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                                   FORM 10-Q

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

               QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
                    OF THE SECURITIES EXCHANGE ACT OF 1934



    FOR QUARTER ENDED SEPTEMBER 30, 1998    COMMISSION FILE NUMBER 1-11792



                        MERCANTILE BANCORPORATION INC.

            (EXACT NAME OF REGISTRANT AS SPECIFIED IN ITS CHARTER)

<TABLE>
<S>                                                <C>
        MISSOURI                                              43-0951744
(STATE OF INCORPORATION)                           (IRS EMPLOYER IDENTIFICATION NO.)


      P.O. BOX 524          ST. LOUIS, MISSOURI               63166-0524
       (ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)               (ZIP CODE)
</TABLE>


       REGISTRANT'S TELEPHONE NUMBER, INCLUDING AREA CODE (314) 425-2525



INDICATE BY CHECK MARK WHETHER THE REGISTRANT (1) HAS FILED ALL REPORTS
REQUIRED TO BE FILED BY SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934 DURING THE PRECEDING 12 MONTHS (OR FOR SUCH SHORTER PERIOD THAT THE
REGISTRANT WAS REQUIRED TO FILE SUCH REPORTS), AND (2) HAS BEEN SUBJECT TO SUCH
FILING REQUIREMENTS FOR THE PAST 90 DAYS.


                                  X
                              ---------  ---------
                                 YES        NO


INDICATE THE NUMBER OF SHARES OUTSTANDING OF EACH OF THE ISSUER'S CLASSES OF
COMMON STOCK, AS OF THE LATEST PRACTICABLE DATE.


COMMON STOCK, $.01 PAR VALUE, 157,351,861 SHARES OUTSTANDING AS OF THE CLOSE OF
BUSINESS ON OCTOBER 30, 1998.


==============================================================================

<PAGE>
<PAGE>
<TABLE>
                                            INDEX

                                 PART I--FINANCIAL INFORMATION

<CAPTION>
                                                                                         PAGE NO.
                                                                                         --------

<S>                                                                               <C>
Item 1--Financial Statements

    Consolidated Statement of Income
    Three months and nine months ended September 30, 1998 and 1997                           3

    Consolidated Balance Sheet
    September 30, 1998 and 1997, and December 31, 1997                                       4

    Consolidated Statement of Changes in Shareholders' Equity
    Nine months ended September 30, 1998 and 1997                                            5

    Consolidated Statement of Cash Flows
    Nine months ended September 30, 1998 and 1997                                            6

    Notes to Consolidated Financial Statements                                               7

Item 2-- Management's Discussion and Analysis of Financial Condition
         and Results of Operations                                                          10

Item 3-- Quantitative and Qualitative Disclosures Regarding Market Risk

         There have been no material changes from the information provided
         in the December 31, 1997 Form 10-K.



                                   PART II--OTHER INFORMATION

Item 5--Other Information                                                                   28

Item 6--Exhibits and Reports on Form 8-K                                                    28

Signature                                                                                   30

Exhibit Index                                                                               31
</TABLE>

                                       2

<PAGE>
<PAGE>
PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

<TABLE>
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF INCOME (UNAUDITED)
(THOUSANDS EXCEPT PER SHARE DATA)

