<PAGE>

                                                                    EXHIBIT 13.0

FIRST BANCTRUST CORPORATION

First BancTrust Corporation (Nasdaq: FBTC) is the parent company of First Bank &
Trust, s.b., an Illinois stock savings bank founded in 1887. First BancTrust's
two other operating subsidiaries are Edgar County Title Company and First
Charter Financial Services.

The bank operates offices in Paris, Marshall, and Savoy, Illinois. First Bank &
Trust expanded to Savoy, a fast-growing community in the Champaign-Urbana
(University of Illinois) area, in September 2003 by purchasing a branch from
another financial institution and operating in an interim facility. Construction
is under way on a permanent facility with occupancy expected by late summer
2004.

First BancTrust Corporation was incorporated in November 2000 for purposes of
converting First Bank & Trust to an Illinois stock savings bank from an Illinois
mutual savings bank. The conversion was completed April 18, 2001, and 1.5
million shares of common stock were issued to the public for gross proceeds of
$15.2 million. As of December 31, 2003, the bank had total assets of $226.2
million, total liabilities of $199.8 million, and total equity of $26.4 million.

Financial Highlights

<TABLE>
<CAPTION>
                                     2003               2002         Change
<S>                            <C>                <C>                <C>
Total Assets                   $   226,194,368    $   202,725,410     11.6%
Deposits                           163,027,890        147,335,381     10.7%
Net Interest Income                  7,278,394          7,505,885     -3.0%
Noninterest Income                   3,818,529          3,492,304      9.3%
Net Income                           1,949,399          1,312,707     48.5%
Diluted Earnings Per Share     $          1.62    $          1.00     62.0%
</TABLE>

<PAGE>


                           TODAY. TOMORROW. TOGETHER.

DEAR FELLOW STOCKHOLDERS:                                 [PHOTOGRAPH OF
                                                          TERRY J. HOWARD
                                                        PRESIDENT AND CEO]

     We completed another solid year in 2003. Our net income rose substantially
to $1.9 million from $1.3 million in 2002. Total assets climbed nearly 12
percent to $226.2 million from $202.7 million. Deposits increased more than 10
percent to $163 million from $147.3 million.

     More important than the raw numbers, however, are the steps we took to
position First Bank & Trust and our other subsidiaries for further growth. We
have been expanding the bank's services and customer base since our conversion
from an Illinois mutual savings bank to an Illinois stock savings bank three
years ago.

EXPANDING GEOGRAPHICALLY

     A key development in 2003 was expanding our operations to Savoy, a growing
community in the Champaign-Urbana area. We established our presence in September
with the purchase of about $3.2 million in deposits from another financial
institution in that area. We have been operating in temporary quarters since
then but are building a modern new facility that we anticipate occupying by
August. The new Savoy branch is located in a prime commercial area and will
include four drive-up lanes and 5,300 square feet of interior space. The prior
year we expanded our Marshall facility by 2,000 square feet to meet growing
demand in that area.

     Our goal is to continue expanding geographically as opportunities arise.

STRATEGIC ALLIANCE

     In September we also entered into an important strategic alliance with
First Advisor Financial Group to provide brokerage and investment services,
insurance products, and asset management to our customer base. In essence, First
Advisor's client base merged with that of our wholly owned subsidiary, First
Charter Service Corporation, to provide these services to our existing customers
as well as bring in new relationships. First Advisor will also operate out of
our new Savoy facility when it is completed.

     A primary objective of the new arrangement was to expand our trust
department, and we have succeeded in growing trust assets under management from
about $2.5 million at year-end 2002 to about $30 million today. Our goal is to
increase that to at least $50 million by year end. We also anticipate increased
brokerage and other fees as a result of the alliance.

     In our core banking operations, we capitalized on the unprecedented boom in
mortgage refinancing during the fist few months of the year. As that ebbed, we
turned our focus to more traditional growth through expanding our core loan
portfolio and deposits and concentrating on originating mortgages for home
purchases. The decline in refinancing also should have a beneficial effect on
bank operations in the future because of an anticipated substantial decrease in
prepayment of our loan portfolio. That, in turn would lead to improved values on
loan servicing rights.

                                                           (Continued on page 2)

<PAGE>

TODAY. TOMORROW. TOGETHER.

LETTER TO STOCKHOLDERS (Continued from Page 1)

NEW PRODUCTS

     We also have been improving and expanding our products to provide enhanced
services. Our "Safety Net Checking," which provides overdraft protection, is a
good example of the growing acceptance of new offerings. That was a significant
factor in a more than 40 percent growth in customer service fees to about
$766,000 from $544,000. We expect continued benefits in the year ahead.

     Our long-term goal is to expand sources of retail banking fees to improve
income and help strengthen the balance sheet as well as continue making the bank
less interest-rate sensitive.

     That is not to say, however, that there are not substantial opportunities
in growing the loan portfolio. We have been developing our commercial and
individual loan products with new offerings to grow those portfolios, which
would increase interest income, income from servicing rights and income from the
sales of loans into the secondary markets.

EXPANDED MARKETING

     To support our operations in new markets as well as promote new and
existing products, we invested in increased spending for advertising and
promotion, a trend we intend to continue through this year. In 2003, advertising
and promotion expense increased more than 34 percent to $278,000 from $206,000.

     Overall, we were pleased with the results of our initiatives during the
past year and look forward to continued benefits going forward. We believe we
have demonstrated our ability to adapt and capitalize on a dynamic and demanding
economic environment.

     We also recognize our success is not attributable solely to management
directives or performance targets. Rather, as a community bank, our ability to
deliver solid results hinges on providing our customers with exceptional and
responsive service. And for that we owe our deep gratitude to the employees of
the bank and our affiliated businesses. We have continually asked them for
exceptional performance -- and they have consistently exceeded expectations.

     We also would be remiss not to extend our thanks to our loyal customers,
our suppliers and associates and, of course, to you -- our stockholders -- who
have demonstrated your faith in our vision.

     Together, we are confident we can achieve our primary goal of enhancing the
value of your investment in First BancTrust Corporation.

Sincerely

/s/ Terry J. Howard
-------------------------------
Terry J. Howard
President and CEO
March 12, 2004

<PAGE>

                           FIRST BANCTRUST CORPORATION
                      MANAGEMENT'S DISCUSSION AND ANALYSIS
             (TABLE DOLLAR AMOUNTS IN THOUSANDS, EXCEPT SHARE DATA)

First BancTrust Corporation (Company) is a financial holding company whose
principal activity is the ownership and management of its wholly-owned
subsidiaries, First Bank & Trust, s.b. (Bank), ECS Service Corporation, and
First Charter Service Corporation.

The Company originates loans and solicits deposits through the Bank, but
otherwise conducts no significant business, except through the Bank, the Bank's
subsidiary, Community Finance Center, Incorporated, and the Company's
subsidiaries First Charter Service Corporation and ECS Service Corporation.
Community Finance Center, Incorporated provides retail consumer lending to the
Bank's market area. First Charter Service Corporation provides securities
brokerage, asset management services, and other investment services through a
third-party broker-dealer, First Advisor Financial Group and also engages in the
sale of tax deferred annuities and other insurance products. ECS Service
Corporation, doing business as Edgar County Title, provides abstracting services
and title insurance for the Bank's market area. All references to the Company
include the Bank and subsidiaries, unless otherwise indicated.

"SAFE HARBOR" STATEMENT

In addition to historical information, forward-looking statements are contained
herein that are subject to risks and uncertainties that could cause actual
results to differ materially from those reflected in the forward-looking
statements. Factors that could cause future results to vary from current
expectations, include, but are not limited to, the impact of economic conditions
(both generally and more specifically in the markets in which the Company
operates), the impact of competition for the Company's customers from other
providers of financial services, the impact of government legislation and
regulation (which changes from time to time and over which the Company has no
control), and other risks detailed in this Annual Report and in the Company's
other Securities and Exchange Commission filings. Readers are cautioned not to
place undue reliance on these forward-looking statements, which reflect
management's analysis only as of the date hereof. The Company undertakes no
obligation to publicly revise these forward-looking statements, to reflect
events or circumstances that arise after the date hereof. Readers should
carefully review the risk factors described in other documents the Company files
from time to time with the Securities and Exchange Commission.

FINANCIAL OVERVIEW

Publicly traded First BancTrust Corporation's business activities are focused on
community banking in east-central Illinois. The community bank activities of
First Bank & Trust, s.b. are enhanced by the services of our two other operating
subsidiaries, Edgar County Title Company and First Charter Financial Services.
The Bank operates offices in Paris, Marshall, and Savoy, Illinois.

                                       4
<PAGE>

A new full-service banking office is being constructed in Savoy for occupancy in
the third quarter of 2004. That office will also become the primary location for
First Charter Financial Services, our investment management and securities
brokerage service provider. Our application to establish a branch office in
Savoy was approved in the summer of 2003. The Bank also received approval to
purchase a branch in Savoy from another financial institution and assumed
operation of that branch in an interim location in late September 2003. Our
expansion into the Champaign County market, which includes the University of
Illinois, affords us access to one of the fastest-growing markets in downstate
Illinois.

Operating results for 2003 were generally favorable. Net income increased as our
net interest income declined even though interest-earning assets and
interest-bearing liabilities grew. Most of the growth in earning assets was in
securities that have little, if any credit risk, but generally provide a lower
rate of return than loans. We anticipate that our residential and small-business
lending products and services will be well-accepted in the Champaign County
market which should generate increased interest income over that normally
available from investments. Noninterest income grew this year as the housing
refinancing boom continued and the income associated with refinancing activities
remained at historically high levels. Since it is not likely that this
phenomenon will recur in the near future, we continue to enhance existing
fee-generating services. Our fee-generating deposit services have been readily
accepted and we anticipate that the expansion of our investment services and
trust departments will result in additional fee income. Noninterest expenses
were significantly lower than in 2002, but this was primarily due to the
recovery of a large portion of an impairment allowance established for loan
servicing rights during the year. However, we were able to reduce most other
operating expenses with the exception of salaries and benefits, net office
occupancy, and marketing. These increases were generally planned to help the
Bank grow and increase earnings in future periods.

Our financial condition has also improved as we liquidated problem loan accounts
and increased our investments in securities with low credit risk. Changes in
underwriting policies and practices have reduced the number and volume of newer
problem credits. Our interest rate risk exposure is relatively low and we are
positioned to readily take advantage of any increases in interest rates
available in the future as cash flows from our investment portfolio remain
robustly positive.

RESULTS OF OPERATIONS

General

Net income for the year ended December 31, 2003 increased by $637,000, or 48.50%
from $1,313,000 for the year ended December 31, 2002 to $1,949,000 for the year
ended December 31, 2003. The increase in net income is primarily due to an
increase in noninterest income and a decrease in noninterest expense, partially
offset by a decrease in net interest income and an increase in income tax
expense. Return on average assets increased to 0.90% for the year ended December
31, 2003 from 0.64% for the year ended

                                        5
<PAGE>

December 31, 2002. Return on average equity increased to 7.38% for the year
ended December 31, 2003 from 4.77% for the year ended December 31, 2002.

                                       6
<PAGE>

Net Interest Income

Net interest income decreased by $227,000 or 3.03% from $7.5 million for the
year ended December 31, 2002 to $7.3 million for the year ended December 31,
2003. The primary reason for the decrease in net interest income is a decrease
in interest income of $1.13 million partially offset by a decrease in interest
expense of $905,000. The Company's net interest margin was 3.68% for the year
ended December 31, 2003 compared to 4.02% for the year ended December 31, 2002.

The net interest margin decreased as a result of a decrease in the ratio of
average interest-earning assets to average interest-bearing liabilities from
115.16 for the year ended December 31, 2002 to 114.80 for the year ended
December 31, 2003. The average interest rate earned on interest-earning assets
declined from 6.98% in 2002 to 6.02% in 2003, while the average balances
increased from $186.6 million in 2002 to $197.5 million in 2003. The increase in
earning assets was primarily due to the additional investment in securities,
which was funded by borrowings and deposits which increased earning liabilities.
The average rate of interest-bearing liabilities decreased from 3.41% in 2002 to
2.69% in 2003, due to the declining rate environment. The average balance of
interest-bearing liabilities increased from $162.0 million in 2002 to $172.0
million in 2003. Interest rate spread for 2003 declined to 3.33% from 3.57% in
2002.

Interest Income - Total interest income was $11.9 million for the year 2003, a
decrease of $1.13 million, or 8.7% from $13.0 million reported in 2002. Interest
income from loans decreased by $605,000 from $9.1 million in 2002 to $8.5
million in 2003, investment income decreased by $566,000 from $3.7 million in
2002 to $3.1 million in 2003, and interest income from deposits with financial
institutions decreased by $36,000 from $98,000 in 2002 to $62,000 in 2003, while
dividend income from Federal Home Loan Bank stock increased from $164,000 in
2002 to $238,000 in 2003.

                                       7
<PAGE>

The following schedule compares average total loan balances by major categories
for the years 2003 and 2002:

<TABLE>
<CAPTION>
                                         Average Balance
                                  -----------------------------              %
                                      2003            2002        Change   Change
                                  -------------   -------------   ------   ------
<S>                               <C>             <C>                      <C>
Real Estate Loans
  One-to-four family              $      37,705   $      41,058   (3,353)   -8.17%
  Multi-family                              279             302      (23)   -7.62%
  Commercial                              9,862           8,946      916    10.24%
  Construction                            1,296             653      643    98.47%
  Agricultural                           13,263          12,239    1,024     8.37%
                                  -------------   -------------   ------   ------
Total real estate loans                  62,405          63,198     (793)   -1.25%
Agricultural production finance          12,317           9,850    2,467    25.05%
Commercial and industrial loans           7,167           7,527     (360)   -4.78%
Consumer loans                           25,793          26,512     (719)   -2.71%
                                  -------------   -------------   ------   ------
Total loans                             107,682         107,087      595     0.56%
Allowance for loan losses                (1,909)         (1,916)       7    -0.37%
                                  -------------   -------------   ------   ------
Net loans                               105,773         105,171      602     0.57%
                                  =============   =============   ======   ======
</TABLE>

The average net loan portfolio increased slightly by $602,000 or 0.57% from
$105.2 million in 2002 to $105.8 million in 2003. This was primarily a result of
an increase in average agricultural production finance loans of $2.5 million,
partially offset by a $793,000 decrease in average real estate loans, a $719,000
decrease in average consumer loans, and a $360,000 decrease in average
commercial and industrial loans. The $793,000 decrease in average real estate
loans was primarily a result of a decrease in the average one-to-four family
real estate loans of $3.4 million from 2002 to 2003, partially offset by an
increase of $1.0 million in average agricultural real estate loans, an increase
of $916,000 in average commercial real estate loans, and an increase of $643,000
in average construction loans.

The decrease in the average one-to-four family residential loans resulted from
increased refinancing in 2003 due to lower interest rates available on
fixed-rate mortgages. Borrowers with adjustable rate loans converted to
fixed-rate products which in turn were sold into the secondary market. The
Company's average agricultural production finance loans increased by $2.5
million from $9.9 million average balance for 2002 compared to $12.3 million
average balance for 2003, as the number of loans outstanding increased due to
increased volume, as did the average balance per loan. Average commercial real
estate loans increased due to a greater number of loan originations in 2003,
while average agricultural real estate loans increased due to a higher average
balance per loan.

The decrease in loan interest income of $605,000 from 2002 to 2003 was primarily
due to a decrease in the average rate earned on outstanding loans. The average
yield on loans receivable decreased by 62 basis points from 8.64% in 2002 to
8.02% in 2003. The decrease in loan yields was due to a general decline in
interest rates during 2003, which was reflected in new originations as well as
adjustable loans repricing to a lower rate.

                                       8
<PAGE>

Income from investments declined by $566,000 from $3.7 million in 2002 to $3.1
million in 2003. The decrease was due to a decrease in the average interest rate
offset by an increase in the average balance. The average rate of investments
decreased by 130 basis points, from 5.10% in 2002 to 3.80% in 2003, due to a
general interest rate decline. Average total investment securities were $81.9
million during 2003, a $9.7 million increase over the 2002 total of $72.2
million. The increase in average investments was funded by deposit growth and
advances from the Federal Home Loan Bank.

Interest income earned on deposits with financial institutions decreased $36,000
or 36.9% from $98,000 in 2003 to $62,000 in 2002. The average balance maintained
at the Federal Home Loan Bank of Chicago in a cash management account decreased
slightly during 2003, from $6.2 million in 2002 to $6.0 million during 2003. The
interest-bearing demand deposit account maintained by the Company is used for
short-term cash needs. The average rate earned on deposits with financial
institutions for 2003 was 1.04% as compared to an average rate of 1.58% for
2002.

Interest Expense - Interest expense decreased from $5.5 million in 2002 to $4.6
million in 2003, a decrease of $905,000 or 16.4%. Interest expense on deposits
declined from $4.3 million in 2002 to $3.2 million in 2003, a reduction of $1.1
million or 26.1%.

Demand deposits, which are largely Investor Checking Accounts, remained stable
at $56.4 million in 2003 compared to $56.3 million in 2002. The average rate on
demand deposits decreased from 2.31% in 2002 to 1.43% in 2003. Investor Checking
Accounts, which have comparable rates to a money market product without the
transaction limitations, averaged $41.0 million in 2003 compared to $41.9
million in 2002. Average money market accounts increased slightly from an
average of $8.8 million during 2002 to $9.0 million average balance for 2003.

Interest expense on savings accounts declined $37,000 from $167,000 in 2002 to
$130,000 in 2003. The average rate paid on savings accounts decreased 69 basis
points from an average rate of 2.00% paid in 2002 to an average rate of 1.31%
paid in 2003. The average balance in savings accounts has increased from $8.3
million in 2002 to an average balance of $9.9 million in 2003.

