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

                                   FORM 10-K
           
          [X]  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d)
                OF THE SECURITIES EXCHANGE ACT OF 1934
 
               For the fiscal year ended December 31, 1998
                                              
          [ ]  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
               OF THE SECURITIES EXCHANGE ACT OF 1934

                     Commission file number 0-20987

                      Grand Premier Financial, Inc.
            (Exact Name of Registrant as Specified in its Charter)

           Delaware                                       36-4077455    
(State or Other Jurisdiction of                      (IRS Employer   
Incorporation or Organization)                        Identification No.)

    486 West Liberty, Wauconda, IL                          60084 
(Address of Principal Executive Office)                  (Zip Code)

Registrant's telephone number, including area code:  (847) 487-1818

         Securities registered pursuant to Section 12(b) of the Act:
                                     None

         Securities registered pursuant to Section 12(g) of the Act:
                          Common Stock ($.01 par value)
                                Title of Class

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

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

     The number of shares of the registrant's Common Stock outstanding on
February 26, 1999 was 22,028,192 shares.  The aggregate market value of the
registrant's Common Stock held by nonaffiliates of the registrant as of
February 26, 1999, based upon the closing sales price at this date was
$143,827,785.

                      DOCUMENTS INCORPORATED BY REFERENCE

     Portions of the 1998 Annual Report to Shareholders are incorporated by
reference into Part II of the Form 10-K.  Portions of the Proxy Statement for
Registrant's 1999 Annual Meeting of Shareholders to be held May 26, 1999 have
been incorporated by reference into Part III of the Form 10-K.

            No. of Pages Sequentially Numbered: 83
                 Exhibit Index is on Page 31
                               


PART I

Item 1.  Business

     Grand Premier Financial, Inc. (the "Company") is a registered bank
holding company organized in 1996 under Delaware law.  The Company is the
surviving corporation from the merger, effective August 22, 1996, of
Northern Illinois Financial Corporation and Premier Financial
Services, Inc.  The operations of the Company and its subsidiaries consist
primarily of those financial activities, including trust and investment
services, common to the commercial banking industry. The Company operates
as a single segment and, unless the context otherwise requires, the term
"Company" as used herein includes Grand Premier Financial, Inc., and its
subsidiaries on a consolidated basis.  

     The primary function of the Company is to coordinate the policies and
operations of its subsidiaries in order to improve and expand their
services and effect economies in their operations by joint efforts in
certain areas such as auditing, training, marketing, and business
development.  The Company also provides operational and data processing
services for its subsidiaries.  All services and counsel to subsidiaries
are provided on a fee basis, with fees based upon fair market value.

     During first half of 1997, the Company's banking subsidiaries
consisting of First Bank North, First Bank South, First National Bank of
Northbrook, First Security Bank of Cary Grove and Grand National Bank were
combined into the single charter of Grand National Bank ("GNB").  Although
chartered as a commercial bank, the offices of GNB serve as general sales
offices providing a full array of financial services and products to
individuals, businesses, local governmental units and institutional
customers throughout northern Illinois.  Banking services include those
generally associated with the commercial banking industry such as demand,
savings and time deposits, loans to commercial, agricultural and individual
customers, cash management, electronic funds transfers and other services
tailored for the client.  The Company has banking offices located in Cary,
Crete, Crystal Lake, DeKalb, Dixon, Freeport, Gurnee, Island Lake, Mokena,
Mundelein, Niles, Northbrook, Rockford, South Chicago Heights, Sterling,
Wauconda, Waukegan and Woodstock, Illinois.

     Grand Premier Trust and Investment, Inc., ("Trust") a wholly owned
subsidiary of GNB, provides a full line of fiduciary and investment
services throughout the Company's general market area.  

     Grand Premier Insurance Services, Inc., a direct subsidiary of the
Company, is a full line casualty and life insurance agency.  Grand Premier
Operating Systems, Inc., ("GPOS"), is also a direct subsidiary of the
Company.  GPOS provides data processing and operational services to the
Company and its subsidiaries.

     American Suburban Mortgage Corporation, ("ASMC") a direct subsidiary
of the Company, was established to engage in secondary mortgage operations. 
ASMC is currently inactive, with secondary mortgage operations performed by
the banking subsidiary.

Competition

     Active competition exists in all principal areas where the Company
and its subsidiaries are engaged, not only with commercial banking
organizations, but also with savings and loan associations, finance
companies, mortgage companies, credit unions, brokerage houses and other
providers of financial services.  The Company has seen the level of
competition and number of competitors in its markets increase in recent
years and expects a continuation of these aggressively competitive market
conditions.

     To gain a competitive market advantage, the Company relies on a
strategic marketing plan that is employed throughout the Company, reaching
every level of its sales force.  The marketing plan includes the
identification of target markets and customers so that the Company's
resources, both financial and manpower, can be utilized where the greatest
opportunities for gaining market share exist.  The differentiation between
the Company's approach to providing products and services to its customers
and that of the competition is in the individualized attention that the
Company devotes to the needs of its customers.  This focus on fulfilling
customer's financial needs generally results in long-term customer
relationships.

     Banking deposits are well balanced, with a large customer base and no
dominant accounts in any category.  The Company's loan portfolio is also
characterized by a large customer base, balanced between loans to
individuals, commercial and agricultural customers, with no dominant
relationships.  There is no readily available source of information which
delineates the market for financial services, including services offered by
non-bank competitors, in the company's market area.

Supervision and Regulation

     Bank holding companies, banks and financial institutions generally
are highly regulated, with numerous federal and state laws and regulations
governing their activities.  The Company is a registered bank holding
company under and subject to the provisions of the Bank Holding Company Act
("BHCA".)  As such, the Company is required to file with the Federal
Reserve Board periodic reports and such additional information as the
Federal Reserve Board may require.  It also is subject to the supervision
of, and examination by, the Federal Reserve Board.  The Company is also
subject to regulation under the Illinois Bank Holding Company Act of 1957,
as amended (the "Illinois BHCA").

     Grand National Bank is a national bank chartered under the laws of
the United States and is subject to the supervision of, and examination by,
the Office of the Comptroller of the Currency ("OCC"), its primary
regulator.  The OCC regularly examines such areas as reserves, loans,
investments, management practices and other aspects of Grand National
Bank's operations.  Grand National Bank must also furnish to the OCC
quarterly reports containing full and accurate statements of their affairs. 
All national banks are members of the Federal Reserve System and subject to
the applicable provisions of the Federal Reserve Act and to regular
examination by the Federal Reserve Bank of their district, in this case the
Federal Reserve Bank of Chicago.     

     Grand Premier Trust and Investment, Inc., is also chartered as a
national bank under the laws of the United States and is subject to the
supervision of, and examination by, the Office of the Comptroller of the
Currency.
  
     The deposits of the bank, subject to FDIC limitations, are insured by
the Bank Insurance Fund of the FDIC.  As a result, the bank is also subject
to the provisions of the Federal Deposit Insurance Act and to examination
by the FDIC.  The examinations of the various regulatory agencies are
designed for the protection of bank depositors and not for stockholders of
banks or their holding companies.

     The following references to material statutes and regulations
affecting the Company and its subsidiaries are brief summaries thereof and
are qualified in their entirety by reference to such statutes and
regulations.  Any change in applicable law or regulations may have a
material effect on the business of the Company and its subsidiary bank.

     The BHCA requires prior Federal Reserve Board approval for, among
other things, the acquisition by a bank holding company of direct or
indirect ownership or control of more than five percent (5%) of the voting
shares or substantially all the assets of any bank, or for a merger or
consolidation of a bank holding company with another bank holding company. 
With certain exceptions, the BHCA prohibits a bank holding company from
acquiring direct or indirect ownership or control of voting shares of any
company which is not a bank or bank holding company and from engaging
directly or indirectly in any activity other than banking or managing or
controlling banks or performing services for its authorized subsidiaries. 
A bank holding company may, however, engage in or acquire an interest in a
company that engages in activities which the Federal Reserve Board has
determined by regulation or order to be so closely related to banking or
managing or controlling banks as to be a proper incident thereto.

     A bank holding company is a legal entity separate and distinct from
its subsidiary bank or banks.  Normally, the major source of a bank holding
company's revenue is the dividends it receives from its subsidiary banks. 
The right of a bank holding company to participate as a stockholder in any
distribution of assets of its subsidiary banks upon their liquidation or
reorganization or otherwise is subject to the prior claims of creditors of
such subsidiary banks.  The subsidiary bank is subject to claims by
creditors for long-term and short-term debt obligations, including
substantial obligations for federal funds purchased and securities sold
under repurchase agreements, as well as deposit liabilities.  Under the
Financial Institutions Reform, Recovery and Enforcement Act of 1989
("FIRREA"), in the event that the FDIC suffers a loss in connection with a
banking subsidiary of a bank holding company, other banking subsidiaries of
the same holding company may be held liable for such loss.

     Federal laws limit the transfer of funds by a subsidiary bank to its
holding company and the non-bank subsidiaries of the holding company
("affiliates") in the form of loans or extensions of credit, investments in
stock or other securities of the bank holding company or its other
subsidiaries or advances to any borrower collateralized by such stock or
other securities.  Transfers of this kind are limited to 10 percent of a
bank's capital and surplus with respect to each affiliate and to 20 percent
with respect to all affiliates in the aggregate and are also subject to
certain collateral requirements.  These transactions, as well as other
transactions between a subsidiary bank and its holding company and other
affiliates, must also be on terms substantially the same as, or at least as
favorable as, those prevailing at the time for comparable transactions with
non-affiliated companies or, in the absence of comparable transactions, on
terms or under circumstances, including credit standards, that would be
offered to, or would apply to, non-affiliated companies. 

     It is the policy of the Federal Reserve Board that a bank holding
company is expected to act as a source of financial strength to each of its
subsidiary banks and to commit resources to support each of its subsidiary
banks.  The Federal Reserve Board takes the position that, in implementing
this policy, it may require bank holding companies to provide such support
when the holding company otherwise would not consider itself able to do so.

     The Illinois BHCA permits bank holding companies domiciled in
Illinois to make acquisitions throughout the state.  It also permits bank
holding companies located in any state of the United States to acquire
banks or bank holding companies within the State of Illinois, subject to
certain conditions, including a regulatory determination that the laws of
the state in which the acquiring bank holding company is located permit
bank holding companies in Illinois to acquire banks or bank holding
companies in the acquiror's state under qualifications and conditions that
are not unduly restrictive when compared to those imposed by Illinois law. 
Subject to these regulatory determinations, the Company may acquire banks
and bank holding companies in such states, and bank holding companies in
those states may acquire banks and bank holding companies in Illinois.  

     The federal and state laws and regulations generally applicable to
banks regulate, among other things, the scope of a bank's business,
allowable investments, required reserves against deposits, loans and
collateral, establishment of branch offices and activities performed at
such offices.  These laws and regulations are generally designed for the
protection of bank depositors and not the stockholders of the bank. 
 
     A national bank, such as Grand National Bank, may not pay a dividend
in any calendar year in excess of its net profits for the current year plus
its adjusted retained profits for the two prior years, unless it obtains
OCC approval.  Net profits from which dividends may be paid must be
adjusted for losses and the amount of statutory bad debts in excess of the
balance of the bank's allowance for possible credit losses.  "Bad debts"
are generally defined to include the principal amounts of loans which are
in arrears with respect to interest by six months or more unless such loans
are well secured and in the process of collection. 
 
     The Community Reinvestment Act (the "CRA") is intended to encourage
banks and thrifts to help meet the credit needs of their entire
communities, including low- and moderate-income neighborhoods, consistent
with safe and sound lending practices.  Under the CRA, the federal banking
agencies take into account a financial institution's record of helping to
meet the credit needs of its entire community when evaluating various types
of applications, such as applications for branches, office relocations,
mergers, consolidations, and purchase and assumption transactions, and may
deny or condition approval of an application on the basis of an
institution's record.  All depository institutions are reviewed and rated
by their primary federal bank regulator. In reviewing applications by bank
holding companies, the Federal Reserve Board takes into account the record
of compliance of a holding company's subsidiary banking institutions with
the CRA. 

     The various federal bank regulators, including the Federal Reserve
Board and the OCC, have adopted risk-based capital requirements for
assessing bank holding company and bank capital adequacy.  The capital
standards (including the definitions of Tier 1 Capital and Tier 2 Capital)
established by the OCC (for national banks such as Grand National Bank) are
substantially the same as those established by the Federal Reserve Board
for bank holding companies.  These standards significantly revise the
definition of capital and establish minimum capital standards in relation
to assets and off-balance sheet exposures, as adjusted for credit risks. 
Capital is classified into two tiers.  For bank holding companies, Tier 1
or "core" capital consists of common shareholders' equity, perpetual
preferred stock (subject to certain limitations) and minority interests in
the common equity accounts of consolidated subsidiaries and is reduced by
goodwill and certain investments in other corporations ("Tier 1 Capital"). 
Tier 2 capital consists of (subject to certain conditions and limitations)
the allowance for possible credit losses, perpetual preferred stock,
"hybrid capital instruments," perpetual debt and mandatory convertible debt
securities, and term subordinated debt and intermediate-term preferred
stock ("Tier 2 Capital").

     Under the risk-adjusted capital standards, a minimum total capital to
total risk-weighted assets ratio of eight percent (8%) is required, and
Tier 1 Capital must be at least 50 percent of total capital. The Federal
Reserve Board also has adopted a minimum leverage ratio of Tier 1 Capital
to total assets of three percent (3%).  The three percent Tier 1 Capital to
total assets ratio constitutes the leverage standard for bank holding
companies and is used in conjunction with the risk-based ratio in
determining the overall capital adequacy of banking organizations.

     The federal banking agencies have emphasized that the foregoing
standards are supervisory minimums and that an institution would be
permitted to maintain such minimum levels of capital only if it were rated
in the highest category under the regulatory rating systems for bank
holding companies and banks.  All other bank holding companies and banks
are required to maintain a leverage ratio of 3 percent plus at least one to
two percent (1% to 2%) of additional capital.  These rules further provide
that banking organizations experiencing internal growth or making
acquisitions will be expected to maintain capital positions substantially
above the minimum supervisory levels and comparable to peer group averages,
without significant reliance on intangible assets.  The Federal Reserve
Board continues to consider a "tangible Tier 1 leverage ratio" in
evaluating proposals for expansion or new activities.  The tangible Tier 1
leverage ratio is the ratio of a banking organization's Tier 1 Capital,
less all intangibles, to total assets, less all intangibles.

     The Company and its banking subsidiary exceed the regulatory capital
guidelines as currently defined.  For additional information regarding the
capital ratios of the Company and its banking subsidiary, see Note 10 to
the Company's 1998 Annual Report to its shareholders which is included as
Exhibit 13 to this report.


     The Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA") imposed relatively detailed standards and mandated the
development of additional regulations governing nearly every aspect of the
operations, management and supervision of banks and bank holding companies. 
It also significantly enhanced the authority of bank regulators to
intervene in the cases of deterioration of a bank's capital level.  FDICIA
requires that the banking regulators take prompt corrective action with
respect to depository institutions that fall below certain capital levels
and prohibits any depository institution from making any capital
distribution that would cause it to be considered undercapitalized. 
Regulations adopted pursuant to FDICIA established five capital categories: 
well-capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized. Institutions that are not
adequately capitalized may be subjected to a broad range of restrictions on
their activities and will be required to submit a capital restoration plan
which, to be accepted by the regulators, must be guaranteed in part by any
company having control of the institution.  Only well-capitalized
institutions and adequately capitalized institutions receiving a waiver
from the FDIC will be permitted to accept brokered deposits, and only those
institutions eligible to accept brokered deposits may provide pass-through
deposit insurance for participants in employee benefit plans.  

     A range of other regulations adopted as a result of FDICIA have
established interagency guidelines standards for safety and soundness for
depository institutions and their holding companies; requirements relating
to annual audits of depository institutions; requirements applicable to
closure of branches; additional requirements for disclosures to depositors
with respect to terms and interest rates applicable to deposit accounts;
requirements for the banking agencies to adopt uniform regulations for
extensions of credit secured by real estate; modification of accounting
standards to conform to GAAP, including the reporting of off-balance sheet
items and supplemental disclosure of estimated fair market value of assets
and liabilities in financial statements filed with the banking regulators;
increased penalties for failing to file assessment reports with the FDIC;
greater restrictions on extensions of credit to directors, officers and
principal shareholders; and increased reporting requirements on
agricultural loans and loans to small businesses.

     As required by FDICIA, the FDIC has established a risk-based
assessment system for deposit insurance provided to depositors at
depository institutions whereby assessments to each institution are
calculated upon the probability that the insurance fund will incur a loss
with respect to the institution, the likely amount of such loss, and the
revenue needs of the insurance fund.  Under the system, deposit insurance
premiums are based upon an institution's assignment to one of three capital
categories and a further assignment to one of three supervisory
subcategories within each capital category.  The result is a nine category
assessment system.  The classification of an institution into a category
depends, among other things, on the results of off-site surveillance
systems, capital ratio, and its CAMELS rating (a supervisory rating of
capital, asset quality, management, earnings, liquidity and sensitivity to
market risk).

     On September 29, 1994, the Riegle-Neal Interstate Banking and
Branching Efficiency Act of 1994 (the "Riegle-Neal Act") became law.  Since
September 29, 1995, the Riegle-Neal Act has permitted adequately
capitalized and managed bank holding companies to acquire banks across
state lines, without regard to whether the transaction is prohibited by
state law, except that state law may establish the minimum age of the banks
in such state that are subject to acquisition by out-of-state bank holding
companies (not to exceed five years).  The acquiring bank holding company
must maintain the acquired bank as a separately chartered institution. 
Under the Riegle-Neal Act, the Federal Reserve Board generally may not
approve an acquisition if, upon consummation, the applicant bank holding
company would control more than 10% of the total deposits of U.S. insured
depository institutions or 30% or more of the deposits in the state where
the target bank is located.  The Federal Reserve Board could approve an
acquisition, notwithstanding the 30% limit, if the state waives the limit
either by statute, regulation or order of the appropriate state official. 
Since September 29, 1995, the Riegle-Neal Act has also permitted any bank
subsidiary of a bank holding company to receive deposits, renew time
deposits, close loans, service loans and receive payments on loans and
other obligations as agent for a bank or thrift affiliate, whether such
affiliate is located in a different state or in the same state.

     Beginning on June 1, 1997, banks may, with the approval of the
appropriate Federal bank regulatory agency, merge with one another across
state lines and thereby create a main bank with branches in separate
states.  After establishing branches in a state through an interstate
merger transaction, the bank could establish and acquire additional
branches at any location in the state where any bank involved in the merger
could have established or acquired branches under applicable federal or
state law.  The responsible federal bank regulatory agency generally may
not approve such a merger, however, if, after the merger, the resulting
entity would control more than 10% of the total deposits of U.S. insured
depository institutions or 30% or more of the deposits in the state where
the target bank is located, the responsible federal bank regulatory agency
may approve such a merger, notwithstanding the 30% limit, if the state
waives the limit either by statute, regulation or order of the appropriate
state official.

     Under the Riegle-Neal Act, states may adopt legislation permitting
interstate mergers before June 1, 1997.  Alternatively, states may adopt
legislation before June 1, 1997, subject to certain conditions, opting-out
of interstate branching.  If a state opts out of interstate branching, no
out-of-state bank may establish a branch in that state through an
acquisition or de novo, and a bank whose home state opts-out may not
participate in an interstate merger transaction.  Illinois adopted
legislation permitting interstate mergers beginning June 1, 1997.

     Deposits of the bank are insured by the FDIC primarily under the Bank
Insurance Fund ("BIF").  The FDIC's deposit insurance premiums are assessed
using a risk-based system under which all insured depository institutions
are placed into one of nine categories based upon their level of capital
and supervisory evaluation. Assessment rates range from $0.00 to $0.27 per
$100 of deposits. The bank, for deposit insurance assessment purposes, is
classified in the highest category and pays the lowest assessment rate for
deposit insurance.  The FDIC also maintains another insurance fund, the
Savings Association Insurance Fund (the "SAIF"), which primarily insures
savings association deposits.  The bank holds approximately $9 million of
deposits acquired in connection with the acquisition of a branch of a
savings association.  Those deposits are insured by SAIF and will continue
to be subject to the assessment rates due on SAIF-insured deposits
(currently the same as BIF insured deposits). The bank also pays Financing
Corporation (FICO) debt assessments on its BIF and SAIF insured deposits.
FICO assessment rates are not tied to the FDIC's risk classifications. FICO
rates, which may be adjusted quarterly, were $0.01164 (annualized) per $100
of BIF assessable deposits and $0.05820 (annualized) per $100 of SAIF
assessable deposits for the final quarter of 1998.


