.  This  Agreement  may be terminated at any time prior to the
Effective Time, whether before or after any requisite  stockholder  approval: by
mutual consent by the Executive Committee of the Board of Directors of Buyer and
the Board of Directors  of Seller;  by the  Executive  Committee of the Board of
Directors  of Buyer or the Board of  Directors  of Seller at any time  after the
date that is twelve months after the date of this  Agreement if the Merger shall
not theretofore  have been consummated  (provided that the terminating  party is
not then in material breach of any representation,  warranty,  covenant or other
agreement  contained  herein which has resulted in the delay in  performance  of
this Agreement);  by the Executive  Committee of the Board of Directors of Buyer
or the Board of Directors of Seller if (i) the Board has denied  approval of the
Merger and such denial has become final and  nonappealable or (ii)  stockholders
of Seller shall not have  approved this  Agreement at the Meeting  provided that
Seller has not  breached its  obligation  under  Section  5.3; by the  Executive
Committee of the Board of  Directors of Buyer in the event of a material  breach
by Seller of any representation, warranty, covenant or other agreement contained
in this Agreement, which breach is not cured within 30 days after written notice
thereof to Seller by Buyer;  by the Board of Directors of Seller in the event of
a material breach by Buyer of any  representation,  warranty,  covenant or other
agreement contained in this Agreement,  which breach is not cured within 30 days
after  written  notice  thereof is given to Buyer by Seller;  or by the Board of
Directors of Seller, upon written notice to Buyer at any time during the ten-day
period commencing two days after the  Determination  Date (as defined below), if
both of the following conditions are satisfied:
The Average Closing Price shall be less than the product of 0.80
and the Starting Price; and
                  (A)    the quotient  obtained by dividing the Average  Closing
                         Price by the Starting  Price shall be less than (B) the
                         quotient  obtained by dividing the Average  Index Price
                         by the Index Price on the Starting Date and subtracting
                         0.15 from the quotient in this clause (ii)(B);
subject,  however, to the following provisions. If Seller elects to exercise its
termination right pursuant to the immediately  preceding sentence, it shall give
prompt written notice to Buyer; provided,  however, that such notice of election
to termination  may be withdrawn at any time within the  aforementioned  ten-day
period.

                  For purposes of this Section 7.1(f), the following terms shall
have the meanings indicated:

                  "Average Closing Price" means the average of the daily closing
prices of Buyer Common Stock as reported on the NYSE composite tape (as reported
in The Wall Street  Journal or, if not  reported  therein,  in another  mutually
agreed upon  authoritative  source) for the ten consecutive full trading days in
which such  shares are traded on the NYSE  ending at the close of trading on the
Determination Date.

                  "Average  Index  Price"  means the average of the Index Prices
for the ten consecutive  full trading days ending at the close of trading on the
Determination Date.

                  "Determination  Date" means the date on which the  approval of
the Board required for consummation of the Merger shall be received.

                  "Index  Group"  means  the 22 bank  holding  companies  listed
below,  the common  stocks of all of which  shall be  publicly  traded and as to
which  there  shall  not have  been,  since the  Starting  Date and  before  the
Determination  Date,  an  announcement  of a  proposal  for such  company  to be
acquired  or for such  company  to  acquire  another  company  or  companies  in
transactions with a value exceeding 25% of the acquiror's market  capitalization
as of the Starting  Date. In the event that the common stock of any such company
ceases to be publicly  traded or any such  announcement  is made with respect to
any such company,  such company  shall be removed from the Index Group,  and the
weights (which have been determined based on the number of outstanding shares of
common stock)  redistributed  proportionately  for purposes of  determining  the
Index Price.  The 22 bank holding  companies and the weights  attributed to them
are as follows:

Holding Company                                  Weighting (%)
NationsBank Corp.                                  11.576
BankAmerica Corp.                                   9.676
Chase Manhattan Corp.                               9.615
Banc One Corp.                                      6.422
First Union Corp.                                   5.924
Norwest Corp.                                       5.110
US Bancorp                                          4.958
Wells Fargo & Co.                                   4.918
First Chicago NBD                                   4.401
J.P. Morgan                                         4.022
National City Corp.                                 3.938
Bank New York                                       3.883
Fleet Financial Group                               3.729
PNC Bank Corp.                                      3.003
Mellon Bank Corp.                                   2.833
Wachovia Corp.                                      2.803
KeyCorp                                             2.769
BankBoston Corp.                                    2.639
SunTrust Banks                                      2.551
Bankers Trust New York                              2.027
Comerica Inc.                                       1.765
Summit Bancorp                                      1.438

                  "Index  Price"  on a given  date  means the  weighted  average
(weighted in accordance  with the factors listed above) of the closing prices on
such date of the companies comprising the Index Group.

                  "Starting  Date" means the last full day on which the NYSE was
open for trading prior to the execution of this Agreement.

                  "Starting  Price"  shall mean the  closing  price per share of
Buyer Common Stock on the Starting  Date, as reported on the NYSE composite tape
(as reported in The Wall Street Journal or, if not reported therein,  in another
mutually agreed upon authoritative source).

                  If Buyer or any company  belonging to the Index Group declares
or  effects  a  stock  dividend,  reclassification,  recapitalization,  slit-up,
combination, exchange of shares or similar transaction between the Starting Date
and the  Determination  Date,  the prices for the common  stock of such  company
shall be  appropriately  adjusted  for the  purposes  of applying  this  Section
7.1(f).