Interest expense on certificates of deposit decreased by $597,000, or 20.8%,
from $2.9 million in the year 2002 to $2.3 million in the year 2003 almost
entirely due to a decline in the average rate. The average rate paid on
certificates for 2003 declined by 86 basis points from 4.04% in 2002 to 3.18% in
2003. The average balance of certificate of deposits has increased slightly from
$71.1 million in 2002 to $71.5 million in 2003.

Interest expense on Federal Home Loan Bank (FHLB) advances and other debt for
2003 was $1.4 million compared to $1.2 million in 2002. The increase was due to
an increase in the average balance offset by a decrease in the average rate. The
average balance of borrowings for 2003 was $34.2 million compared to $26.2
million for 2002. The additional borrowings were used to fund loans and purchase
investment securities.

                                       9
<PAGE>

Borrowings at the FHLB typically consist of fixed-term notes, and an open-end
line of credit. At December 31, 2003, all $35.5 million in borrowings from the
Federal Home Loan Bank were fixed rate, fixed term advances, but $25.5 million
had convertible options. The average rate on average FHLB advances and other
debt decreased from 4.53% in 2002 to 4.13% in 2003.

Average Balance Sheet

The following table presents the average balance sheet for the Company for the
years ended December 31, 2003, 2002, and 2001, the interest on interest-earning
assets and interest-bearing liabilities and the related average yield or cost.
The yields or costs are calculated by dividing income or expense by the average
balance of assets or liabilities, respectively, for the years shown. The yields
and costs include fees, which are considered adjustments to yields.

                                       10
<PAGE>

<TABLE>
<CAPTION>
                                                             As of                          Year Ended
                                                       December 31, 2003                December 31, 2003
                                                    -----------------------    ------------------------------------
                                                     Ending       Average        Average                  Average
                                                     Balance     Yield/Rate      Balance    Interest     Yield/Rate

                                                                        (Dollars in thousands)
<S>                                                 <C>          <C>           <C>          <C>          <C>
Interest-earning assets
    Deposits with financial institutions(1)         $   3,713       0.76%      $    5,970   $      62       1.04%
    Securities                                         93,742       4.28%          81,902       3,115       3.80%
    Loans receivable, net (2)                         106,864       7.42%         105,773       8,484       8.02%
    Federal Home Loan Bank stock                        4,006       7.00%           3,864         238       6.16%
                                                    ---------       ----       ----------   ---------       ----
      Total interest-earning assets                   208,325       5.88%         197,509      11,899       6.02%
                                                                    ----                    ---------       ----
    Non-interest-earning assets                        17,869                      19,218
                                                    ---------                  ----------
      Total assets                                  $ 226,194                  $  216,727
                                                    =========                  ==========
Interest-bearing liabilities
    Deposits:
      Demand                                        $  60,254       1.28%      $   56,370   $     804       1.43%
      Savings                                          11,542       1.10%           9,944         130       1.31%
      Certificates of deposits of $100,000 or more     19,709       3.17%          16,643         582       3.50%
      Other certificates                               56,028       2.89%          54,840       1,692       3.09%
    Borrowings                                         35,500       4.04%          34,245       1,413       4.13%
                                                    ---------       ----       ----------   ---------       ----
    Total interest-bearing liabilities                183,033       2.50%         172,042       4,621       2.69%
                                                                    ----                    ---------       ----
    Non-interest-bearing demand accounts               15,495                      14,599
    Non-interest-bearing liabilities                    1,274                       3,671
                                                    ---------                  ----------
      Total liabilities                               199,802                     190,312
    Total equity capital(3)                            26,392                      26,415
                                                    ---------                  ----------
      Total liabilities and equity capital          $ 226,194                  $  216,727
                                                    =========                  ==========
    Net average interest-earning assets             $  25,292                  $   25,467
                                                    =========                  ==========
    Net interest income; interest rate spread(4)                                            $   7,278       3.33%
                                                                                            =========       ====
    Net interest margin(5)                                                                                  3.68%
                                                                                                            ====
    Average interest-earning assets to average
      interest-bearing liabilities                                                 114.80%
                                                                                   ======
</TABLE>

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

(1)  Includes interest-bearing demand deposits and other interest bearing
     deposits.

(2)  Includes loans held for sale and nonaccruing loans.

(3)  Includes retained earnings and accumulated other comprehensive income
     (loss).

(4)  Interest rate spread represents the difference between the weighted average
     yield on interest-earning assets and the weighted average rate on
     interest-bearing liabilities.

(5)  Net interest margin is net interest income divided by net average
     interest-earning assets.

                                       11
<PAGE>

<TABLE>
<CAPTION>
                                                                                Year ended December 31,
                                                    --------------------------------------------------------------------------
                                                                   2002                                    2001
                                                    ----------------------------------      ----------------------------------
                                                     Average                 Average         Average                 Average
                                                     Balance     Interest   Yield/Rate       Balance     Interest   Yield/Rate

                                                                              (Dollars in thousands)
<S>                                                 <C>          <C>        <C>             <C>          <C>        <C>
INTEREST-EARNING ASSETS
    Deposits with financial institutions(1)         $   6,193    $     98      1.58%        $  10,006    $    383     3.83%
    Securities                                         72,150       3,681      5.10%           49,724       3,042     6.12%
    Loans receivable, net (2)                         105,171       9,089      8.64%          106,708      10,043     9.41%
    Federal Home Loan Bank stock                        3,067         164      5.35%            1,543         106     6.87%
                                                    ---------    --------      ----         ---------    --------     ----
      Total interest-earning assets                   186,581      13,032      6.98%          167,981      13,574     8.08%
                                                                 --------      ----                      --------     ----
    Non-interest-earning assets                        17,176                                  20,135
                                                    ---------                               ---------
      Total assets                                  $ 203,757                               $ 188,116
                                                    =========                               =========

INTEREST-BEARING LIABILITIES
    Deposits:
      Demand                                        $  56,329    $  1,299      2.31%        $  40,629    $  1,572     3.87%
      Savings                                           8,337         167      2.00%            7,010         142     2.03%
      Certificates of deposits of $100,000 or more     15,080         600      3.98%           15,606         795     5.09%
      Other certificates                               56,069       2,271      4.05%           56,843       3,157     5.55%
    Borrowings                                         26,205       1,188      4.53%           26,408       1,324     5.01%
                                                    ---------    --------      ----         ---------    --------     ----
    Total interest-bearing liabilities                162,020       5,525      3.41%          146,496       6,990     4.77%
                                                                 --------      ----                      --------     ----
    Non-interest-bearing demand accounts               12,277                                  13,125
    Non-interest-bearing liabilities                    1,919                                   4,194
                                                    ---------                               ---------
      Total liabilities                               176,216                                 163,815
    Total equity capital(3)                            27,541                                  24,301
                                                    ---------                               ---------
      Total liabilities and equity capital          $ 203,757                               $ 188,116
                                                    =========                               =========
    Net average interest-earning assets             $  24,561                               $  21,485
                                                    =========                               =========
    Net interest income; interest rate spread(4)                 $  7,507      3.57%                     $  6,584     3.31%
                                                                 ========      ====                      ========     ====
    Net interest margin(5)                                                     4.02%                                  3.92%
                                                                               ====                                   ====
    Average interest-earning assets to average
      interest-bearing liabilities                     115.16%                                 114.67%
                                                       ======                                  ======
</TABLE>

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

(1)  Includes interest-bearing demand deposits and other interest bearing
     deposits.

(2)  Includes loans held for sale and nonaccruing loans.

(3)  Includes retained earnings and accumulated other comprehensive income
     (loss).

(4)  Interest rate spread represents the difference between the weighted average
     yield on interest-earning assets and the weighted average rate on
     interest-bearing liabilities.

(5)  Net interest margin is net interest income divided by net average
     interest-earning assets.

                                       12
<PAGE>

Rate/Volume Analysis

The following table presents the extent to which changes in interest rates and
changes in the volume of interest-earning assets and interest-bearing
liabilities have affected the Company's interest income and expense during the
periods indicated. Information is provided in each category with respect to (i)
changes attributable to changes in volume (changes in volume multiplied by prior
rate); (ii) changes attributable to changes in rate (change in rate multiplied
by prior volume); and (iii) the net change. The changes attributable to the
combined impact of volume and rate have been allocated proportionately to the
changes due to volume and the changes due to rate.

<TABLE>
<CAPTION>
                                                  Year Ended 12/31/2003                    Year Ended 12/31/2002
                                                        Compared to                              Compared to
                                                  Year Ended 12/31/2002                    Year Ended 12/31/2001
                                             --------------------------------        --------------------------------
                                              Increase (Decrease)                     Increase (Decrease)
                                                    Due to                                  Due to
                                             --------------------                    -------------------
                                              Volume        Rate        Net           Volume       Rate         Net
                                             -------      -------      ------        -------      ------      -------
                                                                        (in thousands)
<S>                                          <C>          <C>         <C>            <C>         <C>          <C>
Interest-earning assets:
  Interest-bearing demand deposits           ($    3)     ($   33)    ($   36)      ($   112)    ($  173)     ($  285)
  Securities                                     454       (1,020)       (566)         1,207        (575)         632
  Loans receivable, net                           52         (657)       (605)          (143)       (811)        (954)
  Federal Home Loan Bank stock                    47           27          74             84         (18)          66
                                              ------       ------      ------        -------      ------       ------
   Total interest-earning assets                 550       (1,683)     (1,133)         1,036      (1,577)        (541)

Interest-bearing liabilities:
  Demand accounts                                  1         (496)       (495)           487        (760)        (273)
  Savings accounts                                28          (65)        (37)            27          (2)          25
  Certificates of deposit                         10         (607)       (597)           (26)       (169)        (195)
  Borrowings                                     339         (114)        225            (52)       (970)      (1,022)
                                              ------       ------      ------        -------      ------       ------
    Total interest-bearing
      liabilities                                378       (1,282)       (904)           436      (1,901)      (1,465)
                                              ------       ------      ------        -------      ------       ------
    Net change in net interest
      income                                  $  172      ($  401)    ($  229)       $   600      $  324       $  924
                                              ======       ======      ======        =======      ======       ======
</TABLE>

Provision for Loan Losses

The provision for loan losses for the year ended December 31, 2003 was $728,000
compared to $718,000 for the year ended December 31, 2002, an increase of
$10,000 or 1.39%. The provision for both periods reflects management's analysis
of the Company's loan portfolio based on the information which was available to
it at such time. In particular, management meets on a quarterly basis to review
the adequacy of the allowance for loan losses by classifying loans in compliance
with regulatory classifications. Classified loans are individually reviewed to
arrive at specific reserve levels for those loans. Once the specific portion for
each loan is calculated, management calculates a historical portion for each
category based on a combination of loss history

                                       13
<PAGE>

adjusted for current national and local economic conditions, trends in
delinquencies and charge-offs, trends in volume and term of loans, changes in
underwriting standards, and industry conditions. Chargeoffs for 2003 were
$659,000 compared to $526,000 for the year 2002, which were partially offset by
recoveries of $93,000 in 2003 compared to recoveries of $114,000 in 2002.
Chargeoffs in 2003 included $234,000 relating to a single credit on an
agricultural production finance loan. Chargeoffs on vehicle loans increased from
$211,000 in 2002 to $222,000 in 2003, while chargeoffs on one-to-four family
real estate loans increased from $31,000 in 2002 to $118,000 in 2003. While
Company management believes that the allowance for loan losses is sufficient
based on information currently available, no assurances can be made that future
events, conditions, or regulatory directives will not result in increased
provisions for loan losses or additional chargeoffs which may adversely affect
net income.

Noninterest Income

Noninterest income totaled $3.8 million in 2003, compared to $3.5 million in
2002, an increase of 326,000 or 9.3 %, primarily due to increases in customer
service fees, net gains on loan sales, loan servicing fees, and abstract and
title fees, partially offset by decreases in brokerage fees.

Customer service fees increased by $222,000 or 40.9% from $544,000 for the year
ended December 31, 2002 to $766,000 for the year ended December 31, 2003. The
$222,000 increase was primarily a result of increases in non-sufficient funds
and overdraft fees generated from "Safety-Net Checking" accounts. The
"Safety-Net Checking" product provides overdraft protection in the form of a
pre-approved amount of overdrafts, up to $500. At December 31, 2003 there were
1,189 "Safety-Net Checking" accounts compared to 935 at December 31, 2002.

Net gains on loan sales increased $149,000 from $586,000 for the year ended
December 31, 2002 to $735,000 for the year ended December 31, 2003. Net gains on
loan sales are comprised of actual cash gains at the time of sale, and the gain
recognized from the capitalization of the related loan servicing assets. When a
loan is sold into the secondary market and the servicing rights to that loan are
retained, an asset is created representing the future payment stream of the
servicing which is recognized as income from the loan sale. Cash gains on the
sales of loans increased by $133,000 from $155,000 for the year ended December
31, 2002 to $288,000 for the year ended December 31, 2003. The gain recognized
from the capitalization of servicing assets increased by $15,000 from $432,000
during 2002 to $447,000 for 2003. Loans sold into the secondary market during
2002 were $41.2 million, compared to $45.6 million in loans sold into the
secondary market during 2003. The Company sells both one-to-four family
residential loans and agricultural loans in the secondary market.

Loan servicing fees for the year ended December 31, 2003 were $526,000 compared
to $498,000 for the year ended December 31, 2002, an increase of $28,000 or 5.7%
due to an increase in loans sold to others. Loans serviced for others totaled
$89.9 million at December 31, 2003, compared to $80.8 million at December 31,
2002.

                                       14
<PAGE>

Brokerage fees decreased by $114,000 from $177,000 in 2002 to $63,000 in 2003
due to the mid-year resignation of a brokerage service representative for First
Charter Service Corporation, one of the Company's wholly-owned subsidiaries. In
September, 2003 a new alliance was formed with First Advisor Financial Group to
provide brokerage and investment services, insurance products, and asset
management to the Bank's customer base.

Abstract and title fees increased by $33,000 or 8.2% from $406,000 for the year
ended December 31, 2002 to $439,000 for the year ended December 31, 2003. The
$33,000 increase was a result of an increased volume of business due to the
increase of loan originations by lenders.

Noninterest Expense

Total noninterest expense decreased from $8.4 million in 2002 to $7.5 million in
2003, a decrease of $867,000 or 10.4% due primarily to the recovery of a
previously identified impairment on loan servicing assets, and decreases in data
processing fees, professional fees, net foreclosed assets expense, and
amortization of loan servicing rights, partially offset by an increases in
salaries and benefits expense, net occupancy expense, marketing expense, and
other expenses.

In 2002, when existing loan servicing assets were valued with estimated shorter
lives due to the lower interest rate environment and accelerated prepayment
speeds, the calculated value was substantially less than the book value of the
servicing assets, identifying an impairment. The impairment of $683,000 was
charged against earnings in 2002, and a valuation allowance was established for
this amount. During subsequent valuations in 2003, the Company recognized a
$416,000 recovery of the previously identified impairment.

Data processing fees decreased $38,000 from $475,000 for the year ended December
31, 2002 to $437,000 for the year ended December 31, 2003, due to renegotiation
of the data processing contract. Professional fees totaled $282,000 for the year
ended December 31, 2003 compared to $314,000 for the year ended December 31,
2002. The decrease of $32,000 was from a reduction in legal expense and
consulting fees in 2003.

Foreclosed assets expense, net, decreased by $97,000 from $214,000 for the year
ended December 31, 2002, to $118,000 for the year ended December 31, 2003, a
45.1% decrease. The decease was due to a decrease in expenses associated with
holding and disposing of real estate properties acquired through foreclosure. In
2003, foreclosed assets were primarily associated with one-to-four family
residential properties, while foreclosed assets acquired and disposed of in 2002
included commercial and multi-family residential properties as well as
one-to-four family properties.

Amortization of loan servicing rights was $895,000 for the year ended December
31, 2002 compared to $849,000 for the year ended December 31, 2003, a decrease
of

                                       15
<PAGE>

$46,000. The amortization reported in 2002 related to loan servicing rights with
higher values from prior years.

Salaries and employee benefits totaled $3.9 million in 2002 and $4.1 million in
2003, an increase of $174,000. The increase in salaries and employee benefits
was primarily due to increases in salaries, Employee Stock Ownership Plan
("ESOP") expense, and recognition and retention plan expense. Salaries and wages
increased by $23,000 due to normal pay increases and increased commissions paid
on a higher volume of loan originations. ESOP expense increased by $75,000 from
$240,000 for the year ended December 31, 2002 to $315,000 for the year ended
December 31, 2003 due to a higher average share price. The ESOP expense each
month is calculated on a fixed number of shares at the average share price for
the month, and as the monthly average share price increases, the ESOP expense
increases accordingly. In April, 2002 at the annual stockholders' meeting, the
stockholders approved the adoption of the 2002 Recognition and Retention Plan
and Trust Agreement (the "RRP"). In February, 2002 the Committee of the Board of
Directors which administers the plan approved the grant of 34,246 shares of
restricted stock that will vest over a five-year period. The associated expense
for RRP increased $37,000 from $73,000 in 2002 to $110,000 in 2003, due to a
full year of expense in 2003 compared to eight months expense in 2002. Health
insurance expense increased by $19,000 due to premium increases in major medical
insurance.

Net occupancy expenses increased by $43,000 from $192,000 for the year ended
December 31, 2002 to $235,000 for the year ended December 31, 2003 primarily as
a result from the expansion to the Bank's branch in Marshall, Illinois. In 2002,
an additional 2000 square feet was added to the facility in a main floor
addition with a finished basement. In late September, 2003, banking operations
commenced in a temporary facility in Savoy, Illinois, in Champaign County.
Future plans include the building of a full-service permanent facility in a
retail area in Savoy in 2004.

Marketing expense increased by $72,000, from $206,000 for the year ended
December 31, 2002, to $278,000 for the year ended December 31, 2003, a 34.8%
increase. The increase was primarily a result of periodic promotions targeting
specific bank products, the implementation of a bank-wide training program on
sales and customer service, and entering the new market area in the Savoy,
Illinois area.