Monetary Policy and Economic Conditions

     The earnings of commercial banks and bank holding companies are
affected not only by general economic conditions, but also by the policies
of various governmental regulatory authorities.  In particular, the Federal
Reserve Board influences conditions in the money and capital markets, which
affect interest rates and growth in bank credit and deposits.  Federal
Reserve Board monetary policies have had a significant effect on the
operating results of commercial banks in the past and are expected to in
the future. In view of changing conditions in the national economy and in
the money markets, as well as the effect of credit policies by monetary and
fiscal authorities, including the Federal Reserve System, no representation
can be made as to possible future changes in interest rates, deposit levels
and loan demand, or their effect on the business and earnings of the
Company and its subsidiaries.


Employees

     As of December 31, 1998 the Company and its subsidiaries had a total
of 527 full-time and 112 part-time employees.


Item 2.  Properties

     The Company's corporate office is at 486 West Liberty Street,
Wauconda, Illinois in a building owned by GNB.  The Company leases
approximately 5,000 square feet from GNB.  The Company also conducts
business in Freeport, Illinois.  The two story office building in Freeport
consists of approximately 13,000 square feet, and is located at 110 West
Stephenson Street, Freeport, Illinois.  The building and underlying land
are owned by the Company.

     The banking affiliate, as of February 26, 1999, occupied 25 offices
in 18 different communities within northern Illinois, of which 2 are leased
and 23 are owned by GNB.

     Grand Premier Operating Systems, Inc., ("GPOS") conducts the majority
of its operations from a 28,800 square foot, one story office building
located at 588 Lakeview Parkway, Vernon Hills, Illinois.  GPOS leases this
building from an unaffiliated party (with an option to purchase) through
September, 2001.
 
Item 3.  Legal Proceedings

     There are various legal claims pending against the Company arising in
the normal course of business. Management believes, based upon the opinion
of counsel, that liabilities arising from these proceedings, if any, will
not be material to the Company's financial position as of
December 31, 1998.


Item 4.  Submission of Matters to a Vote of Security Holders

     No matters, through the solicitation of proxies or otherwise, have
been submitted to a vote of security holders for the quarter ended
December 31, 1998.



                            PART II

Item 5.  Market for the Registrant's Common Stock and Related Stockholder 
         Matters

     The approximate number of Holders of Common Stock as of 12/31/98 was
as follows:
                        Title of Class          No. of Record Holders

                         Common Stock      
                       ($.01 Par Value)                  1,279

     Other information required by this item is incorporated herein by
reference to the Registrant's Annual Report to its shareholders for the
year ended December 31, 1998, which is included as Exhibit 13 to this
report. 


Item 6.  Selected Financial Data

     Incorporated herein by reference to the Registrant's Annual Report to
its shareholders for the year ended December 31, 1998, which is included as
Exhibit 13 to this report.



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

     Incorporated by reference to the Registrant's Annual Report to its
shareholders for the year ended December 31, 1998, which is included as
Exhibit 13 to this report.

     Submitted herewith is the following supplementary financial
information of the registrant for each of the last three years (unless
otherwise stated):

     Distribution of Assets, Liabilities and Stockholders' Equity; 
     Interest Rates and Interest Differential;
     Changes in Interest Margin for each of the last two years;
     Investment Portfolio;
     Maturities of Investments, December 31, 1998;
     Loan Portfolio for each of the last five years;
     Loan Maturities and Sensitivity to Changes in Interest Rates,
       December 31, 1998;
     Risk Elements in the Loan Portfolio for the last five years;
     Summary of Loan Loss Experience for the last five years;
     Deposits;
     Time Certificates and other Time Deposits of $100,000 or more as of
       December 31, 1998;
     Return on Equity and Assets;
     Short Term Borrowings.


<TABLE>
Distribution of Assets, Liabilities and Stockholders' Equity; Interest Rates and Interest Differentials
      
The following table presents the average balances of major categories of interest earning assets and interest bearing liabilities,
the interest earned or paid on such categories, and the average yield on such categories of interest earning assets and the
average rates paid on such categories of interest bearing liabilities during each of the reported periods, (in thousands)
      
<CAPTION>
Year Ended December 31,                           1998                           1997                            1996            
                                                           Average                        Average                         Average
                                         Average            Yield/      Average            Yield/       Average            Yield/
Assets                                   Balance  Interest    Rate      Balance  Interest    Rate       Balance  Interest    Rate
<S>                                   <C>         <C>      <C>       <C>         <C>      <C>        <C>         <C>      <C>    
Interest earning assets
  Interest bearing deposits
      in other banks                  $    1,624  $     99   6.10%   $    2,608  $     52   1.99%    $    4,071  $    244   5.99%
  Investment securities (1)
    Taxable                              316,211    18,469   5.84       339,176    21,873   6.45        424,754    26,514   6.24
    Tax exempt (2)                       143,332     8,451   9.07       132,549     7,771   9.32        126,830     7,142   8.79
  Federal funds sold and securities
    purchased under agreements
    to resell                             46,253     2,646   5.72        12,305       733   5.96         12,413       654   5.27
  Loans (2)(3)                           972,802    86,990   8.95     1,007,561    90,192   8.96        909,632    79,816   8.78
      
Total interest earning
     assets/interest income            1,480,222   116,655   8.19     1,494,199   120,621   8.39      1,477,700   114,370   8.01
Cash and due from banks                   44,558                         53,709                          52,745                 
Premises and equipment                    35,004                         34,185                          35,945                 
Nonaccruing loans                          7,394                          4,085                           5,475 
Other assets                              49,795                         49,585                          46,138                 
Securities valuation -
    available for sale (1)                21,196                         22,626                          10,879
Allowance for loan losses                (13,660)                       (10,424)                         (9,743)                 
      
Total                                 $1,624,509                     $1,647,965                      $1,619,139                  
      
Liabilities and
  Shareholders' Equity
Interest bearing liabilities
  Demand deposits                     $  337,177    10,421   3.09    $  293,879     8,497   2.89     $  289,698     8,357   2.88 
  Savings deposits                       251,855     7,493   2.98       265,268     7,895   2.98        279,386     8,521   3.05
  Other time deposits                    558,527    31,132   5.57       627,642    35,874   5.72        613,910    35,380   5.76 
  Short-term borrowings                   18,338       909   4.96        45,447     2,404   5.29         60,826     3,482   5.72
  Long-term borrowings                    70,000     4,340   6.20        39,534     2,496   6.31         12,758       818   6.41
Total interest bearing liabilities/
    interest expense                   1,235,897    54,295   4.39     1,271,770    57,166   4.49      1,256,578    56,558   4.50
Noninterest bearing deposits             182,206                        187,019                         189,645        
Other liabilities                         26,539                         20,125                          20,826               
Shareholders' equity                     179,867                        169,051                         152,090                
      
Total                                 $1,624,509                     $1,647,965                      $1,619,139                
      
Net interest income                               $ 62,360   3.80%               $ 63,455   3.90%                $ 57,812   3.51%
      
Net yield on interest earning assets                         4.53%                          4.56%                           4.18%
      
(1) Investments are at amortized cost. The valuation from amortized cost to market for available for sale securities is shown
          separately.
(2) Yields are tax equivalent using a 35% federal tax rate.
(3) Average volume excludes nonaccrual loans.          
</TABLE>

                   CHANGES IN INTEREST MARGIN


     The following table sets forth the registrant's dollar amount of
change in interest earned on each major category of interest earning assets
and the dollar amount of change in interest paid on each major category of
interest bearing liabilities, as well as the portion of such changes
attributable to changes in rate and changes in volume for each of the last
two years (dollar figures in thousands):
                                              Increase (Decrease)
                                      1998 over 1997       1997 over 1996  
                                      Rate     Volume      Rate     Volume 
Changes in Interest Earned:
  Interest bearing deposits         $    73   $   (26)   $  (125) $    (67)
  Taxable investment securities      (1,981)   (1,423)       853    (5,494)
  Tax exempt investment securities       44       636        300       329
  Fed funds sold and securities
   purchased under agreements
   to resell                            (30)    1,943         85        (6)
  Loans (net of unearned discount)      (94)   (3,108)     1,637     8,739

     Total                           (1,988)   (1,978)     2,750     3,501

Changes in Interest Paid:
  Interest bearing deposits            (262)   (2,958)      (476)      484
  Short-term borrowings                (142)   (1,353)      (249)     (829)
  Long-term borrowings                  (46)    1,890        (13)    1,691

        Total                          (450)   (2,421)      (738)    1,346
          
Changes in Interest Margin          $(1,538)  $   443    $ 3,488   $ 2,155



Changes attributable to rate/volume, i.e., changes in the interest margin
which occurred because of a combination rate/volume changes, are
apportioned between rate and volume in proportion to the absolute dollar
amount of the change in each category.


                      INVESTMENT PORTFOLIO


     The following table sets forth the registrant's book values of
investments in obligations of the U.S. Treasury and other U.S. Government
Agencies and Corporations, State and Political Subdivisions (U.S.), and
other securities for each of the last three years (dollar figures in
thousands):
                                                                           
                                        1998          1997          1996   

U.S. Treasury and U.S. Agency
  Securities                         $311,621      $248,612      $348,877
Obligations of States and
  Political Subdivisions              167,402       148,742       134,633

Other Securities                       37,060        57,046        52,177

        Total                        $516,083      $454,400      $535,687

     The following table sets forth the registrant's book values of
investments in obligations of the U.S. Treasury and other U.S. Government
Agencies and Corporations, State and Political Subdivisions (U.S.), and
other securities as of December 31, 1998 by remaining maturity and also
sets forth the weighted average yield for each range of maturities.

                                          Obligations
                          U.S. Treasury     of States
                                    and           and              Weighted
                            U.S. Agency     Political       Other   Average
Book Value:                  Securities  Subdivisions  Securities    Yield 

 One Year or Less              $ 89,854      $  4,973     $21,426    5.60%
 After One Year to Five Years    18,534        22,848       2,964    8.12%
 After Five Years to Ten Years   21,442        19,559       1,527    7.80%
 Over Ten Years                 181,791       120,022      11,143    6.44%

     Total                     $311,621      $167,402     $37,060    6.51%


(1)  Weighted Average Yields were calculated as follows:

 A.  The weighted average yield for each category in the portfolio was 
     calculated based upon the maturity distribution shown in the table
     above.
 B.  The yields determined in step A were weighted in relation to the
     total investments in each maturity range shown in the table above.

(2)  Yields on tax exempt securities are full tax equivalent yields at a
     35% rate.

At December 31, 1998 the Company did not own any Obligation of a State or
Political Subdivision or Other Security which was greater than 10% of its
total equity capital.


                         LOAN PORTFOLIO


     The following table sets forth the registrant's Loan Portfolio by
major category for each of the last five years (dollar figures in
thousands):

                                       Year Ended December 31,             
                             1998      1997      1996      1995      1994  

Commercial, financial
 and agricultural Loans   $275,450 $  231,707  $229,700  $229,589  $200,178
Real Estate - 
   Construction             43,250     50,186    42,772    45,098    46,150
   Mortgage                569,851    631,069   625,364   530,636   450,271
Loans to Individuals        68,602    115,901    68,488    71,010    68,453

     Total                $957,153 $1,028,863  $966,324  $876,333  $765,052


The following tables set forth the registrant's loan maturity distribution
for certain major categories of loans as of December 31, 1998 (dollar
figures in thousands).

                                              AMOUNT DUE IN
                                                                           

                              1 Year or Less    1-5 Years     After 5 Years

Commercial, financial and 
  agricultural loans             $123,465       $135,910        $ 16,075  
Real Estate - Construction         36,779          5,219           1,252

   Total                         $160,244       $141,129        $ 17,327


     As of December 31, 1998 loans totaling $112,012,000, which are due
after one year have predetermined interest rates, while $46,444,000 of
loans due after one year have floating interest rates.



              RISK ELEMENTS IN THE LOAN PORTFOLIO

     The Company's financial statements are prepared on the accrual basis
of accounting. All of the loans currently accruing interest are accruing at
the rate contractually agreed upon when the loan was negotiated. It is the
Company's policy to discontinue the accrual of interest thereon if payment
in full of both interest and principal is doubtful and any scheduled or
expected reduction of principal or interest is in default for 90 days or
more unless the loan is both well secured and in the process of collection.
At the time a loan is placed in non-accrual status, all interest accrued
but not yet collected is reversed against current interest income. 
Troubled debt restructurings (renegotiated loans) are loans on which
interest is being accrued at less than the original contractual rate of
interest because of the inability of the borrower to service the obligation
under the original terms of the agreement.  Income is accrued at the
renegotiated rate so long as the borrower is current under the revised
terms and conditions of the agreement.  Other Real Estate is real estate,
sales contracts, and other assets acquired because of the inability of the
borrower to serve the obligation of a previous loan collateralized by such
assets.

     During 1997, the Company experienced rapid growth in the category of
loans to individuals, primarily in the indirect segment of the portfolio.
At December 31, 1997, the indirect segment of the portfolio totaled
approximately $88.4 million and approximately 4% of the balance was more
than 60 days past due. In December 1997, the Company made a provision for
possible loan losses of approximately $6 million in response to
deterioration in the indirect portfolio and discontinued this type of
lending. As of December 31, 1998, the balance of the indirect portfolio has
been reduced by approximately $47.3 million through normal principal
repayments and a sale of loans with balances totaling approximately
$8.1 million.

     The following table sets forth the registrant's non-accrual, past
due, and renegotiated loans, for each of the last five years (dollar
figures in thousands):


                                        Year Ended December 31,           
                             1998     1997      1996      1995      1994  
Non-accrual Loans          $ 6,893  $ 6,223   $ 4,718   $ 6,118   $ 8,911
Loans past due 90 days
  or more and still
  accruing                     170    1,347     1,946       539       703 
Renegotiated Loans             413      436       510       551     3,395 

   Total                   $ 7,476  $ 8,006   $ 7,174   $ 7,208   $13,009 


     The following table sets forth interest information for certain
non-performing loans for the year ended December 31, 1998 (dollar figures
in thousands):

                                 Non-Accrual Loans   Renegotiated Loans

Balance December 31, 1998              $ 6,893               $ 413

Gross interest income that would
  have been recorded if the loans
  had been current in accordance
  with their original terms                775                  25

Amount of interest included in 
  net earnings.                            481                  32



                SUMMARY OF LOAN LOSS EXPERIENCE

     The Company and its subsidiary bank have historically evaluated the
adequacy of the Allowance for Possible Loan Losses on an overall basis, and
the resulting provision charged to expense has similarly been determined in
relation to management's evaluation of the entire loan portfolio.  In
determining the adequacy of its Allowance for Possible Loan Losses,
management considers such factors as the size, composition and quality of
the loan portfolio, historical loss experience, current loan losses,
current potential risks, economic conditions, and other risks inherent in
the loan portfolio. In addition to provisions made within the context of
these factors, the Company made an additional provision for possible loan
losses of approximately $6 million in the fourth quarter of 1997 in
response to deterioration identified in the indirect segment of the loan
portfolio (included in the installment loans to individuals category). For
additional information on the determination of provisions, see Provision
for Possible Loan Losses in Management's Discussion and Analysis of
Financial Condition and Results of Operations included in Exhibit 13 to
this report.

The following table sets forth the registrant's loan loss experience for
each of the last five years (dollar figures in thousands):

                                             Year Ended December 31,      

                                      1998    1997    1996    1995    1994 

Balance at beginning of year        $15,404 $10,116 $ 9,435 $ 9,738 $10,595

Charge-offs:
  Commercial, financial and
    agricultural                      1,415   1,431   1,896   1,707   1,437
  Real estate construction               19      11       -       -      55
  Real estate mortgage                  159     618      91     235     140
  Installment loans to individuals    9,170   3,267     778     912     706

                                     10,763   5,327   2,766   2,854   2,338
Recoveries:
  Commercial, financial and
    agricultural                        545     522     286     865     578
  Real estate mortgage                  243      36      26      28      15
  Installment loans to individuals    3,414     357     259     223     333

                                      4,202     915     572   1,116     926

Net charge-offs                       6,561   4,412   2,194   1,738   1,412

Operating expense provision           3,600   9,700   2,875   1,435     555

Balance at end of year              $12,443 $15,404 $10,116 $ 9,435 $ 9,738

Ratio of net charge-offs during the
  year to average loans                .67%    .44%    .24%    .21%    .19%


<TABLE>
      
Allocation of the Allowance for Loan Losses
       (dollar figures in thousands)

                                                                         Year End December 31,                            
<CAPTION>
      
                                 1998                 1997                 1996                 1995                 1994       
                                     Percent              Percent              Percent              Percent              Percent
                                    of Loans             of Loans             of Loans             of Loans             of Loans
                                     in Each              in Each              in Each              in Each              in Each
                                    Category             Category             Category             Category             Category
                                    to Total             to Total             to Total             to Total             to Total
                           Amount      Loans    Amount      Loans    Amount      Loans    Amount      Loans    Amount      Loans

<S>                        <C>      <C>         <C>      <C>         <C>      <C>         <C>      <C>         <C>      <C>     
Commercial, financial 
  and agricultural         $ 4,000     28.8%    $ 4,000     22.5%    $ 3,343     23.8%     $2,475     26.2%     $2,964     26.2%
      
Real estate-construction       443      4.5         454      4.9         445      4.4         445      5.1         186      6.0 
      
Real estate-mortgage         5,000     59.5       5,500     61.3       5,628     64.7       5,693     60.6       5,396     58.9 
      
Installment loans 
  to individuals             3,000      7.2       5,450     11.3         700      7.1         822      8.1       1,192      8.9 
      
                           $12,443    100.0%    $15,404    100.0%    $10,116    100.0%     $9,435    100.0%     $9,738    100.0%
      
      
    The amount of the additions to the allowance for possible loan losses charged to expense for the periods indicated were based
on a variety of factors, including actual charge-offs during the year, historical loss experience, character of portfolio,
specific loan allocations, industry guidelines and an evaluation of economic conditions in the Bank's market areas.  Because the
Company has historically evaluated its Allowance for Loan Losses on an overall basis, the Allowance has not been allocated by
category.  The allocation shown in the table above, encompassing the major segments of the loan portfolio judged most informative
by management, represents only an estimate for each category of loans based upon historical loss experience and management's
judgement of amounts deemed reasonable to provide for the possibility of losses being incurred within each category.  
      
</TABLE>
      

                            DEPOSITS


     The following table sets forth the classification of average deposits
for the indicated periods (dollar figures in thousands):


                                                 Year ended December 31,   
                                               1998       1997       1996 

Noninterest bearing demand deposits          $182,206   $187,019   $189,645
Interest bearing demand deposits              337,177    293,879    289,698
Savings deposits                              251,855    265,268    279,386
Time deposits                                 558,527    627,642    613,910


     The following table sets forth the average rates paid on deposits for
the indicated periods:

                                                 Year Ended December 31,

                                                 1998     1997     1996 

Interest bearing demand deposits                 3.09%    2.89%    2.88%
Savings deposits                                 2.98     2.98     3.05
Time deposits                                    5.57     5.72     5.76


     The following table sets forth the remaining maturities of time
deposits of $100,000 or more for the period indicated (dollar figures in
thousands):

                                                        Year Ended
                                                       December 31,
                                                           1998    

Three months or less                                    $ 55,122
Over three months to six months                           49,209
Over six months to twelve months                          46,936
Over twelve months                                        18,609

Total                                                   $169,876


                  RETURN ON EQUITY AND ASSETS

     The following table presents certain ratios relating to the
Registrant's equity and assets:

                                             Year Ended December 31,  
                                            1998      1997      1996  

Return on average assets                    1.69%     1.03%      .82%
Return on average equity                   15.23     10.04      8.76 
Dividend payout ratio                      27.66     40.74     43.55
Average total shareholders' equity
  to average total assets                  11.07     10.26      9.39


                     SHORT TERM BORROWINGS

     The following table sets forth a summary of the registrant's
short-term borrowings for each of the last three years (dollar figures in
thousands):

                                               Year Ended December 31      
                                              1998       1997       1996   
Balance at End of Period:    
  Federal funds purchased                  $     -    $33,000    $     -
  Securities sold under 
   repurchase agreements                    11,887     14,598     23,486
      Total                                $11,887    $47,598    $23,486

Weighted Average Interest
  Rate at the end of period:
  Federal funds purchased                        -%      7.10%         -%
  Securities sold under
   repurchase agreements                      4.26       4.42       4.33 

Highest amount outstanding
  at any month-end:
  Federal funds purchased                  $32,000    $45,200   $ 42,469
  Securities sold under
   repurchase agreements                    17,629     20,859     54,952
  Other                                          -     40,000     13,953

Average outstanding during
  the year:
  Federal funds purchased                  $ 4,819   $ 15,004   $ 10,101
  Securities sold under
   repurchase agreements                    13,519     16,197     39,550
  Other                                          -     14,247     11,175

Weighted average interest
  rate during the year:
  Federal funds purchased                     5.89%      5.66%      5.25%   
  Securities sold under
   repurchase agreements                      4.63       4.55       5.13
  Other                                          -       5.67       8.27



Item 7a. Quantitative and Qualitative Disclosure About Market Risk

     Market risk is the risk of loss arising from adverse changes in
market rates and prices, such as interest rates, foreign currency exchange
rates, commodity prices and equity prices. The Company's exposure to market
risk arises primarily from changes in interest rates.