7.2 Effect of Termination.  In the event of  termination  of this  Agreement as
provided in  Sections  7.1(a)  through  7.1(c) and Section  7.1(f)  above,  this
Agreement  shall  forthwith  become  void and  there  shall be no  liability  or
obligation  on the part of Buyer or  Seller  or  their  respective  officers  or
directors  except as set forth in the  second  sentence  of  Section  5.1 and in
Section 5.6. 

7.3 Amendment.  This Agreement and the Schedules  hereto may be
amended  by the  parties  hereto,  by  action  taken  by or on  behalf  of their
respective  Boards of  Directors,  at any time before or after  approval of this
Agreement by the stockholders of Seller; provided,  however, that after any such
approval  by the  stockholders  of Seller no such  modification  shall  alter or
change the amount or kind of  consideration  to be received by holders of Seller
Common Stock as provided in this  Agreement.  This  Agreement may not be amended
except by an instrument in writing signed on behalf of each of Buyer and Seller

7.4 Severability.  Any term, provision,  covenant or restriction contained in
this  Agreement  held  by  a  court  or  a  Regulatory  Authority  of  competent
jurisdiction  or the  Board  to be  invalid,  void or  unenforceable,  shall  be
ineffective to the extent of such invalidity, voidness or unenforceability,  but
neither the remaining terms, provisions,  covenants or restrictions contained in
this  Agreement  nor  the  validity  or  enforceability  thereof  in  any  other
jurisdiction  shall be  affected  or  impaired  thereby.  Any  term,  provision,
covenant or  restriction  contained in this  Agreement that is so found to be so
broad  as to be  unenforceable  shall  be  interpreted  to  be  as  broad  as is
enforceable. 
7.5 Waiver.  Any term, condition or provision of this Agreement
may be  waived  in  writing  at any  time  by  the  party  which  is,  or  whose
stockholders are, entitled to the benefits thereof.

                                  ARTICLE VIII

                               GENERAL PROVISIONS

8.1 Non-Survival of Representations, Warranties and Agreements. No investigation
by  the  parties   hereto  made   heretofore  or  hereafter   shall  affect  the
representations  and  warranties of the parties  which are contained  herein and
each such representation and warranty shall survive such  investigation.  Except
as set forth below in this  Section  8.1, all  representations,  warranties  and
agreements in this Agreement of Buyer and Seller or in any instrument  delivered
by Buyer or Seller pursuant to or in connection with this Agreement shall expire
at the Effective Time or upon  termination of this Agreement in accordance  with
its terms or, in the case of any other such  instrument,  in accordance with the
terms of such  instrument.  In the  event of  consummation  of the  Merger,  the
agreements contained in or referred to in Sections 5.2(b), 5.7, 5.9, 5.10, 5.11,
5.12 and 5.18 shall survive the Effective  Time. In the event of  termination of
this Agreement in accordance with Sections 7.1(a), 7.1(b), 7.1(c) or 7.1(f), the
agreements  contained  in or referred to in the second  sentence of Section 5.1,
Section 5.6 and Section 7.2 shall survive such termination.

8.2 Notices. All notices and other communications  hereunder shall be in writing
and shall be deemed to be duly received (i) on the date given if delivered
personally or (ii) upon confirmation of receipt, if by facsimile  transmission
or (iii) on the date received if mailed by registered or certified mail (return
receipt  requested), or (iv) on the  business  date after being  delivered  to a
reputable  overnight delivery service, if by such service, to the parties at the
following addresses (or at such other address for a party as shall be specified
by like notice):
                                 (i)     if to Buyer:

                              Star Banc Corporation
                               425 Walnut Street
                             Cincinnati, Ohio 45202
                            Attention: David Moffett
                            Telecopy: (513) 632-4279

                                 Copies to:

                              Star Banc Corporation
                              425 Walnut Street
                             Cincinnati, Ohio 45202
                            Attention: Jennie Carlson
                            Telecopy: (513) 632-4279

                                 (ii)    if to Seller:

                              Trans Financial, Inc.
                              500 East Main Street
                            Bowling Green, Kentucky  42101
                            Attention: Vince A Berta
                            Telecopy: (502) 782-4912

                                 Copies to:

                              Wachtell, Lipton, Rosen & Katz
                               51 West 52nd Street
                            New York, New York 10019
                            Attention:  Edward D. Herlihy, Esq.
                            Telecopy: (212) 403-2000

8.3 Miscellaneous.  This Agreement (including the Schedules and other written
documents  referred to herein or provided  hereunder) (i) constitutes the entire
agreement and supersedes all other prior  agreements  and  understandings,  both
written and oral, among the parties, or any of them, with respect to the subject
matter  hereof,  including  any  confidentiality  agreement  between the parties
hereto,  (ii) except with respect to Sections 5.9(c) and 5.12 is not intended to
confer  upon any person not a party  hereto  any rights or  remedies  hereunder,
(iii) shall not be assigned by operation  of law or otherwise  and (iv) shall be
governed in all  respects by the laws of the State of Ohio,  except as otherwise
specifically  provided  herein or required by the KBCA.  This  Agreement  may be
executed in counterparts  which together shall constitute a single agreement and
may be delivered by facsimile.


<PAGE>


                  IN  WITNESS  WHEREOF,   Buyer  and  Seller  have  caused  this
Agreement to be signed as of the date first written above.

                                                     STAR BANC CORPORATION



                                            By:  /s/ Jerry A. Grundhofer
                                           Name:     Jerry A. Grundhofer
                                         Title:    Chairman, President and Chief
                                                   Executive Officer




                                                     TRANS FINANCIAL, INC.





                                          By:  /s/ Vince A. Berta
                                         Name:     Vince A. Berta
                                         Title:    President and Chief
                                                   Executive Officer