<CAPTION>
                                                                         THREE MONTHS ENDED     NINE MONTHS ENDED
                                                                            SEPTEMBER 30           SEPTEMBER 30
                                                                          1998       1997        1998        1997
                                                                          ----       ----        ----        ----
<S>                                                                     <C>        <C>        <C>         <C>
INTEREST INCOME
  Interest and fees on loans and leases                                  $443,631   $462,063  $1,331,843  $1,204,182
  Investments in debt and equity securities
    Trading                                                                 1,819      1,641       6,730       4,443
    Taxable                                                               138,986    123,657     415,993     278,911
    Tax-exempt                                                              5,491      6,324      17,546      19,469
                                                                         --------   --------  ----------  ----------
        Total Investments in Debt and Equity Securities                   146,296    131,622     440,269     302,823
  Due from banks--interest bearing                                          3,285      3,192       9,861       6,561
  Federal funds sold and repurchase agreements                              4,049      5,535      12,555      13,036
                                                                         --------   --------  ----------  ----------
        Total Interest Income                                             597,261    602,412   1,794,528   1,526,602
INTEREST EXPENSE
  Interest bearing deposits                                               226,286    236,494     687,115     582,429
  Foreign deposits                                                          5,697      7,708      19,555      19,147
  Short-term borrowings                                                    38,864     53,001     139,117     108,228
  Bank notes                                                                  374      2,687       3,065       7,860
  Long-term debt and mandatorily redeemable preferred securities           52,961     18,800     124,574      36,408
                                                                         --------   --------  ----------  ----------
        Total Interest Expense                                            324,182    318,690     973,426     754,072
                                                                         --------   --------  ----------  ----------
      NET INTEREST INCOME                                                 273,079    283,722     821,102     772,530
PROVISION FOR POSSIBLE LOAN LOSSES<F*>                                     23,871     29,209      39,752      78,728
                                                                         --------   --------  ----------  ----------
      NET INTEREST INCOME AFTER PROVISION FOR POSSIBLE LOAN LOSSES        249,208    254,513     781,350     693,802
OTHER INCOME
  Trust                                                                    27,442     26,888      84,386      77,535
  Service charges                                                          30,498     29,770      87,815      79,941
  Investment banking and brokerage                                          9,760     10,837      30,652      28,021
  Mortgage banking                                                          6,149      7,819      21,051      14,691
  Gain on sale of mortgage servicing rights                                    --         --      23,155          --
  Credit card fees                                                          3,045      5,836       9,128      16,927
  Securitization revenue                                                    5,775      3,357      14,818      15,374
  Securities gains<F*>                                                      2,297      2,131       9,584       5,248
  Gain on sale of subsidiaries<F*>                                         48,051         --      48,051          --
  Miscellaneous                                                            28,822     25,706      84,901      67,386
                                                                         --------   --------  ----------  ----------
      Total Other Income                                                  161,839    112,344     413,541     305,123
OTHER EXPENSE
  Salaries                                                                106,007    101,728     312,385     280,613
  Employee benefits                                                        18,148     22,800      58,727      64,595
  Net occupancy                                                            17,448     17,018      49,647      45,373
  Equipment                                                                21,160     18,307      63,273      50,318
  Intangible asset amortization                                            14,311     15,276      43,369      25,180
  Loss on sale of credit card loans<F*>                                        --     50,000          --      50,000
  Miscellaneous<F*>                                                       134,078    114,038     229,015     252,178
                                                                         --------   --------  ----------  ----------
      Total Other Expense                                                 311,152    339,167     756,416     768,257
                                                                         --------   --------  ----------  ----------
        INCOME BEFORE INCOME TAXES                                         99,895     27,690     438,475     230,668
INCOME TAXES<F*>                                                           36,751     14,334     153,325      89,245
                                                                         --------   --------  ----------  ----------
        NET INCOME<F*>                                                   $ 63,144   $ 13,356  $  285,150  $  141,423
                                                                         ========   ========  ==========  ==========
PER SHARE DATA
  Basic earnings per share                                                   $.41       $.09       $1.87       $1.03
  Diluted earnings per share                                                  .41        .09        1.84        1.01
  Dividends declared                                                          .31        .287        .93         .861

<FN>
<F*>Includes the following nonrecurring amounts:
    Provision for possible loan losses                                   $ 19,600   $ 13,800  $   19,600  $   20,340
    Securities losses                                                       1,649         --       1,649          --
    Gain on sale of subsidiaries                                          (48,051)        --     (48,051)         --
    Loss on sale of credit card loans                                          --     50,000          --      50,000
    Miscellaneous expense                                                  89,192     69,530      89,192     121,393
    Income tax benefit                                                    (15,028)   (43,379)    (15,028)    (59,356)
                                                                         --------   --------  ----------  ----------
      Reduction of Net Income                                            $ 47,362   $ 89,951  $   47,362  $  132,377
                                                                         ========   ========  ==========  ==========
</TABLE>

                                       3

<PAGE>
<PAGE>
<TABLE>
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEET
(THOUSANDS)
<CAPTION>
                                                                                   SEPT. 30                   SEPT. 30
                                                                                     1998        DEC. 31        1997
                                                                                 (UNAUDITED)       1997     (UNAUDITED)
                                                                                 -----------     -------    -----------
<S>                                                                              <C>           <C>          <C>
ASSETS
    Cash and due from banks                                                      $ 1,175,006   $ 1,330,512  $ 1,169,211
    Due from banks--interest bearing                                                 153,408       251,909      313,591
    Federal funds sold and repurchase
      agreements                                                                     214,889       303,859      192,999
    Investments in debt and equity
      securities
      Trading                                                                         98,301        70,536      137,817
      Available-for-sale (Amortized cost
        of $8,956,729, $8,023,157 and
        $7,585,601, respectively)                                                  9,061,675     8,059,066    7,624,053
      Held-to-maturity (Estimated fair
        value of $117,538, $341,954 and
        $374,419, respectively)                                                      116,007       335,279      365,195
                                                                                 -----------   -----------  -----------
          Total Investments in Debt and
            Equity Securities                                                      9,275,983     8,464,881    8,127,065
    Loans held-for-sale                                                              129,569        96,955       83,879
    Loans and leases, net of unearned
      income                                                                      21,871,875    21,265,000   21,098,142
                                                                                 -----------   -----------  -----------
          Total Loans and Leases                                                  22,001,444    21,361,955   21,182,021
    Reserve for possible loan losses                                                (308,869)     (284,165)    (286,042)
                                                                                 -----------   -----------  -----------
          Net Loans and Leases                                                    21,692,575    21,077,790   20,895,979
    Bank premises and equipment                                                      541,099       531,650      513,418
    Intangible assets                                                                794,593       839,285      853,722
    Receivable for credit card loans
      sold                                                                                --            --      372,835
    Other assets                                                                     748,968       532,304      685,848
                                                                                 -----------   -----------  -----------
          Total Assets                                                           $34,596,521   $33,332,190  $33,124,668
                                                                                 ===========   ===========  ===========
LIABILITIES
    Deposits
      Non-interest bearing                                                       $ 3,788,416   $ 3,956,138   $3,463,883
      Interest bearing                                                            20,426,340    20,267,878   20,520,898
      Foreign                                                                        327,551       585,439      669,483
                                                                                  ----------   -----------   ----------
          Total Deposits                                                          24,542,307    24,809,455   24,654,264
    Federal funds purchased and
      repurchase agreements                                                        1,562,384     2,127,443    2,420,159
    Other short-term borrowings                                                    1,000,750     1,551,097    1,546,227
    Bank notes                                                                        25,000       175,000      175,000
    Long-term Federal Home Loan Bank
      advances                                                                     2,888,728       578,484      261,538
    Other long-term debt                                                             793,026       789,687      789,731
    Company obligated mandatorily
      redeemable preferred securities
      of Mercantile Capital Trust I                                                  150,000       150,000      150,000
    Other liabilities                                                                575,652       388,722      428,337
                                                                                  ----------   -----------   ----------
          Total Liabilities                                                       31,537,847    30,569,888   30,425,256
Commitments and contingent liabilities                                                    --            --           --