     Net interest income is the largest contributor to the earnings of the
Company. The Company's success is largely dependent upon its ability to
manage risk associated with changes in interest rates.  Reducing the
volatility of net interest income by managing this risk is one of the
Company's primary objectives. Interest rate risk management is the
responsibility of the Company's Asset/Liability Management Committee
("ALCO") established by the Board of Directors.  The committee is composed
of senior management representatives. ALCO actively manages the
characteristics of the Company's interest earning assets and interest
bearing liabilities. ALCO has several strategies available to manage
interest rate risk including: controlling asset mix, defining product
offerings and their maturities, establishing pricing parameters and hedging
identified risks with off-balance sheet interest rate derivative
instruments.

     ALCO uses three different measurement methods to analyze and quantify
the effect of hypothetical changes in interest rates on net interest
income.  The methods are static gap analysis, income simulation and market
value sensitivity.  In gap analysis, the carrying amounts of rate-sensitive
assets and liabilities are grouped by expected maturity dates. The results
are summed to show a cumulative interest sensitivity "gap" between assets
and liabilities. Income simulation attempts to project net interest income
over the following twelve month period under various hypothetical interest
rate scenarios. Under income simulation, maturing and repricing assets and
liabilities are replaced at the new rates in effect at that time. Market
value sensitivity analysis measures the hypothetical effects of possible
changes in market prices of rate-sensitive assets and liabilities under
different interest rate scenarios.  The following tables of financial
instruments represents the Company's static gap positions based on
estimated maturities of interest sensitive assets and liabilities, as of
December 31, 1998 and 1997 (dollars in thousands):

<TABLE>
                                             December 31, 1998
                                          Expected Maturity Date                                
<CAPTION>
                                                                                                 Fair 
                          1999      2000      2001      2002      2003  Thereafter   Total      Value
<S>                    <C>       <C>       <C>       <C>       <C>       <C>       <C>        <C>       
Assets:

 Debt Securities (1):
  Fixed Rate           $209,151  $ 50,200  $ 54,239  $ 19,756  $  8,854  $153,911  $496,111   $507,373
    Average rate          4.98%     5.73%     6.21%     6.55%     6.72%     5.71%     5.51%

 Loans:
  Fixed Rate           $232,376  $138,130  $ 94,160  $ 52,945  $ 35,103  $ 29,500  $582,214   $591,110
    Average rate          8.60%     8.79%     8.95%     8.93%     8.00%     7.93%     8.66%

  Variable Rate        $178,507  $ 33,029  $ 26,978  $ 56,361  $ 26,906  $ 52,205  $373,986   $375,448
    Average rate          7.68%     7.71%     7.67%     7.68%     7.77%     7.48%     7.66%

 Interest bearing
   deposits:           $  1,718                                                    $  1,718   $  1,718
    Average Rate          4.68%                                                       4.68%

 Securities purchased
   under agreements
   to resell and 
   federal funds sold  $ 58,195                                                    $ 58,195   $ 58,195
    Average Rate          4.88%                                                       4.88%


Total interest
sensitive assets       $679,947  $221,359  $175,377  $129,062  $ 70,863  $235,616

Liabilities:

 Savings:
  Fixed Rate           $105,976  $ 97,809  $ 97,809  $ 58,681  $ 58,681  $ 78,182  $497,138   $497,138
    Average rate          2.69%     2.35%     2.35%     2.35%     2.35%     2.35%     2.42%

  Variable Rate        $ 53,839  $ 17,619  $ 16,416  $  9,801  $  9,801  $ 13,067  $120,543   $120,543
    Average rate          4.53%     4.53%     4.52%     4.52%     4.52%     4.52%     4.53%

 Time Deposits:
  Fixed Rate           $425,429  $ 81,138  $ 24,478  $  8,094  $  4,655  $    461  $544,255   $548,914
    Average rate          5.29%     5.87%     5.58%     5.67%     5.38%     5.58%     5.40%

 Short-Term Borrowings:
  Fixed Rate           $ 11,887                                                    $ 11,887   $ 11,834
    Average rate          4.19%                                                       4.19%

 Long-Term Borrowings:
  Fixed Rate           $  5,000  $  5,000  $ 20,000  $ 40,000                      $ 70,000   $ 72,498
    Average rate          5.85%     6.54%     6.37%     5.97%                         6.13%

Total interest
sensitive liabilities  $602,131  $201,566  $158,703  $116,576  $ 73,137  $ 91,710

Asset (liability) gap  $ 77,816  $ 19,793  $ 16,674  $ 12,486  $( 2,274) $143,906

Cumulative asset
 (liability) gap       $ 77,816  $ 97,609  $114,283  $126,769  $124,495  $268,401

 (1) Rates are not on a taxable equivalent basis.

</TABLE>

<TABLE>

                                             December 31, 1997
                                          Expected Maturity Date                                
<CAPTION>
                                                                                                  Fair
                          1998      1999      2000      2001      2002  Thereafter    Total      Value
<S>                    <C>       <C>       <C>       <C>       <C>       <C>       <C>        <C>     
Assets:

 Debt Securities (1):
  Fixed Rate           $102,346  $ 56,881  $ 37,793  $ 40,840  $ 28,872  $141,369  $408,101   $415,601
    Average rate          6.27%     6.65%     6.69%     6.68%     6.74%     6.15%     6.39%

 Loans:
  Fixed Rate           $255,605  $157,587  $102,973  $ 63,671  $ 37,058  $ 39,506  $656,400   $661,911
    Average rate          8.63%     9.15%     9.40%     9.91%     9.81%     8.60%     9.06%

  Variable Rate        $170,097  $ 36,319  $ 36,564  $ 26,538  $ 68,436  $ 33,518  $371,472   $372,043
    Average rate          8.70%     8.57%     8.55%     8.52%     8.61%     7.32%     8.52%

 Other Earning Assets:
  Interest bearing
   deposits            $    159                                                    $    159   $    159
    Average Rate          5.40%                                                       5.40%

  Securities purchased
   under agreements
   to resell           $ 19,922                                                    $ 19,922   $ 19,922
    Average Rate          6.22%                                                       6.22%

Total interest
sensitive assets       $548,129  $250,787  $177,330  $131,049  $134,366  $214,393

Liabilities:

 Savings:
  Fixed Rate           $108,565                                          $388,073  $496,638   $496,638
    Average rate          3.61%                                             2.61%     2.83%

  Variable Rate        $ 16,208                                          $ 49,942  $ 66,150   $ 66,150
    Average rate          5.18%                                             5.18%     5.18%

 Time Deposits:
  Fixed Rate           $421,492  $103,382  $ 40,041  $  9,898  $  4,632  $    355  $579,800   $581,499
    Average rate          5.74%     5.91%     6.21%     5.88%     5.95%     5.61%     5.81%

 Short-Term Borrowings:
  Fixed Rate           $ 47,598                                                    $ 47,598   $ 47,609
    Average rate          5.17%                                                       5.17%

 Long-Term Borrowings:
  Fixed Rate                     $  5,000  $  5,000  $ 20,000  $ 40,000            $ 70,000   $ 70,530
    Average rate                    5.85%     6.54%     6.37%     5.97%               6.13%

Total interest
sensitive liabilities  $593,863  $108,382  $ 45,041  $ 29,898  $ 44,632  $438,370

Asset (liability) gap  $(45,734) $142,405  $132,289  $101,151  $ 89,734 $(223,977)

Cumulative asset
 (liability) gap       $(45,734) $ 96,671  $228,960  $330,111  $419,845  $195,868

(1) Rates are not on a taxable equivalent basis.

</TABLE>

     Assets maturing within one year increased by approximately $131.8
million in 1998 when compared to 1997. The increase was primarily
attributable to an increase in short-term debt securities maintained to
fund the pending sales of four branch offices and their associated deposit
liabilities in the first quarter 1999. A decline in loans maturing within
one year is largely offset by increased short-term investments in
securities purchased under agreements to resell and federal funds sold. 

     Fixed rate debt securities include collateralized mortgage
obligations ("CMO's"). CMO's were approximately $159.6 million and $121.5
million as of December 31, 1998 and 1997, respectively. Principal cash
flows for CMO's are spread over their projected amortization periods under
the interest rate environment in effect at the time the gap analysis is
performed. The timing of principal payments on CMO's, however, can be
subject to substantial volatility under different interest rate
environments due to prepayment options on the underlying mortgage loans and
their effect on the general structure of the CMO. Generally, the CMO's held
by the Company are shorter-maturity bonds structured to provide more
predictable cash flows by being less sensitive to prepayments during
periods of changing interest rates.

     Principal payments on amortizing loans are based on their contractual
schedules. Additional principal prepayments are estimated, generally
between six and ten percent annually, for certain fixed rate loans. The
vast majority of variable rate loans are tied to the U.S. prime rate and
can reprice on a daily basis. 

     Savings (including N.O.W., money market and regular savings) accounts
have no contractual maturity. The Company considers a substantial portion
of its savings accounts as a stable source of funding (i.e. "core
balances"). Ninety percent of the lowest average monthly balance during the
two most recent years is considered "core" for purposes of estimating
maturities.  Core balances were re-allocated by ALCO during 1998 based on
the committee's evaluation of anticipated customer behavior. In 1998, these
core balances were allocated as follows: twenty-five percent within two
years, twenty-five percent within three years, fifteen percent within four
years, fifteen percent within 5 years, and twenty percent in more than five
years. In 1997, the Company considered all core balances as maturing beyond
five years. The remaining savings balances are considered due in one year
or less.

     Changes in the maturities of fixed rate liabilities during 1998 were
primarily the result of the core deposit allocation changes made by ALCO as
discussed in the preceding paragraph. An increase of approximately $50
million in variable rate money market accounts during 1998 was the main
reason for the change in variable rate savings liabilities due in one year
or less.

     Fair value for debt securities is based on market prices or dealer
quotes for U.S. Treasury and U.S. Government Agency securities and quoted
market prices, if available, for other investment securities. If a quoted
market price is not available for other securities, fair value is estimated
using quoted market prices for similar securities. 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. The fair value of savings
accounts is the amount payable on demand at the reporting date.  Fair value
of time deposits is estimated using the rates currently offered for
deposits of similar remaining maturities. The fair value of short-term and
long-term borrowings is estimated by discounting the future cash flows
using the current interest rates at which similar borrowings could be made
for the same maturities.

     Income simulation, another measurement tool used by the Company,
estimates net interest income over the next twelve months under different,
hypothetical interest rate scenarios. As of December 31, 1998, the
simulation model indicated a minimal change (less than 3.3 percent) in net
interest income under the different rate scenarios when compared to the
base model. For additional information on income simulation, see the
discussion under the caption "Interest Rate Risk Management" in Item 7 -
Management's Discussion and Analysis of Financial Condition and Results of
Operations in the Company's 1998 Annual Report to Shareholders.

     The Company purchases off-balance sheet derivative instruments to
hedge interest rate exposure. As of December 31, 1998, the Company had
interest rate swap contracts with an aggregate notional value of
$30 million outstanding with an aggregate negative market value of
approximately $178 thousand. The Company does not believe that market risk
associated with its off-balance sheet derivative instruments as of
December 31, 1998 is material to its overall market risk position.

     All of the Company's financial instruments are held for other than
trading purposes.

     During 1998, the Company sold its portfolio of listed equity
securities. As a result of the sales, the Company essentially eliminated
its 1997 risk exposure from adverse changes in equity prices.  As of
December 31, 1998, the Company's remaining equity portfolio totaled
$8.7 million.  The portfolio consisted of 1) $7.8 million of Federal
Reserve Bank ("FRB") stock and Federal Home Loan Bank ("FHLB") stock, both
of which are not readily marketable and 2) unlisted equity securities.  
FHLB, FRB and other unlisted equity securities are deemed to have a market
value equal to cost.


Item 8.  Financial Statements and Supplementary Data

     The following consolidated financial statements of the Company, which
are included in the registrant's Annual Report to its shareholders for the
year ended December 31, 1998, are submitted herewith as Exhibit 13, and are
incorporated by reference:

     1.  Consolidated Balance Sheets, December 31, 1998 and 1997
     2.  Consolidated Statements of Earnings, for the three years
            ended December 31, 1998
     3.  Consolidated Statements of Changes in Stockholders' Equity
            for the three years ended December 31, 1998
     4.  Consolidated Statements of Cash Flows for the three years
            ended December 31, 1998
     5.  Notes to Consolidated Financial Statements
     6.  Independent Auditors' Report
     7.  Selected Quarterly Financial Information


Item 9.  Change in and Disagreements with Accountants on Accounting
         and Financial Disclosures

     None.

                            PART III

Item 10.  Directors and Executive Officers of the Registrant

     Incorporated herein by reference to the Registrant's Proxy Statement
dated on or about April 12, 1999 in connection with its annual meeting to
be held on May 26, 1999.

     Item 405 of Regulation S-K calls for disclosure of any known late
filing or failure by an insider to file a report required by Section 16 of
the Exchange Act.  This disclosure is contained in the Registrant's Proxy
Statement dated on or about April 12, 1999 under the Section "Compliance
with Section 16 (a) of the Exchange Act" and is incorporated herein by
reference in this Annual Report on Form 10-K.


Item 11.  Executive Compensation

     Incorporated herein by reference to the Registrant's Proxy Statement
dated on or about April 12, 1999, in connection with its annual meeting to
be held on May 26, 1999.


Item 12.  Security Ownership of Certain Beneficial Owners and Management

     Incorporated herein by reference to the Registrant's Proxy Statement
dated on or about April 12, 1999, in connection with its annual meeting to
be held on May 26, 1999.


Item 13.  Certain Relationships and Related Transactions

     Incorporated herein by reference to the Registrant's Proxy Statement
dated on or about April 12, 1999, in connection with its annual meeting to
be held on May 26, 1999.

                            PART IV

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

1.  The following documents are filed as a part of this report:

  A. Consolidated Financial Statements of the Company which are included
     in the Annual Report of the registrant to its shareholders for the
     year ended December 31, 1998 as follows:

     1. Consolidated Balance Sheets, December 31, 1998 and 1997.
     2. Consolidated Statements of Earnings, for the three years ended
        December 31, 1998.
     3. Consolidated Statements of Cash Flows, for the three years ended
        December 31, 1998.
     4. Consolidated Statements of Changes in Stockholders' Equity, for
        the three years ended December 31, 1998.
     5. Independent Auditors' Report.
     6. Notes to Consolidated Financial Statements.

  B.  Financial Statement Schedules as follows:

     1. Selected Quarterly Financial Information included in Note 15 of
        Registrant's 1998 Annual Report to shareholders.

  C.  Exhibits as follows:

  The following exhibits are filed with, or incorporated by reference in,
  this report.  Each management contract or compensatory plan or
  arrangement required to be filed as an exhibit to this report has been
  marked with an asterisk.

  2.1   Agreement and Plan of Merger, dated January 22, 1996, among
        Northern Illinois Financial Corporation, Premier Financial
        Services, Inc and the Company (incorporated by referenced to
        Exhibit 2.1 to the Company's Registration Statement on Form S-4,
        as amended, File No. 333-03327), as amended by the First
        Amendment thereto, dated March 18, 1996 (incorporated by
        reference to Exhibit 2.2 to the Company's Registration Statement
        on Form S-4, as amended, File No. 333-03327), and the Second
        Amendment thereto, (incorporated by reference to Exhibit 2.3 to
        the Company's Current Report on Form 8-K, dated August 22, 1996,
        Commission File No. 0-20987).

  3.1   Amended and Restated Certificate of Incorporation of the Company
        (incorporated by reference to Appendix F to the final proxy
        statement prospectus included in the Company's Registration
        Statement on Form S-4, as amended, File No. 333-03327).

  3.2   By-laws of the Company (incorporated by reference to Exhibit 3.4
        to the Company's Registration Statement on Form S-4, as amended,
        File No. 333-03327).

  4.    Rights Agreement, dated as of July 8, 1996, between Grand
        Premier Financial, Inc. and Premier Trust Services, Inc.
        (incorporated by reference to the Company's Registration
        Statement on Form S-4, as amended, File No. 333-03327).

  10.1* Form of Change in Control Agreement, dated October (2)/(8),
        1996, entered into between the Company and each of Richard L.
        Geach, David L. Murray, Kenneth A. Urban, Steven E. Flahaven and
        Scott Dixon (incorporated by reference to the Company's Form
        10-Q dated September 30, 1996 Commission file No. 0-20987.)

  10.2* Form of Change in Control Agreement, dated October (2)/(8),
        1996, entered into between the Company and each of Robert
        Hinman, Alan Emerick, Jack Emerick, Joseph Esposito, William
        Theobald, Reid French, Larry O'Hara and Ralph Zicco
        (incorporated by reference to the Company's Form 10-Q dated
        September 30, 1996 Commission file No. 0-20987.)

  10.3* Grand Premier Financial, Inc. 1996 Non-Qualified Stock Option
        Plan, as amended (incorporated by reference to Exhibit 10.3 of
        the Company's Annual Report on Form 10-K dated December 31,
        1997, Commission file No. 0-20987).

  10.4* Premier Financial Services, Inc. 1995 Non-Qualified Stock Option
        Plan, as amended (incorporated by reference to Exhibit 10.4 of
        the Company's Annual Report on Form 10-K dated December 31,
        1997, Commission file No. 0-20987).

  10.5* Premier Financial Services, Inc. 1988 Non-Qualified Stock Option
        Plan, as amended (incorporated by reference to Exhibit 10.5 of
        the Company's Annual Report on Form 10-K dated December 31,
        1997, Commission file No. 0-20987)..

  10.6* Premier Financial Services, Inc. Senior Leadership and Directors
        Deferred Compensation Plan, as amended (incorporated by
        reference to Exhibit 4.1 to the Company's Registration Statement
        on Form S-8, File No. 333-11645).

  10.7* Consulting Agreement, dated February, 17, 1995, between Howard
        A. McKee and Grand National Bank (incorporated by reference to
        Exhibit 10.1 to the Company's Registration Statement on Form
        S-4, as amended, File No. 333-03327).

  10.8* Grand Premier Financial, Inc. Deferred Compensation Plan
        (incorporated by reference to Exhibit 10.8 to the Company's Form
        10-K dated December 31, 1996 Commission file No. 0-20987).

  10.9* Grand Premier Financial, Inc. Savings and Stock Plan and Trust
        (incorporated by reference to Exhibit 10.9 to the Company's Form
        10-K dated December 31, 1996 Commission file No. 0-20987).

  10.10*     Employment and Consulting Agreement, dated May 1, 1997, between
             Grand Premier Financial, Inc., and Howard A. McKee (incorporated
             by reference to Exhibit 10.10 to the Company's Form 10-Q dated
             June 30, 1997 Commission file No. 0-20987).

  10.11*     Grand Premier Financial, Inc. Non-Employee Directors Stock
             Option Plan (incorporated by reference to Appendix A of the
             Companys' Definitive Proxy Statement dated April 13, 1998).

  11.   Statement re computation of per share earnings (see Notes 1 and
        16 to the 1998 Annual Report to Stockholders included as Exhibit
        13 to this report).

  13.   Grand Premier Financial, Inc. 1998 Annual Report to Stockholders

  21.   Subsidiaries of the Registrant

  23.   Consent of KPMG LLP

  27.   Article 9 Financial Data Schedule for the Fiscal Year Ended
        December 31, 1998


2.  Reports on Form 8-K

  The registrant has not filed a report on Form 8-K during the quarter
    ended December 31, 1998.


                           SIGNATURES

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

Grand Premier Financial, Inc.

By:/s/ Richard L. Geach                                          
   Richard L. Geach, Chief Executive Officer
   Date: March 22, 1999               

Pursuant to the requirements of the Securities Exchange Act of 1934, this
report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.