Other expenses increased $147,000 from $792,000 in 2002 to $939,000 in 2003, an
increase of 18.5%. The increase was due primarily to increases in loan related
expenses, expenses relating to insurance on vehicle loan collateral, corporate
filing fees, and charitable contributions. Loan related expenses for loans sold
into the secondary market increased by $58,000 due to additional underwriting
and delivery fees imposed by Federal Home Loan Mortgage Corporation in 2003. In
2003, the Company incurred $26,000 in expense to purchase insurance coverage for
loss protection to collateral securing the vehicle loan portfolio. Corporate
filing fees for the Company increased by $24,000 due to increased corporate
franchise tax and fees associated with filing regulatory reports with the
Securities and Exchange Commission. Charitable

                                       16
<PAGE>

contributions increased by $9,000 primarily due to contributions to a foundation
to fund additional scholarships to area college students.

                                       17
<PAGE>

Income Tax Expense

Total income tax expense was $932,000 in 2003, compared to $613,000 in 2002, an
increase of $319,000 or 52.0%. The increase of $319,000 is attributable to
higher taxable income in 2003 of $2.9 million compared to $1.9 million in 2002.
The effective tax rates for the years ended December 31, 2003 and December 31,
2002 were 32.3% and 31.8%, respectively.

FINANCIAL CONDITION

Total assets of the Company increased by $23.5 million or 11.6% to $226.2
million at December 31, 2003 from $202.7 million at December 31, 2002. The
growth in total assets was due primarily to a $21.0 million increase in
investment securities available for sale, a $1.2 million increase in loans, net
of allowance for loan losses, a $679,000 increase in cash surrender value of
life insurance, a $295,000 increase in Federal Home Loan Bank stock, and a
$722,000 increase in other assets, partially offset by an $159,000 decrease in
cash and cash equivalents, a $143,000 decrease in loans held for sale, and a
$119,000 decrease in interest receivable. The overall increase in total assets
was funded primarily by increases in deposits and Federal Home Loan Bank
advances.

The Company's cash and cash equivalents decreased by $159,000, from $10.5
million at December 31, 2002 to $10.3 million at December 31, 2003.
Interest-bearing demand deposits with banks increased by $255,000 from $3.5
million at December 31, 2002 to $3.7 million at December 31, 2003. Cash and due
from banks decreased by $415,000 from $7.0 million at December 31, 2002 to $6.6
million at December 31, 2003.

Investment securities available for sale totaled $93.7 million at December 31,
2003 compared to $72.7 million at December 31, 2002, an increase of $21.0
million. The increase resulted from $91.7 million in investment purchases,
primarily in mortgage-backed securities, U.S. Treasury bonds, and Federal Home
Loan Bank ("FHLB") bonds, offset by calls, maturities, and pre-payments of $68.5
million, and amortization of premiums of $887,000. The increase in securities
available for sale was funded by deposit growth and additional Federal Home Loan
Bank advances.

Loans held for sale decreased by $143,000 from $597,000 at December 31, 2002 to
$453,000 at December 31, 2003. Loans for sale at December 31, 2003 consisted
entirely of one-to-four family residential loans, which were in the process of
being sold into the secondary market to the Federal Home Loan Mortgage
Corporation and Illinois Housing Development Authority.

The Company's net loan portfolio increased by $1.2 million or 1.17%, from $105.2
million at December 31, 2002 to $106.4 million at December 31, 2003. Gross loans
increased by $1.4 million, offset by an increase in the allowance for loan loss
of $162,000. Loans secured by 1-4 family residences decreased by $3.1 million
from December 31, 2002 to December 31, 2003. Low fixed mortgage rates have
resulted in higher loan volume with many borrowers refinancing adjustable rate
loans to fixed rate to

                                       18
<PAGE>

take advantage of the lower rates. These fixed rate residential loans are sold
into the secondary market. Real estate construction loans have increased by $1.6
million from December 31, 2002 to December 31, 2003 due to increased
originations. Commercial and agricultural real estate loans have increased by
$1.7 million, due to a higher average balance per loan, and agricultural
production loans have increased by $786,000 due to a higher volume of loans.
Other loans have increased by $1.1 million primarily due to the investment in a
new origination of industrial revenue bonds issued to fund an expansion project
at the local hospital. Commercial and industrial loans have increased by
$372,000 due to a higher average balance per loans. Consumer loans decreased by
$1.0 million due to a decrease in vehicle loans.

At December 31, 2003, the allowance for loan losses was $2.1 million or 1.96% of
the total loan portfolio compared to $2.0 million or 1.83% at December 31, 2002.
The Company's net chargeoffs were $566,000 for 2003 compared to $412,000 for
2002. The Company's non-performing loans, which are loans delinquent 90 days or
more, were $1.1 million or 1.05% of total loans at December 31, 2003, compared
to $1.5 million or 1.42% of total loans at December 31, 2002. Non-performing
assets, which include non-performing loans and foreclosed assets totaled $1.2
million at December 31, 2003 compared to $1.7 million at December 31, 2002.
Troubled debt restructurings are loans which are modified due to the borrower's
financial difficulties, to terms which the bank might not have otherwise
considered. Once these loans are restructured, they continue to be monitored for
the remaining life of the loan, even though they are performing in accordance
with the new terms. At December 31, 2003 troubled debt restructurings totaled
$1.4 million, compared to $888,000 at December 31, 2002. Nonperforming assets
and troubled debt restructurings as of percentage of total loans increased
slightly from 2.25% at December 31, 2002 to 2.35% at December 31, 2003. The
Company's nonperforming assets and troubled debt restructurings at December 31,
2003 consist primarily of restructured commercial and agricultural loans and
nonperforming loans primarily secured by residences and farming assets. Included
in the $2.6 million of nonperforming loans and troubled debt restructurings are
restructured agricultural loans of $1.1 million which are 90% guaranteed for
$983,000 by the Farmers Home Administration, thereby limiting the Company's
exposure on those loans. Management reviews the adequacy of the allowance for
loan losses quarterly, and believes that its allowance is adequate; however, the
Company cannot assure that future chargeoffs and/or provisions will not be
necessary.

Federal Home Loan Bank stock increased $295,000 from $3.7 million at December
31, 2002 to $4.0 million at December 31, 2003. The 7.9% increase is the result
of dividends received in the form of additional stock.

Foreclosed assets have decreased by $89,000 from $185,000 at December 31, 2002
to $96,000 at December 31, 2003. As of December 31, 2003, the Company had two
foreclosed real estate properties totaling $57,000 which consisted of single
family dwellings. Other repossessed assets consisted of $39,000, primarily
repossessed vehicles. Foreclosed assets are carried at lower or cost or net
realizable value. When foreclosed

                                       19
<PAGE>

assets are acquired, any required adjustment is charged to the allowance for
loan losses. All subsequent activity is included in current operations.

Interest receivable decreased by $119,000 from $2.3 million as of December 31,
2002 to $2.2 million as of December 31, 2003. The $119,000 decrease was
attributable to lower interest rates in 2003.

Loan servicing rights increased $14,000 from $950,000 at December 31, 2002 to
$964,000 at December 31, 2003. The slight increase was due to newly capitalized
assets and a recovery of a previously identified impairment, offset by
amortization of loan servicing rights. Capitalized servicing assets for 2003
were $447,000 compared to $433,000 for 2002 while total loans sold in the
secondary market in 2003 were $45.6 million compared to $41.2 million during
2002. An independent valuation of servicing assets is obtained quarterly, to
establish the market value of the assets using current prepayment assumptions.
In 2002, the independent valuation of the servicing assets was substantially
less than the recorded book value of the servicing assets, identifying an
impairment. As a result, a provision for the valuation allowance of $683,000 was
recorded and charged against earnings. In 2003, subsequent valuations of the
servicing assets indicated a partial recovery of the impairment of $416,000.
Amortization of servicing rights amounted to $849,000 in 2003 compared to
$895,000 in 2002. The original amount capitalized is recognized as a gain and is
included as gain on sale of loans in the income statement. Capitalized servicing
rights are amortized in proportion to and over the period of estimated servicing
revenues.

Cash surrender value of life insurance increased from $3.7 million at December
31, 2002 to $4.3 million at December 31, 2003. The increase of $679,000 was due
to the purchase of $512,000 of bank owned life insurance on directors and an
increase in the cash surrender value of $167,000.

Other assets increased from $105,000 at December 31, 2002 to $827,000 at
December 31, 2003, an increase of $722,000. The increase was partially due to an
increase of $333,000 in prepaid income taxes and a $116,000 core deposit
intangible associated with the purchase of deposits and the development of the
Savoy branch in 2003, and prepaid expenses relating to the construction of a new
facility in Savoy. In late September, 2003, operations commenced in a temporary
facility in Savoy, Illinois with the purchase of $3.2 million in deposits from
another financial institution. Construction is scheduled to begin on a permanent
facility in early 2004. Other assets also increased $99,000 due to partial
payments for imaging equipment for a conversion scheduled for mid-2004, and by
$48,000 for partial payments on equipment and fixtures for the new Savoy branch.

The Company's total deposits increased from $147.3 million at December 31, 2002
to $163.0 million at December 31, 2003, an increase of $15.7 million or 10.7%.
The increase in total deposits was due to a $12.3 million increase in savings,
NOW and money market accounts and a $5.2 million increase in time deposits,
offset by a decrease of $1.8 million in non-interest bearing demand deposits.

                                       20
<PAGE>

Investor Checking, the largest component of NOW account deposits was $40.7
million at December 31, 2003 compared to $41.0 million at December 31, 2002.
Investor Checking has comparable rates to money market accounts, without
withdrawal restrictions. Other NOW accounts increased by $5.0 million, of which
$4.4 million was from public entity accounts.

Money market accounts have grown $4.6 million in 2003, with most of the growth
occurring in the business money market account. At December 31, 2002 business
money market accounts totaled $4.0 million compared to $8.5 million at December
31, 2003, an increase of $4.5 million. The growth was primarily from proceeds
from a bond issue by a public entity and pension funds administered by the Trust
Department.

Savings accounts have grown from $8.7 million at December 31, 2002 to $11.6
million at December 31, 2003, an increase of $2.9 million. Signature savings
accounts, a traditional savings product, increased by $2.7 million from $6.9
million at December 31, 2002 to $9.6 million at December 31, 2003. While the
account volume has decreased from 3,968 at December 31, 2002 to 3,815 at
December 31, 2003, the average balance per account has increased. "Pay Yourself
First" savings accounts are structured so interest is paid on a tiered basis,
with the requirement of an automatic transfer from a bank checking account at
least monthly. At December 31, 2003, "Pay Yourself First" savings accounts
increased slightly to $1.5 million compared to $1.4 million at December 31,
2002, an increase of $104,000. Although the dollar growth was minimal, the
number of accounts has increased from 462 at December 31, 2002 to 558 at
December 31, 2003.

Certificates of deposit have increased by $5.2 million from $70.5 million at
December 31, 2002 to $75.7 million at December 31, 2003. At December 31, 2003,
the special certificate of deposit offered was a 2.00% certificate of deposit
for an eleven-month term or a 2.45% certificate of deposit for a twenty-one
month term. At December 31, 2003 the weighted average rate on certificates of
deposits was 2.95% compared to 3.57% at December 31, 2002. At December 31, 2003,
time deposits $100,000 or more totaled $19.7 million compared to $15.0 million
at December 31, 2002.

Federal Home Loan Bank advances and other debt at December 31, 2003 was $35.5
million, an increase of $9.0 million over the December 31, 2002 balance of $26.5
million. The $9.0 million net increase was a result of proceeds from two fixed
rate Federal Home Loan Bank advances totaling $10.0 million with an average rate
of 2.77%, offset by the repayment of the open-end line of credit with the
Federal Home Loan Bank of $1.0 million. At December 31, 2003, borrowings
consisted of $35.5 million in long-term fixed rate advances, of which $25.5
million are fixed-rate convertible advances. Convertible advances have specific
lock-out periods, usually two to three years, after which the Federal Home Loan
Bank has the option to convert the advance to a quarterly adjustable rate loan,
with the option of prepayment at the conversion date, or on any future date of
rate adjustment. At December 31, 2003 the average rate on Federal Home Loan Bank
advances was 4.04% compared to 4.43% at December 31, 2002.

                                       21
<PAGE>

Stockholders' equity at December 31, 2003 was $26.4 million compared to $27.3
million at December 31, 2002, a decrease of 914,000. The decrease was a result
of purchase of treasury stock and a decrease in accumulated other comprehensive
income, primarily offset by an increase in retained earnings. Retained earnings
increased by $1.5 million primarily due to net income of $1.9 million offset by
dividends declared and paid of $449,000. The decrease in accumulated other
comprehensive income of $638,000 was due to a decrease in unrealized
appreciation on available-for-sale securities from December 31, 2002 to December
31, 2003, net of income tax expense. The change of $176,000 in unallocated
employee stock ownership plan shares was due to the allocation of 15,204 shares
to plan participants. The change of $113,000 in unearned incentive plan shares
was due the allocation of 6,852 shares to recipients. Treasury stock increased
by $2.2 million from $2.4 million at December 31, 2002 to $4.6 million at
December 31, 2003. The Company purchased 115,485 shares for a cost of $2.2
million. All repurchased shares will be held as treasury shares to be used for
general corporate purposes.

CRITICAL ACCOUNTING POLICIES

The accounting and reporting policies of the Company are in accordance with
accounting principles generally accepted in the United States and conform to
general practices within the banking industry. The Company's significant
accounting policies are described in detail in the notes to the Company's
consolidated financial statements for the year ended December 31, 2003. The
preparation of financial statements in conformity with accounting principles
generally accepted in the United States of America requires management to make
estimates and assumptions. The financial position and results of operations can
be affected by these estimates and assumptions and are integral to the
understanding of reported results. Critical accounting policies are those
policies that management believes are the most important to the portrayal of the
Company's financial condition and results, and they require management to make
estimates that are difficult, subjective, or complex.

Allowance for Loan Losses - The allowance for loan losses provides coverage for
probable losses inherent in the Company's loan portfolio. Management evaluates
the adequacy of the allowance for credit losses each quarter based on changes,
if any, in underwriting activities, the loan portfolio composition (including
product mix and geographic, industry or customer-specific concentrations),
trends in loan performance, regulatory guidance and economic factors. This
evaluation is inherently subjective, as it requires the use of significant
management estimates. Many factors can affect management's estimates of specific
and expected losses, including volatility of default probabilities, rating
migrations, loss severity and economic and political conditions. The allowance
is increased through provisions charged to operating earnings and reduced by net
charge-offs.

The Company determines the amount of the allowance based on relative risk
characteristics of the loan portfolio. The allowance recorded for commercial
loans is based on reviews of individual credit relationships and an analysis of
the migration of

                                       22
<PAGE>

commercial loans and actual loss experience. The allowance recorded for
homogeneous consumer loans is based on an analysis of loan mix, risk
characteristics of the portfolio, fraud loss and bankruptcy experiences, and
historical losses, adjusted for current trends, for each homogenous category or
group of loans. The allowance for credit losses relating to impaired loans is
based on the loan's observable market price, the collateral for certain
collateral-dependent loans, or the discounted cash flows using the loan's
effective interest rate.

Regardless of the extent of the Company's analysis of customer performance,
portfolio trends or risk management processes, certain inherent but undetected
losses are probable within the loan portfolio. This is due to several factors
including inherent delays in obtaining information regarding a customer's
financial condition or changes in their unique business conditions, the
judgmental nature of individual loan evaluations, collateral assessments and the
interpretation of economic trends. Volatility of economic or customer-specific
conditions affecting the identification and estimation of losses for larger
non-homogeneous credits and the sensitivity of assumptions utilized to establish
allowances for homogeneous groups of loans are among other factors. The Company
estimates a range of inherent losses related to the existence of the exposures.
The estimates are based upon the Company's evaluation of imprecision risk
associated with the commercial and consumer allowance levels and the estimated
impact of the current economic environment.

Mortgage Servicing Rights - Mortgage servicing rights ("MSRs") associated with
loans originated and sold, where servicing is retained, are capitalized and
included in the consolidated balance sheet. The value of the capitalized
servicing rights represents the present value of the future servicing fees
arising from the right to service loans in the portfolio. Critical accounting
policies for MSRs relate to the initial valuation and subsequent impairment
tests. The methodology used to determine the valuation of MSRs requires the
development and use of a number of estimates, including anticipated principal
amortization and prepayments of that principal balance. Events that may
significantly affect the estimates used are changes in interest rates, mortgage
loan prepayment speeds and the payment performance of the underlying loans. The
carrying value of the MSRs is periodically reviewed for impairment based on a
determination of fair value. For purposes of measuring impairment, the servicing
rights are compared to a valuation prepared based on a discounted cash flow
methodology, utilizing current prepayment speeds and discount rates. Impairment,
if any, is recognized through a valuation allowance and a corresponding charge
to in the income statement.

LIQUIDITY AND CAPITAL RESOURCES

As of December 31, 2003, the total amount of certificates scheduled to mature in
the following 12 months was $45.9 million.

The following table presents additional information about our contractual
obligations as of December 31, 2003, which by their terms have contractual
maturity and termination dates subsequent to December 31, 2003 (dollars in
thousands):

                                       23
<PAGE>

<TABLE>
<CAPTION>
                                                Next 12         13-36         37-60        More than
                                                 Months         Months        Months        60 Months         Totals
                                                -------        -------       -------        ---------        --------
<S>                                             <C>            <C>           <C>            <C>              <C>
CONTRACTUAL OBLIGATIONS:
  Certificates of deposit                       $45,941        $15,265       $ 8,778        $   5,753        $ 75,737
  Federal Home Loan Bank advances                    --          8,000         5,000           22,500          35,500
  Minimum operating lease commitments               320            588           399              583           1,890
                                                -------        -------       -------        ---------        --------

    Totals                                      $46,261        $23,853       $14,177        $  28,836        $113,127
                                                =======        =======       =======        =========        ========
</TABLE>

The Company's purchase obligations have no material impact on its cash flow or
liquidity, and accordingly, have not been included in the above table.