<CAPTION>

                                           SEPT. 30      DEC. 31     SEPT. 30
                                             1998          1997        1997
                                           --------      -------     --------
<S>                                       <C>          <C>          <C>          <C>           <C>          <C>
SHAREHOLDERS' EQUITY
    Preferred stock--no par value
      Shares authorized                        5,000        5,000        5,000
      Shares issued and outstanding               --           --           --            --            --           --
    Common stock--$.01 par value
      Shares authorized                      400,000      200,000      200,000
      Shares issued                          157,346      148,874      148,624         1,574         1,489        1,486
    Capital surplus                                                                  996,239     1,016,844    1,015,555
    Retained earnings                                                              1,993,671     1,724,752    1,660,354
    Accumulated other comprehensive
      income                                                                          70,607        25,222       27,431
    Treasury stock, at cost                       76          162          157        (3,417)       (6,005)      (5,414)
                                                                                 -----------   -----------  -----------
          Total Shareholders' Equity                                               3,058,674     2,762,302    2,699,412
                                                                                 -----------   -----------  -----------
          Total Liabilities and
            Shareholders' Equity                                                 $34,596,521   $33,332,190  $33,124,668
                                                                                 ===========   ===========  ===========
</TABLE>

                                       4

<PAGE>
<PAGE>
<TABLE>
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY
(UNAUDITED)
($ IN THOUSANDS)

<CAPTION>
                                                         COMMON STOCK
                                                    ----------------------                                           TOTAL
                                                    OUTSTANDING               CAPITAL    RETAINED     TREASURY    SHAREHOLDERS'
                                                       SHARES      DOLLARS    SURPLUS   EARNINGS<F*>    STOCK        EQUITY
                                                    -----------    -------    -------   ------------  --------    -------------
<S>                                                 <C>           <C>        <C>         <C>         <C>          <C>
BALANCE AT DECEMBER 31, 1996                        134,174,597   $ 683,832  $   16,091  $1,647,521  $ (84,201)    $2,263,243
Net income                                                                                  141,423                   141,423
Common dividends declared:
  Mercantile Bancorporation Inc.--$.861 per share                                           (95,086)                  (95,086)
  Pooled companies prior to acquisition                                                     (24,313)                  (24,313)
Issuance of common stock in acquisitions of:
  Roosevelt Financial Group, Inc.                    18,948,884         123     353,128       6,872    280,981        641,104
  Regional Bancshares, Inc.                             900,625                    (474)        361     28,813         28,700
Change in par value of common stock from
  $5.00 per share to $.01 per share                                (676,575)    676,575                                    --
Issuance of common stock for:
  Employee incentive plans                              695,266         320       6,166                  4,773         11,259
  Convertible notes                                      75,384          80         758                                   838
Other comprehensive income                                                                   11,014                    11,014
Purchase of treasury stock                           (6,750,199)                                      (285,958)      (285,958)
Reissuance of treasury stock                                         (7,396)    (42,950)                50,346             --
Pre-merger transactions of pooled companies and
  other                                                 422,151       1,102       6,261          (7)      (168)         7,188
                                                    -----------   ---------  ----------  ----------  ---------     ----------
BALANCE AT SEPTEMBER 30, 1997                       148,466,708   $   1,486  $1,015,555  $1,687,785  $  (5,414)    $2,699,412
                                                    ===========   =========  ==========  ==========  =========     ==========