/s/ Richard L. Geach                    /s/ David L. Murray             
By: Richard L. Geach, Chief             By: David L. Murray, Senior    
    Executive Officer, President            Executive Vice President, Chief
    and Director                            Financial Officer and Director
    Date: March 22, 1999                    Date: March 22, 1999

/s/ Frank J. Callero                    /s/ Nanette K. Donton           
By: Frank J. Callero, Director          By: Nanette K. Donton, Chief  
    Date: March 22, 1999                    Accounting Officer
                                            Date: March 22, 1999

/s/ Alan J. Emerick                     /s/ Brenton J. Emerick          
By: Alan J. Emerick, Director           By: Brenton J. Emerick, Director
    Date: March 22, 1999                    Date: March 22, 1999

/s/ James Esposito                      /s/ Thomas D. Flanagan          
By: James Esposito, Director            By: Thomas D. Flanagan, Director
    Date: March 22, 1999                    Date: March 22, 1999  

/s/ R. Gerald Fox                       /s/ Noa W. Horner               
By: R. Gerald Fox, Director             By: Noa W. Horner, Director     
    Date: March 22, 1999                    Date: March 22, 1999  

/s/ Howard A. McKee                     /s/ Stephen J. Schostok         
By: Howard A. McKee, Director           By: Stephen J. Schostok, Director 
    Date: March 22, 1999                    Date: March 22, 1999  



                  EXHIBIT INDEX TO FORM 10-K

      The following exhibits are filed herewith or incorporated herein by
reference. All documents incorporated by reference to prior filings have been
filed under Commission File No. 0-20987. Each management contract or
compensatory plan or arrangement required to be filed as an exhibit to this
report has been marked with an asterisk.


Exhibit No.          Description                     

 2.1  Agreement and Plan of Merger, dated January 22, 1996, among Northern
      Illinois Financial Corporation, Premier Financial Services, Inc. and
      the Company (incorporated by referenced to Exhibit 2.1 to the
      Company's Registration Statement on Form S-4, as amended, File No.
      333-03327), as amended by the First Amendment thereto, dated March
      18, 1996 (incorporated by referenced to Exhibit 2.2 to the Company's
      Registration Statement on Form S-4, as amended, File No. 333-03327),
      and the second Amendment thereto, incorporated by reference to
      Exhibit 2.3 to the Company's Current Report on Form 8-K, dated August
      22, 1996, Commission File No. 0-20987.

3.1 Amended and Restated Certificate of Incorporation of the Company
    (incorporated by reference to Appendix F to the final proxy-statement
    prospectus included in the Company's Registration Statement on Form
    S-4, as amended, File No. 333-03327).

3.2 By-laws of the Company (incorporated by reference to Exhibit 3.4 to
    the Company's Registration Statement on Form S-4, as amended, File
    No. 333-03327).

4.  Rights Agreement, dated as of July 8, 1996, between Grand Premier
    Financial, Inc. and Premier Trust Services, Inc. (incorporated by 
    reference to the Company's Registration Statement on Form S-4, as 
    amended, File No.333-03327).

10.1* Form of Change in Control Agreement, dated October (2)/(8), 1996,
      entered into between the Company and each of Richard L. Geach, David
      L. Murray, Kenneth A. Urban, Steven E. Flahaven and Scott Dixon
      (incorporated by reference to the Company's Form 10-Q dated September
      30, 1996 Commission file No. 0-20987.)

10.2* Form of Change in Control Agreement, dated October (2)/(8), 1996,
      entered into between the Company and each of Robert Hinman, Alan
      Emerick, Jack Emerick, Joseph Esposito, William Theobald, Reid
      French, Larry O'Hara and Ralph Zicco(incorporated by reference to the
      Company's Form 10-Q dated September 30, 1996 Commission file No. 0-20987.)

10.3* Grand Premier Financial, Inc. 1996 Non-Qualified Stock Option Plan,
      as amended (incorporated by reference to Exhibit 10.3 of the
      Company's Annual Report on Form 10-K dated December 31, 1997,
      Commission file No. 0-20987).


10.4* Premier Financial Services, Inc. 1995 Non-Qualified Stock Option
      Plan, as amended  (incorporated by reference to Exhibit 10.4 of the
      Company's Annual Report on Form 10-K dated December 31, 1997,
      Commission file No. 0-20987).

10.5* Premier Financial Services, Inc. 1988 Non-Qualified Stock Option
      Plan, as amended (incorporated by reference to Exhibit 10.5 of the
      Company's Annual Report on Form 10-K dated December 31, 1997,
      Commission file No. 0-20987).

10.6* Premier Financial Services, Inc. Senior Leadership and Directors
      Deferred Compensation Plan, as amended (incorporated by reference to
      Exhibit 4.1 to the Company's Registration Statement on Form S-8, File
      No. 333-11645).

10.7* Consulting Agreement, dated February, 17, 1995, between Howard A.
      McKee and Grand National Bank (incorporated by reference to Exhibit
      10.1 to the Company's Registration Statement on Form S-4, as amended,
      File No. 333-03327).

10.8* Grand Premier Financial, Inc. Deferred Compensation Plan
      (incorporated by reference to Exhibit 10.8 to the Company's Form 10-K
      dated December 31, 1996 Commission file No. 0-20987).

10.9* Grand Premier Financial, Inc. Savings and Stock Plan and Trust
      (incorporated by reference to Exhibit 10.9 to the Company's Form 10-K
      dated December 31, 1996 Commission file No. 0-20987).

10.10*   Employment and Consulting Agreement, dated May 1, 1997, between Grand
         Premier Financial, Inc., and Howard A. McKee (incorporated by
         reference to Exhibit 10.10 to the Company's Form 10-Q dated June 30,
         1997 Commission file No. 0-20987).

10.11*   Grand Premier Financial, Inc. Non-Employee Directors Stock Option
         Plan (incorporated by reference to Appendix A of the Companys'
         Definitive Proxy Statement dated April 13, 1998).

11. Statement re computation of per share earnings (see Notes 1 and 16
    to the 1998 Annual Report to Stockholders included as Exhibit 13 to
    this report).

13. Grand Premier Financial, Inc. 1998 Annual Report to Stockholders.

21. Subsidiaries of the Registrant.

23.   Consent of KPMG LLP.

27. Article 9 Financial Data Schedule for the Fiscal Year Ended
    December 31, 1998.


                          EXHIBIT 13





1998 Annual Report
Grand Premier Financial, Inc.



Contents




     Corporate Message to the shareholders 

2    Independent Auditors' Report

3    Consolidated Balance Sheets

4    Consolidated Statements of Earnings

5    Consolidated Statements of Cash Flows

7    Consolidated Statements of Changes in Stockholders' Equity 

8    Notes to Consolidated Financial Statements

26   Management's Discussion and Analysis of
     Financial Condition and Results of Operations

36   Supplementary Business and Stock Information

37   Five Year Summary of Selected Financial Data

38   Board of Directors and Executive Officers








                     Letter to Shareholders

Over the past the past two years we've devoted much of our time and effort
to making the changes necessary to merge two companies into one, and to
putting the building blocks in place for the future of Grand Premier
Financial, Inc.

We've completely changed the way we do business from one of simply reacting
to our customer's needs to actively anticipating them and providing
financial solutions that exceed their expectations.

Along the way we've experienced successes and a few setbacks.  We've closed
(or sold) some offices, dealt with a significant loss in our loan portfolio
(in 1997), written off quite a bit of obsolete equipment and computer
software and generally experienced the changes in systems, processes and
people associated with a merger of this size.  As we enter 1999, we're
pleased with the fact that all of our officers and associates who deserve
credit for the transition, as well as our Directors who provided guidance
along the way, are confident that the major building blocks are or soon
will be in place.  The final step will be replacing our current data
processing system in the first quarter of 1999 with one which is much more
customer friendly.

The actions we've taken in the past two years, although necessary, have
naturally had an impact on financial results.  We'd encourage you to review
the section in this report entitled "Management's Discussion and Analysis
of Financial Condition and Results of Operations" for a more detailed
analysis.  Suffice it to say that while our net earnings in 1997 and 1998
were acceptable, they certainly didn't meet the expectations we set for
ourselves. The financial strengths Grand Premier evidences revolve around
the quality of our assets, a significant capital base and a respected,
profitable group of fiduciary, trust and investment services.  The
challenge is to convert those strengths into continually improving
financial performance.  

In reviewing this report you'll also note that in the section titled
"Supplementary Business and Stock Information" we've included the internet
address of our home page, www.grandpremier.com.  In the future, we intend
to publish all of our earnings and other press releases, as well as link
access to our quarterly and financial filings, on our home page.  The
process began effective with our earnings release for the year ended
December 31, 1998.

In December 1998, your Board of Directors distributed a 10% stock dividend
followed by declaration of a $.09 per share cash dividend.  That action
effectively raised the annual cash dividend by 10% and is reflective of our
confidence in Grand Premier going forward.

We appreciate your support and your investment in Grand Premier, and will
continue our efforts to make Grand Premier an exceptional financial
services company.

/s/ Richard L. Geach
Chairman of the Board, President and Chief Executive Officer

/s/ David L. Murray
Senior Executive Vice President and Chief Financial Officer


                  Independent Auditors' Report



The Board of Directors
Grand Premier Financial, Inc:

    We have audited the accompanying consolidated balance sheets of
Grand Premier Financial, Inc. and subsidiaries as of December 31, 1998 and
1997, and the related consolidated statements of earnings, cash flows, and
changes in stockholders' equity for each of the years in the three-year
period ended December 31, 1998.  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 generally accepted
auditing standards.  Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement.  An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements.  An audit also includes assessing the accounting principles
used and significant estimates made by management, as well as evaluating
the overall financial statement presentation.  We believe that our audits
provide a reasonable basis for our opinion.

    In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position of
Grand Premier Financial, Inc. and subsidiaries as of December 31, 1998 and
1997, and the results of their operations and their cash flows for each of
the years in the three-year period ended December 31, 1998, in conformity
with generally accepted accounting principles.
    

                              /s/ KPMG  LLP

Chicago, Illinois
January 22, 1999, except for Note 18,
  which is as of February 18, 1999


                  Consolidated Balance Sheets

                   December 31, 1998 and 1997
        (000's omitted except share and per share data)


                            ASSETS

                                                      1998          1997

  Cash & non-interest bearing deposits          $   52,994    $   63,502
  Interest bearing deposits                          1,718           159
  Federal funds sold                                48,000             -
    Cash and cash equivalents                      102,712        63,661
 
  Securities available for sale, at fair value     516,083       454,400
  Securities purchased under agreement to resell    10,195        19,922
  Loans                                            957,153     1,028,863
    Less: Unearned income                             (953)         (991)
          Allowance for possible loan losses       (12,443)      (15,404)
      Net loans                                    943,757     1,012,468 

  Bank premises and equipment                       34,099        35,154
  Excess cost over fair value 
    of net assets acquired                          15,281        16,885
  Accrued interest receivable                       11,573        12,994
  Other assets                                      14,541        30,896
        Total assets                            $1,648,241    $1,646,380


See accompanying notes to consolidated financial statements.


                  Consolidated Balance Sheets
                         (continued)

                   December 31, 1998 and 1997
        (000's omitted except share and per share data)


              LIABILITIES & STOCKHOLDERS' EQUITY

Liabilities
  Non-interest bearing deposits                 $  199,084    $  187,943
  Interest bearing deposits                      1,161,936     1,142,588
    Total deposits                               1,361,020     1,330,531

  Short-term borrowings                             11,887        47,598
  Long-term borrowings                              70,000        70,000
  Other liabilities                                 21,945        25,742
    Total liabilities                            1,464,852     1,473,871

Stockholders' equity
  Preferred stock - $1 par value, 2,000,000 
    shares authorized:
    Series B convertible, $1,000 stated value 
      8.00%, 7,250 shares authorized,
      issued and outstanding                         7,250        7,250
    Series C perpetual, $1,000 stated value,
      8.00%, 2,000 shares authorized,
      issued and outstanding                         2,000        2,000
  Common stock - $.01 par value
    No. of Shares   1998        1997
    Authorized   30,000,000  30,000,000
    Issued       22,047,672  22,002,819
    Outstanding  21,981,739  22,002,819                220          220
  Surplus                                           79,056       79,003
  Retained earnings                                 88,756       69,487
  Accumulated other comprehensive income             6,794       14,549
  Treasury stock, at cost
    (65,933 shares at 12/31/98)                       (687)           -

    Stockholders' equity                           183,389      172,509

       Total liabilities & stockholders' equity $1,648,241   $1,646,380




See accompanying notes to consolidated financial statements.


              Consolidated Statements of Earnings

          Years ended December 31, 1998, 1997 and 1996
             (000's omitted except per share data)

                                              1998       1997       1996
Interest income
Interest & fees on loans                  $ 86,990   $ 90,192   $ 79,816
Interest & dividends on 
  investment securities:
    Taxable                                 18,469     21,873     26,514
    Exempt from federal income tax           8,451      7,771      7,142
Other interest income                        2,745        785        898
        Interest income                    116,655    120,621    114,370

Interest expense
Interest on deposits                        49,046     52,266     52,258
Interest on short-term borrowings              909      2,404      3,482
Interest on long-term borrowings             4,340      2,496        818
        Interest expense                    54,295     57,166     56,558

Net interest income                         62,360     63,455     57,812
Provision for possible loan losses           3,600      9,700      2,875
Net interest income after provision
 for possible loan losses                   58,760     53,755     54,937

Other income
Service charges on deposits                  5,657      5,715      5,732
Trust fees                                   3,494      3,207      2,875
Investment securities gains, net            20,196      7,669      3,838
Other operating income                       4,315      4,504      5,271
        Other income                        33,662     21,095     17,716

Other expenses
Salaries                                    19,082     20,052     21,972
Pension, profit sharing & other
 employee benefits                           4,925      4,149      4,643
Net occupancy of bank premises               4,585      4,686      4,676
Furniture & equipment                        3,964      3,772      3,050
Data processing                              2,045      1,857      1,514
Professional services                        2,089      1,637      1,386
Amortization of excess cost over
 fair value of net assets acquired           1,604      1,604      1,738
Write-down of real estate held for
 development                                     -          -      2,506
Other                                       12,164     12,455     12,566
        Other expenses                      50,458     50,212     54,051

Earnings before income taxes                41,964     24,638     18,602
Income tax expense                          14,564      7,668      5,285
Net earnings                              $ 27,400   $ 16,970   $ 13,317

Earnings per share
  Basic                                      $1.21       $.74       $.57
  Diluted                                    $1.17       $.73       $.56

See accompanying notes to consolidated financial statements.


             Consolidated Statements of Cash Flows
          Years ended December 31, 1998, 1997 and 1996
                        (000's omitted)


                                                1998      1997      1996
Cash flows from operating activities:
Net earnings                                $ 27,400  $ 16,970  $ 13,317

Adjustments to reconcile net earnings to
 net cash from operating activities:
Amortization net, related to:
 Investment securities                           752     1,034     1,260
 Excess of cost over fair value of
   net assets acquired                         1,604     1,604     1,738
 Other                                           366       771      (133)
Depreciation                                   4,070     3,569     3,059
Provision for possible loan losses             3,600     9,700     2,875
Write-down of real-estate
 held for development                              -         -     2,506
Gain on sale related to:
 Investment securities                       (20,196)   (7,669)   (3,838)
 Loans sold to secondary market                 (656)     (264)     (185)
 Other real estate owned                        (164)     (142)     (545)
Loans originated for sale                    (74,202)  (29,567)  (38,163)
Loans sold to secondary market                74,858    29,567    38,163 
Deferred income tax expense (benefit)          6,431    (4,425)   (5,165)
Change in:
 Other assets                                 14,495   (14,307)   (2,738)
 Other liabilities                            (3,975)   11,966     1,473 
Net cash from operating activities            34,383    18,807    13,624 

Cash flows from investing activities:
Purchase of securities available for sale   (413,790) (116,304) (304,580)
Proceeds from:
 Maturities of securities available for sale 303,840   104,225   227,389 
 Sales of securities available for sale       55,048   107,833   142,485 
 Sales of other real estate owned              2,098     1,201     2,351
Net (increase) decrease in loans              64,605   (67,055)  (92,395)
Purchase of bank premises & equipment         (3,051)   (5,656)   (4,224)
Net (increase) decrease in securities 
 purchased under resale agreements             9,727   (15,517)   (4,405)
Net cash from investing activities          $ 18,477  $  8,727  $(33,379)




See accompanying notes to consolidated financial statements.


             Consolidated Statements of Cash Flows
          Years ended December 31, 1998, 1997 and 1996
                          (continued)
                        (000's omitted)


                                                1998      1997      1996

Cash flows from financing activities:
Net increase (decrease) in:
 Deposits                                   $ 30,489  $(86,863) $ 65,737 
 Short-term borrowings                       (35,711)   24,112   (64,746)
 Long-term borrowings                              -    40,000    18,412 
Redemption of preferred stock                      -         -    (5,000)
Cash dividends paid                           (7,947)   (7,142)   (6,322)
All other financing activities                  (640)       65       326
Net cash from financing activities           (13,809)  (29,828)    8,407 

Increase (decrease) in cash and 
 cash equivalents                             39,051    (2,294)  (11,348)
Cash and cash equivalents, beginning of year  63,661    65,955    77,303 
Cash and cash equivalents, end of year      $102,712  $ 63,661  $ 65,955 



Supplemental disclosures of cash flow information:

Cash paid during the year for:
  Interest                                  $ 55,065  $ 57,367  $ 56,926 
  Income taxes                                 4,475    11,911    10,526 

Non-cash activities:
  Loans transferred to other real
   estate owned                                  176       986       988 
  Land transferred to other assets                 -         -     1,803




See accompanying notes to consolidated financial statements.


<TABLE>

Consolidated Statements of Changes in Stockholders' Equity
Years ended December 31, 1998, 1997 and 1996
(000's omitted except per share data)

<CAPTION>
                                                                              Accumulated             
                                                                                    Other
                                                                            Comprehensive    
                                 Preferred   Common              Retained         Income,   Treasury
                                     Stock    Stock    Surplus   Earnings      Net of Tax      Stock      Total

<S>                                <S>         <S>     <S>        <S>             <S>           <S>    <S>      
 Balance January 1, 1996           $14,250     $219    $78,613    $52,865         $10,050       $  0   $155,997

 Net earnings                                                      13,317                                13,317
 Other comprehensive income,
   net of tax:
   Unrealized gains on securities,
     net of reclassification
     adjustment                                                                      (235)                 (235)
 Comprehensive income                                                                                    13,082
 Cash dividends on
   common stock ($.25 per share)                                   (5,382)                               (5,382)
 Cash dividends on 
   preferred stock                                                   (940)                                 (940)
 Exercised stock options                          1        329                                              330
 Redemption of Series A
   preferred stock                  (5,000)                                                              (5,000)
 Cash paid out for
   fractional shares                                        (4)                                              (4)

 Balance December 31, 1996         $ 9,250     $220    $78,938    $59,860         $ 9,815       $  0   $158,083

 Net earnings                                                      16,970                                16,970
 Other comprehensive income,
   net of tax:
   Unrealized gains on securities,
     net of reclassification
     adjustment                                                                     4,734                 4,734
 Comprehensive income                                                                                    21,704
 Cash dividends on
   common stock ($.30 per share)                                   (6,603)                               (6,603)
 Cash dividends on 
   preferred stock                                                   (740)                                 (740)
 Exercised stock options                                    65                                               65

 Balance December 31, 1997         $ 9,250     $220    $79,003    $69,487         $14,549       $  0   $172,509

 Net earnings                                                      27,400                                27,400
 Other comprehensive income,
   net of tax:
   Unrealized gains on securities,
     net of reclassification
     adjustment                                                                    (7,755)               (7,755)
 Comprehensive income                                                                                    19,645
 Cash dividends on
   common stock ($.34 per share)                                   (7,391)                               (7,391)
 Cash dividends on 
   preferred stock                                                   (740)                                 (740)
 Purchase of treasury stock                                                                     (687)      (687) 
 Exercised stock options                                    53                                               53

 Balance December 31, 1998         $ 9,250     $220    $79,056    $88,756         $ 6,794      $(687)  $183,389




See accompanying notes to consolidated financial statements 

</TABLE>


             Notes to Consolidated Financial Statements



1.   Summary of Significant Accounting Policies

Nature of operations
Grand Premier Financial, Inc. (the "Company") is a registered bank holding
company organized in 1996 under Delaware law.  The operations of the Company and
its subsidiaries consist primarily of those financial activities, including
trust and investment services, common to the commercial banking industry.  The
Company's markets are throughout northern Illinois.