At December 31, 2003, the Company had outstanding commitments to originate loans
of $2.7 million. The commitments extended over varying periods of time with the
majority being disbursed within a one-year period. Loan commitments at fixed
rates of interest amounted to $591,000, with the remainder at floating market
rates. In addition, the Company had outstanding unused lines of credit to
borrowers aggregating $5.4 million for commercial lines, and $1.7 million for
consumer lines of credit. Outstanding commitments for letters of credit at
December 31, 2003 totaled $29,000.

The following table presents additional information about our unfunded
commitments as of December 31, 2003, which by their terms have contractual
maturity dates subsequent to December 31, 2003 (dollars in thousands):

<TABLE>
<CAPTION>
                                                Next 12         13-36         37-60         More than
                                                Months          Months        Months        60 Months         Totals
                                                -------        -------       -------        ---------        --------
<S>                                             <C>            <C>           <C>            <C>              <C>
UNFUNDED COMMITMENTS:
  Letters of credit                             $    29        $    --       $    --        $      --        $     29
  Lines of credit                                 6,067            262           107              691           7,127
                                                -------        -------       -------        ---------        --------

    Totals                                      $ 6,096        $   262       $   107        $     691        $  7,156
                                                =======        =======       =======        =========        ========
</TABLE>

The Company believes that it has adequate resources to fund all of its
commitments. The Company's most liquid assets are cash and cash equivalents. The
level of cash and cash equivalents is dependent on the Company's operating,
financing, lending and investing activities during any given period. The level
of cash and cash equivalents at December 31, 2003 was $10.3 million. The
Company's future short-term requirements for cash are not expected to
significantly change. However, in the event that the Company should require
funds beyond its ability to generate them internally, additional sources of
funds are available, such as Federal Home Loan Bank advances. With no parent
company debt

                                       24
<PAGE>

and sound capital levels, the Company has several options for longer-term cash
needs, such as for future expansion and acquisitions.

A review of the Consolidated Statement of Cash Flows included in the
accompanying financial statements shows that the Company's cash and cash
equivalents ("cash") decreased by $159,000 in 2003 and $6.3 million in the year
ended December 31, 2002. Cash decreased in 2003 due to net cash used by
investing activities of $25.5 million, partially offset by net cash provided by
operating activities of $3.3 million and net cash provided by financing
activities of $22.0 million. Cash provided by operating activities included net
income of $1.9 million, plus non cash adjustments to net income including the
proceeds from sales of loans originated for sale of $45.6 million, offset by
$45.2 million of loans originated for sale and net gain on loan sales of
$735,000, the provision for loan losses of $728,000, net amortization of
premiums and discounts on securities of $887,000, depreciation and amortization
of $218,000, compensation related to employee stock ownership and incentive
plans of $424,000, and amortization of loan servicing rights of $849,000,
partially offset by the recovery of $416,000 of a previously identified
impairment of loan servicing rights.

Net cash used by investing activities included $91.7 million in purchases of
available-for-sale securities, net originations of loans of $2.4 million, the
purchase of director life insurance of $512,000, and the purchase of premised
and equipment of $227,000, offset by proceeds from maturities of
available-for-sale securities of $68.5 million, proceeds from sales of
foreclosed assets of $442,000, and proceeds from sales of available-for-sale
securities of $417,000. Cash provided by financing activities included a net
increase in demand deposits, money market, NOW and savings accounts of $10.5
million, $10.0 million in proceeds for the issuance of Federal Home Loan Bank
advances, and an increase in certificates of deposits of $5.2 million, offset by
the repayment of $1.0 million of Federal Home Loan Bank advances, the purchase
of treasury stock of $2.2 million, and dividends paid of $449,000.

Cash decreased in 2002 due to net cash provided by operating activities of $3.2
million and net cash provided by financing activities of $4.2 million, offset by
net cash used by investing activities of $13.7 million. Cash provided by
operating activities included net income of $1.3 million, plus non cash
adjustments to net income including the proceeds from sales of loans originated
for sale of $41.2 million offset by $41.0 million of loans originated for sale
and net gain on loan sales of $586,000, the provision for loan losses of
$718,000, depreciation and amortization of $268,000, amortization of loan
servicing rights of $895,000, the provision for valuation allowance for loan
servicing rights of $683,000, and compensation related to employee stock
ownership and incentive plans of $313,000. Net cash used by investing activities
included $41.0 million in purchases of available-for-sale securities, the
purchase of Federal Home Loan Bank stock of $2.0 million, net originations of
loans of $5.7 million, and the purchase of premises and equipment of $604,000,
offset by proceeds from maturities of available-for-sale securities of $34.2
million, proceeds from sales of foreclosed assets of $986,000, and proceeds from
sales of available-for-sale securities of $378,000. Cash provided by financing
activities included net increase in demand deposits, money market, NOW and
savings accounts of $8.4 million and $1.0 million proceeds for the issuance of
Federal Home

                                       25
<PAGE>

Loan Bank advances offset by a decrease in certificates of deposit of $2.1
million, the purchase of incentive plan shares of $1.0 million, and the purchase
of treasury stock of $1.5 million.

The Bank is required to maintain regulatory capital sufficient to meet tier I
leverage, tier I risk-based and total risk-based capital ratios of at least
4.0%, 4.0% and 8.0%, respectively. At December 31, 2003, the Bank exceeded each
of its capital requirements with ratios of 11.0%, 20.4% and 21.7%, respectively.

Management of Interest Rate Risk

The principal objectives of the Company's interest rate risk management function
are: (i) to evaluate the interest rate risk included in certain balance sheet
accounts; (ii) to determine the level of risk appropriate given the Company's
business focus, operating environment, capital and liquidity requirements, and
performance objectives; (iii) to establish asset concentration guidelines; and
(iv) to manage the risk consistent with Board-approved guidelines. Through such
management, the Company seeks to reduce the vulnerability of its operations to
changes in interest rates and to manage the ratio of interest rate sensitive
assets to interest rate sensitive liabilities within specified maturity terms or
repricing dates. The Company's Board of Directors has established as
Asset/Liability Committee consisting of directors and senior management
officers, which is responsible to reviewing the Company's asset/liability
policies and interest rate risk position. Such committee generally meets on a
quarterly basis, and at other times as dictated by market conditions, and
reports to the Board of Directors.

The Company's interest rate risk strategy primarily consists of: (i) emphasizing
the attraction and retention of core deposits, which tend to be a more stable
source of funding; (ii) emphasizing the origination of adjustable rate mortgage
loan products and short-term commercial and consumer loans for the in-house
portfolio, although this is dependent largely on the market for such loans;
(iii) selling longer-term fixed-rate one-to-four family mortgage loans into the
secondary market; and (iv) investing primarily in U.S. government agency
investments and mortgage-backed securities.

Our ability to maintain net interest income depends upon earning a higher yield
on assets than the rates we pay on deposits and borrowings and sustaining this
positive interest rate spread during the fluctuations in prevailing interest
rates. Interest rate sensitivity is a measure of the difference between amounts
of interest-earning assets and interest-bearing liabilities that either re-price
or mature within a given period of time. The difference, or the interest rate
repricing "gap", provides an indication of how an institution's interest rate
spread will be affected by changes in interest rates. A gap is considered
positive when the amount of interest-rate sensitive assets exceeds the amount of
interest-rate sensitive liabilities, and is considered negative when the amount
of interest-rate sensitive liabilities exceeds the amount of interest-rate
sensitive assets. Generally, during a period of rising interest rates, a
negative gap within shorter maturities would adversely affect net interest
income, while a positive gap within shorter maturities would result in an
increase in net interest income. During a period of falling interest rates, a
negative gap within

                                       26
<PAGE>

shorter maturities would result in an increase in net interest income while a
positive gap within shorter maturities would have the opposite effect.

The following table sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at December 31, 2003, which mature or
re-price in the periods shown. Except as stated in the table, the amount of
assets and liabilities shown which re-price or mature during a particular period
were determined in accordance with the earlier of term to repricing or
contractual maturity. Cumulatively, as of December 31, 2003, the amount of the
Company's interest-bearing liabilities estimated to mature or re-price within
one year exceeded the Company's earning assets with the same time
characteristics by $27.4 million or 12.12% of the Company's total book assets.

<TABLE>
<CAPTION>
                                      Daily       1 to 3     3 to 12     1 to 3      3 to 5      Over 5
                                     Reprice      Months      Months      Years      Years        Years     Total
                                     -------     --------    --------   --------    --------     -------   --------
                                                                     (in thousands)
<S>                                  <C>        <C>         <C>         <C>         <C>          <C>       <C>
Interest-earning Assets:
 Loans receivable, net (1,5,6)       $     0     $ 18,310    $ 26,778   $ 37,068    $ 21,665     $ 5,168   $108,989
 Investment Securities (2,3,5,6)           0       16,225      24,101     25,522      15,011      12,883     93,742
 Interest-bearing Due From             3,713            0           0          0           0           0      3,713
                                     -------     --------    --------   --------    --------     -------   --------
   TOTAL                               3,713       34,535      50,879     62,590      36,676      18,051    206,444
                                     -------     --------    --------   --------    --------     -------   --------

Interest-bearing Liabilities
 Deposits (4)                              0       88,199      28,946     15,604      14,784           0    147,533
 Borrowings                                0            0           0      8,000       5,000      22,500     35,500
                                     -------     --------    --------   --------    --------     -------   --------
   TOTAL                                   0       88,199      28,946     23,604      19,784      22,500    183,033
                                     -------     --------    --------   --------    --------     -------   --------

Gap                                    3,713      (53,664)     21,933     38,986      16,892      (4,449)    23,411
                                     -------     --------    --------   --------    --------     -------   --------

                                     -------     --------    --------   --------    --------     -------   --------
Cumulative Gap                       $ 3,713    ($ 49,951)  ($ 28,018)  $ 10,968    $ 27,860     $23,411   $ 27,406
                                     =======     ========    ========   ========    ========     =======   ========
Cumulative Gap as a %
of Total Assets                         1.64%      -22.08%     -12.39%      4.85%      12.32%      10.35%     12.12%
                                     -------     --------    --------   --------    --------     -------   --------
</TABLE>

(1)  Fixed rate loans are slotted according to their final maturity date.
     Adjustable rate loans are slotted according to their next reprice date. The
     cash flows Resdiential R/E, Commercial R/E and Consumer Installment Loans
     al receive an amortizing treatment. The cash flows for Residential R/E are
     accelerated to reflect assumptions for prepayments.

(2)  Reflects re-pricing, contractual maturity, or anticipated call date.

(3)  All securities are classified as available for sale.

(4)  Adjusted to reflect next likely reset period.

(5)  The cash flows for MBS receive an amortizing treatment.

(6)  The cash flows for MBS are accelerated to reflect assumptions for
     prepayments.

The Company tends to be liability sensitive due to the levels of non-maturity
deposits (Now, Savings, and MMDA), the offering rates of which are available to
be reset at least monthly, and certificates of deposit that will mature within
twelve months. Based on information provided in the table, assuming no
significant impact from competitive pressure and no major restructuring of the
balance sheet, it is estimated that the effect of a 100 basis point rate
increase would cause a decline in the Bank's future 12-month year-to-date net
interest income of approximately $56,000.

                                       27
<PAGE>

Management believes that the assumptions used to evaluate interest rate
sensitivity approximate actual experience and considers this method a reasonable
tool; however, the interest rate sensitivity of the Company's assets and
liabilities and the estimated effect of changes in interest rates on net
interest income could vary substantially if different assumptions were used or
actual experience differs from the historical experiences on which these
assumptions were based.

IMPACT OF INFLATION AND CHANGING PRICES

The consolidated financial statements of the Company and related notes presented
herein have been prepared in accordance with accounting principles generally
accepted in the United States of America, which generally require the
measurement of financial position and operating results in terms of historical
dollars, without considering changes in relative purchasing power over time due
to inflation. Unlike most industrial companies, virtually all of the Bank's
assets and liabilities are monetary in nature. As a result, interest rates
generally have a more significant impact on the Bank's performance than does the
effect of inflation. Interest rates do not necessarily move in the same
direction or in the same magnitude as the prices of goods and services, since
such prices are affected by inflation to a larger extent than interest rates.

IMPACT OF ACCOUNTING CHANGES

In May 2003, the Financial Accounting Standards Board ("FASB") issued Statement
of Financial Standards ("SFAS") No. 150, Accounting for Certain Financial
Instruments with Characteristics of both Liabilities and Equity. SFAS 150
establishes standards for classification and measurement in the statement of
financial position of certain financial instruments with characteristics of both
liabilities and equity. It requires that an issuer classify a financial
instrument that is within its scope as a liability. The FASB's Staff Position
150-3 deferred indefinitely the guidance in SFAS No. 150 on certain mandatorily
redeemable noncontrolling interests. The adoption of SFAS No. 150 will have no
impact on the Company's financial position or results of operation.

In January of 2003, the FASB issued Interpretation No. 46, Consolidation of
Variable Interest Entities, an Interpretation of Accounting Research Bulletin No
51, and in December 2003, the FASB deferred certain effective dates of
Interpretation No. 46. For all variable interest entities other than special
purpose entities, the revised Interpretation is effective for periods ended
after March 15, 2004. For variable interest entities meeting the definition of
special purpose entities under earlier accounting rules, the Interpretation
remains effective for periods ending after December 31, 2003. The Interpretation
requires the consolidation of entities in which an enterprise absorbs a majority
of the entity's expected losses, receives a majority of the entity's expected
residual returns, or both, as a result of ownership, contractual or other
financial interests in the entity. Currently, entities are generally
consolidated by an enterprise when it has a controlling interest through
ownership of a majority voting interest in the entity. The Company has
determined that is has no such interests.

                                       28
<PAGE>

In December 2002, the FASB issued SFAS No. 148, Accounting for Stock-based
Compensation - Transition and Disclosure, which provides guidance for transition
from the intrinsic value method of accounting for stock-based compensation under
Accounting Principles Board ("APB") Opinion No. 25 to SFAS No. 123's fair value
method of accounting, if a company so elects. The Company applies APB Opinion
No. 25 and related Interpretations in accounting for the stock option plan.
Accordingly, no compensation costs have been recognized, as all options granted
had an exercise price equal to the market value of the underlying common stock
on the date of the grant. Had compensation cost for the Company's stock option
plan been recorded based on the fair value at the grant dates for awards under
the plan consistent with the method prescribed by SFAS No. 123, net income and
net income per share would have been adjusted to the proforma amounts indicated
in Note 1.

In November, 2002, FASB Interpretation No. 45 ("FIN 45"), Guarantor's Accounting
and Disclosure Requirements for Guarantees, Including Indirect Guarantees of
Indebtedness of Others was issued. FIN 45 requires the disclosures to be made by
a guarantor in its financial statements about its obligations under certain
guarantees that it has issued. It also clarifies that a guarantor is required to
recognize, at the inception of a guarantee, a liability for the fair value of
the obligation undertaken in issuing the guarantee. The most significant FIN 45
instruments of the Company are standby letters of credit. The required FIN 45
disclosure has been incorporated into Note 20.

In 2003, the Securities and Exchange Commission (the "SEC") indicated they will
provide guidance on the accounting for loan commitments that relate to the
origination of mortgage loans that will be held for resale pursuant to FASB
Statement No. 133, "Accounting for Derivative Instruments and Hedging
Activities" which was released in 1998 and FASB Statement No. 149, "Amendment of
Statement 133 on Derivative Instruments and Hedging Activities" which was issued
in 2003. The SEC staff have expressed their view that loan commitments that
relate to the origination of mortgage loans that will be held for resale are
written options from the perspective of the prospective lender. Thus, upon the
origination of a loan commitment, the SEC staff believes that the fair value of
the loan commitment should be recorded as a liability with the offset to expense
to the extent consideration has not been received. The written option would
remain a liability until the expiration or culmination of the contract. This
accounting treatment should be applied to all loan commitments originated in the
first reporting period beginning after March 15, 2004. The Company does not
expect the adoption of this SEC recommendation to materially impact the
Company's financial statements or results of operations.

                                       29
<PAGE>

[LOGO BKD LLP]                                 225 North Water Street, Suite 400
                                               P.O. Box 1580
                                               Decatur, IL 62525-1580
                                               217 429-2411 Fax 217 429-6109

                                               bkd.com

                         INDEPENDENT ACCOUNTANTS' REPORT

                   To the Stockholders
                    and Board of Directors
                   First BancTrust Corporation
                   Paris, Illinois

                   We have audited the accompanying consolidated balance sheets
                   of First BancTrust Corporation as of December 31, 2003 and
                   2002, and the related consolidated statements of income,
                   stockholders' equity, and cash flows for the years then
                   ended. These consolidated financial statements are the
                   responsibility of the Company's management. Our
                   responsibility is to express an opinion on these consolidated
                   financial statements based on our audits.

                   We conducted our audits in accordance with auditing standards
                   generally accepted in the United States of America. Those
                   standards require that we plan and perform the audit to
                   obtain reasonable assurance about whether the financial
                   statements are free of material misstatement. An audit
                   includes examining, on a test basis, evidence supporting the
                   amounts and disclosures in the financial statements. An audit
                   also includes assessing the accounting principles used and
                   significant estimates made by management, as well as
                   evaluating the overall financial statement presentation. We
                   believe that our audits provide a reasonable basis for our
                   opinion.

                   In our opinion, the consolidated financial statements
                   described above present fairly, in all material respects, the
                   consolidated financial position of First BancTrust
                   Corporation as of December 31, 2003 and 2002, and the results
                   of its operations and its cash flows for the years then ended
                   in conformity with accounting principles generally accepted
                   in the United States of America.