BALANCE AT DECEMBER 31, 1997                        148,712,307   $   1,489  $1,016,844  $1,749,974  $  (6,005)    $2,762,302
Net income                                                                                  285,150                   285,150
Common dividends declared:
  Mercantile Bancorporation Inc.--$.93 per share                                           (130,853)                 (130,853)
  Pooled companies prior to acquisition                                                     (10,466)                  (10,466)
Issuance of common stock in acquisitions of:
  First Financial Bancorporation                      3,139,069          31       8,534      50,343                    58,908
  Financial Services Corporation of the Midwest       2,071,448          21       5,093      27,730                    32,844
  HomeCorp, Inc.                                        854,760           9       6,727      13,792                    20,528
  Horizon Bancorp, Inc.                               2,549,970          25      10,755      35,615        357         46,752
Issuance of common stock for:
  Employee incentive plans                            1,453,000          13      38,467                  7,462         45,942
  Convertible notes                                      23,892           1         265                                   266
Other comprehensive income                                                                   43,007                    43,007
Reissuance of treasury stock                                                    (94,471)                94,471             --
Purchase of treasury stock                           (1,806,250)                                       (99,702)       (99,702)
Pre-merger transactions of pooled companies and
  other                                                 271,638         (15)      4,025         (14)                    3,996
                                                    -----------   ---------  ----------  ----------  ---------     ----------
BALANCE AT SEPTEMBER 30, 1998                       157,269,834   $   1,574  $  996,239  $2,064,278  $  (3,417)    $3,058,674
                                                    ===========   =========  ==========  ==========  =========     ==========
<FN>
<F*>Includes accumulated other comprehensive income.
</TABLE>

                                       5

<PAGE>
<PAGE>
<TABLE>
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED)
(THOUSANDS)

<CAPTION>
                                                                                               NINE MONTHS ENDED
                                                                                                 SEPTEMBER 30
                                                                                               1998        1997
                                                                                               ----        ----
<S>                                                                                        <C>          <C>
OPERATING ACTIVITIES
  Net income                                                                               $   285,150  $   141,423
  Adjustments to reconcile net income to net cash provided by operating activities
    Provision for possible loan losses                                                          39,752       78,728
    Depreciation and amortization                                                               55,323       44,397
    Provision for deferred income taxes (credits)                                               (6,593)         (78)
    Net change in loans held-for-sale                                                          (26,540)      (8,502)
    Net change in trading securities                                                            (4,088)    (147,324)
    Net change in accrued interest receivable                                                   (5,479)          59
    Net change in accrued interest payable                                                      11,282       39,932
    Other, net                                                                                 (72,171)     (57,119)
                                                                                           -----------  -----------
      Net Cash Provided by Operating Activities                                                276,636       91,516

INVESTING ACTIVITIES
  Investments in debt and equity securities, other than trading securities
    Purchases                                                                               (5,463,631)  (2,754,785)
    Proceeds from maturities                                                                 3,859,077    2,576,787
    Proceeds from sales of available-for-sale securities                                     1,283,036      430,056
  Net change in loans and leases                                                               146,108     (781,599)
  Purchases of loans and leases                                                               (434,839)    (248,655)
  Proceeds from sale of mortgage servicing rights                                               26,330           --
  Proceeds from sales of loans and leases                                                      640,738      413,823
  Purchases of premises and equipment                                                          (62,764)     (75,349)
  Proceeds from sales of premises and equipment                                                 19,361        4,011
  Proceeds from sales of foreclosed property                                                    41,198       38,153
  Cash and cash equivalents from acquisitions, net of cash paid                                125,833     (231,736)
  Sale of banking offices, net of cash paid                                                     57,947     (167,488)
  Other, net                                                                                    18,046       (8,252)
                                                                                           -----------  -----------
      Net Cash Provided (Used) by Investing Activities                                         256,440     (805,034)

FINANCING ACTIVITIES
  Net change in non-interest bearing, savings, interest bearing demand and
    money market deposit accounts                                                             (376,849)     915,819
  Net change in time certificates of deposit under $100,000                                   (949,703)  (1,668,756)
  Net change in time certificates of deposit $100,000 and over                                  32,068       11,197
  Net change in other time deposits                                                            (60,772)     (21,219)
  Net change in foreign deposits                                                              (257,888)     417,596
  Net change in short-term borrowings                                                       (1,166,957)     524,887
  Principal payments on bank notes                                                            (150,000)          --
  Issuance of long-term FHLB advances and other long-term debt                               2,336,500      616,835
  Issuance of company-obligated mandatorily
    redeemable preferred securities                                                                 --      150,000
  Principal payments on long-term debt                                                         (65,906)     (13,402)
  Cash dividends paid                                                                         (135,222)    (119,044)
  Proceeds from issuance of common stock for employee incentive plans and
    pre-merger transactions of pooled companies                                                 18,496       18,176
  Purchase of treasury stock                                                                   (99,702)    (297,733)
  Other, net                                                                                      (118)      (1,351)
                                                                                           -----------  -----------
      Net Cash Provided (Used) by Financing Activities                                        (876,053)     533,005
                                                                                           -----------  -----------
DECREASE IN CASH AND CASH EQUIVALENTS                                                         (342,977)    (180,513)
CASH AND CASH EQUIVALENTS AT BEGINNING OF PERIOD                                             1,886,280    1,856,314
                                                                                           -----------  -----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD                                                 $ 1,543,303  $ 1,675,801
                                                                                           ===========  ===========
</TABLE>

                                       6

<PAGE>
<PAGE>
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE A

ACCOUNTING POLICIES

The consolidated financial statements include all adjustments which are, in the
opinion of management, necessary for the fair statement of the results of these
periods and are of a normal recurring nature, with the exception of the
nonrecurring charges as disclosed with an asterisk on the Consolidated
Statement of Income on page 3.