Principles of presentation
The accompanying consolidated financial statements conform to generally accepted
accounting principles and to general practices within the banking industry.  The
preparation of financial statements in conformity with generally accepted
accounting principles 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 income and expense during the reporting period.  Actual
results could differ from those estimates.  

The accompanying consolidated financial statements include the financial
information of the Company and its subsidiaries, all of which are wholly owned. 
Significant intercompany balances and transactions have been eliminated.  

Securities available for sale
Securities classified as securities available for sale are carried at fair
value. Unrealized gains and losses, net of income taxes, are excluded from
earnings but are included in accumulated other comprehensive income as a
component of stockholders' equity.  Gains or losses on sale of securities are
determined on the basis of specific identification.

Investments held-to-maturity
Investments held-to-maturity are stated at cost adjusted for amortization of
premiums and accretion of discounts using the level yield method over the life
of the security.  Management has the positive intent and ability to hold these
investment securities to maturity.  The Company has no investments designated as
held-to-maturity at December 31, 1998 and 1997.

Loans
Loans are stated at face value less unearned discounts.  Interest income on
loans not discounted is computed on the principal balance outstanding.  Interest
income on discounted loans is computed on a basis which results in an
approximate level rate of return over the term of the loan.  Accrual of interest
is discontinued on a loan when management believes that the borrower's financial
condition is such that collection of interest is doubtful.

Impaired loans
Impaired loans are loans for which it is probable that the creditor will be
unable to collect all amounts due according to the terms of the loan agreement. 
The specific factors that influence management's judgment in determining when a
loan is impaired include evaluation of the financial strength of the borrower
and the fair value of the collateral.  A loan is not impaired during a period of
"minimum delay" in payment, regardless of the amount of shortfall, if the
ultimate collectibility of all amounts due is expected.  The Company defines
"minimum delay" as past due less than 90 days. Large groups of homogeneous loans
such as real estate-residential and loans to individuals are collectively
evaluated for impairment.

Impaired loans are measured and reported based on the present value of expected
cash flows discounted at the loan's effective interest rate, or at the fair
value of the loan's collateral if the loan is deemed "collateral dependent."  A
valuation allowance is required to the extent that the measure of the impaired
loans is less than the recorded investment.

The Company applies the measurement methods described above to loans on a
loan-by-loan basis.  The Company's impaired loans are nonaccrual loans, as
generally loans are placed on nonaccrual status on the earlier of the date that
principal or interest amounts are 90 days or more past due or the date that
collection of such amounts is judged uncertain based on evaluation of the
financial strength of the borrower and the fair market value of the collateral. 
Restructured loans are impaired loans in the year of restructuring; thereafter,
such loans are subject to management's evaluation of impairment based on the
restructured terms.

An impaired loan, or portion thereof, is charged-off when the impaired loan is
considered uncollectible or when transferred to foreclosed properties and the
collateral value is less than the outstanding loan balance.

Consistent with the Company's method for nonaccrual loans, interest receipts on
impaired loans are recognized as interest income or are applied to principal if
the ultimate collectibility of principal is in  doubt.

Allowance for possible loan losses
The allowance for possible loan losses is increased by provisions charged to
expense and recoveries on loans previously charged off, and reduced by loans
charged off in the period.  The allowance is based on past loan loss experience,
management's evaluation of the loan portfolio considering current economic
conditions and such other factors, which, in management's best judgement,
deserve current recognition in estimating loan losses.  Regulatory examiners may
require the Company to recognize additions to the allowances based upon their
judgments about information available to them at the time of their examination.

Bank premises and equipment
Bank premises and equipment are stated at cost, less accumulated depreciation 
and amortization.  Depreciation expense is computed by the straight line method 
for furniture and equipment and both the straight line method and the declining
balance method for buildings based on the estimated useful lives of the assets. 
Rates of depreciation are based on the following:  buildings 31-40 years and
equipment 3-15 years. Cost of major additions and improvements are capitalized. 
Expenditures for maintenance and repairs are reflected as expense when incurred.

Excess cost over fair value of net assets acquired
The excess cost over fair value of net assets acquired is being amortized over 
25 years for acquisitions prior to 1985, and over 15 years for acquisitions
subsequent to that date using the straight line method.

Income taxes
The Company and its subsidiaries file consolidated federal and state income tax
returns.  Deferred tax assets and liabilities are recognized for the future tax
consequences attributable to differences between the financial statement
carrying amounts of existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured using enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to be recovered or settled.  The effect on deferred
taxes of a change in tax rates is recognized in income in the period that
includes the enactment date. 
  
Stock Option Plan
The Company follows SFAS No. 123, "Accounting for Stock-based Compensation"
("SFAS No. 123").  SFAS No. 123 permits entities to recognize as expense over
the vesting period the fair value of all stock-based awards on the date of
grant. Alternatively, SFAS No. 123 also allows entities to continue to apply the
provisions of APB Opinion No. 25 and provide pro forma net income and pro forma
earnings per share disclosures for employee stock option grants as if the
fair-value-based method defined in SFAS No. 123 had been applied.  The Company
has elected to continue to apply the provisions of APB Opinion No. 25 and 
provide the pro forma disclosure provisions of SFAS No. 123.

Earnings per share
In 1997, the Company adopted SFAS No. 128, "Earnings per share". Under SFAS No.
128, basic earnings per share is computed by dividing net income less preferred
stock dividends by the average number of common shares outstanding during the
period.  Diluted earnings per share is computed by dividing net income less
preferred stock dividends excluding dividends on convertible preferred stock by
the average number of common shares outstanding during the period plus the
average number of shares that would be issued upon exercise of dilutive stock
options using the treasury method plus the average number of shares that would 
be issued upon conversion of dilutive convertible preferred stock.  Earnings per
share amounts for the year ended December 31, 1996 have been restated in
accordance with SFAS No. 128.

All share and per share amounts have been restated for a 10% stock dividend
distributed December 1, 1998 to shareholders of record on November 15, 1998.

Cash and non-interest bearing deposits
Cash and non-interest bearing deposits include reserve balances that the
Company's subsidiary bank is required to maintain with the Federal Reserve Bank
of Chicago.  These required reserves vary and are based principally on deposits
outstanding.  The reserve balance requirement as of December 31, 1998 and 1997
was approximately $0 and $11.8 million, respectively.

Statements of Cash Flows
For purposes of Statements of Cash Flows, cash and cash equivalents consists of
cash, due from banks and federal funds sold.

Derivative financial instruments
Derivatives used by the Company consist of off-balance sheet interest rate
contracts. These instruments are used by the Company to assist in asset and
liability management activities which include hedging of specific groups of
on-balance sheet assets. Amounts to be paid or received are recognized as an
adjustment to interest income relating to the specific group of assets hedged.
Premiums paid are amortized over the life of the contract as an adjustment to
interest income relating to the group of assets hedged. Any gain or loss upon 
the early termination of a contract would be deferred and amortized as an 
adjustment to interest income.

Finacial reporting of segments
In June 1997, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards No. 131 (SFAS 131), "Disclosures about Segments 
of an Enterprise and Related information." SFAS 131 establishes standards for 
the way public business enterprises report information about operating segments 
in annual financial statements. Operating segments are components of an 
enterprise for which separate financial information is available, and is 
evaluated regularly by management in deciding how to allocate resources and in 
assessing performance. SFAS 131 establishes standards for related disclosures 
about products, services, geographic areas, and major customers. The Company 
operates as a single segment.

Basis of presentation
Certain amounts for 1996 and 1997 have been reclassified to conform to the 1998
presentation.


2.  Merger

The merger of Northern Illinois Financial Corporation ("Northern Illinois") and
Premier Financial Services, Inc. ("Premier") with and into the Company was
consummated on August 22, 1996 and was accounted for as a pooling of interests.
Each outstanding share of Northern Illinois and Premier common stock was
converted into 4.25 shares and 1.116 shares of the Company common stock,
respectively. Total shares issued of the Company's common stock was 19,940,181. 
Each of the 7,250 shares of Premier Series B Preferred Stock was converted into
one share of Grand Premier Series B Preferred Stock, and each of the 2,000 
shares of Premier Series D Preferred Stock was converted into one share of Grand
Premier Series C Preferred Stock.  All financial statements and information 
prior to the merger date have been restated to reflect the merger.


3.  Securities Available for Sale

The amortized cost and approximate fair value of securities available for sale 
at December 31, 1998 are as follows (in thousands):

                                             Gross      Gross Approximate
                              Amortized Unrealized Unrealized        Fair
                                   Cost      Gains     Losses       Value

U.S. Treasury obligations     $ 52,018     $   725     $    -    $ 52,743
U.S. Government agencies        72,844         421       (106)     73,159
Obligations of state & 
  political subdivisions       158,833       8,891       (322)    167,402
Corporate debt securities       25,845         119        (47)     25,917
Mortgage-backed securities     186,571       1,842       (261)    188,152
Equity securities                8,710           -          -       8,710
                              $504,821     $11,998     $ (736)   $516,083


The amortized cost and approximate fair value of securities available for sale 
at December 31, 1997 are as follows (in thousands):

                                             Gross      Gross Approximate
                              Amortized Unrealized Unrealized        Fair
                                   Cost      Gains     Losses       Value

U.S. Treasury obligations     $ 68,241     $   425     $  (18)   $ 68,648
U.S. Government agencies        25,873         158        (38)     25,993
Obligations of state & 
  political subdivisions       143,345       5,427        (30)    148,742
Corporate debt securities        6,594          38         (2)      6,630
Mortgage-backed securities     164,048       1,756       (216)    165,588
Equity securities               22,374      16,425          -      38,799
                              $430,475     $24,229     $ (304)   $454,400


The amortized cost and fair value of securities available for sale as of 
December 31, 1998 by contractual maturity are shown below. Expected maturities
may differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.

(In thousands)                                      Approximate
                                        Amortized          Fair
                                             Cost         Value

Due in one year or less                  $116,172      $116,253
Due after one year through five years      42,132        43,895
Due after five years through ten years     20,775        22,239
Due after ten years                       130,461       136,834
Mortgage-backed and equity securities     195,281       196,862
                                         $504,821      $516,083


Proceeds from sales of securities available for sale during 1998 were
$55,048,000.  Gross gains of $20,224,000 and gross losses of $28,000 were
realized on those sales. During 1997, proceeds from sales of securities 
available for sale were $107,833,000.  Gross gains of $8,835,000 and gross 
losses of $1,166,000 were realized on those sales. Proceeds from sales of 
securities available for sale in 1996 were $142,485,000.  Gross gains 
of $4,389,000 and gross losses of $551,000 were realized on those sales. 

On December 31, 1998, securities with a carrying value of approximately
$252,614,000 were pledged to secure funds and trust deposits and for other
purposes as required or permitted by law.

4.  Loans

The following is a summary of loans by major classification as of
December 31, 1998 and 1997 (in thousands):

                                         1998            1997
Commercial, financial and
  agricultural loans                  $275,450      $  231,707
Real estate-construction loans          43,250          50,186
Real estate-mortgage loans             569,851         631,069
Loans to individuals                    68,602         115,901
                                      $957,153      $1,028,863

The Company services loans for others. The total principal balance outstanding 
on serviced loans was $139,315,000, $100,996,000 and $87,983,000 as of
December 31, 1998, 1997 and 1996, respectively.  Custodial escrow balances
maintained in connection with the foregoing loan servicing and included in 
demand deposits were approximately $502,000 and $213,000 at December 31, 1998 
and 1997, respectively.

A summary of changes in the allowance for possible loan losses for the three
years ended December 31 is as follows (in thousands):

                                       1998       1997       1996  

Balance beginning of year           $15,404    $10,116    $ 9,435
Provision for possible loan losses    3,600      9,700      2,875
Less: loans charged off             (10,763)    (5,327)    (2,766)
Recoveries                            4,202        915        572
Balance end of year                 $12,443    $15,404    $10,116


The recorded investment of impaired loans at December 31, 1998 and 1997 was
$6,893,000 and $6,223,000, respectively.  The recorded investment in loans for
which an impairment has been recognized was $1,134,000 and $1,320,000 and the
related allowance for possible loan losses was $533,000 and $528,000 at
December 31, 1998 and 1997, respectively.  The average recorded investment in
impaired loans during 1998, 1997 and 1996 was $7,394,000, $4,085,000 and
$5,475,000, respectively.  Interest income recognized on impaired loans during
1998, 1997 and 1996 was approximately $481,000, $355,000 and $188,000,
respectively. Had interest on such loans been accrued, interest and fees on 
loans in the accompanying consolidated statements of earnings would have been 
greater by approximately $294,000, $240,000 and $369,000 in 1998, 1997 and 1996,
respectively.

The Company's subsidiary bank makes loans to its executive officers, directors,
principal holders of the Company's equity securities and to associates of such
persons.  These loans were made in the ordinary course of business on the same
terms and conditions, including interest rates and collateral, as those
prevailing at the time for comparable transactions with other customers and do
not involve more than a normal risk.  The following is a summary of activity 
with respect to such loans for the latest fiscal year (in thousands):

    Balance, January 1, 1998     $ 9,523
    New loans                      5,292
    Less repayments               (5,025)
    Balance, December 31, 1998   $ 9,790


5.  Bank premises and equipment

Bank premises and equipment are recorded at cost less accumulated depreciation 
as follows (in thousands):


                                          1998       1997 
    Land                                $ 6,621    $ 6,621
    Buildings and improvements           37,299     36,969
    Furniture, fixtures and equipment    17,750     22,691
                                         61,670     66,281
    Less accumulated depreciation        27,571     31,127
                                        $34,099    $35,154


6.  Short-term borrowings

The following is a summary of short-term borrowings and securities sold under
agreements to repurchase at December 31, 1998 and 1997 (in thousands):

                                                    1998          1997

 Federal funds purchased                         $     -       $33,000
 Securities sold under agreements to repurchase   11,887        14,598
                                                 $11,887       $47,598  

At December 31, 1998 and 1997, there were no material amounts of assets at risk
with any one customer under agreements to repurchase securities sold.  At
December 31, 1998 and 1997 securities sold under agreements to repurchase are
summarized as follows (in thousands):

                                       Weighted
                                        Average    Collateral  Collateral
                         Repurchase    Interest          Book      Market
                          Liability        Rate         Value       Value
1998
Demand                      $ 8,091       3.54%       $12,341     $12,417
Term                          3,796       5.81          4,989       4,950
                            $11,887       4.26%       $17,330     $17,367

1997
Demand                      $10,246       3.83%       $12,863     $12,913
Term                          4,352       5.80          5,202       5,252
                            $14,598       4.42%       $18,065     $18,165 

At December 31, 1998, the Company had an unused line of credit of $20,000,000
maturing January, 1999.  The line bears interest at the option of the Company of
prime rate floating or fixed at one month, two month, three month or six month
periods at LIBOR plus 1 3/4%.  The note agreement contains certain restrictive
covenants.  The Company was in compliance with such covenants at December 31,
1998.


7.  Long-term borrowings

At December 31, 1998 and 1997, long-term borrowings consisted of the following
(in thousands):

                                                   1998             1997

FHLB advances, 5.85%, interest payable
 monthly, due December 20, 1999                 $ 5,000           $ 5,000
FHLB advances, 6.54%, interest payable
 monthly, due August 23, 2000                     5,000             5,000
FHLB advances, 6.75%, interest payable
 monthly, due July 2, 2001                        5,000             5,000
FHLB advances, 6.24%, interest payable
 monthly, due November 6, 2001                   15,000            15,000
FHLB advances, 5.97%, interest payable
 monthly, due October 7, 2002                    40,000            40,000

                                                $70,000           $70,000

Advances from the Federal Home Loan Bank are collateralized by a blanket lien on
the Company's loans secured by first liens on 1-4 family residential properties.
At December 31, 1998, securities with an approximate carrying value of
$10,657,000 are also pledged against advances from the Federal Home Loan Bank.

8.  Employee Benefit Plans

The Company has a savings and stock plan for officers and employees.  Company
contributions to the plan are discretionary.  The plan includes provisions for
employee contributions which are considered tax-deferred under Section 401(k) of
the Internal Revenue Code.  Total expense was $761,000 for 1998, $697,000 for
1997 and $886,000 for 1996.

The Company has stock option plans for key employees and non-employee Directors.
Options are granted at the fair market value of the stock at the grant date. 
Options vest at the rate of 20% of granted shares at the end of each year in the
succeeding five year period after the grant date, with the exception of 120,000
options granted in 1996 which vest ratably over a three year period beginning
September 23, 1997.  The plan provides for adjusting the total number of shares
of common stock that may be available for options under the Plan on January 1, 
of each calendar year, so that the total number of shares of common stock that 
may be issued and sold under the Plan as of January 1 of each calendar year to 
be equal to four percent (4%) of the outstanding shares of common stock of the
Company on such date; provided, however, that no such adjustment will reduce the
total number of shares of common stock that may be issued and sold under the 
plan below 400,000.  

The Company applies APB Opinion 25 and related interpretations in accounting for
its plan.  Accordingly, no compensation cost has been recognized for its stock
option plans.  Had compensation cost for the Company's stock-based compensation
plans been determined based on the fair value at the grant dates for awards 
under those plans consistent with the method contained in SFAS No.123, the 
Company's net income and earnings per share would have been reduced to the pro 
forma amounts indicated below:

                                        1998        1997        1996  

Net Income             As reported    $27,400     $16,970     $13,317
                       Pro forma      $27,258     $16,782     $13,244

Earnings per share
          Basic        As reported      $1.21        $.74        $.57
                       Pro forma        $1.21        $.73        $.56

          Diluted      As reported      $1.17        $.73        $.56
                       Pro forma        $1.17        $.72        $.56



The fair value of each option grant was estimated on the date of grant using the
Black-Scholes option-pricing model with the following assumptions for 1996, 1997
and 1998, respectively; risk-free interest rates of 5.9%, 5.7% and 4.8%; 
expected dividend yield of 3.0% for all years; expected lives of 5, 10 and 10 
years; and expected volatility of 30%, 28% and 35%.  The weighted fair value of
the options granted in 1996, 1997 and 1998 was $2.34, $4.19 and $4.40, 
respectively.

A summary of the status of the Company's stock option plan as of and for each of
the years in the three year period ended December 31, 1998 is presented below.

                                           Number
                                        of options        Exercise price 

Outstanding at January 1, 1996            488,338        $ 2.03 to $ 5.84
Granted                                   244,783                    9.77
Exercised                                (125,818)         2.03 to   5.84
Forfeited                                 (11,981)         2.03 to   5.84

Outstanding at December 31, 1996          595,322          2.03 to   9.77
Granted                                    95,150                   13.07
Exercised                                 (20,772)         2.57 to   5.84
Forfeited                                 (18,685)         5.60 to   9.77

Outstanding at December 31, 1997          651,015          2.03 to  13.07
Granted                                   112,200         12.13 to  14.66
Exercised                                 (49,824)         2.03 to   5.84
Forfeited                                 (26,721)         9.77 to  13.07

Outstanding at December 31, 1998          686,670        $ 2.23 to $14.66


The number of options exercisable at December 31, 1998, 1997 and 1996 were
384,228, 337,662 and 272,359, respectively.

The following table summarizes information about stock options outstanding at
December 31, 1998.

                       Number              Remaining             Number
 Exercise Price     of Shares       Contractual Life        Exercisable

       2.58           98,248             .5 years              98,248
       2.23           38,126              2 years              38,126
       3.70           35,213              3 years              35,213
       5.84           38,316              5 years              38,316
       5.60           59,317              6 years              34,076
       9.77          220,000              8 years             123,199
      13.07           85,250              9 years              17,050
      14.66           22,000              9 years                   -
      12.13           90,200             10 years                   -

                     686,670                                  384,228


The Company has a Deferred Compensation Plan for Directors and certain officers
designated by the Board of Directors.  Participants may elect to defer up to 50%
of salary, 100% of any bonus or 100% of director fees under the Plan.  The
Company makes a 25% matching contribution.  Seventy-five thousand shares are
registered for purchase by the Plan.  Company contributions are 100% vested on
the earlier of 1) the end of the fifth year following the year in which 
deferrals are made, 2) normal retirement, or 3) employment termination due to 
death or disability. Total expense was approximately $157,000 in 1998, $135,000
in 1997 and $329,000 in 1996.


9.  Stockholders' equity

On September 28, 1998, the Company declared a 10% stock dividend to be
distributed on December 1, 1998 to shareholders of record on November 15, 1998.
All share information has been restated to reflect the stock dividend.