                   /s/ BKD, LLP

                   Decatur, Illinois
SOLUTIONS          January 23, 2004
FOR
SUCCESS
                                                       A member of    [MRI LOGO]
                                                       Moores Rowland
                                                       International

                                       30
<PAGE>

                           FIRST BANCTRUST CORPORATION
                           CONSOLIDATED BALANCE SHEETS
                           DECEMBER 31, 2003 AND 2002

ASSETS

<TABLE>
<CAPTION>
                                                                          2003            2002
                                                                      ------------   ------------
<S>                                                                   <C>            <C>
Cash and due from banks                                               $  6,581,064   $  6,995,804
Interest-bearing demand deposits                                         3,713,041      3,457,568
                                                                      ------------   ------------

       Cash and cash equivalents                                        10,294,105     10,453,372
                                                                      ------------   ------------

Available-for-sale securities                                           93,741,777     72,747,550

Loans held for sale                                                        453,342        596,565

Loans, net of allowance for loan losses of $2,124,297 and
  $1,962,551 at December 31, 2003 and 2002                             106,411,086    105,181,804

Premises and equipment                                                   2,780,691      2,771,616

Federal Home Loan Bank stock                                             4,006,300      3,711,600

Foreclosed assets held for sale, net                                        95,561        185,083

Interest receivable                                                      2,237,594      2,356,771

Deferred income taxes                                                       37,137             --

Loan servicing rights, net of valuation allowance of $266,639
  and $683,087 at December 31, 2003 and 2002                               964,024        949,580

Cash surrender value of life insurance                                   4,345,976      3,666,926

Other                                                                      826,775        104,543
                                                                      ------------   ------------

       Total assets                                                   $226,194,368   $202,725,410
                                                                      ============   ============
</TABLE>

See Notes to Consolidated Financial Statements

                                       31

<PAGE>

LIABILITIES AND STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
                                                                           2003            2002
                                                                      -------------    -------------
<S>                                                                   <C>              <C>
LIABILITIES
    Deposits
       Demand                                                         $  15,494,812    $  17,295,781
       Savings, NOW, and money market                                    71,796,378       59,523,897
       Time                                                              75,736,700       70,515,703
                                                                      -------------    -------------

           Total deposits                                               163,027,890      147,335,381
                                                                      -------------    -------------

    Federal Home Loan Bank advances and other debt                       35,500,000       26,501,230
    Pass through payments received on loans sold                            261,701          260,753
    Advances from borrowers for taxes and insurance                         109,285          132,885
    Deferred income taxes                                                        --          267,765
    Interest payable                                                        126,958          105,651
    Other                                                                   776,926          816,021
                                                                      -------------    -------------

           Total liabilities                                            199,802,760      175,419,686
                                                                      -------------    -------------
COMMITMENTS AND CONTINGENT LIABILITIES

STOCKHOLDERS' EQUITY
    Preferred stock, $.01 par value; authorized and unissued -
      1,000,000 shares
    Common stock, $.01 par value; authorized 5,000,000 shares;
      Issued 1,520,875 shares
      Outstanding - 2003 - 1,250,225 shares, 2002 - 1,365,710
      shares                                                                 15,209           15,209
    Additional paid-in capital                                           14,579,685       14,444,010
    Retained earnings                                                    17,743,300       16,243,149
    Unearned ESOP compensation; 2003 - 79,859 shares, 2002 - 95,063
      shares                                                               (923,034)      (1,098,766)
    Unearned incentive plan shares; 2003 - 49,415 shares, 2002 -
      56,267 shares                                                        (815,480)        (928,538)
    Accumulated other comprehensive income                                  355,593          993,257
    Treasury stock, at cost
       Common; 2003 - 270,650 shares, 2002 - 155,165 shares              (4,563,665)      (2,362,597)
                                                                      -------------    -------------

           Total stockholders' equity                                    26,391,608       27,305,724
                                                                      -------------    -------------

           Total liabilities and stockholders' equity                 $ 226,194,368    $ 202,725,410
                                                                      =============    =============
</TABLE>

                                       32

<PAGE>

                           FIRST BANCTRUST CORPORATION
                        CONSOLIDATED STATEMENTS OF INCOME
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                      2003          2002
                                                                   -----------   -----------
<S>                                                                <C>           <C>
INTEREST AND DIVIDEND INCOME
    Loans
       Taxable                                                     $ 8,445,980   $ 9,044,909
       Tax-exempt                                                       38,003        43,952
    Securities
       Taxable                                                       2,771,604     3,387,666
       Tax-exempt                                                      343,367       293,145
    Dividends on Federal Home Loan Bank stock                          237,954       163,752
    Deposits with financial institutions and other                      62,066        98,337
                                                                   -----------   -----------

           Total interest and dividend income                       11,898,974    13,031,761
                                                                   -----------   -----------

INTEREST EXPENSE
    Deposits                                                         3,207,433     4,337,536
    Federal Home Loan Bank advances and other debt                   1,413,147     1,188,340
                                                                   -----------   -----------

           Total interest expense                                    4,620,580     5,525,876
                                                                   -----------   -----------

NET INTEREST INCOME                                                  7,278,394     7,505,885

PROVISION FOR LOAN LOSSES                                              728,000       718,000
                                                                   -----------   -----------

NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES                  6,550,394     6,787,885
                                                                   -----------   -----------

NONINTEREST INCOME
    Customer service fees                                              766,457       544,041
    Other service charges and fees                                     885,260       877,746
    Net gains on loan sales                                            735,309       585,934
    Net realized gains on sales of available-for-sale securities       133,965       119,654
    Loan servicing fees                                                526,237       497,884
    Brokerage fees                                                      62,704       176,739
    Abstract and title fees                                            439,491       406,247
    Other                                                              269,106       284,059
                                                                   -----------   -----------

           Total noninterest income                                  3,818,529     3,492,304
                                                                   -----------   -----------
</TABLE>

See Notes to Consolidated Financial Statements

                                       33

<PAGE>

<TABLE>
<CAPTION>
                                                                       2003           2002
                                                                   -----------    -----------
<S>                                                                <C>            <C>
NONINTEREST EXPENSE
    Salaries and employee benefits                                 $ 4,113,413    $ 3,939,395
    Net occupancy expense                                              234,991        191,794
    Equipment expense                                                  653,779        644,102
    Data processing fees                                               437,429        475,410
    Professional fees                                                  281,772        313,937
    Foreclosed assets expense, net                                     117,685        214,268
    Marketing expense                                                  278,086        206,239
    Amortization of loan servicing rights                              848,746        894,553
    Provision (recovery) for impairment of loan servicing rights      (416,448)       683,087
    Other                                                              938,570        791,909
                                                                   -----------    -----------

           Total noninterest expense                                 7,488,023      8,354,694
                                                                   -----------    -----------

INCOME BEFORE INCOME TAXES                                           2,880,900      1,925,495

PROVISION FOR INCOME TAXES                                             931,501        612,788
                                                                   -----------    -----------

NET INCOME                                                         $ 1,949,399    $ 1,312,707
                                                                   ===========    ===========

BASIC EARNINGS PER SHARE                                           $      1.70    $      1.02
                                                                   ===========    ===========

DILUTED EARNINGS PER SHARE                                         $      1.62    $      1.00
                                                                   ===========    ===========
</TABLE>

                                       34

<PAGE>

                           FIRST BANCTRUST CORPORATION
                 CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                             COMMON STOCK
                                                     ----------------------------   ADDITIONAL PAID
                                                        SHARES          AMOUNT        -IN CAPITAL
                                                     ------------    ------------   ---------------
<S>                                                  <C>             <C>            <C>
BALANCE, JANUARY 1, 2002                                1,458,275    $     15,209   $ 14,381,726

    Comprehensive income
       Net income                                              --              --             --
       Change in unrealized appreciation on
          available-for-sale securities, net of
          taxes                                                --              --             --

           Total comprehensive income

    Dividends on common stock, $.20 per share                  --              --             --
    ESOP shares earned (15,204 shares)                         --              --         64,274
    Incentive plan shares purchased (60,835
      shares)                                                  --              --             --
    Incentive plan shares allocated (4,568
      shares)                                                  --              --         (1,990)
    Purchase of treasury stock (92,565 shares)            (92,565)             --             --
                                                     ------------    ------------   ------------

BALANCE, DECEMBER 31, 2002                              1,365,710          15,209     14,444,010

    Comprehensive income
       Net income                                              --              --             --
       Change in unrealized appreciation on
          available-for-sale securities, net of
          taxes                                                --              --             --

           Total comprehensive income

    Dividends on common stock, $.35 per share                  --              --             --
    ESOP shares earned (15,204 shares)                         --              --        139,101
    Incentive plan shares allocated (6,852 shares)             --              --         (3,426)
    Purchase of treasury stock (115,485 shares)          (115,485)             --             --
                                                     ------------    ------------   ------------

BALANCE, DECEMBER 31, 2003                              1,250,225    $     15,209   $ 14,579,685
                                                     ============    ============   ============
</TABLE>

See Notes to Consolidated Financial Statements

                                       35

<PAGE>

<TABLE>
<CAPTION>
                                                  ACCUMULATED
                  UNEARNED                          OTHER
  RETAINED     INCENTIVE PLAN   UNEARNED ESOP   COMPREHENSIVE
  EARNINGS         SHARES       COMPENSATION        INCOME     TREASURY STOCK       TOTAL
------------   --------------   -------------   -------------  --------------   ------------
<S>             <C>             <C>             <C>             <C>             <C>
$ 15,213,625    $         --    $ (1,274,498)   $    246,590    $   (864,855)   $ 27,717,797

   1,312,707              --              --              --              --       1,312,707

          --              --              --         746,667              --         746,667
                                                                                ------------
                                                                                   2,059,374

    (283,183)             --              --              --              --        (283,183)
          --              --         175,732              --              --         240,006

          --      (1,003,888)             --              --              --      (1,003,888)
          --          75,350              --              --              --          73,360
          --              --              --              --      (1,497,742)     (1,497,742)
------------    ------------    ------------    ------------    ------------    ------------
  16,243,149        (928,538)     (1,098,766)        993,257      (2,362,597)     27,305,724

   1,949,399              --              --              --              --       1,949,399

          --              --              --        (637,664)             --        (637,664)
                                                                                ------------
                                                                                   1,311,735

    (449,248)             --              --              --              --        (449,248)
          --              --         175,732              --              --         314,833
          --         113,058              --              --              --         109,632
          --              --              --              --      (2,201,068)     (2,201,068)
------------    ------------    ------------    ------------    ------------    ------------
$ 17,743,300    $   (815,480)   $   (923,034)   $    355,593    $ (4,563,665)   $ 26,391,608
============    ============    ============    ============    ============    ============
</TABLE>

                                       36

<PAGE>

                           FIRST BANCTRUST CORPORATION
                      CONSOLIDATED STATEMENTS OF CASH FLOWS
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                                          2003            2002
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
OPERATING ACTIVITIES
    Net income                                                        $  1,949,399    $  1,312,707
    Items not requiring (providing) cash
       Depreciation and amortization                                       217,838         267,618
       Provision for loan losses                                           728,000         718,000
       Loss on foreclosed assets, net                                       42,443          75,644
       Amortization of premiums and discounts on securities, net           887,042         257,207
       Amortization of loan servicing rights                               848,746         894,553
       Provision (recovery) for impairment of loan servicing rights       (416,448)        683,087
       Deferred income taxes                                               157,744        (382,868)
       Net realized gains on available-for-sale securities                (133,965)       (119,654)
       Net gain on loan sales                                             (735,309)       (585,934)
       Federal Home Loan Bank stock dividends                             (237,954)       (129,500)
       Compensation related to ESOP and incentive plan                     424,465         313,366
       Loans originated for sale                                       (45,201,025)    (41,039,245)
       Proceeds from sales of loans originated for sale                 45,632,815      41,192,812
    Changes in
       Interest receivable                                                  62,431        (240,449)
       Cash surrender value of life insurance                             (167,050)       (188,285)
       Other assets                                                       (722,232)        212,674
       Interest payable                                                     21,307         (18,109)
       Other liabilities                                                   (39,095)        (10,378)
                                                                      ------------    ------------

           Net cash provided by operating activities                     3,319,152       3,213,246
                                                                      ------------    ------------

INVESTING ACTIVITIES
    Purchases of available-for-sale securities                         (91,737,490)    (40,973,822)
    Proceeds from maturities of available-for-sale securities           68,473,021      34,188,402
    Proceeds from sales of available-for-sale securities                   416,855         377,724
    Net change in loans                                                 (2,352,060)     (5,682,690)
    Proceeds from sales of foreclosed assets                               441,857         985,615
    Purchase of premises and equipment                                    (226,913)       (604,116)
    Purchase of Federal Home Loan Bank stock                                    --      (2,000,000)
    Purchase of life insurance                                            (512,000)             --
                                                                      ------------    ------------

           Net cash used in investing activities                       (25,496,730)    (13,708,887)
                                                                      ------------    ------------
</TABLE>

                                       37

<PAGE>

<TABLE>
<CAPTION>
                                                                          2003           2002
                                                                      ------------    ------------
<S>                                                                   <C>             <C>
FINANCING ACTIVITIES
    Net increase in demand deposits, money market, NOW and savings
      accounts                                                        $ 10,471,512    $  8,131,613
    Net increase (decrease) in certificates of deposit                   5,220,997      (2,111,943)
    Proceeds from the issuance of Federal Home Loan Bank advances
      and other debt                                                    10,000,000       1,000,000
    Repayment of Federal Home Loan Bank advances and other debt         (1,001,230)        (14,343)
    Net change in pass through payments received on loans sold                 948          (9,769)
    Net decrease in advances from borrowers for taxes and insurance        (23,600)         (7,663)
    Purchase of incentive plan shares                                                   (1,003,888)
    Dividends paid                                                        (449,248)       (283,183)
    Purchase of treasury stock                                          (2,201,068)     (1,497,742)
                                                                      ------------    ------------

           Net cash provided by financing activities                    22,018,311       4,203,082
                                                                      ------------    ------------

DECREASE IN CASH AND CASH EQUIVALENTS                                     (159,267)     (6,292,559)

CASH AND CASH EQUIVALENTS, BEGINNING OF YEAR                            10,453,372      16,745,931
                                                                      ------------    ------------

CASH AND CASH EQUIVALENTS, END OF YEAR                                $ 10,294,105    $ 10,453,372
                                                                      ============    ============

SUPPLEMENTAL CASH FLOWS INFORMATION

    Interest paid                                                     $  4,599,273    $  5,543,985

    Income taxes paid (net of refunds)                                $  1,300,000    $    780,008

    Real estate acquired in settlement of loans                       $    394,778    $    439,008
</TABLE>

                                       38

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                     YEARS ENDED DECEMBER 31, 2003 AND 2002

NOTE 1: NATURE OF OPERATIONS AND SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

     NATURE OF OPERATIONS

          First BancTrust Corporation ("Company") is a financial holding company
          whose principal activity is the ownership and management of its
          wholly-owned subsidiaries, First Bank & Trust, S.B. (Bank), ECS
          Service Corporation, and First Charter Service Corporation. The Bank
          is primarily engaged in providing a full range of banking and
          financial services to individual and corporate customers in East
          Central Illinois. The Company also provides other services, such as
          brokerage and abstract and title services through its subsidiaries,
          ECS Service Corporation and First Charter Service Corporation. The
          Bank's subsidiary, Community Finance Center, Inc., provides retail
          consumer loans to the Company's customers. The Company and Bank are
          subject to competition from other financial institutions. The Company
          and Bank are subject to the regulation of certain federal and state
          agencies and undergo periodic examinations by those regulatory
          authorities.

     PRINCIPLES OF CONSOLIDATION

          The consolidated financial statements include the accounts of the
          Company and the Bank. All significant intercompany accounts and
          transactions have been eliminated in consolidation.

     USE OF ESTIMATES

          The preparation of financial statements in conformity with accounting
          principles generally accepted in the United States of America requires
          management to make estimates and assumptions that affect the reported
          amounts of assets and liabilities and disclosure of contingent assets
          and liabilities at the date of the financial statements and the
          reported amounts of revenues and expenses during the reporting period.
          Actual results could differ from those estimates.

          Material estimates that are particularly susceptible to significant
          change relate to the determination of the allowance for loan losses,
          the valuation of real estate acquired in connection with foreclosures
          or in satisfaction of loans, loan servicing rights, and premiums on
          mortgage backed securities and collateralized mortgage obligations. In
          connection with the determination of the allowance for loan losses and
          the valuation of foreclosed assets held for sale, management obtains
          independent appraisals for significant properties. Management
          estimates loan servicing rights taking into consideration changes in
          interest rates, current prepayment rates and expected future cash
          flows and obtains an independent valuation for the asset. Management
          estimates the prepayment assumptions used in calculating the
          amortization on premiums on mortgage backed securities and
          collateralized mortgage obligations.

     CASH EQUIVALENTS

          The Company considers all liquid investments with original maturities
          of three months or less to be cash equivalents.

                                       39

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

     SECURITIES

          Available-for-sale securities, which include any security for which
          the Company has no immediate plan to sell but which may be sold in the
          future, are carried at fair value. Unrealized gains and losses are
          recorded, net of related income tax effects, in other comprehensive
          income.

          Amortization of premiums and accretion of discounts are recorded as
          interest income from securities. Realized gains and losses are
          recorded as net security gains (losses). Gains and losses on sales of
          securities are determined on the specific identification method.

     LOANS HELD FOR SALE

          The Company sells one-to-four family residential loans, real estate
          loans and agricultural loans, including farmland and agricultural
          production finance, to various investors. The agricultural loans are
          underwritten to carry a government guarantee that covers 90% of any
          loss on the loan. The guaranteed portion is sold to the various
          investors with servicing retained.

          Loans originated and intended for sale in the secondary market are
          carried at the lower of cost or fair value in the aggregate. Net
          unrealized losses, if any, are recognized through a valuation
          allowance by charges to income.