NOTE B

NEW ACCOUNTING STANDARDS

Financial Accounting Standard ("FAS") 128, "Earnings per Share," was issued in
February 1997. This statement, effective in the fourth quarter of 1997,
requires additional reporting of earnings per share which gives effect to
dilutive common share equivalents such as stock options or convertible notes.
The Corporation's disclosure under FAS 128 is included in Note C to the
Consolidated Financial Statements.

FAS 130, "Reporting Comprehensive Income," was issued in June 1997.
Comprehensive income is defined as net income plus certain items that are
recorded directly to shareholders' equity, such as unrealized gains and losses
on available-for-sale securities. Components of the Corporation's comprehensive
income are included in Note E.

FAS 131, "Disclosures about Segments of an Enterprise and Related Information,"
is effective for financial statements for periods beginning after December 15,
1997, but interim period reporting is not required in 1998. An operating
segment is defined under FAS 131 as a component of an enterprise that engages
in business activities that generate revenue and expense for which operating
results are reviewed by the chief operating decision maker in the determination
of resource allocation and performance. Mercantile is currently evaluating the
impact of FAS 131 on future financial statement disclosures.

FAS 132, "Employers' Disclosures about Pensions and Other Postretirement
Benefits," addresses disclosure of such benefit plans and is effective for
fiscal years beginning after December 31, 1997. The Corporation does not
anticipate a significant impact when making these new disclosures.

FAS 133, "Accounting for Derivative Instruments and Hedging Activities," which
was issued in June 1998, establishes accounting and reporting standards for
derivative instruments and hedging activities. Under FAS 133, derivatives are
recognized on the balance sheet at fair value as an asset or liability. Changes
in the fair value of derivatives are reported as a component of other
comprehensive income or recognized as earnings through the income statement
depending on the nature of the instrument. FAS 133 is effective for all
quarters of fiscal years beginning after June 15, 1999 with earlier adoption
permitted. The Corporation is currently evaluating FAS 133's effect.

FAS 134, "Accounting for Mortgage-Backed Securities Retained after the
Securitization of Mortgage Loans Held for Sale by a Mortgage Banking
Enterprise," is effective in the first fiscal quarter beginning after December
15, 1998. FAS 134 is not anticipated to impact Mercantile.

NOTE C

EARNINGS PER SHARE

Basic earnings per share is calculated by dividing net income by the weighted
average number of common shares outstanding during the period.

                                       7

<PAGE>
<PAGE>
Diluted earnings per share gives effect to both the increase in the average
shares outstanding that would have resulted from both the exercise of dilutive
stock options and the conversion of the entire balance of outstanding
convertible notes. Net income is increased in the diluted earnings per share
computation by interest expense that would not be incurred on notes if they
converted, net of taxes. The components of basic and diluted earnings per share
are as follows:

<TABLE>
<CAPTION>
                                                                   (THOUSANDS EXCEPT PER SHARE DATA)
                                                                THIRD QUARTER              NINE MONTHS
                                                              1998         1997         1998         1997
                                                              ----         ----         ----         ----
<S>                                                        <C>          <C>          <C>          <C>
BASIC
Net income                                                     $63,144      $13,356     $285,150     $141,423
Weighted average shares outstanding                        153,427,490  148,327,222  152,150,676  137,117,594
    BASIC EARNINGS PER SHARE                                      $.41         $.09        $1.87        $1.03

DILUTED
Net income                                                     $63,144      $13,356     $285,150     $141,423
Interest on convertible notes, net of taxes                         10           14           33           69
                                                               -------      -------     --------     --------
    Diluted Net Income                                         $63,154      $13,370     $285,183     $141,492
                                                               =======      =======     ========     ========
Weighted average common shares outstanding                 153,427,490  148,327,222  152,150,676  137,117,594
Employee incentive plans                                     2,209,843    2,731,394    2,494,483    2,303,074
Convertible notes                                               83,850      108,834       91,849      146,850
                                                           -----------  -----------  -----------  -----------
    Diluted Average Shares Outstanding                     155,721,183  151,167,450  154,737,008  139,567,518
                                                           ===========  ===========  ===========  ===========
    DILUTED EARNINGS PER SHARE                                    $.41         $.09        $1.84        $1.01
</TABLE>

All per share amounts and average shares outstanding have been restated to give
effect to a three-for-two stock split distributed on October 1, 1997. Per share
data for 1997 gives effect to the computational and reporting requirements of
FAS 128.