In 1996, the Company redeemed all of the outstanding Premier Series A Preferred
Perpetual Stock for $5,000,000. The Company's Series B Preferred Stock is
convertible into 936,852 shares of common stock at the option of the holder.

Under the Company's shareholder rights plan, each share of common stock entitles
its holder to one right.  Under certain conditions, each right entitles the
holder to purchase one one-hundredth of a share of Junior Preferred Stock at a
price of $24.7727 per share, subject to adjustment.  The rights will only be
exercisable if a person or group has acquired, or announced an intention to
acquire 15% or more of the outstanding shares of Company common stock or any
person or group would be the beneficial owner of 30% or more of the voting power
of the Company.  Under certain circumstances, including the existence of a 15%
acquiring party, each holder of a right, other than the acquiring party, will be
entitled to purchase at the exercise price Company common stock having a market
value of two times the exercise price.  The rights may be redeemed at a price of
$.01 per right prior to the existence of a 15% acquiring party, and thereafter,
may be exchanged for one common share per right to the existence of a 50%
acquiring party.  The rights will expire on June 30, 2006.  The rights do not
have voting or dividend rights and until they become exercisable, have no
dilutive effect on the earnings of the Company.  

10.  Regulatory matters

The Company and its banking subsidiary 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's financial statements.  Under capital
adequacy guidelines and the regulatory framework for prompt corrective action,
the Company and its banking subsidiary must meet specific capital guidelines 
that involve quantitative measures of each entities' assets, liabilities, and 
certain off-balance sheet items as calculated under regulatory accounting 
practices.  The Company's and its banking subsidiary 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 and its banking subsidiary to maintain minimum amounts and
ratios (set forth in the table below) of total and Tier 1 capital (as defined in
the regulations) to risk-weighted assets (as defined), and of Tier 1 capital (as
defined) to average assets (as defined). As of December 31, 1998 the Company and
its banking subsidiary met all regulatory capital adequacy requirements.  As of
December 31, 1998 and 1997, the Company and it's banking subsidiary were
categorized as well capitalized under the regulatory framework.  There are no
conditions or events since year end that management believes have changed that
categorization.


<TABLE>
<CAPTION>

                                                                              To Be Well
                                                                              Capitalized Under
                                                              For Capital     Prompt Corrective
                                              Actual       Adequacy Purposes  Action Provisions
($ Amounts in thousands)                  Amount   Ratio     Amount  Ratio     Amount   Ratio

<S>                                     <C>        <C>      <C>       <C>    <C>        <C>    
As of December 31, 1998:
Total Capital (to risk weighted assets):
  Grand Premier Financial, Inc.         $173,092   14.82%   $93,425   8.00%  $116,781   10.00%
  Grand National Bank                    163,040   14.13     92,295   8.00    115,369   10.00

Tier 1 Capital (to risk weighted assets):
  Grand Premier Financial, Inc.          160,649   13.76     46,713   4.00     70,069    6.00
  Grand National Bank                    150,597   13.05     46,148   4.00     69,221    6.00

Tier 1 Capital (to average assets):
  Grand Premier Financial, Inc.          160,649    9.99     64,309   4.00     80,387    5.00
  Grand National Bank                    150,597    9.48     63,565   4.00     79,456    5.00


As of December 31, 1997:
Total Capital (to risk weighted assets):
  Grand Premier Financial, Inc.         $154,878   13.28%   $93,272   8.00%  $116,590   10.00%
  Grand National Bank                    143,602   12.50     91,906   8.00    114,882   10.00

Tier 1 Capital (to risk weighted assets):
  Grand Premier Financial, Inc.          140,304   12.03     46,636   4.00     69,954    6.00
  Grand National Bank                    129,242   11.25     45,953   4.00     68,929    6.00

Tier 1 Capital (to average assets):
  Grand Premier Financial, Inc.          140,304    8.51     65,919   4.00     82,398    5.00
  Grand National Bank                    129,242    7.95     65,053   4.00     81,316    5.00

</TABLE>

Certain legal and regulatory restrictions exist regarding the payment of
cash dividends from the banking subsidiary to the Company. Although the
Company is not subject to these restrictions, future Company cash
dividends may depend upon dividends from the banking subsidiary.


11.  Income taxes

The components of consolidated income tax expense (benefit) for the
years ended December 31, 1998, 1997, and 1996 are as follows (in
thousands):

                                            1998       1997       1996

 Current                                 $ 8,133    $12,093    $10,450
 Deferred                                  6,431     (4,425)    (5,165)
   Total income tax expense              $14,564    $ 7,668    $ 5,285 


The actual tax expense differs from the expected tax expense computed by 
applying the Federal Corporate tax rate of 35% to earnings before income
taxes as follows (in thousands):


                                            1998       1997       1996
Federal income tax expense          
  at statutory rate                      $14,688     $8,623     $6,511
Tax-exempt income, net of disallowed
  interest deduction                      (2,639)    (2,503)    (2,650)
State income tax expense, net of
  federal income tax benefit               1,772        931      1,369
Valuation allowance on state NOLs              -          -       (763)
Goodwill amortization                        561        561        583
Other, net                                   182         56        235 
   Total income tax expense              $14,564     $7,668     $5,285


The tax effects of temporary differences that give rise to significant
portions of the deferred tax assets and deferred tax liabilities at
December 31, 1998 and 1997 are presented below (in thousands):

                                                     1998       1997
Deferred tax assets
  Securities, sections 475 and 481 adjustments    $ 1,509    $ 7,687
  Loans, principally due to allowance for losses    4,936      6,110
  Deferred compensation                             2,201      1,589
  Other                                               511        636
    Total gross deferred tax assets               $ 9,157    $16,022


Deferred tax liabilities:
  Security accretion                              $    90    $   103
  Tax depreciation in excess of book depreciation    (167)        91
  Difference between tax and book basis of 
    assets acquired                                   280        402
  Deferred loan fees                                  240        280
  Other                                                 6          7
    Total gross deferred tax liabilities              449        883
    Deferred tax asset before unrealized
      gain on securities available for sale         8,708     15,139
  Unrealized gain on securities
    available for sale                             (4,468)    (9,490)
  Net deferred tax asset                          $ 4,240    $ 5,649


At December 31, 1996, the Company had net operating loss carryforwards
for Illinois state income tax purposes of approximately $17.8 million
which were fully utilized. No valuation allowance has been recorded as of
December 31, 1998 and 1997 as the Company believes it is likely that the
deferred tax assets will be fully utilized.

12.  Financial instruments with off-balance sheet risk and contingencies

The company utilizes various financial instruments with off-balance sheet
risk to meet the financing needs of its customers, to generate profits
and to reduce its own exposure to fluctuations in interest rates.  These
financial instruments, many of which are considered "off-balance sheet"
transactions, involve to varying degrees, credit and interest rate risk
in excess of the amount recognized as either an asset or liability in the
consolidated balance sheets.

Credit risk is the possibility that a loss may occur because a party to a
transaction failed to perform according to the terms of the contract. 
Interest rate risk is the possibility that future changes in market
interest rates will cause a financial instrument to be less valuable or
more onerous.  The Company controls the credit risk arising from these
instruments through its credit approval process and through the use of
risk control limits and monitoring procedures.  The Company uses the same
credit policies when entering into financial instruments with off-balance
sheet risk as it does for on-balance sheet instruments.  At December
31, 1998 and 1997, such commitments and off-balance sheet financial
instruments are as follows (in thousands).

                                                    1998         1997

  Letters of credit                             $ 18,088     $ 11,880
  Lines of credit and other loan commitments     333,906      258,684
                                                $351,994     $270,564

Letters of credit are conditional commitments issued by the Company to
guarantee the performance of a customer to a third party.  The credit
risk involved in issuing standby letters of credit is essentially the
same as that involved in extending loan facilities to customers.

Commitments to extend credit are agreements to lend to a customer as long
as there is no violation of any condition established in the contract. 
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee.  Since many of the commitments
are expected to expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash requirements.

The Company uses off-balance sheet derivatives as an end user in
connection with its risk management activities. The derivatives currently
used are interest rate products and are used to manage interest rate risk
relating to specific groups of on-balance sheet assets. The market and
credit risks associated with these products, as well as the operating
risks, are similar to those relating to other types of financial
instruments. Market risk is the exposure created by potential
fluctuations in interest rates and other values, and is a function of the
product type, the volume of transactions, the tenor and terms of the
agreement, and the underlying volatility. Credit risk is the exposure to
loss in the event of nonperformance by the other party to the
transaction. Credit exposure at the reporting date is represented by the
fair value of instruments with a positive fair value at that date.
Balance sheet credit exposure is limited to the amount of any unrealized
gains at the reporting date.

In 1998, the Company entered into an interest rate swap agreement as a
means of hedging interest rate exposure on its fixed rate loans. Interest
rate swaps involve the exchange of interest rate payments based on
differentials between specified financial indices as applied to a
notional principal amount. Amounts to be paid or received under the
interest rate swap agreement are recognized as interest income in the
periods in which they accrue. Any gain or loss on the early termination
of the agreement would be deferred and amortized as an adjustment to
interest income over the remaining term of the original agreement.

The Company also purchased an interest rate cap in 1998 as a means of
hedging interest rate exposure on collateralized mortgage obligation
securities owned by the Company. Purchased interest rate caps are used to
effectively reduce the risk of rising interest rates. Purchased interest
rate caps are option contracts that require the payment of an up front
fee or premium for the right to receive interest payments on a contract
notional amount when a specified rate index rises above a strike rate
during the life of the contract. Premiums paid are amortized over the
term of the contract as an adjustment to interest income. Amounts
received under the agreement are recorded in interest income as earned.

A summary of off-balance sheet interest rate derivatives outstanding at
December 31, 1998 is as follows:

                         Notional      Company       Company
                          Amount         Pays        Receives 

  Interest rate swap   $10,000,000      5.85%      3 Month LIBOR
  Interest rate cap     20,000,000         -       5 Year CMT less 6%


There are various claims pending against the Company and its subsidiaries
arising in the normal course of business.  Management believes, based
upon the opinion of counsel, that liabilities arising from these
proceedings, if any, will not be material to the Company's financial
position.


13.  Disclosures About Fair Value of Financial Instruments

The following methods and assumptions were used to estimate the fair
value of each class of financial instrument for which it is practical to
estimate that value:

Securities
For U.S. Treasury and U.S. Government Agency securities, fair values are
based on market prices or dealer quotes.  For other investment
securities, fair value equals quoted market price if available.  If a
quoted market price is not available, fair value is estimated using
quoted market prices for similar securities.

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.

Deposits
The fair value of demand deposits, savings accounts, NOW and money market
accounts is the amount payable on demand at the reporting date.  The fair
value of fixed-maturity certificates of deposit is estimated using the
rates currently offered for deposits of similar remaining maturities.

Short-term and Long-term Borrowings
The fair value of short-term and long-term borrowings is estimated by
discounting the future cash flows using the current interest rates at
which similar borrowings could be made for the same maturities.

Commitments to Extend Credit and Standby Letters 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
counter parties.  For fixed-rate loan commitments, fair value also
considers the difference between current levels of interest rates and the
committed rates.  The fair value of letters of credit is based on fees
currently charged for similar agreements or on the estimated cost to
terminate them or otherwise settle the obligations with the counter
parties at the reporting date. The fair value of these commitments is not
material.

Off-Balance Sheet Derivative Instruments
The fair value of off-balance sheet interest rate contracts is based on
dealer quotes and represents the estimated amount the Company would
receive or pay to terminate the contracts.

The estimated fair value of the Company's financial instruments at
December 31, 1998 and 1997 are as follows (in thousands):

                                        1998                    1997
                              Carrying       Fair     Carrying       Fair
                                Amount      Value       Amount      Value
Financial Assets:
  Cash                      $   52,994 $   52,994   $   63,502 $   63,502
  Interest bearing deposits      1,718      1,718          159        159
  Securities available
    for sale                   516,083    516,083      454,400    454,400
  Federal funds sold and
    securities purchased
    under agreements to
    resell                      58,195     58,195       19,922     19,922
  Loans, gross                 956,200    966,558    1,027,872  1,033,954


Financial Liabilities:
  Deposits                   1,361,020  1,365,679    1,330,531  1,332,230
  Short-term borrowings         11,887     11,834       47,598     47,609
  Long-term borrowings          70,000     72,498       70,000     70,530

Off-Balance Sheet Items:
  Interest rate contracts            -       (179)          -           -



14.  Condensed financial information (Parent Company only)

The following is a summary of condensed financial information for the
Parent Company only (in thousands):



Condensed balance sheets - December 31,              1998         1997

Assets
  Investment in subsidiaries                     $179,815     $161,074
  Cash & interest bearing deposits                  5,370        4,276
  Securities available for sale                       912        9,621
  Premises and equipment                              659        1,297
  Other assets                                      7,022        7,234
     Total assets                                $193,778     $183,502

Liabilities and stockholders' equity
  Dividend payable                               $  1,984     $  1,800
  Other liabilities                                 8,405        9,193
    Total liabilities                              10,389       10,993
  Stockholders' equity                            183,389      172,509
     Total liabilities and stockholders' equity  $193,778     $183,502



Condensed statements of earnings
For the years ended December 31,                1998      1997      1996

Income:
  Dividends from subsidiaries                $ 5,000   $ 9,300   $22,285
  Investment security gains, net               4,300         -     2,513
  Other                                       12,070     9,270     8,504
                                              21,370    18,570    33,302
Expenses:
  Interest on borrowings                           -         -       924
  Salaries                                     5,489     6,607     7,372
  Other                                        5,938     3,252     9,757
                                              11,427     9,859    18,053
Earnings before income tax
  and equity in undistributed
  earnings of subsidiaries                     9,943     8,711    15,249
Income tax expense (benefit)                   1,962      (215)   (2,298)
Earnings before equity in
  undistributed earnings of
  subsidiaries                                 7,981     8,926    17,547
Equity in undistributed earnings of
  subsidiaries                                19,419     8,044    (4,230)
Net earnings                                 $27,400   $16,970   $13,317


Condensed statements of cash flows
For the years ended December 31,                1998      1997      1996

Operating activities:
    Net cash provided by operating activities $ 4,695  $ 13,166  $19,276

Investing activities:
  Sale of securities available for sale        10,445         3    7,077
  Purchase of securities available for sale       (22)     (572)  (3,459)
  (Purchase) disposals of bank premises
    and equipment                                 263      (664)    (894)
  Net advances to subsidiary                   (5,700)   (1,331)       -
    Net cash provided by (used in)
      investing activities                      4,986    (2,564)   2,724 

Financing activities:
  Decrease in short-term debt                       -         -  (13,250)
  Redemption of preferred stock                     -         -   (5,000)
  Purchase of treasury stock                     (687)        -        - 
  Dividends paid                               (7,947)   (7,142)  (6,322)
  Other                                            47        65    2,841 
    Net cash used in financing activities      (8,587)   (7,077) (21,731)

Increase in cash                              $ 1,094   $ 3,525  $   269

Cash paid (received) for:
  Interest                                    $  (124) $    (17) $   985
  Income taxes                                $ 2,543  $ (1,443) $(1,453)


15.  Quarterly financial information (unaudited)
     (in thousands except per share data)

                                   First    Second     Third    Fourth
                                 Quarter   Quarter   Quarter   Quarter
1998
Interest income                  $29,202   $29,186   $29,423   $28,844
Interest expense                  13,612    13,385    13,800    13,498
Net interest income               15,590    15,801    15,623    15,346
Provision for loan losses            900       900       900       900
Other operating income             3,659     4,789    21,695     3,519
Other operating expense           11,803    12,335    13,155    13,165
Income before income taxes         6,546     7,355    23,263     4,800
Provision for income taxes         2,088     2,394     8,747     1,335

Net income                       $ 4,458   $ 4,961   $14,516   $ 3,465

Net income per share - basic        $.19      $.22      $.65      $.15
Net income per share - diluted      $.19      $.21      $.62      $.15

1997
Interest income                  $29,099   $30,633   $30,716   $30,173
Interest expense                  14,020    14,298    14,498    14,350
Net interest income               15,079    16,335    16,218    15,823
Provision for loan losses            410       950       925     7,415
Other operating income             6,778     2,617     4,204     7,496
Other operating expense           12,440    12,251    12,227    13,294
Income before income taxes         9,007     5,751     7,270     2,610
Provision for income taxes         3,100     1,767     2,503       298

Net income                       $ 5,907   $ 3,984   $ 4,767   $ 2,312

Net income per share - basic        $.26      $.17      $.21      $.10
Net income per share - diluted      $.25      $.17      $.20      $.10


Earnings per share amounts have been restated for a 10% stock dividend
declared September 28, 1998.

16.  Earnings per share

The following schedule reconciles net income to income available to
common stockholders and the number of average shares used in the
computation of basic and diluted earnings per share. All share and per
share amounts have been restated for a 10% stock dividend distributed
December 1, 1998 to shareholders of record on November 15, 1998.


                                 Income          Shares        Per-Share
                              (Numerator)     (Denominator)     Amount
                             (in thousands)                             

December 31, 1998:

Net income                       $27,400    
Less: Preferred stock dividends     (740)

Basic EPS
Income available to
 common stockholders              26,660        21,977,029        $1.21

Effect of dilutive securities
Stock options                                      288,966
Convertible preferred stock          580           936,852

Diluted EPS
Income available to common
 stockholders and assumed
 conversions                     $27,240        23,202,847        $1.17


December 31, 1997:

Net income                       $16,970    
Less: Preferred stock dividends     (740)

Basic EPS
Income available to
 common stockholders              16,230        22,002,136        $ .74

Effect of dilutive securities
Stock options                                      239,446
Convertible preferred stock          580           936,852

Diluted EPS
Income available to common
 stockholders and assumed
 conversions                     $16,810        23,178,434        $ .73


December 31, 1996:

Net income                       $13,317    
Less: Preferred stock dividends     (940)

Basic EPS
Income available to
 common stockholders              12,377        21,904,710        $ .57

Effect of dilutive securities
Stock options                                      117,148
Convertible preferred stock          559           936,852

Diluted EPS
Income available to common
 stockholders and assumed
 conversions                     $12,936        22,958,710        $ .56



17. Comprehensive income

The Company adopted Statement of Financial Accounting Standards No. 130,
"Reporting Comprehensive Income" ("SFAS 130") effective January 1, 1998.
SFAS 130 establishes standards for reporting and the display of
comprehensive income and its components in a full set of general purpose
financial statements.

The Company's comprehensive income includes net income and other
comprehensive income comprised entirely of unrealized gains or losses on
securities available for sale, net of tax.
                                                        Tax
                                    Before Tax    (Expense)   Net of Tax
                                        Amount      Benefit       Amount
December 31, 1998
Net income                             $41,964     $(14,564)     $27,400

Other comprehensive income:
  Unrealized holding gains
    arising during the period            4,100       (1,589)       2,511
  Less: reclassification adjustment
    for gains included in
    net income                         (16,763)       6,497      (10,266)
Net other comprehensive effect         (12,663)       4,908       (7,755)

Comprehensive income                   $29,301     $ (9,656)     $19,645


December 31, 1997
Net income                             $24,638     $ (7,668)     $16,970

Other comprehensive income:
  Unrealized holding gains
    arising during the period           13,068       (5,169)       7,899
  Less: reclassification adjustment
    for gains included in
    net income                          (5,236)       2,071       (3,165)
Net other comprehensive effect           7,832       (3,098)       4,734

Comprehensive income                   $32,470     $(10,766)     $21,704


December 31, 1996
Net income                             $18,602     $ (5,285)     $13,317

Other comprehensive income:
  Unrealized holding gains
    arising during the period            3,496       (1,387)       2,109
  Less: reclassification adjustment
    for gains included in
    net income                          (3,886)       1,542       (2,344)
Net other comprehensive effect            (390)         155         (235)

Comprehensive income                   $18,212     $ (5,130)     $13,082


18. Subsequent events

During the fourth quarter of 1998, the Company entered into separate
agreements to sell four of its branch offices located in Polo, Mount
Carroll, Stockton and Warren, Illinois along with deposit accounts with
balances totaling approximately $85.1 million associated with those
offices. The Company completed the last of the sales in February 1999 and
recognized one-time aggregate gains, before tax, of approximately $7.8
million.