     LOANS

          Loans that management has the intent and ability to hold for the
          foreseeable future or until maturity or payoffs are reported at their
          outstanding principal balances adjusted for any charge-offs, net of
          the allowance for loan losses and any deferred fees or costs on
          originated loans. Interest income is reported on the interest method
          and includes amortization of the net deferred loan fees and costs over
          the loan term. Generally, loans are placed on non-accrual status at
          ninety days past due and interest is considered a loss, unless the
          loan is well-secured and in the process of collection.

     ALLOWANCE FOR LOAN LOSSES

          The allowance for loan losses is established as losses are estimated
          to have occurred through a provision for loan losses charged to
          income. Loan losses are charged against the allowance when management
          believes the uncollectibility of a loan balance is confirmed.
          Subsequent recoveries, if any, are credited to the allowance.

          The allowance for loan losses is evaluated on a regular basis by
          management and is based upon management's periodic review of the
          collectibility of the loans in light of historical experience, the
          nature and volume of the loan portfolio, adverse situations that may
          affect the borrower's ability to repay, estimated value of any
          underlying collateral and prevailing economic conditions. This
          evaluation is inherently subjective as it requires estimates that are
          susceptible to significant revision as more information becomes
          available.

                                       40

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          A loan is considered impaired when, based on current information and
          events, it is probable that the Company will be unable to collect the
          scheduled payments of principal or interest when due according to the
          contractual terms of the loan agreement. Factors considered by
          management in determining impairment include payment status,
          collateral value and the probability of collecting scheduled principal
          and interest payments when due. Loans that experience insignificant
          payment delays and payment shortfalls generally are not classified as
          impaired. Management determines the significance of payment delays and
          payment shortfalls on a case-by-case basis, taking into consideration
          all of the circumstances surrounding the loan and the borrower,
          including the length of the delay, the reasons for the delay, the
          borrower's prior payment record and the amount of the shortfall in
          relation to the principal and interest owed. Impairment is measured on
          a loan-by-loan basis for commercial and construction loans by either
          the present value of expected future cash flows discounted at the
          loan's effective interest rate, the loan's obtainable market price or
          the fair value of the collateral if the loan is collateral dependent.

          Large groups of smaller balance homogenous loans are collectively
          evaluated for impairment. Accordingly, the Company does not separately
          identify individual consumer and residential loans for impairment
          disclosures.

     PREMISES AND EQUIPMENT

          Depreciable assets are stated at cost less accumulated depreciation.
          Depreciation is charged to expense using the straight-line method over
          the estimated useful lives of the assets. Leasehold improvements are
          capitalized and depreciated using the straight-line method over the
          terms of the respective leases or the estimated useful lives of the
          improvements, whichever is shorter.

     FEDERAL HOME LOAN BANK STOCK

          Federal Home Loan Bank stock is a required investment for institutions
          that are members of the Federal Home Loan Bank system. The required
          investment in the common stock is based on a predetermined formula.

     FORECLOSED ASSETS HELD FOR SALE

          Assets acquired through, or in lieu of, loan foreclosure are held for
          sale and are initially recorded at fair value at the date of
          foreclosure, establishing a new cost basis. Subsequent to foreclosure,
          valuations are periodically performed by management and the assets are
          carried at the lower of carrying amount or fair value less cost to
          sell. Revenue and expenses from operations and changes in the
          valuation allowance are included in net expenses from foreclosed
          assets.

                                       41

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

     LOAN SERVICING RIGHTS

          Loan servicing rights on originated loans that have been sold are
          capitalized by allocating the total cost of the loans between the loan
          servicing rights and the loans based on their relative fair values.
          Capitalized servicing rights are amortized in proportion to and over
          the period of estimated servicing revenues. Impairment of loan
          servicing rights is assessed based on the fair value of those rights.
          Fair values are estimated using either an independent valuation or by
          discounted cash flows based on a current market interest rate. For
          purposes of measuring impairment, the rights are stratified based on
          the predominant risk characteristics of the underlying loans. The
          predominant characteristic currently used for stratification is type
          of loan. The amount of impairment recognized is the amount by which
          the capitalized loan servicing rights for a stratum exceed their fair
          value.

     INCENTIVE PLAN

          The Company accounts for its stock award program or incentive plan in
          accordance with Accounting Principals Board Opinion (APB) No. 25,
          Accounting for Stock Issued to Employees. The aggregate purchase price
          of all shares owned by the incentive plan is reflected as a reduction
          of stockholders' equity. Compensation expense is based on the market
          price of the Company's stock on the date the shares are granted and is
          recorded over the vesting period. The difference between the aggregate
          purchase price and the fair value on the date granted of the shares
          earned is recorded as an adjustment to additional paid-in capital.

     EMPLOYEE STOCK OWNERSHIP PLAN

          The Company accounts for its employee stock ownership plan (ESOP) in
          accordance with American Institute of Certified Public Accountants
          (AICPA) Statement of Position 93-6. The cost of shares issued to the
          ESOP but not yet allocated to participants are presented in the
          consolidated balance sheet as a reduction of stockholders' equity.
          Compensation expense is recorded based on the market price of the
          shares as they are committed to be released for allocation to
          participant accounts. The difference between the market price and the
          cost of shares committed to be released is recorded as an adjustment
          to additional paid-in capital. Dividends on allocated ESOP shares are
          recorded as a reduction of retained earnings; dividends on unallocated
          ESOP shares are reflected as a reduction of debt.

          Shares are considered outstanding for earnings per share calculations
          when they are committed to be released; unallocated shares are not
          considered outstanding.

     TREASURY STOCK

          Treasury stock is stated at cost. Cost is determined by the first-in,
          first-out method.

                                       42

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

     STOCK OPTIONS

          During 2003, the Company adopted a stock-based employee compensation
          plan, which is described more fully in Note 16. The Company accounts
          for this plan under the recognition and measurement principles of APB
          Opinion No. 25, Accounting for Stock Issued to Employees, and related
          Interpretations. No stock-based employee compensation cost is
          reflected in net income, as all options granted under this plan had an
          exercise price equal to the market value of the underlying common
          stock on the grant date. The following table illustrates the effect of
          net income and earnings per share if the Company had applied the fair
          value provisions of FASB Statement No. 123, Accounting for Stock Based
          Compensation to stock based employee compensation.

<TABLE>
<CAPTION>
                                                                                       YEAR ENDED
                                                                                          2003
                                                                                      ------------
<S>                                                                                   <C>
Net income, as reported                                                               $  1,943,399
Less: Total stock-based employee compensation cost determined
   under the fair value based method, net of income taxes                                  (86,483)
                                                                                      ------------

Pro forma net income                                                                  $  1,856,916
                                                                                      ============

Earnings per share:

    Basic - as reported                                                               $       1.70
                                                                                      ============
    Basic - pro forma                                                                 $       1.62
                                                                                      ============
    Diluted - as reported                                                             $       1.62
                                                                                      ============
    Diluted - pro forma                                                               $       1.54
                                                                                      ============
</TABLE>

     INCOME TAXES

          Deferred tax assets and liabilities are recognized for the tax effects
          of differences between the financial statement and tax bases of assets
          and liabilities. A valuation allowance is established to reduce
          deferred tax assets if it is more likely than not that a deferred tax
          asset will not be realized. The Company files consolidated income tax
          returns with its subsidiaries.

                                       43

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

     EARNINGS PER SHARE

          Earnings per shares have been computed based upon the weighted average
          common shares outstanding during each year. Unearned ESOP shares and
          unearned incentive plan shares which have not vested have been
          excluded from the computation of average shares outstanding.

     RECLASSIFICATIONS

          Certain reclassifications have been made to the 2002 financial
          statements to conform to the 2003 financial statement presentation.
          These classifications had no effect on net income.

NOTE 2: RESTRICTION ON CASH AND DUE FROM BANKS

          The Company is required to maintain reserve funds in cash and/or on
          deposit with the Federal Reserve Bank. The reserve required at
          December 31, 2003 was $2,585,000.

NOTE 3: SECURITIES

          The amortized cost and approximate fair values of securities are as
          follows:

<TABLE>
<CAPTION>
                                               GROSS           GROSS
                              AMORTIZED      UNREALIZED      UNREALIZED     APPROXIMATE
                                COST            GAINS          LOSSES        FAIR VALUE
                             ------------   ------------    ------------    ------------
<S>                          <C>            <C>             <C>             <C>
AVAILABLE-FOR-SALE
   SECURITIES:
    December 31, 2003:
       U.S. Treasuries       $  3,802,922   $         --    $    (10,745)   $  3,792,177
       U.S. government
          agencies              7,503,537         57,430         (43,774)      7,517,193
       Mortgage-backed
          securities           70,759,087        543,255        (488,343)     70,813,999
       State and political
          subdivisions          9,488,922        478,890         (63,905)      9,903,907
       Equity securities        1,599,082        115,419              --       1,714,501
                             ------------   ------------    ------------    ------------

                             $ 93,153,550   $  1,194,994    $   (606,767)   $ 93,741,777
                             ============   ============    ============    ============
</TABLE>

                                       44

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                           GROSS           GROSS
                           AMORTIZED     UNREALIZED      UNREALIZED      APPROXIMATE
                             COST          GAINS           LOSSES        FAIR VALUE
                         ------------   ------------    ------------    ------------
<S>                      <C>            <C>             <C>             <C>
December 31, 2002:
   U.S. government
      agencies           $  9,497,724   $    150,385    $         --    $  9,648,109
   Mortgage-backed
      securities           53,168,583      1,213,022        (181,016)     54,200,589
   State and political
      subdivisions          6,872,582        430,907              --       7,303,489
   Equity securities        1,520,124         75,239              --       1,595,363
                         ------------   ------------    ------------    ------------

                         $ 71,059,013   $  1,869,553    $   (181,016)   $ 72,747,550
                         ============   ============    ============    ============
</TABLE>

          The amortized cost and fair value of available-for-sale securities at
          December 31, 2003, by contractual maturity, are shown below. Expected
          maturities will differ from contractual maturities because issuers may
          have the right to call or prepay obligations with or without call or
          prepayment penalties.

<TABLE>
<CAPTION>
                                      AMORTIZED     APPROXIMATE
                                         COST       FAIR VALUE
                                     ------------   -----------
<S>                                  <C>            <C>
Within one year                      $     60,939   $    60,699
One to five years                      10,851,007    10,963,012
Five to ten years                       8,348,806     8,563,152
After ten years                         1,534,629     1,626,414
                                     ------------   -----------
                                       20,795,381    21,213,277
Mortgage-backed securities             70,759,087    70,813,999
Equity securities                       1,599,082     1,714,501
                                     ------------   -----------

       Totals                        $ 93,153,550   $93,741,777
                                     ============   ===========
</TABLE>

          The carrying value of securities pledged as collateral, to secure
          public deposits, Federal Home Loan Bank advances and for other
          purposes, was $40,892,801 at December 31, 2003 and $21,874,713 at
          December 31, 2002.

          Gross gains of $133,965 and $119,654 resulting from sales of
          available-for-sale securities were realized for 2003 and 2002. Income
          tax expense of $55,307 and $49,399 was recognized on the sales of
          available-for-sale securities during 2003 and 2002.

                                       45

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          With the exception of securities of U.S. government agencies and
          corporations, the Company did not hold any securities of a single
          issuer, payable from and secured by the same source of revenue or
          taxing authority, the book value of which exceeded 10% of
          stockholder's equity at December 31, 2003.

          Certain investments in debt and marketable equity securities are
          reported in the financial statements at an amount less than their
          historical cost. Total fair value of these investments at December 31,
          2003, was $57,672,602, which is approximately 62% of the Company's
          available-for-sale investment portfolio. These declines primarily
          resulted from recent increases in market interest rates and failure of
          certain investments to maintain consistent credit quality ratings.

          Based on evaluation of available evidence, including recent changes in
          market interest rates, credit rating information and information
          obtained from regulatory filings, management believes the declines in
          fair value for these securities are temporary.

          Should the impairment of any of these securities become other than
          temporary, the cost basis of the investment will be reduced and the
          resulting loss recognized in net income in the period the
          other-than-temporary impairment is identified.

          The following table shows our investments' gross unrealized losses and
          fair value, aggregated by investment category and length of time that
          individual securities have been in a continuous unrealized loss
          position at December 31, 2003:

<TABLE>
<CAPTION>
                          LESS THAN 12 MONTHS            12 MONTHS OR MORE                TOTAL
   DESCRIPTION OF                     UNREALIZED                   UNREALIZED                  UNREALIZED
     SECURITIES         FAIR VALUE      LOSSES       FAIR VALUE      LOSSES       FAIR VALUE     LOSSES
     ----------         -----------   -----------    -----------   -----------   -----------   -----------
<S>                     <C>           <C>            <C>           <C>           <C>           <C>
U.S. Treasury           $ 3,792,177   $   (10,745)     $      --     $      --   $ 3,792,177   $   (10,745)
U.S. government
   agencies               4,456,226       (43,774)            --            --     4,456,226       (43,774)
Mortgage-backed
   securities            46,550,880      (488,343)            --            --    46,550,880      (488,343)
State and political
   subdivisions           2,873,319       (63,905)            --            --     2,873,319       (63,905)
                        -----------   -----------      ---------     ---------   -----------   -----------
    Total temporarily
       impaired
       securities       $57,672,602   $  (606,767)     $      --     $      --   $57,672,602   $  (606,767)
                        ===========   ===========      =========     =========   ===========   ===========
</TABLE>

                                       46

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE 4: LOANS AND ALLOWANCE FOR LOAN LOSSES

         Categories of loans at December 31, include:

<TABLE>
<CAPTION>
                                              2003             2002
                                          -------------    -------------
<S>                                       <C>              <C>
Commercial and industrial                 $   6,417,335    $   6,044,968
Agricultural production financing            12,356,785       11,570,334
Real estate construction                      2,275,537          724,021
Commercial and agricultural real estate      24,031,965       22,325,759
Residential real estate                      36,779,088       39,935,439
Consumer                                     25,559,880       26,584,209
Other                                         1,982,899          901,464
                                          -------------    -------------

       Total loans                          109,403,489      108,086,194

Less
    Unearned discount and fees                 (845,137)        (613,534)
    Undisbursed loans in process                (22,969)        (328,305)
    Allowance for loan losses                (2,124,297)      (1,962,551)
                                          -------------    -------------

       Net loans                          $ 106,411,086    $ 105,181,804
                                          =============    =============
</TABLE>

          Activity in the allowance for loan losses was as follows:

<TABLE>
<CAPTION>
                                                               2003           2002
                                                            -----------    -----------
<S>                                                         <C>            <C>
Balance, beginning of year                                  $ 1,962,551    $ 1,656,946
Provision charged to expense                                    728,000        718,000
Losses charged off, net of recoveries of $92,928 for 2003
   and $113,680 for 2002                                       (566,254)      (412,395)
                                                            -----------    -----------

Balance, end of year                                        $ 2,124,297    $ 1,962,551
                                                            ===========    ===========
</TABLE>

          Impaired loans totaled $9,607,086 and $6,300,019 at December 31, 2003
          and 2002, respectively. An allowance for loan losses of $994,108 and
          $1,057,232 relates to impaired loans of $6,404,942 and $4,449,318, at
          December 31, 2003 and 2002, respectively. At December 31, 2003 and
          2002, impaired loans of $3,202,144 and $1,850,701 had no related
          allowance for loan losses.

          Interest of $590,645 and $351,033 was recognized on average impaired
          loans of $8,770,220 and $5,857,487 for 2003 and 2002. Interest of
          $575,749 and $313,228 was recognized on impaired loans on a cash basis
          during 2003 and 2002.

                                       47

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          At December 31, 2003 and 2002, accruing loans delinquent 90 days or
          more totaled $1,126,000 and $1,511,000, respectively. Non-accruing
          loans at December 31, 2003 and 2002 were $0 and $9,000, respectively.

NOTE 5: PREMISES AND EQUIPMENT

          Major classifications of premises and equipment, stated at cost, are
          as follows:

<TABLE>
<CAPTION>
                                       2003           2002
                                    -----------    -----------
<S>                                 <C>            <C>
Land                                $   495,702    $   495,702
Buildings and improvements            3,067,277      2,748,817
Leasehold improvements                    5,946          5,946
Equipment                             3,621,140      3,682,896
                                    -----------    -----------

                                      7,190,065      6,933,361

Less accumulated depreciation        (4,409,374)    (4,161,745)
                                    -----------    -----------

       Net premises and equipment   $ 2,780,691    $ 2,771,616
                                    ===========    ===========
</TABLE>

NOTE 6: LOAN SERVICING

          Loans serviced for others are not included in the accompanying
          consolidated balance sheets. The unpaid principal balances of serviced
          loans consist of the following:

<TABLE>
<CAPTION>
                                          2003          2002
                                       -----------   -----------
<S>                                    <C>           <C>
One-to-four family residential loans
    FHLMC                              $68,388,141   $55,651,739
    IHDA                                 7,256,632     7,971,222
    Other                                   36,102       127,827
                                       -----------   -----------
                                        75,680,875    63,750,788

Agricultural loans
    Farmer Mac                             307,960       706,540
    GSC Group                           13,957,816    16,376,428
                                       -----------   -----------

                                       $89,946,651   $80,833,756
                                       ===========   ===========
</TABLE>

                                       48

<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          Custodial escrow balances maintained in connection with the foregoing
          loan servicing, and included in demand deposits, were approximately
          $185,373 and $144,272 at December 31, 2003 and 2002, respectively.

          The aggregate fair value of capitalized loan servicing rights at
          December 31, 2003 and 2002 totaled $964,024 and $949,580,
          respectively. Comparable market values and a valuation model that
          calculates the present value of future cash flows were used to
          estimate fair value. For purposes of measuring impairment, risk
          characteristics including product type, and interest rate, were used
          to stratify the originated loan servicing rights.