NOTE D

ACQUISITIONS

On July 1, 1998, the Corporation acquired CBT Corporation ("CBT") of Paducah,
Kentucky, and Firstbank of Illinois Co. ("Firstbank"), headquartered in
Springfield, Illinois. The CBT and Firstbank acquisitions were accounted for
under the pooling-of-interests method, and accordingly, Mercantile's financial
statements have been restated. Net income and basic earnings per share prior to
this restatement were as follows:

<TABLE>
<CAPTION>
                                                   (THOUSANDS EXCEPT
                                                    PER SHARE DATA)

                                                   SIX MONTHS ENDED
                                                     JUNE 30, 1998
                                                   -----------------
<S>                                               <C>
MERCANTILE
Net income                                             $198,902
Basic earnings per share                                   1.50
CBT
Net income                                                7,151
Basic earnings per share                                   1.40
FIRSTBANK
Net income                                               15,953
Basic earnings per share                                   1.21
</TABLE>

On July 1, 1997, the Corporation acquired Roosevelt Financial Group, Inc.
("Roosevelt"), a $7.3 billion-asset thrift holding company headquartered in St.
Louis, Missouri. The Roosevelt acquisition was accounted for as a purchase.
Unaudited pro forma combined consolidated financial data including the
Corporation and Roosevelt for the nine months ending September 30, 1997 is

                                       8

<PAGE>
<PAGE>
disclosed below. The unaudited pro forma combined consolidated financial data
provided includes the impact of goodwill amortization and the reduction in net
interest income due to: 1) interest lost on cash paid for share repurchases or
paid directly to Roosevelt shareholders as consideration; and 2) interest on
$650 million of senior debt, subordinated debt and redeemable preferred
securities issued in 1997 largely to finance the Roosevelt acquisition, offset
by interest earned on funds not utilized in the acquisition.

<TABLE>
<CAPTION>
                                     (THOUSANDS EXCEPT PER SHARE DATA)

                                         FOR THE NINE MONTHS ENDED
                                             SEPTEMBER 30, 1997
                                     ---------------------------------
<S>                                  <C>
Net interest income                               $849,323
Other income                                       292,549
Net income                                         100,854
Basic earnings per share                               .69
</TABLE>

In the third quarter of 1998, the Corporation consummated its acquisitions of:
1) Financial Services Corporation of the Midwest ("FSCM"), headquartered in
Rock Island, Illinois; 2) Iowa City-based First Financial Bancorporation
("First Financial"); and 3) Bruno, Stolze & Company, Inc. ("Bruno Stolze"), a
St. Louis-based discount brokerage company. The acquisitions of FSCM and First
Financial were accounted for as poolings-of-interests. However, due to their
immateriality the Corporation did not restate its financial statements. The
Bruno Stolze acquisition was accounted for under the purchase method of
accounting.

NOTE E

COMPREHENSIVE INCOME

Comprehensive income as defined by FAS 130 is as follows:

<TABLE>
<CAPTION>
                                                                               (THOUSANDS)
                                                                   THIRD QUARTER          NINE MONTHS
                                                                  1998       1997       1998       1997
                                                                  ----       ----       ----       ----
<S>                                                             <C>        <C>        <C>        <C>
Net income                                                      $ 63,144    $13,356   $285,150   $141,423
Other comprehensive income before tax:
    Holding gains on available-for-sale securities                61,172     20,951     75,749     22,193
    Less: Reclassification adjustment for securities gains
      included in net income above                                (2,297)    (2,131)    (9,584)    (5,248)
                                                                --------    -------   --------   --------
    Other Comprehensive Income Before Tax                         58,875     18,820     66,165     16,945
Income Taxes Related to Other Comprehensive Income               (20,606)    (6,587)   (23,158)    (5,931)
                                                                --------    -------   --------   --------
    Other Comprehensive Income Net of Tax                         38,269     12,233     43,007     11,014
                                                                --------    -------   --------   --------
    COMPREHENSIVE INCOME                                        $101,413    $25,589   $328,157   $152,437
                                                                ========    =======   ========   ========
</TABLE>

NOTE F

COMPANY-OBLIGATED MANDATORILY REDEEMABLE PREFERRED SECURITIES OF MERCANTILE
CAPITAL TRUST I

Mercantile Capital Trust I is a subsidiary of which the Corporation owns all
the outstanding common securities; its sole assets are the $150,000,000 in
mandatorily redeemable preferred securities, and considered together, the
back-up undertakings constitute a full and unconditional guarantee by the
Corporation of the trust's obligations under the preferred securities.

                                       9

<PAGE>
<PAGE>
Item 2. Management's Discussion and Analysis of Financial Condition and Results
of Operations.