                               
             MANAGEMENT'S DISCUSSION AND ANALYSIS
       OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS




INTRODUCTION

The discussion presented below provides an analysis of the Company's
financial condition and results of operations for the past three years,
and is intended to cover significant factors affecting the Company's
overall performance during that time.  It is designed to provide
shareholders with a more comprehensive review of the operating results
and financial condition than could be obtained from an examination of the
consolidated financial statements alone, and should be read in
conjunction with the consolidated financial statements, accompanying
notes and other financial information presented in the 1998 Annual Report
to Shareholders.  All financial statements and information have been
restated to reflect the merger of Northern Illinois Financial Corporation
and Premier Financial Services, Inc. with and into Grand Premier
Financial, Inc. on August 22, 1996. The merger was accounted for as a
pooling of interests.

Statements or comments contained in the following discussion and analysis
of financial condition and results of operations that are not historical
facts may contain forward looking information. These "forward looking
statements" fall within the meaning of Section 27 A of the Securities Act
of 1933, as amended, and Section 21 E of the Securities Exchange Act of
1934, as amended, and represent the Company's expectations concerning
future events and involve substantial risks and uncertainties.  The
Company cautions that actual results, performance or achievement could
differ materially from the results, performance or achievements expressed
or implied by these forward looking statements. Important factors that
might cause actual results to differ materially include, but are not
limited to: federal and state legislative and regulatory requirements;
changes in management's estimate of the adequacy of the allowance for
loan losses and/or other significant estimates; changes in the level and
direction of loan delinquencies and charge-offs; interest rate movements
and their impact on customer behavior and the Company's net interest
income; the impact of pricing, re-pricing and competitors' pricing on
loans, deposits and other sources or uses of funds; the Company's ability
to adapt successfully to technological changes to meet customers' needs
and developments in the marketplace; the Company's ability to access cost
effective funding; changes in the Company's estimate of the steps and
costs necessary to address the Year 2000 Issue including ensuring that
not only the Company's automated systems, but also those of vendors and
customers, can become or are Year 2000 compliant; and general / economic
and business conditions. The Company does not undertake, and specifically
disclaims, any obligation to update any forward looking statements to
reflect events or circumstances occurring after the date of such
statements.



RESULTS OF OPERATIONS

Net earnings totaled $27.4 million, or $1.17 diluted earnings per share,
in 1998 compared to $17.0 million, or $.73 diluted earnings per share, in
1997 and $13.3 million, or $.56 diluted earnings per share, in 1996. The
significant increase in 1998 over the previous two years was primarily
the result of selling the Company's portfolio of listed equity
securities. In 1998, pre-tax gains on sales of equity securities
contributed $19.8 million to total securities gains of $20.2 million. By
comparison, total securities gains were $7.7 million and $3.8 million in
1997 and 1996, respectively. Excluding securities gains, net earnings
were approximately $15.2 million, $12.3 million and $11.0 million in
1998, 1997 and 1996, respectively and diluted earnings per share were
$.64, $.53 and $.46 during the respective years. Other significant
factors, which reduced net earnings by approximately $1.1 million,
include charges associated with the closing of two branch offices, a
write-off of obsolete computer software, and expenses associated with the
Company's pending conversion to a new data processing system early in
1999.

Net earnings in 1997 were affected by a provision for possible loan
losses much larger than provisions recorded in 1998 and 1996. The Company
also combined its five banking subsidiaries into a single charter in
1997, operating as Grand National Bank.  The resulting conversion to a
common data processing system, along with supplies, printing and other
associated costs resulted in increased expenses during the year. Earnings
in 1996 were affected significantly by a number of non-recurring items,
many of them related to the Company's formation and organization as a
result of the merger noted above. Included were charges for contract and
lease terminations, severance benefits related to staff reductions, and
investment banking and professional fees. Also during 1996, the Company
recorded a write-down on a parcel of real estate that had previously been
held for future development. 

Net Interest Income

A generally lower interest rate environment, combined with a decline in
average loan balances and extremely competitive market conditions
contributed to a slight decline in taxable equivalent net interest income
from 1997 ($67.9 million) to 1998 ($67.0 million).  Tax equivalent
interest income fell by $3.8 million (from $125.1 million in 1997 to
$121.3 million in 1998), while interest expense declined only $2.9
million  (from $57.2 million in 1997 to $54.3 million in 1998),
accounting for the overall drop.  Taxable equivalent net interest income
increased by $6.2 million from 1996 to 1997, largely as a result of
growth in net earning assets and a change in asset mix favoring loans.

The Company's tax equivalent net interest margin also declined slightly
from 1997 (4.48%) to 1998 (4.46%), both of which significantly exceeded
the 1996 margin of 4.14%.  Various components of the earning asset
portfolio were affected differently by changes in asset mix, market
rates, actions taken by management to improve Grand Premier's net
interest margin, and other factors.

Average earning assets were $1.50 billion in 1998, $1.52 billion in 1997
and $1.49 billion in 1996.  Average loans, which are generally the
highest yielding component in the earning asset portfolio, represented
61.1% of earning assets in 1996, increased to 66.4% in 1997, and declined
to 64.8% in 1998.  The net decline in average loans from 1997 to 1998
resulted primarily from the Company's actions directed at reducing its
indirect loan portfolio.  (See "Provision for Possible Loan Losses".)
Average investment securities represented 32.0%, 32.6% and 37.8% of the
earning asset portfolio in 1998, 1997 and 1996 respectively.  Short-term
investments in federal funds sold, securities purchased under agreements
to resell and other short-term interest bearing balances comprise the
remainder of the Company's earning assets, averaging 3.2% of total
earning assets in 1998, 1.0% in 1997 and 1.1% in 1996. This year-to year
change in asset mix was the single largest factor affecting the Company's
tax equivalent interest income.

During 1998, the average tax equivalent yield on loans remained steady at
8.95% when compared to 8.96% during 1997.  The average yield in 1996 was
8.78%.  The higher yields in both 1997 and 1998 were achieved despite
generally lower market rates as a result of the Company's focus on yield
enhancement and relationship pricing.  During the three year period from
1996 to 1998, Grand Premier's tax equivalent yield on its investment
portfolio rose from 6.67% in 1996 to 6.88% in 1997, falling to 6.55% in
1998.  The year-to-year changes in yield are reflective of 1) reinvesting
proceeds from maturing securities at lower prevailing market rates, and
2) accelerated prepayments on mortgage backed securities prompted by
borrowers refinancing at lower rates in 1997 and 1998.  Short-term
investments are also subject to re-investment at market rates upon
maturity or sale, with yields averaging 5.45% in 1996, 5.27% in 1997 and
5.73% in 1998.

Grand Premier's cost of funds, which is primarily influenced by rates
paid on interest bearing deposits, averaged 3.80%, 3.77% and 3.62% in
1996, 1997 and 1998. Average rates paid on interest bearing deposits were
4.42% in 1996, 4.40% in 1997 and 4.27% in 1998.

Interest Rate Risk Management

One of the Company's objectives is to manage volatility in net interest
income resulting from changes in interest rates.  This is accomplished by
actively managing the re-pricing characteristics of its interest earning
assets and interest bearing liabilities in a dynamic environment. Grand
Premier uses simulation modeling to analyze the effect of predicted or
assumed changes in interest rates on balances and subsequently net
interest income.  The model provides for simultaneously comparing six
different interest rate scenarios and their estimated effect on net
interest income over various time horizons.  Two "rising" and two
"declining" rate scenarios, driven by short-term interest rates changing
300 basis points up and down over twelve and twenty four month periods,
along with "most likely" and "flat rate" scenarios are used to identify
the potential impact of rapid changes, up or down, from current rates. 
The "base" or "flat rate" simulation, (more traditionally known as "gap
measurement") is used as a control to quantify the effect of changes in
net interest income caused solely by re-pricing existing balances at
market rates as they mature. Changes in balances reflecting repayment
risk, likely changes in customer behavior under different interest rate
environments and other "what if" assumptions based on management
estimates are also simulated under each scenario.  Interest sensitivity,
i.e., the Company's exposure to changes in net interest income, is
normally measured over a rolling 12 month period under the different rate
scenarios and compared to the base case forecast.  Generally, Grand
Premier's policy is to maximize net interest income while limiting
negative interest sensitivity (i.e., a decline in net interest income) to
no more than 5% of net interest income under any interest rate scenario. 
As of December 31, 1998, the simulation model indicated a change in net
interest income of less than 3.3% in either the rising or declining rate
environments described above.

The following table shows the Company's base or flat rate measurement
(i.e., "gap position") as of December 31, 1998:


                               Volumes Subject to Re-pricing
                                     (in thousands)

                             within    within    within      over
                            90 days    1 year   5 years   5 years     

Loans (net of unearned
 income)                   $422,898  $169,639  $331,038  $ 32,625
Investment securities       130,997    79,046   133,048   172,992
Other earning assets         59,913         -         -         - 
  Total earning assets      613,808   248,685   464,086   205,617

Transaction accounts         23,301    23,301   124,811    31,202
Savings accounts            145,778    29,692   188,169    47,053
Time deposit accounts       146,738   283,065   118,365       461
Short-term borrowing          9,379     2,508         -         -
Long-term borrowing               -     5,000    65,000         -  
  Total interest-bearing
    liabilities             325,196   343,566   496,345    78,716

  Asset (liability) gap..  $288,612  $(94,881) $(32,259) $126,901 

  Cumulative asset gap...  $288,612  $193,731  $161,472  $288,373


In reviewing the table, it should be noted that the balances are shown
for a specific point in time and because interest sensitivity is dynamic,
it can change significantly over time.  Furthermore, the balances reflect
both contractual re-pricing of deposits and management's re-pricing
assumptions on certain deposits.  Approximately 63.8% of core demand
deposit accounts and regular savings accounts have been classified as
re-pricing beyond one year.  While these accounts are subject to
immediate withdrawal, experience indicates they are relatively rate
insensitive.


Provision for Possible Loan Losses

The Company's provision for possible loan losses is based on periodic
(but no less than quarterly) evaluations by management.  In these
evaluations, numerous factors are considered including, but not limited
to, current economic conditions, loan portfolio composition, prior loan
loss experience, and an estimation of potential losses.

Each loan in the portfolio is graded according to specific financial risk
and repayment criteria.  The aggregate required reserve balance for the
entire portfolio is maintained through earnings provisions as required. 
The provision for loan losses in 1998 totaled $3.6 million as compared to
$9.7 million and $2.9 million in 1997 and 1996, respectively.

The Company's 1998 provision was reflective of management's evaluation of
the loan portfolio within the context of the factors outlined above. In
1997, approximately $6.0 million of the $9.7 million provision was made
as an additional provision in response to deterioration identified by
management in the indirect segment of the loan portfolio (totaling $88.4
million, or 8.60% of the loan portfolio, at December 31, 1997).  Over the
first six months of 1997, the Company had experienced rapid growth in
indirect loans originated for the purchase of automobiles, recreation
vehicles and other consumer goods. Management performed an extensive
internal review of the indirect portfolio in the fourth quarter of 1997
prompted by an increase in the delinquency rate (i.e. past due 60 days or
more), which rose from 1.0% in June, 1997 to 4.0% at the end of November,
1997.  As a result of the review, management determined that an
additional provision was prudent.  The Company discontinued this type of
lending concurrent with recording the provision. The remainder of the
Company's 1997 provision ($3.7 million), as well as the 1996 provision,
was essentially tied to overall portfolio growth.

At December 31, 1998 the allowance for possible loan losses totaled $12.4
million (1.3% of gross loans) compared to $15.4 million (1.5% of gross
loans) at December 31,1997 and $10.1 million (1.05% of gross loans) at
December 31, 1996. Net charge-offs as a percentage of average loans were
 .67% in 1998, compared with .44% and .24% in 1997 and 1996, respectively.
The year-to-year increases in net charge-offs were mainly attributable to
indirect loans, with net charge-offs totaling $5.51 million in 1998 (.56%
of average loans) and $2.77 million in 1997 (.27% of average loans).

Although management believes that the allowance for possible loan losses
currently provides adequate risk coverage for the loan portfolio, there
can be no assurance that significant provisions for losses will not be
required in the future based on factors such as portfolio growth,
deterioration of market conditions, major changes in borrowers' financial
conditions, delinquencies and defaults.  Future provisions will continue
to be determined in relation to overall asset quality as well as other
factors mentioned previously.

Other Income

Other income, excluding net investment securities gains, increased
modestly (.3%), from $13,426,000 in 1997 to $13,466,000 in 1998. By
comparison, other income decreased 3.3% in 1997 from $13,878,000 in 1996.
Service charges on deposits and trust fees are the primary components of
non-interest income.

Service charges on deposits represent Grand Premier's largest fee-based
source of income. The majority of service charges on deposits are
generated from transaction based accounts. During the three years from
1996 through 1998, aggregate balances in these accounts remained
relatively stable, averaging $378.5 million in 1996, $369.7 million in
1997 and $369.1 million in 1998. As a result, service charges on deposits
remained virtually unchanged at $5.7 million in each of the three years.

Trust fees totaled $3.5 million in 1998 compared to $3.2 million in 1997
and $2.9 million 1996.  The year-to-year growth was primarily due to
favorable performance of managed assets and increases in the amount of
assets under administration.  Trust fees are based on providing
fiduciary, investment management, custodial and related services to
corporate and personal clients.  As of December 31, 1998, the market
value of total managed assets approximated $840 million.  Management
anticipates continued growth in relationships and fees in future years.

Net investment security gains totaled $20.2 million in 1998 and was the
main reason for a 59.6% increase in total other income, which increased
from $21.1 million in 1997 to $33.7 million in 1998. The substantial
increase was primarily a result of $19.8 million in gains realized from
selling the Company's portfolio of listed equity securities during the
third quarter.  Net investment security gains were $7.7 million in 1997
and $3.8 million in 1996. Securities available for sale are utilized to
manage interest rate risk, to provide liquidity, and as a contributor to
earnings. As conditions change over time, overall interest rate risk,
liquidity demands and return on the investment security portfolio will
vary.  The Company will continue to use its securities available for sale
portfolio to manage interest rate risk, meet liquidity needs and optimize
overall investment returns and net interest income.

Other operating income decreased to $4,315,000 in 1998 from $4,504,000 in
1997 and $5,271,000 in 1996. The Company recorded gains from the sale of
other real estate owned totaling $164,000, $142,000 and $545,000 in 1998,
1997 and 1996, respectively. During 1998, the Company also recorded gains
from the sale of loans to the secondary market totaling $656,000. In
1997, other operating income included gains totaling approximately
$399,000, primarily from the sale of loans to the secondary market, as
well as a one-time gain of $132,000 from sale of a marginally profitable
line of business in its insurance subsidiary.  In 1996, gains totaling
approximately $429,000, primarily from the sale of loans to the secondary
market, are included in other operating income. During 1998, the Company
standardized its processing of merchant credit card transactions and its
method of realizing income from rentals of safe deposit boxes. In
aggregate, these changes resulted in a decrease in other income totaling
approximately $225,000.

Other Expenses

Total other expenses increased a minimal $246,000 (.5%) to $50.5 million
in 1998 from $50.2 million in 1997. The small increase followed a
decrease of $3.8 million (7.1%) from $54.0 million in 1996.

Salaries and benefits, the largest component of other expense, totaled
$24.0 million in 1998, down slightly from $24.2 million in 1997 and
substantially less than the $26.6 million recorded in 1996. The decrease
in 1998 was mainly attributable to a reduction of full-time equivalent
employees, from 635 at December 31, 1997 to 583 at December 31, 1998. The
decrease (9.0%) from 1996 to 1997 was the result of a combination of
factors. In 1996, $350,000 in severance benefits were paid to employees
whose positions were eliminated as a result of combining four subsidiary
banks into one charter in February, 1996 and $614,000 was subsequently
expensed in recognition of the Company's liability for earned vacation
pay as of December 31, 1996.  In addition, Grand Premier accrued an
expense of $700,000 in the fourth quarter of 1996 for anticipated
severance payments to employees whose positions would be eliminated as
the Company completed consolidating its operations in early 1997.  Three
employee groups, including officials and managers, technicians, and
office and clerical totaling 46 employees were included in the
restructuring plan. Severance payments, including benefits, totaling
$811,000 were paid to 45 employees in the first quarter of 1997
concluding the restructuring plan. At December 31, 1996, full-time
equivalent employees totaled 642 not including approximately 40 full-time
equivalent positions filled by office temporaries.

Net occupancy expense declined slightly in 1998, to $4.6 million, as
compared to $4.7 million in both 1997 and 1996. Furniture and equipment
expense increased $192,000 (to $4.0 million) in 1998, following an
increase of $722,000 in 1997 compared to 1996. The year-to-year increases
are mainly attributable to depreciation expense associated with upgrading
and standardizing computer hardware, telephone systems, data
communication lines and signage throughout the Company.

Data processing expenses were $2.05 million, $1.86 million, and $1.51
million in 1998, 1997 and 1996, respectively. The 1998 increase is mainly
attributable to expenses associated with preparing for conversion to a
fully integrated, in-house core data processing system in early 1999. 
Management believes that an in-house system will provide the tools
necessary to expand its array of relationship based financial services
while stabilizing costs. The increase from 1996 to 1997 was the result of
activity volume added to the Company's current third party core
processing system when the Company combined its five remaining bank
charters into one. Prior to combining the bank charters, four of the
banks processed on an in-house system and were not subject to third party
fees.

Fees paid to outside professionals approximated $2.09 million in 1998,
$1.64 million in 1997 and $1.39 million in 1996. The primary reason for
the year-to-year increase was fees paid for training and implementation
of a company-wide sales management program ($300,000 in 1998 and $100,000
in 1997). In addition, the Company out-sourced its internal audit
function in 1998 and retained information technology consultants in both
1997 and 1998 to assist in 1) standardizing its voice and data
communications networks, and 2) selecting a core processing solution.

The Company owned 5.5 acres of property in Riverwoods, Illinois, which it
acquired in 1993 for possible future expansion.  In October 1996, Grand
Premier decided that developing the property was no longer consistent
with its long-term plans. The Company recorded a $2.5 million charge to
1996 pre-tax earnings reflecting the write-down of the property to
approximate fair value.  The sale of the property was completed in
December 1997 for approximately $35,000 greater than the recorded book
value.

Other expenses decreased to $12.2 million in 1998, from $12.5 million in
1997 and $12.6 million in 1996. The majority of other expenses are
recurring normal operating expenses. Several one-time or non-recurring
expenses are also included in each of the three years ending December 31,
1998. One-time charges in 1998 include 1) write-off of obsolete computer
software ($231,000), 2) expenses associated with closing two branch
offices ($365,000) and 3) expenses related to the Company's pending
conversion to a new data processing system in 1999 ($550,000). In
addition, loan recovery expenses increased approximately $703,000 from
1997 to 1998 as a result of the Company's aggressive collection efforts
relating to its indirect loan portfolio.  Non-recurring expenses that
resulted from consolidating bank charters and data processing conversions
in 1997 approximated $1.3 million.  Other expenses in 1997 also included
costs associated with closing a branch office in Homewood, Illinois
($200,000) and losses from check and credit card fraud ($456,000).  In
1996, other expenses included just under $2.0 million for several
non-recurring items; 1) expenses of approximately $750,000 for contract
and lease terminations, and 2) $1.2 million in investment banking,
professional expenses and other organizational start up costs associated
with the merger.

Income Taxes

Income taxes for 1998 totaled $14.6 million as compared to $7.7 million
in 1997 and $5.3 million in 1996.  Grand Premier's effective tax rate was
34.7% in 1998, 31.1% in 1997 and 28.4% in 1996. The significant
securities gains recorded in 1998 are the main reason for the increase in
the effective tax rate from 1997.  In 1996, the Company reversed a
deferred tax valuation allowance of approximately $763,000, thereby
reducing the effective tax rate for the year.  The remaining changes in
the effective tax rates from year to year are primarily the result of
changes in the amount of interest income exempt from income taxes as a
percentage of income before taxes.


FINANCIAL CONDITION

Average assets decreased slightly (1.4%) from 1997 to 1998. During the
same two years average earning assets as a percent of average total
assets increased slightly, from 92.0% in 1997 to 92.4% in 1998.  Balance
sheet mix over the two-year period was relatively stable, with modest
decreases in average loans and deposits, and increases in average
investment securities and long-term and short-term borrowings.  The
Company increased its long-term advances from the Federal Home Loan Bank
during 1997, to $70.0 million at year-end, a balance which remained
unchanged during the year ended December 31, 1998.  The action was taken
as a result of favorable market conditions.  Long-term borrowings
averaged $40.0 million in 1997 and $70.0 million in 1998.