<TABLE>
<CAPTION>
                                          2003            2002
                                       -----------    -----------
<S>                                    <C>            <C>
Loan Servicing Rights
    Balance, beginning of year         $ 1,632,667    $ 2,094,510
    Servicing rights capitalized           446,742        432,710
    Amortization of servicing rights      (848,746)      (894,553)
                                       -----------    -----------

                                         1,230,663      1,632,667
    Valuation allowance                   (266,639)      (683,087)
                                       -----------    -----------

    Balance, end of year               $   964,024    $   949,580
                                       ===========    ===========
</TABLE>

          Activity in the valuation allowance for loan servicing rights was as
          follows:

<TABLE>
<CAPTION>
                               2003         2002
                             ---------    ---------
<S>                          <C>          <C>
Balance, beginning of year   $ 683,087    $      --

    Additions                       --      683,087
    Deletions                 (416,448)          --
    Direct write-downs              --           --
                             ---------    ---------

Balance, end of year         $ 266,639    $ 683,087
                             =========    =========
</TABLE>

                                       49
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE 7: INTEREST-BEARING DEPOSITS

          Interest-bearing deposits in denominations of $100,000 or more were
          $47,913,566 on December 31, 2003 and $38,046,681 on December 31, 2002.

          At December 31, 2003, the scheduled maturities of time deposits are as
          follows:

<TABLE>
<C>                       <C>
2004                      $     45,941,392
2005                            12,632,714
2006                             2,631,237
2007                             3,724,765
2008                             5,053,876
Thereafter                       5,752,716
                          ----------------
                          $     75,736,700
                          ================
</TABLE>

NOTE 8: FEDERAL HOME LOAN BANK ADVANCES AND OTHER DEBT

          Federal Home Loan Bank advances and other debt consisted of the
          following components:

<TABLE>
<CAPTION>
                                                                              2003               2002
                                                                          ------------      -------------
<S>                                                                       <C>               <C>
Federal Home Loan Bank open line of credit, variable
  rate, 1.48% at December 31, 2002                                        $         --      $   1,000,000
Federal Home Loan Bank advances, fixed and variable
  rates ranging from 2.62% to 5.32% at December 31, 2003,
  due at various dates through September 2011                               35,500,000         25,500,000
Other debt                                                                          --              1,230
                                                                          ------------      -------------

        Total Federal Home Loan Bank advances and other debt              $ 35,500,000      $  26,501,230
                                                                          ============      =============
</TABLE>

          The Federal Home Loan Bank advances are secured by first-mortgage
          loans, certain mortgage and other investment securities, and all
          Federal Home Loan Bank stock owned by the Company. Advances are
          subject to restrictions or penalties in the event of prepayment. The
          Company's Federal Home Loan Bank borrowings as of December 31, 2003
          are callable. These callable advances are subject to being called as
          follows: 2004 - $10,000,000, 2006 - $8,000,000, and 2008 - $2,000,000.

          Other debt consisted of a contract for deed related to the purchase of
          real estate, payable in equal monthly installments of $1,230,
          including interest at a fixed rate of 5.53% per annum. Final payment
          was due January 15, 2003.

                                       50
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          Aggregate annual maturities of Federal Home Loan Bank advances at
          December 31, 2003, are:

<TABLE>
<C>                 <C>
2006                $    8,000,000
2008                     5,000,000
Thereafter              22,500,000
                    --------------
                    $   35,500,000
                    ==============
</TABLE>

NOTE 9: INCOME TAXES

          The provision for income taxes includes these components:

<TABLE>
<CAPTION>
                                                      2003              2002
                                                  ------------      ------------
<S>                                               <C>               <C>
Taxes currently payable
     Federal                                      $    647,785      $    829,342
     State                                             125,972           166,314
Deferred income taxes
     Federal                                           131,243          (318,540)
     State                                              26,501           (64,328)
                                                  ------------      ------------

         Income tax expense                       $    931,501      $    612,788
                                                  ============      ============
</TABLE>

          A reconciliation of income tax expense at the statutory rate to the
          Company's actual income tax expense is shown below:

<TABLE>
<CAPTION>
                                                                   2003            2002
                                                               ------------    ------------
<S>                                                            <C>             <C>
Computed at the statutory rate (34%)                           $    979,506    $    654,668
Increase (decrease) resulting from
     Tax exempt interest                                           (100,617)        (97,197)
     State income taxes                                             100,632          67,311
     Increase in cash surrender value of life insurance             (55,811)        (69,592)
     Other                                                            7,791          57,598
                                                               ------------    ------------

         Actual tax expense                                    $    931,501    $    612,788
                                                               ============    ============
</TABLE>

                                       51
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          The tax effects of temporary differences related to deferred taxes
          shown on the balance sheets were:

<TABLE>
<CAPTION>
                                                                   2003            2002
                                                               ------------    ------------
<S>                                                            <C>             <C>
Deferred tax assets
     Allowance for loan losses                                 $    851,099    $    784,783
     Reserve for uncollected interest                                24,720          45,042
     Deferred compensation                                           70,646          49,747
     Other                                                           61,703          45,906
                                                               ------------    ------------

                                                                  1,008,168         925,478
                                                               ------------    ------------

Deferred tax liabilities
     Depreciation                                                  (210,798)       (174,539)
     Unrealized gains on available-for-sale securities             (232,634)       (695,280)
     Federal Home Loan Bank stock dividends                        (260,185)       (162,687)
     Capitalized loan servicing rights                             (214,227)        (66,938)
     Other                                                          (53,187)        (93,799)
                                                               ------------    ------------

                                                                   (971,031)     (1,193,243)
                                                               ------------    ------------

         Net deferred tax asset (liability)                    $     37,137    $   (267,765)
                                                               ============    ============
</TABLE>

          Retained earnings at December 31, 2003 and 2002, include approximately
          $2,000,000 for which no deferred federal income tax liability has been
          recognized. These amounts represent an allocation of income to bad
          debt deductions for tax purposes only. Reduction of amounts so
          allocated for purposes other than tax bad debt losses or adjustments
          arising from carryback of net operating losses would create income for
          tax purposes only, which would be subject to the then-current
          corporate income tax rate. The deferred income tax liabilities on the
          preceding amounts that would have been recorded if they were expected
          to reverse into taxable income in the foreseeable future were
          approximately $800,000 at December 31, 2003 and 2002.

                                       52
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE 10: OTHER COMPREHENSIVE INCOME

          Other comprehensive income (loss) components and related taxes were as
          follows:

<TABLE>
<CAPTION>
                                                                   2003            2002
                                                               ------------    ------------
<S>                                                            <C>             <C>
Unrealized gains (loss) on available-for-sale securities       $   (966,345)   $  1,390,242
Less reclassification adjustment for realized gains
   included in income                                               133,965         119,654
                                                               ------------    ------------
         Other comprehensive income (loss), before tax
            effect                                               (1,100,310)      1,270,588
Tax expense (benefit)                                              (462,646)        523,921
                                                               ------------    ------------

         Other comprehensive income (loss)                     $   (637,664)   $    746,667
                                                               ============    ============
</TABLE>

NOTE 11: REGULATORY MATTERS

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

          Quantitative measures established by regulation to ensure capital
          adequacy require the Company to maintain minimum amounts and ratios
          (set forth in the table below). Management believes, as of December
          31, 2003 and 2002, that the Company and Bank meet all capital adequacy
          requirements to which they are subject.

          As of December 31, 2003, the most recent notification from the
          regulatory agencies categorized the Company and Bank as well
          capitalized under the regulatory framework for prompt corrective
          action. To be categorized as well capitalized, the Company and Bank
          must maintain capital ratios as set forth in the table. There are no
          conditions or events since that notification that management believes
          have changed the Company and Bank's category.

                                       53
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          The Company and Bank's actual capital amounts and ratios are also
          presented in the following table.

<TABLE>
<CAPTION>
                                                                                                      TO BE WELL CAPITALIZED
                                                                          FOR CAPITAL ADEQUACY        UNDER PROMPT CORRECTIVE
                                                      ACTUAL                    PURPOSES                 ACTION PROVISIONS
                                                AMOUNT         RATIO      AMOUNT           RATIO        AMOUNT         RATIO
                                             -------------     -----   -------------       -----     -------------     -----
<S>                                          <C>               <C>     <C>                 <C>       <C>               <C>
As of December 31, 2003
   Total capital
      (to risk-weighted assets)
     Consolidated                            $      27,369     23.6%   $       9,269        8.0%                        N/A
     Bank                                           24,872     21.7            9,176        8.0      $      11,470     10.0

   Tier I capital
      (to risk-weighted assets)
     Consolidated                                   25,913     22.4            4,634        4.0                         N/A
     Bank                                           23,430     20.4            4,588        4.0              6,882      6.0

   Tier I capital
      (to average assets)
     Consolidated                                   25,913     12.0            8,618        4.0                         N/A
     Bank                                           23,430     11.0            8,483        4.0             10,604      5.0

As of December 31, 2002
   Total capital
      (to risk-weighted assets)
     Consolidated                            $      27,527     24.2%   $       9,118        8.0%                        N/A
     Bank                                           23,044     20.4            9,021        8.0      $      11,276     10.0

   Tier I capital
      (to risk-weighted assets)
     Consolidated                                   26,096     22.9            4,559        4.0                         N/A
     Bank                                           21,628     19.2            4,511        4.0              6,765      6.0

   Tier I capital
      (to average assets)
     Consolidated                                   26,096     12.8            8,167        4.0                         N/A
     Bank                                           21,628     10.7            8,105        4.0             10,132      5.0
</TABLE>

          The Bank is permitted to pay dividends to the Company in an amount
          equal to its net profits in any fiscal year; however, in the event
          that capital is less than 6% to total assets, the Bank can pay up to
          50% of its net profits for that year without prior approval of the
          State of Illinois Office of Banks and Real Estate. In addition, the
          Bank is unable to pay dividends in an amount which would reduce its
          capital below the greater of (i) the amount required by the FDIC or
          (ii) the amount required by the Bank's liquidation account. The FDIC
          and the Commissioner also have the authority to prohibit the payment
          of any dividends by the Bank if they determine that the distribution
          would constitute an unsafe or unsound practice.

                                       54
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE 12: RELATED PARTY TRANSACTIONS

          At December 31, 2003 and 2002, the Company had loans outstanding to
          executive officers, directors, significant stockholders and their
          affiliates (related parties).

          The aggregate amount of loans, as defined, to such related parties
          were as follows:

<TABLE>
<S>                                        <C>
Balance, January 1, 2003                   $ 472,341
New loans, including renewals                443,899
Payments, etc., including renewals          (501,257)
                                           ---------
Balance, December 31, 2003                 $ 414,983
                                           =========
</TABLE>

          In management's opinion, such loans and other extensions of credit
          were made in the ordinary course of business and were made on
          substantially the same terms (including interest rates and collateral)
          as those prevailing at the time for comparable transactions with other
          persons. Further, in management's opinion, these loans did not involve
          more than normal risk of collectibility or present other unfavorable
          features.

NOTE 13: EMPLOYEE BENEFIT PLANS

          The Company has a retirement savings 401(k) covering substantially all
          employees. The Company may contribute to the plan at the discretion of
          the Board of Directors. Employer contributions charged to expense for
          2003 and 2002 were $4,240 and $7,913, respectively.

          The Company also maintains a voluntary employee's benefit association
          (VEBA) for the benefit of substantially all of its full-time
          employees. Those benefits available under the VEBA include major
          medical, life, accidental death and dismemberment, and disability
          insurance. These benefits are available to all employees who have
          attained a minimum age and length of service. The VEBA is funded
          through voluntary contributions from employees and contributions of
          the Company. Employer contributions totaled $338,000 and $319,000 for
          the years ended December 31, 2003 and 2002. The VEBA has been
          determined to be a tax-exempt organization with its fiscal year ending
          December 31.

                                       55
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          The Company has a defined-benefit deferred director fee plan covering
          certain directors whereby each director may elect to defer their
          annual fees. For the years ended December 31, 2003 and 2002, fees
          deferred and interest expense related to the plan totaled $58,761 and
          $69,011, respectively. The liability related to these plans was
          $202,988 and $144,227 as of December 31, 2003 and 2002.

NOTE 14: EMPLOYEE STOCK OWNERSHIP PLAN

          The Company has an employee stock ownership plan (ESOP) covering
          substantially all employees who work 20 or more hours per week. The
          ESOP borrowed $1,406,297 from the Company and used those funds to
          acquire 121,670 shares of the Company's common stock at an average
          price of $11.56.

          Shares issued to the ESOP are allocated to ESOP participants based on
          principal repayments made by the ESOP on the loan from the Company.
          The loan is secured by shares purchased with the loan proceeds and
          will be repaid by the ESOP with funds from the Bank's discretionary
          contributions to the ESOP and earnings on ESOP assets. Dividends on
          unallocated ESOP shares will be applied to reduce the loan. Principal
          payments are scheduled to occur in even annual amounts over an eight
          year period. However, in the event contributions exceed the minimum
          debt service requirements, additional principal payments will be made.

          Stock totaling 15,204 shares for 2003 and 2002 with an average fair
          value of $20.71 and $15.79 were committed to be released, resulting in
          ESOP compensation expense of $314,833 and $240,006 for 2003 and 2002,
          respectively. The ESOP shares as of December 31 were as follows:

<TABLE>
<CAPTION>
                                                                   2003            2002
                                                               ------------    ------------
<S>                                                            <C>             <C>
Allocated shares                                                     41,811          26,607
Shares released for allocation                                           --              --
Unreleased shares                                                    79,859          95,063
                                                               ------------    ------------

         Total ESOP shares                                          121,670         121,670
                                                               ============    ============

Fair value of unreleased shares at December 31                 $  1,936,581    $  1,585,651
                                                               ============    ============
</TABLE>

          The Company is obligated at the option of each beneficiary to
          repurchase shares of the ESOP upon the beneficiary's termination or
          after retirement. At December 31, 2003, the fair value of the 41,811
          allocated shares held by the ESOP is $1,013,917

                                       56
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE 15: INCENTIVE PLAN

          The Company has a stock award program or incentive plan which provides
          for the award and issuance of up to 60,835 shares of the Company stock
          to members of the Board of Directors and management. The incentive
          plan purchased 60,835 shares of the Company stock in the open market
          in 2002.

          At December 31, 2003, 34,246 shares had been awarded. Common stock
          awarded under the incentive plan vests ratably over a five-year
          period, commencing with the date of the award. Expense recognized
          under the incentive plan totaled approximately $109,632 and $73,360
          for 2003 and 2002, respectively.

NOTE 16: STOCK OPTION PLAN

          The Company has a fixed option plan under which the Company may grant
          options that vest over five years to selected employees for up to
          152,087 shares of common stock. The exercise price of each option is
          intended to equal the fair value of the Company's stock on the date of
          grant. An option's maximum term is ten years.

          A summary of the status of the plan at December 31, 2003, and changes
          during the year then ended is presented below:

<TABLE>
<CAPTION>
                                                       2003
                                                              WEIGHTED-
                                                               AVERAGE
                                                SHARES      EXERCISE PRICE
                                                -------     --------------
<S>                                             <C>         <C>
Outstanding, beginning of year                       --
     Granted                                    152,087     $         19.74
     Exercised                                       --
     Forfeited                                       --
     Expired                                         --
                                                -------

Outstanding, end of year                        152,087     $         19.74
                                                =======

Options exercisable, end of year                      0
                                                =======
</TABLE>

                                       57
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          The fair value of options granted is estimated on the date of the
          grant using an option-pricing model with the following
          weighted-average assumptions:

<TABLE>
<CAPTION>
                                                                            2003
                                                                          --------
<S>                                                                       <C>
Dividend yields                                                               1.89%
Volatility factors of expected market price of common stock                  17.00%
Risk-free interest rates                                                      4.70%
Expected life of options                                                  10 years

Weighted-average fair value of options granted during the year            $   5.50
</TABLE>

          The following table summarizes information about stock options under
          the plan outstanding at December 31, 2003:

<TABLE>
<CAPTION>
                                              OPTIONS OUTSTANDING                 OPTIONS EXERCISABLE
                                    WEIGHTED-AVERAGE
                      NUMBER      REMAINING CONTRACTUAL   WEIGHTED-AVERAGE      NUMBER      WEIGHTED-AVERAGE
EXERCISE PRICE      OUTSTANDING            LIFE             EXERCISE PRICE    EXERCISABLE     EXERCISE PRICE
--------------      -----------   ---------------------   ----------------    -----------   ----------------
<S>                 <C>           <C>                     <C>                 <C>           <C>
    $19.74           152,087             9.3 years              $19.74           --                --
</TABLE>

NOTE 17: EARNINGS PER SHARE

          Earnings per share (EPS) were computed as follows:

<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31, 2003
                                                                        WEIGHTED-          PER SHARE
                                                       INCOME        AVERAGE SHARES          AMOUNT
                                                    ------------     --------------        ---------
<S>                                                 <C>              <C>                   <C>
Net income                                          $  1,949,399          1,144,305
Basic earnings per share
    Income available to common
      stockholders                                                                         $    1.70
                                                                                           =========
Effect of dilutive securities
    Stock options                                                            11,591
    Unearned incentive plan shares                                           50,214
                                                    ------------     --------------
Diluted earnings per share
    Income available to common
      stockholders and assumed conversions          $  1,949,399          1,206,110        $    1.62
                                                    ============     ==============        =========
</TABLE>

                                       58
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

<TABLE>
<CAPTION>
                                                               YEAR ENDED DECEMBER 31, 2002
                                                                        WEIGHTED-          PER SHARE
                                                       INCOME        AVERAGE SHARES          AMOUNT
                                                    ------------     --------------        ---------
<S>                                                 <C>              <C>                   <C>
Net income                                          $  1,312,707          1,281,573
Basic earnings per share
    Income available to common
      stockholders                                                                         $    1.02
                                                                                           =========
Effect of dilutive securities
    Unearned incentive plan shares                                           30,281
                                                    ------------     --------------
Diluted earnings per share
    Income available to common
      stockholders and assumed conversions          $  1,312,707          1,311,854        $    1.00
                                                    ============     ==============        =========
</TABLE>

                                       59
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE 18: DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS

          The following table presents estimated fair values of the Company's
          financial instruments. The fair values of certain of these instruments
          were calculated by discounting expected cash flows, which method
          involves significant judgments by management and uncertainties. Fair
          value is the estimated amount at which financial assets or liabilities
          could be exchanged in a current transaction between willing parties,
          other than in a forced or liquidation sale. Because no market exists
          for certain of these financial instruments and because management does
          not intend to sell these financial instruments, the Company does not
          know whether the fair values shown below represent values at which the
          respective financial instruments could be sold individually or in the
          aggregate.