<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------

EXHIBIT 1
HIGHLIGHTS<F1>

<CAPTION>
                                                                THIRD QUARTER                           NINE MONTHS
($ IN THOUSANDS EXCEPT PER SHARE DATA)                 1998         1997        CHANGE        1998         1997        CHANGE
<S>                                                 <C>          <C>          <C>          <C>          <C>          <C>
-----------------------------------------------------------------------------------------------------------------------------------
PER SHARE DATA
    Diluted earnings per share                             $.41         $.09          --%        $1.84        $1.01        82.2%
    Basic earnings per share                                .41          .09          --          1.87         1.03        81.6
    Dividends declared                                      .31          .287        8.0           .93          .861        8.0
    Book value at September 30                            19.45        18.18         7.0         19.45        18.18         7.0
    Market price at September 30                         48 3/8       50 3/4        (4.7)       48 3/8       50 3/4        (4.7)
-----------------------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS AND SELECTED RATIOS
EXCLUDING NONRECURRING AMOUNTS<F2>
    Adjusted net income                                $110,506     $103,307         7.0%     $332,512     $273,800        21.4%
    Adjusted diluted earnings per share                     .71          .68         4.4          2.15         1.96         9.7
    Adjusted basic earnings per share                       .72          .70         2.9          2.19         2.00         9.5
    Return on assets                                       1.29%        1.25%                     1.29%        1.32%
    Return on equity                                      14.84        14.94                     15.24        15.30
    Efficiency ratio                                      56.56        54.83                     55.58        54.69
    Other expense to average assets                        2.59         2.66                      2.59         2.87
-----------------------------------------------------------------------------------------------------------------------------------
OPERATING RESULTS<F3>
    Taxable-equivalent net interest income             $276,985     $288,199        (3.9)%    $833,434     $786,290         6.0%
    Tax-equivalent adjustment                             3,906        4,477       (12.8)       12,332       13,760       (10.4)
    Net interest income                                 273,079      283,722        (3.8)      821,102      772,530         6.3
    Provision for possible loan losses                   23,871       29,209       (18.3)       39,752       78,728       (49.5)
    Other income                                        161,839      112,344        44.1       413,541      305,123        35.5
    Other expense                                       311,152      339,167        (8.3)      756,416      768,257        (1.5)
    Income taxes                                         36,751       14,334          --       153,325       89,245        71.8
    Net income                                           63,144       13,356          --       285,150      141,423          --
-----------------------------------------------------------------------------------------------------------------------------------
SELECTED RATIOS AND DATA<F3>
    Return on assets                                        .74%         .16%                     1.10%         .68%
    Return on equity                                       8.48         1.93                     13.07         7.90
    Efficiency ratio                                      70.91        84.68                     60.66        70.39
    Other expense to average assets                        3.63         4.11                      2.93         3.69

    Net interest rate margin                               3.51         3.79                      3.56         4.13

    Tangible equity to tangible assets                                                            6.70         5.72
    Equity to assets                                                                              8.84         8.15
    Tier I capital to risk-adjusted assets                                                        9.87         9.35
    Total capital to risk-adjusted assets                                                        12.75        12.56
    Leverage                                                                                      7.12         6.30

    Reserve for possible loan losses to
      outstanding loans                                                                           1.40         1.35
    Reserve for possible loan losses to
      non-performing loans                                                                      231.98       217.65
    Non-performing loans to outstanding loans                                                      .61          .62

    Banks                                                                                           20           37
    Banking offices                                                                                628          666
    Full-time equivalent employees                                                              10,919       10,905
-----------------------------------------------------------------------------------------------------------------------------------
AVERAGE BALANCES
    Total assets                                    $34,260,343  $33,030,120         3.7%  $34,414,208  $27,749,161        24.0%
    Earning assets                                   31,275,935   30,208,065         3.5    31,344,274   25,478,078        23.0
    Loans and leases                                 21,673,393   21,587,546          .4    21,690,744   18,621,892        16.5
    Deposits                                         24,371,409   24,788,328        (1.7)   24,793,816   21,452,650        15.6
    Shareholders' equity                              2,979,246    2,766,664         7.7     2,909,216    2,385,789        21.9
-----------------------------------------------------------------------------------------------------------------------------------
<FN>
<F1> All previously reported financial information has been restated to reflect
     the July 1, 1998 mergers with Firstbank of Illinois Co. and CBT
     Corporation, which were accounted for as poolings-of-interests.
<F2> Nonrecurring amounts reduced net income in the first nine months of 1998
     and 1997 by $47,362,000 and $132,377,000, respectively.
<F3> Includes nonrecurring amounts noted in (2) above.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


                                      10

<PAGE>
<PAGE>
PERFORMANCE SUMMARY

   Net income for Mercantile Bancorporation Inc. ("Mercantile" or
   "Corporation") was $63,144,000 in the third quarter of 1998 versus
   $13,356,000 in the same period of 1997. Basic and diluted earnings per share
   was $.41 compared with $.09 in the third quarter of 1997. Net income for the
   nine months ended September 30, 1998 was $285,150,000 compared with
   $141,423,000 last year, and the corresponding diluted earnings per share
   figures were $1.84 and $1.01, respectively.

   The comparison of operating results from 1997 to 1998 is significantly
   affected by several factors. The Corporation recorded one-time after-tax
   acquisition costs of $76,783,000 ($.49 per share) in the third quarter of
   1998. Additionally, in the third quarter the Corporation recorded a gain on
   the required divestiture of the two Missouri banks owned by Firstbank of
   Illinois Co. ("Firstbank"). The sale of these banks, which had total assets
   of approximately $300 million, resulted in an after-tax gain of $.19 per
   share. Thus the one-time acquisition costs net of the sale proceeds was $.30
   per share in the third quarter of 1998.

   In 1997, similar expense was recorded for Roosevelt Financial Group, Inc.
   ("Roosevelt") in the third quarter of 1997 and for both Mark Twain
   Bancshares, Inc. ("Mark Twain") and Regional Bancshares, Inc. in the second
   quarter of 1997. Another one-time expense resulted in a pre-tax charge to
   earnings of $50,000,000 in the third quarter of 1997, as the Corporation
   sold $405 million in former co-branded credit card receivables to Direct
   Merchants Credit Card Bank, N.A. at a discount.