Securities

Grand Premier's securities available for sale portfolio is used by the
Company as an integral part of its interest rate risk management,
earnings and tax planning strategies. The portfolio largely consists of
debt securities, any of which may be sold in response to changes in
interest rates, for liquidity, or for tax purposes.  At
December 31, 1998, $516.1 million was invested in securities available
for sale, compared to $454.4 million at year-end 1997. The increase is
due to a decline in loans outstanding, primarily as a result of the
actions taken by management to reduce its portfolio of indirect loans 
(See "Provision for Possible Loan Losses").  The Company also increased
its short-term investments in anticipation of funding requirements
relating to the pending sales of four branch offices and their associated
deposit liabilities in the first quarter of 1999.

At December 31, 1998, approximately 24% of the total carrying value of
securities available for sale were U. S. Treasury and U.S. government
agency securities, 33% obligations of states and political subdivisions,
36% mortgage-backed securities, 5% corporate securities and commercial
paper, and 2% equity securities.  The Company's mortgage-backed
securities included $159.6 million invested in collateralized mortgage
obligations ("CMO's") and $28.6 million in other mortgage-backed
securities. The CMO's held by the Company are primarily shorter-maturity
bonds (average lives generally less than 3 years).  At December 31, 1998,
substantially all of the mortgage-backed securities held by the Company
were issued or backed by U.S. Government and U.S. Government-sponsored
agencies.

Loans

The Company's lending strategy stresses quality growth, diversified by
product, geography and industry.  Loans represent the largest component
of Grand Premier's earning assets. Gross loans outstanding totaled $956.2
million at December 31, 1998, $71.7 million (7%) lower than year-end
1997. Active refinancing combined with the Company's practice of
retaining customer servicing while selling loans secured by first liens
on 1-4 family residential properties to the secondary mortgage market,
resulted in a decrease ($38.6 million) in these loans from year-end 1997
to 1998.  The Company also sold indirect loans with balances totaling
approximately $8.1 million from its portfolio in 1998, realizing a net
loss of $266,000.  Combined with normal principal repayments, the sale
resulted in a $47.3 million reduction in indirect loans outstanding, from
$88.4 million at December 31, 1997 to $41.1 at year-end 1998. The
reductions in the 1-4 family and indirect portfolios were partially
offset by strong growth (18.9%) in commercial loans.  As of December 31,
1998, the loan portfolio consisted of 28.8% commercial loans, 4.5% loans
for construction purposes, 59.5% real estate-mortgages, and 7.2% loans to
individuals.

Asset Quality

The Company reduced non-performing assets from $10.2 million at year-end
1997 to $7.9 million at year-end 1998. Non-performing assets, consisting
of loans 90 days or more past due, loans not accruing interest, loans
with renegotiated credit terms, and other real estate owned were .48% of
total assets compared to .62% of total assets at year-end 1998 and 1997,
respectively. Non-accruing loans increased slightly, from $6.2 million at
year-end 1997 to $6.9 million at December 31, 1998. Loans past due 90
days or more and still accruing were $170,000 at year-end 1998, a
decrease of $1.2 million from the previous year-end.  Sales of other real
estate owned during 1998 resulted in a significant reduction in
properties owned at year-end, from $2.2 million in 1997 to $392,000 in
1998.  Renegotiated loans decreased modestly, from $436,000 at year-end
1997 to $414,000 at December 31, 1998. At December 31, 1998, the
allowance for possible loan losses totaled $12.4 million or 1.30% of
gross loans compared to $15.4 million or 1.50% of gross loans at December
31, 1997.

Sources of Funds

The Company considers core deposits, which include transaction accounts,
savings accounts, and consumer time deposits less than $100,000 as its
most stable sources of funding. These deposits are supplemented by time
deposits from governmental entities, time deposits greater than $100,000
and securities sold under agreements to repurchase. Other short-term
borrowings, long-term borrowings and stockholders' equity provides the
remainder of the Company's funding sources. Total deposits increased
$30.5 million (2.3%) to $1.36 billion at December 31, 1998 when compared
to $1.33 billion at year-end 1997. Non-interest bearing deposits were
14.6% and 14.1% of total deposits at December 31, 1998 and 1997,
respectively.

Total short-term borrowings, including repurchase agreements, were $11.9
million at December 31, 1998 compared to $47.6 million at December 31,
1997. The lower year-end balance is the result of a $33.0 million
reduction in federal funds purchased. Long-term borrowings, consisting
solely of advances from the Federal Home Loan Bank, were unchanged at
$70.0 million at December 31, 1998 and 1997.

Liquidity

Grand Premier defines liquidity as having funds available to meet cash
flow requirements. Effective management of balance sheet liquidity is
necessary to fund growth in earning assets, to pay liabilities, to
satisfy depositors' withdrawal requirements and to accommodate changes in
balance sheet mix. The Company has three major sources for generating
cash other than through operations: 1) primary and secondary market
deposits, 2) securities available for sale, and 3) lines of credit from
unaffiliated banks. Liquid assets are compared to the potential needs for
funds on an ongoing basis to determine if the Company has sufficient
coverage for future liquidity needs. Management believes a primary
liquidity position that provides for a minimum 100% coverage and total
liquidity that provides for a minimum 150% coverage relative to the
anticipated likelihood of potential events taking place is prudent. At
year-end 1998, the Company's primary and secondary liquidity coverage
exceeded these minimums.

Stockholders' Equity

Stockholders' equity increased by $10.9 million (6.3%) during 1998, from
$172.5 million at December 31, 1997 to $183.4 million in 1998. The
increase was primarily due to retained net earnings of $19.3 million (net
income of $27.4 million less total common and preferred stock dividends
of $8.1 million). Accumulated other comprehensive income decreased $7.8
million from year-end 1997 to 1998, primarily from sales of investment
securities, resulting in previously unrealized gains being realized as
income during 1998.

The Federal Reserve Board currently specifies three capital measurements
under their risk-based capital guidelines: 1) "tier 1 capital" (i.e.,
stockholders' equity less goodwill to risk-adjusted assets), 2) "total
risk-based capital" (i.e., tier 1 capital plus the lesser of 1.25% of
risk-adjusted assets or the allowance for possible loan losses), and 3)
"tier 1 leverage ratio" (i.e., stockholders' equity less goodwill to
total assets less goodwill). Bank holding companies are required to
maintain minimum risk-based capital ratios of 4% for "tier 1 capital", 8%
for "total risk-based capital," and a "tier 1 leverage ratio" of 3% or
greater. At December 31, 1998, Grand Premier's "tier 1 capital" ratio was
13.76%, well above the regulatory minimum. The Company's "total
risk-based capital" and "tier 1 leverage" ratios were 14.82% and 9.99%
respectively, also considerably greater than required. The Company's
banking subsidiary met the definition of "well capitalized" under the
FDIC's risk related premium system at December 31, 1998.

CURRENT ACCOUNTING DEVELOPMENTS

The Financial Accounting Standards Board ("FASB") issued Statement of
Financial Accounting Standards No. 133, "Accounting for Derivative
Instruments and Hedging Activities" ("SFAS 133") in June 1998. SFAS 133
standardizes the accounting for derivative instruments, including certain
derivative instruments embedded in other contracts. Under the standard,
entities are required to carry all derivative instruments in the
statement of financial position at fair value. The accounting changes in
the fair value (i.e. gains or losses) of a derivative instrument depends
on whether it has been designated and qualifies as part of a hedging
relationship and, if so, on the reason for holding it. If certain
conditions are met, entities may elect to designate a derivative
instrument as a hedge of exposures to changes in fair values, cash flows,
or foreign currencies. If the hedged exposure is a fair value exposure,
the gain or loss on the derivative instrument is recognized in earnings
in the period of change together with the offsetting loss or gain on the
hedged item attributable to the risk being hedged. If the hedged exposure
is a cash flow exposure, the effective portion of the gain or loss on the
derivative instrument is reported initially as a component of other
comprehensive income (outside earnings) and subsequently reclassified
into earnings when the forecasted transaction affects earnings. Any
amounts excluded from the assessment of hedge effectiveness as well as
the ineffective portion of the gain or loss is reported in earnings
immediately. Accounting for foreign currency hedges is similar to the
accounting for fair value and cash flow hedges. If the derivative
instrument is not designated as a hedge, the gain or loss is recognized
in earnings in the period of change. SFAS 133 shall be effective for all
fiscal quarters of all fiscal years beginning after June 15, 1999, but
earlier application is permitted. The adoption of SFAS 133 is not
expected to have a material impact on the Company.

In October 1998, the FASB issued Statement of Financial Accounting
Standards No. 134, "Accounting for Mortgage-Backed Securities Retained
after the Securitization of Mortgage Loans Held for Sale by a Mortgage
Banking Enterprise" ("SFAS 134"). SFAS 134 amends Statement No. 65,
"Accounting for Certain Mortgage Banking Activities" to conform the
subsequent accounting for securities retained after the securitization of
mortgage loans by a mortgage banking enterprise with the subsequent
accounting for securities retained after the securitization of other
types of assets by a non-mortgage banking enterprise. SFAS 134 is
effective for the first quarter beginning after December 15, 1998 and
enterprises may reclassify mortgage-backed securities and other
beneficial interests retained after the securitization of mortgage loans
held for sale from the trading category, except for those with sales
commitments in place. The reclassification is to be done only by those
enterprises covered by SFAS 134 and is to be done when the statement is
initially applied. The adoption of SFAS 134 is not expected to have a
material impact on the Company.


YEAR 2000

Many existing computer programs use only two digits to identify a year in
a date field. These programs were designed and developed without
considering the impact of a change in century. If not corrected, many
computer programs could fail or create erroneous results which could
affect a company's ability to do business prior to, at, or after December
31, 1999.

Financial service organizations such as Grand Premier are heavily reliant
upon computer systems for processing transactions and accounting for
services provided to customers. Substantially all of the Company's major
computer systems are currently contracted with third party providers.
Beginning during the second quarter of 1999, the Company will operate
licensed software "in-house." Although the contracted vendors bear the
responsibility for making their systems "year 2000 compliant", assuming
the costs associated with necessary changes, keeping the Company
appraised of their progress in meeting established benchmarks, and
certifying to the Company that the systems are in fact "year 2000 ready",
the Company bears ultimate responsibility for testing, due diligence and
assurance that its major vendors will continue to provide service without
interruption due to the change in century at year-end 1999.

In mid 1997, the Company established an internal task force to identify
and/or resolve issues related to the year 2000 change. In addition to the
internal task force, the Company employs one full-time project manager as
well as outside consultants dedicated to the year 2000 project. The task
force has completed a comprehensive inventory of all systems used by the
Company. These systems include not only data processing and technology
driven systems, but also systems which may have embedded chips such as
elevators, security systems, building controls, and various office
handling equipment. Further, the Company has identified those systems
which are deemed "mission critical" to its business.

The Company maintains regular communications with vendors who provide
critical systems to the Company to verify that 1) their time-lines and
benchmarks are met, 2) testing is performed regularly and according to
schedule, and 3) necessary changes are being identified and addressed.
Similarly, the task force has established its own benchmarks and
timelines for managing the "year 2000 project", for evaluating and
changing (if necessary) other systems used internally by the Company, and
for prioritizing efforts with regard to overall year 2000 issues as they
apply to the Company.

Management has developed contingency plans in the event that efforts to
remedy the Company's systems are not fully successful or are not
completed in accordance with current expectations. The contingency plans
are being designed to address any failure to remedy the Company's
internal systems and to address failures of any third party vendors. The
contingency plans primarily include the use of substitute third party
service providers and/or a shift to manual processes.

The Company has begun testing all mission critical systems. Mission
critical testing for third party systems is partially dependent on the
vendor and accomplished mostly through user group and/or proxy testing.
Mission critical testing for in house systems is being performed by the
Company's year 2000 task force members, key members of the technology
group, and outside consultants. Management plans on having all testing of
mission critical systems completed by June 30, 1999.

After extensive investigation, the Company entered into an agreement in
August 1998 to change core data processing systems for strategic business
reasons unrelated to the Year 2000. Conversion to the new system is
anticipated to occur early in the second quarter of 1999. The new data
processing system will be licensed software operated "in-house". The
software was originally developed with four digit date fields, and
accordingly, the vendor has asserted that its system is fully "year 2000
ready". Other licensees of the software have reviewed and participated in
the vendor's testing relative to Year 2000. Based on review of the
vendor's testing scripts and discussions with other licensees, the
Company believes the testing to be satisfactory and the system "year 2000
compliant".

As a part of its credit analysis process, the Company has also developed
a project plan for assessing the Year 2000 readiness of its significant
credit customers. Initial information has been obtained from significant
borrowers relative to their year 2000 preparedness. The Company will
continue correspondence with these significant customers to ensure
continued progress and preparedness for year 2000.

The projected total cost of the year 2000 project is currently estimated
to be less than $200,000, consisting primarily of the internal project
manager's salary and external consulting fees. As of December 31, 1998, a
cumulative total of approximately $60,000 had been spent on the Year 2000
project. All costs associated with the year 2000 project are being
charged to expense as incurred. The estimate does not include the time
that internal staff and user departments are devoting to task force
meetings, planning, and testing relative to Year 2000. These costs are
not anticipated to have a material impact on operations.

Supplementary Business and Stock Information

GRAND PREMIER FINANCIAL, INC. is a registered bank holding company
established under Delaware Law.  The operations of Grand Premier and its
subsidiaries consist primarily of financial activities common to the
commercial banking industry, as well as trust and investment services,
data processing and electronic banking services and insurance.  Services
are extended to individuals, businesses, local government units and
institutional customers throughout Northern Illinois.  

Stock information
The Company's common stock is traded on The Nasdaq Stock Market under the
symbol GPFI.  As of December 31, 1998 there were 1,279 shareholders of
record.  A two-year record of trade prices by quarter, as well as cash
dividends declared, is as follows:

                1998                                1997
 Quarter  High     Low      Cash     Quarter  High     Low       Cash
                         Dividends                           Dividends
    1st  17.50   12.73      .082        1st  10.34    8.18      .073
    2nd  17.61   12.96      .082        2nd  13.64    9.77      .073
    3rd  15.00   10.68      .082        3rd  13.64   11.65      .073
    4th  14.00   10.00      .090        4th  13.52   11.71      .081
  Total                     .34       Total                     .30 



10K notice
The Annual Report to the Securities and Exchange Commission, Form 
10-K, may be obtained by shareholders free of charge upon written 
request to Alan J. Emerick, Secretary of the Corporation, Grand Premier
Financial, Inc., 486 West Liberty Street, Wauconda, Illinois 60084. The
Company's Form 10-K is also available on the EDGAR database at the
Securities and Exchange Commission's web site at http://www.sec.gov.


Web Site Information
Product information, financial information and other news concerning the
Company including earnings and other press releases are available at
Grand Premier's corporate web site at http://www.grandpremier.com.


<TABLE>

<CAPTION>
            Five Year Summary of Selected Financial Data


                                                1998        1997        1996        1995        1994
<S>                                       <C>         <C>         <C>         <C>          <C>    
Earnings:
Interest income                             $116,655    $120,621    $114,370    $108,782     $92,166
Interest expense                              54,295      57,166      56,558      53,541      38,928
Net interest income                           62,360      63,455      57,812      55,241      53,238
Provision for possible loan losses             3,600       9,700       2,875       1,435         555
Earnings before income taxes                  41,964      24,638      18,602      23,185      17,893
Net earnings                                  27,400      16,970      13,317      17,029      13,344
Net earnings available to common
  shareholders                              $ 26,660    $ 16,230    $ 12,377    $ 15,923    $ 12,140


Per common share statistics*:
Basic earnings per share                       $1.21       $ .74       $ .57       $ .73       $ .55
Diluted earnings per share                      1.17         .73         .56         .71         .54
Cash dividends declared                          .34         .30         .25         .17         .16
Book value                                     $7.92       $7.42       $6.77       $6.48       $5.12


Common shares outstanding - year end*     21,981,739  22,002,819  21,982,047  21,856,805  22,040,666

Return on beginning stockholders' equity      15.88%      10.73%       8.54%      13.39%      10.03%


Financial position - year end:
Securities held-to-maturity               $        -  $        -  $        -  $        -  $  114,174
Securities available for sale                516,083     454,400     535,687     598,570     457,161
Loans, net                                   943,757   1,012,468     955,366     865,317     752,973
Allowance for possible loan losses            12,443      15,404      10,116       9,435       9,738
Excess cost over fair value of net
  assets acquired                             15,281      16,885      18,489      20,227      21,601
Non-interest bearing deposits                199,084     187,943     211,015     196,534     198,659
Interest bearing deposits                  1,161,936   1,142,588   1,206,379   1,155,123   1,066,735
Total deposits                             1,361,020   1,330,531   1,417,394   1,351,657   1,265,394
Short-term borrowings                              -      33,000           -      38,475      29,210
Securities sold under agreements to
  repurchase                                  11,887      14,598      23,486      49,757      53,638
Long-term borrowings                          70,000      70,000      30,000      11,588       5,650
Stockholders' equity                         183,389     172,509     158,083     155,997     127,130
Total assets                              $1,648,241  $1,646,380  $1,642,538  $1,624,673  $1,493,067 



* Share statistics have been adjusted to reflect a three-for-one stock split in the form of a 200% stock
dividend to shareholders of record June 8, 1994 and a 10% stock dividend to shareholders of record on
November 15, 1998.

</TABLE>

  
Board of Directors

Jean M. Barry          Senior Investment Officer

Frank J. Callero       Partner
                       Callero and Callero LLP
                       (Certified Public Accountants)

Alan J. Emerick        Executive Vice President
                       and Chief Administrative Officer

Brenton J. Emerick     Retired Chief Executive Officer
                       Northern Illinois Financial Corporation
                       (Bank holding company)

James Esposito         Executive Vice President
                       Grand National Bank

Thomas D. Flanagan     Founding Partner
                       Flanagan, Bilton & Branagan (law firm)

R. Gerald Fox          President and Chief Executive Officer
                       F.I.A. Publishing Company
                       (Publisher of Financial Books and Periodicals)

Richard L. Geach       Chairman of the Board, President and
                       Chief Executive Officer

Noa W. Horner          President,
                       The Municipal Insurance Company of America
                       of Elgin, Illinois (insurance company)

Edward G. Maris        Private Investor

Howard A. McKee        Chairman of the Executive Committee

David L. Murray        Senior Executive Vice President
                       and Chief Financial Officer

H. Barry Musgrove      Chairman of the Board and President
                       Franz Manufacturing Company
                       (Manufacturer of anti-friction products)

Joseph C. Piland       Educational Consultant and retired President
                       Highland Community College

Stephen J. Schostok    Attorney and Partner
                       Dimonte Schostok & Lizak, Attorneys at Law

John Simcic            Chairman of the Board,
                       Maki & Associates, Inc. (d/b/a Century 21 United - 
                       real estate sales)


Executive Officers

Richard L. Geach        Chairman of the Board, President
                          and Chief Executive Officer

David L. Murray         Senior Executive Vice President
                          and Chief Financial Officer

Alan J. Emerick         Executive Vice President
                          and Chief Administrative Officer

Scott Dixon             Executive Vice President
                          and Senior Sales Leader

Larry W. O'Hara         Executive Vice President

William R. Theobald     Executive Vice President

Kenneth A. Urban        President,
                        Grand Premier Trust and Investment, Inc.

Jack R. Croffoot        Senior Vice President

Nanette K. Donton       Senior Vice President

Al Lutton               Senior Vice President

James K. Watts          Senior Vice President






                          EXHIBIT 21


                Subsidiaries of the Registrant


The following subsidiaries are 100% owned by Grand Premier Financial,
Inc.


Grand National Bank

Grand Premier Trust and Investment Services, Inc.

Grand Premier Operating Systems, Inc.

Grand Premier Insurance Services, Inc.

American Suburban Mortgage Corporation (inactive)


                              
                         EXHIBIT 23
                              
                              
                Independent Auditor's Consent
                              
                              
                              
The Board of Directors
Grand Premier Financial, Inc.:


We consent to incorporation by reference in the Registration Statement
(No. 333-03327) on Form S-4 and (Nos., 333-11635, 333-11645, 333-11663,
333-65455, and 333-65453) on Form S-8 of Grand Premier Financial, Inc. of
our report dated January 22, 1999, except for Note 18, which is as of
February 18, 1999 relating to the consolidated balance sheets of Grand
Premier Financial, Inc. and subsidiaries as of December 31, 1998 and
1997, and the related consolidated statements of earnings, changes in
stockholders' equity, and cash flows for each of the years in the
three-year period ended December 31, 1998, which report appears in the
December 31, 1998 annual report on Form 10-K of Grand Premier
Financial, Inc.



                             /s/ KPMG LLP
Chicago, Illinois
March 22, 1999