<TABLE>
<CAPTION>
                                          DECEMBER 31, 2003                   DECEMBER 31, 2002
                                   --------------------------------    -------------------------------
                                      CARRYING            FAIR           CARRYING            FAIR
                                       AMOUNT            VALUE            AMOUNT            VALUE
                                   --------------    --------------    --------------   --------------
<S>                                <C>               <C>               <C>              <C>
Financial assets
    Cash and cash equivalents      $   10,294,105    $   10,294,105    $   10,453,372   $   10,453,372
    Available-for-sale
      securities                       93,741,777        93,741,777        72,747,550       72,747,550
    Loans held for sale                   453,342           453,342           596,565          596,565
    Loans, net allowance of
      loan losses                     106,411,086       106,428,721       105,181,804      105,295,137
    Federal Home Loan Bank
      stock                             4,006,300         4,006,300         3,711,600        3,711,600
    Interest receivable                 2,237,594         2,237,594         2,356,771        2,356,771
    Cash surrender value of
      life insurance                    4,345,976         4,345,976         3,666,926        3,666,926

Financial liabilities
    Deposits                          163,027,890       163,047,031       147,335,381      147,934,033
    Federal Home Loan Bank
      advances and other debt          35,500,000        35,587,183        26,501,230       26,321,428
    Pass through payments
      received on loans sold              261,701           261,701           260,753          260,753
    Advances by borrowers
      for taxes and insurance             109,285           109,285           132,885          132,885
    Interest payable                      126,958           126,958           105,651          105,651
Unrealized financial
   instruments (net of
   contract amount)
    Commitments to originate
      loans                                     0                 0                 0                0
    Lines of credit                             0                 0                 0                0
</TABLE>

                                       60
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          The following methods and assumptions were used to estimate the fair
          value of each class of financial instruments.

     CASH AND CASH EQUIVALENTS, FEDERAL HOME LOAN BANK STOCK AND CASH SURRENDER
     VALUE OF LIFE INSURANCE

          The carrying amount approximates fair value.

     SECURITIES

          Fair values equal quoted market prices, if available. If quoted market
          prices are not available, fair value is estimated based on quoted
          market prices of similar securities.

     LOANS HELD FOR SALE

          For homogeneous categories of loans, such as loans held for sale, fair
          value is estimated using the quoted market prices for securities
          backed by similar loans, adjusted for differences in loans
          characteristics.

     LOANS

          The fair value of loans is estimated by discounting the future cash
          flows using the current rates at which similar loans would be made to
          borrowers with similar credit ratings and for the same remaining
          maturities. Loans with similar characteristics were aggregated for
          purposes of the calculations. The carrying amount of accrued interest
          approximates its fair value.

     DEPOSITS

          The fair value of demand deposits, savings accounts, NOW accounts, and
          certain money market deposits is the amount payable on demand at the
          reporting date, i.e., their carrying amount. The fair value of
          fixed-maturity time deposits is estimated using a discounted cash flow
          calculation that applies the rates currently offered for deposits of
          similar remaining maturities. The carrying amount of accrued interest
          payable approximates its fair value.

     FEDERAL HOME LOAN BANK ADVANCES AND OTHER DEBT

          Rates currently available to the Company for debt with similar terms
          and remaining maturities are used to estimate fair value of existing
          debt.

     PASS THROUGH PAYMENTS RECEIVED ON LOAN SOLD AND ADVANCE PAYMENTS BY
     BORROWERS FOR TAXES AND INSURANCE

          The fair value approximates the carrying value.

                                       61
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

     COMMITMENTS TO ORIGINATE LOANS AND LINES OF CREDIT

          The fair value of commitments is estimated using the fees currently
          charged to enter into similar agreements, taking into account the
          remaining terms of the agreements and the present creditworthiness of
          the counterparties. The fair value of lines of credit is based on fees
          currently charged for similar agreements or on the estimated cost to
          terminate or otherwise settle the obligations with the counterparties
          at the reporting date.

NOTE 19: SIGNIFICANT ESTIMATES AND CONCENTRATIONS

          Accounting principles generally accepted in the United States of
          America require disclosure of certain significant estimates and
          current vulnerabilities due to certain concentrations. Estimates
          related to the allowance for loan losses, loan servicing rights,
          foreclosed assets held for sale, and amortization of premiums on
          mortgage backed securities and collateralized mortgage obligations are
          reflected in the footnotes regarding loans, loan servicing rights,
          foreclosed assets held for sale, and securities. Current
          vulnerabilities due to certain concentrations of credit risk are
          discussed in the footnote on commitments and credit risk.

NOTE 20: COMMITMENTS, CREDIT RISK, AND CONTINGENT LIABILITIES

          The Company generates commercial, mortgage and consumer loans and
          receives deposits from customers located primarily in Edger and Clark
          counties as well as the surrounding communities. The Company's loans
          are generally secured by specific items of collateral including real
          property, consumer assets and business assets. Although the Company
          has a diversified loan portfolio, a substantial portion of its
          debtors' ability to honor their contracts is dependent upon economic
          conditions in the agricultural industry.

     COMMITMENTS TO ORIGINATE LOANS

          Commitments to originate loans are agreements to lend to a customer as
          long as there is no violation of any condition established in the
          contract. Commitments generally have fixed expiration dates or other
          termination clauses and may require payment of a fee. Since a portion
          of the commitments may expire without being drawn upon, the total
          commitment amounts do not necessarily represent future cash
          requirements. Each customer's creditworthiness is evaluated on a
          case-by-case basis. The amount of collateral obtained, if deemed
          necessary, is based on management's credit evaluation of the
          counterparty. Collateral held varies, but may include accounts
          receivable, inventory, property, plant and equipment, commercial real
          estate and residential real estate.

                                       62
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

          At December 31, 2003 and 2002, the Company had outstanding commitments
          to originate loans aggregating approximately $2,665,250 and
          $3,245,665, respectively. The commitments extended over varying
          periods of time with the majority being disbursed within a one-year
          period. Loan commitments at fixed rates of interest amounted to
          $591,450 and $3,001,765 at December 31, 2003 and 2002, respectively,
          with the remainder at floating market rates.

     LINES OF CREDIT

          Lines of credit are agreements to lend to a customer as long as there
          is no violation of any condition established in the contract. Lines of
          credit generally have fixed expiration dates. Since a portion of the
          line may expire without being drawn upon, the total unused lines do
          not necessarily represent future cash requirements. Each customer's
          creditworthiness is evaluated on a case-by-case basis. The amount of
          collateral obtained, if deemed necessary, is based on management's
          credit evaluation of the counterparty. Collateral held varies but may
          include accounts receivable, inventory, property, plant and equipment,
          commercial real estate and residential real estate. Management uses
          the same credit policies in granting lines of credit as it does for
          on-balance-sheet instruments.

          At December 31, 2003, the Company had granted unused lines of credit
          to borrowers aggregating approximately $5,409,688 and $1,717,043 for
          commercial lines and open-end consumers lines, respectively. At
          December 31, 2002, unused lines of credit to borrowers aggregated
          approximately $4,771,472 for commercial lines and $847,644 for
          open-end consumer lines.

     OTHER CREDIT RISKS AND CONTINGENT LIABILITIES

          The Company had a concentration of funds on deposit with the Federal
          Home Loan Bank totaling $3,723,179 and $3,577,334 at December 31, 2003
          and 2002.

          The Company and Subsidiaries are subject to claims and lawsuits which
          arise primarily in the ordinary course of business. It is the opinion
          of management that the disposition or ultimate resolution of such
          claims and lawsuits will not have a material adverse effect on the
          consolidated financial position of the Company.

                                       63
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

NOTE 21: CONDENSED FINANCIAL INFORMATION (PARENT COMPANY ONLY)

          Presented below is condensed financial information as to financial
position, results of operations and cash flows of the Company:

                            CONDENSED BALANCE SHEETS

<TABLE>
<CAPTION>
                                                                  DECEMBER 31,
                                                              2003           2002
                                                          ------------   -------------
<S>                                                       <C>            <C>
ASSETS
     Cash and due from banks                              $        450   $          --
     Interest bearing demand deposits                          192,186       1,927,966
                                                          ------------   -------------
         Total cash and cash equivalents                       192,636       1,927,966

     Available-for-sale securities                             982,858         768,128
     ESOP loan to subsidiaries                                 923,034       1,098,766
     Investment in common stock of subsidiaries             24,393,738      23,601,668
     Other assets                                                   --           4,045
                                                          ------------   -------------

         Total assets                                     $ 26,492,266   $  27,400,573
                                                          ============   =============

LIABILITIES                                               $    100,658   $      94,849
                                                          ------------   -------------

STOCKHOLDERS' EQUITY                                        26,391,608      27,305,724
                                                          ------------   -------------

         Total liabilities and stockholders' equity       $ 26,492,266   $  27,400,573
                                                          ============   =============
</TABLE>

                                       64
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

                         CONDENSED STATEMENTS OF INCOME

<TABLE>
<CAPTION>
                                                                           YEAR ENDING DECEMBER 31,
                                                                             2003             2002
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
INCOME
     Dividends from subsidiaries                                         $    500,000    $         --
     Interest income                                                           76,333         165,323
     Net realized gains on sales of available-for-sale securities             133,965         119,654
                                                                         ------------    ------------

         Total income                                                         710,298         284,977
                                                                         ------------    ------------

EXPENSES-OTHER                                                                266,494         382,328
                                                                         ------------    ------------
INCOME (LOSS) BEFORE INCOME TAX AND EQUITY IN
  UNDISTRIBUTED INCOME OF SUBSIDIARIES                                        443,804         (97,351)

INCOME TAX BENEFIT                                                            (16,157)        (26,500)
                                                                         ------------    ------------
INCOME (LOSS) BEFORE EQUITY IN UNDISTRIBUTED
  INCOME OF SUBSIDIARIES                                                      459,961         (70,851)

EQUITY IN UNDISTRIBUTED INCOME OF SUBSIDIARIES                              1,489,438       1,383,558
                                                                         ------------    ------------
NET INCOME                                                               $  1,949,399       1,312,707
                                                                         ============    ============
</TABLE>

                                       65
<PAGE>

                  FIRST BANCTRUST CORPORATION AND SUBSIDIARIES
                   NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
                           DECEMBER 31, 2003 AND 2002

                       CONDENSED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
                                                                           YEAR ENDING DECEMBER 31,
                                                                             2003            2002
                                                                         ------------    ------------
<S>                                                                      <C>             <C>
OPERATING ACTIVITIES
     Net income                                                          $  1,949,399    $  1,312,707
     Items not requiring (providing) cash
         Net realized gains on available-for-sale securities                 (133,965)       (119,654)
         Equity in undistributed income of subsidiaries                    (1,489,438)     (1,383,558)
         Compensation related to ESOP and incentive plan                      424,465         313,366
     Changes in
         Other assets                                                           4,045          45,455
         Other liabilities                                                      5,809         123,115
                                                                         ------------    ------------

         Net cash provided by operating activities                            760,315         291,431
                                                                         ------------    ------------
INVESTING ACTIVITIES
     Net change in ESOP loan                                                  175,732         175,732
     Purchases of available-for-sale securities                              (437,916)        (89,870)
     Proceeds from the sales of available-for-sale securities                 416,855          38,448
                                                                         ------------    ------------

         Net cash provided by investing activities                            154,671         124,310
                                                                         ------------    ------------
FINANCING ACTIVITIES
     Purchase of incentive plan shares                                             --      (1,003,888)
     Purchase of treasury stock                                            (2,201,068)     (1,497,742)
     Dividends paid                                                          (449,248)       (283,183)
                                                                         ------------    ------------

         Net cash used in financing activities                             (2,650,316)     (2,784,813)
                                                                         ------------    ------------
NET CHANGE IN CASH AND CASH EQUIVALENTS                                    (1,735,330)     (2,369,072)

CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR                              1,927,966       4,297,038
                                                                         ------------    ------------

CASH AND CASH EQUIVALENTS AT END OF YEAR                                 $    192,636    $  1,927,966
                                                                         ============    ============
</TABLE>

                                       66
<PAGE>

                                    DIRECTORS

TERRY T. HUTCHISON
Chairman of the Board; Self-employed Business Consultant in Paris, Illinois

JOSEPH R. SCHROEDER
Attorney in private practice with law firm of Bennett, Schroeder & Wieck,
Marshall, Illinois

VICK N. BOWYER
Co-owner and registered principal of a Linsco/Private Ledger (Member NASD/SIPC),
Marshall, Illinois

JAMES D. MOTLEY
Self employed Certified Public Accountant, Accounting and Tax Preparation,
Paris, Illinois

JOHN W. WELBORN
Project Manager, Garmong Design, Terre Haute, Indiana. Retired Former Facilities
Manager, TRW, Inc., Marshall, Illinois

DAVID W. DICK
Insurance Agent for Country Companies Insurance, Bloomington, Illinois

TERRY J. HOWARD
President and Chief Executive Officer of the Company and First Bank

                               EXECUTIVE OFFICERS

TERRY J. HOWARD
Director, President and Chief Executive Officer of the Company and First Bank

ELLEN M. LITTERAL
Chief Financial Officer and Treasurer of the Company and Senior Vice President
and Controller of First Bank

JACK R. FRANKLIN
Vice President of the Company and President of the First Bank of Savoy, a branch
of First Bank & Trust, s.b.

DAVID F. SULLIVAN
Vice President of the Company and Senior Vice President - Lending of First Bank

LARRY W. STROHM
Vice President of the Company and Senior Vice President - Branch Manager of
First Bank

                                BANKING LOCATIONS

                                   MAIN OFFICE
                            206 South Central Avenue
                              Paris, Illinois 61944
                                 (217) 465-6381

                                OPERATIONS CENTER
                            101 South Central Avenue
                              Paris, Illinois 61944

                                 BRANCH OFFICES
                            610 North Michigan Avenue
                            Marshall, Illinois 62441
                                 (217) 826-6308

                             407 North Dunlap Avenue
                              Savoy, Illinois 61874
                                 (217) 351-3526

                                       67
<PAGE>

Stock Listing and Price Information

The Company's common stock trades on the Nasdaq SmallCap Market under the symbol
"FBTC". At March 12, 2004, 294,173 shares of the Company's common stock were
held of record by 467 persons or entities, not including the number of persons
or entities holding stock in nominee or street name through various brokers or
banks.

The following schedule shows the high and low bid prices for each of the
quarters in 2002 and 2003:

<TABLE>
<CAPTION>
  Quarter Ended:                                                  High                        Low
  -------------                                                  -------                    -------
<S>                                                              <C>                        <C>
June, 30 2001                                                    $ 13.05                    $ 11.25
September 30, 2001                                                 12.00                      13.50
December 31, 2001                                                  15.80                      12.00
March 31, 2002                                                     15.10                      14.65
June, 30 2002                                                      16.70                      14.91
September 30, 2002                                                 16.55                      15.40
December 31, 2002                                                  16.75                      15.74
March 31, 2003                                                     18.16                      16.60
June, 30 2003                                                      22.08                      17.85
September 30, 2003                                                 23.70                      20.50
December 31, 2003                                                  24.95                      23.25
</TABLE>

At March 12, 2004 the closing price of a common share was $23.75. Such prices do
not necessarily reflect retail markups, markdowns, or commissions. During the
years ended December 31, 2002 and 2003, the Company declared dividends as
follows:

<TABLE>
<CAPTION>
 Date Declared                      Record Date                   Payment Date                       Amount
 -------------                      -----------                   ------------                       ------
<S>                              <C>                            <C>                                  <C>
February 7, 2002                 February 19, 2002              February 28, 2002                    $0.05
May 9, 2002                      May 23, 2002                   May 31, 2002                         $0.05
August 9, 2002                   August 22, 2002                August 30, 2002                      $0.05
November 14, 2002                November 27, 2002              December 6, 2002                     $0.05
February 6, 2003                 February 18, 2003              February 28, 2003                    $0.05
May 15, 2003                     May 27, 2003                   June 10, 2003                        $0.10
August 14, 2003                  August 25, 2003                September 5, 2003                    $0.10
November 13, 2003                November 24, 2003              December 8, 2003                     $0.10
</TABLE>

Investor Relations
Ellen M. Litteral
Chief Financial Officer
First BancTrust Corporation
101 S. Central Avenue
Paris, IL 61944-0880

Annual Report on Form 10-KSB
A copy of the annual report on Form 10-KSB for the fiscal year ended December
31, 2003, filed with the Securities and Exchange Commission is available to
stockholders (excluding exhibits) at no charge, upon written request to Ellen M.
Litteral, Chief Financial Officer, at the above address.

Special Regulatory Counsel
Howard & Howard Attorneys, P.C.
The Pinehurst Office Center
39400 Woodward Avenue
Suite 101
Bloomfield Hills, MI 48304-5151
Independent Accountants
BKD, LLP
225 North Water Street, Suite 400
Decatur, IL 62525-1580

Annual Meeting of Stockholders
The Annual Meeting of Stockholders of First BancTrust Corporation will be held
at 10:00 a.m. April 19, 2004 at:
Human Resources Center
118 E. Court Street
                                       68
<PAGE>

Paris, Illinois  61944

Transfer Agent
Inquiries regarding stock transfer, registration, lost certificates or changes
in name and address should be directed to the transfer agent:
Illinois Stock Transfer Company (312) 427-2953
209 W. Jackson Boulevard
Suite 903
Chicago, Illinois 60606

                                       69