   Exhibit 2 presents third quarter and year-to-date 1997 and 1998 results
   adjusted to exclude such nonrecurring amounts, and as shown, year-to-date
   adjusted diluted earnings per share was $2.15 in 1998, up 9.7% from the 1997
   comparable figure of $1.96. For the third quarter of 1998, the adjusted
   figure was $.71, up 4.4% from the 1997 comparable per share amount.

<TABLE>
-------------------------------------------------------------------------------

EXHIBIT 2
ADJUSTED RESULTS

<CAPTION>
                                                DILUTED
                               NET INCOME      EARNINGS         RETURN ON
                              (THOUSANDS)      PER SHARE         ASSETS
                              -----------      ---------        ---------
<S>                           <C>              <C>             <C>
THIRD QUARTER ENDED
  SEPTEMBER 30, 1998:
Reported                        $ 63,144         $ .41             .74%
Acquisition expenses              76,783           .49             .89
Gain on sale of
  subsidiaries                   (29,421)         (.19)           (.34)
                                --------         -----            ----
Adjusted                        $110,506         $ .71            1.29%
                                ========         =====            ====
NINE MONTHS ENDED
  SEPTEMBER 30, 1998:
Reported                        $285,150         $1.84            1.10%
Acquisition expenses              76,783           .50             .30
Gain on sale of
  subsidiaries                   (29,421)         (.19)           (.11)
                                --------         -----            ----
Adjusted                        $332,512         $2.15            1.29%
                                ========         =====            ====
THIRD QUARTER ENDED
  SEPTEMBER 30, 1997:
Reported                        $ 13,356         $ .09             .16%
Acquisition expenses              57,451           .38             .70
Loss on sale of credit card
  loans                           32,500           .21             .39
                                --------         -----            ----
Adjusted                        $103,307         $ .68            1.25%
                                ========         =====            ====
NINE MONTHS ENDED
  SEPTEMBER 30, 1997:
Reported                        $141,423         $1.01             .68%
Acquisition expenses              99,877           .72             .48
Loss on sale of credit card
  loans                           32,500           .23             .16
                                --------         -----            ----
Adjusted                        $273,800         $1.96            1.32%
                                ========         =====            ====
-------------------------------------------------------------------------------
</TABLE>


                                      11

<PAGE>
<PAGE>
   The Corporation believes it is significant to disclose cash based earnings,
   which excludes intangible asset amortization, because it is more indicative
   of cash flows, and thus, the Corporation's ability to support growth and pay
   dividends. Mercantile added $608 million of goodwill to its balance sheet in
   conjunction with the purchase of Roosevelt on July 1, 1997. Intangible asset
   amortization for the first nine months of 1998 was $43,369,000 compared with
   $25,180,000 for the same 1997 period. Third quarter 1998 cash based adjusted
   diluted earnings per share was $.80, up 2.6% from the $.78 earned in 1997.
   See Exhibit 3 for other cash based performance ratios.

<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------

EXHIBIT 3
CASH BASED EARNINGS
($ IN THOUSANDS EXCEPT PER SHARE DATA)

<CAPTION>
                                                                        THIRD QUARTER                       NINE MONTHS
                                                                 1998       1997         CHANGE     1998       1997         CHANGE
                                                                 ----       ----         ------     ----       ----         ------
<S>                                                            <C>        <C>           <C>       <C>        <C>           <C>
Adjusted Net Income                                            $110,506   $103,307         7.0%   $332,512   $273,800        21.4%
Add Back:
  Goodwill amortization                                          13,700     13,876        (1.3)     41,503     20,884        98.7
  Other intangible asset amortization                               611      1,400       (56.4)      1,866      4,296       (56.6)
                                                               --------   --------                --------   --------
    Total Intangible Asset Amortization                          14,311     15,276        (6.3)     43,369     25,180        72.2
Less:
  Tax effect                                                       (221)      (461)      (52.1)       (673)    (1,410)      (52.3)
                                                               --------   --------                --------   --------
CASH BASED ADJUSTED NET INCOME                                 $124,596   $118,122         5.5    $375,208   $297,570        26.1
                                                               ========   ========                ========   ========
CASH BASED ADJUSTED DILUTED EARNINGS PER SHARE                     $.80       $.78         2.6       $2.43      $2.13        14.1

CASH BASED ADJUSTED PERFORMANCE RATIOS
  Return on tangible assets                                        1.49%      1.47%                   1.49%      1.45%
  Return on tangible equity                                       22.91      24.90                   23.93      20.34
  Efficiency ratio                                                52.91      51.02                   51.96      52.38
  Other expense to average tangible assets                         2.48       2.54                    2.48       2.79
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>


   Exhibit 4 details acquisitions completed during 1997 and 1998. On July 1,
   1998, Mercantile completed the acquisition of CBT Corporation ("CBT") of
   Paducah, Kentucky, a bank holding company with assets totaling $1.0 billion.
   The merger was accounted for as a pooling-of-interests. Also on July 1,
   1998, Mercantile completed the acquisition of Firstbank, a $2.3 billion-
   asset bank holding company headquartered in Springfield, Illinois. This
   merger was also accounted for as a pooling-of-interests. Mercantile
   converted the banks in the Firstbank group to its operating systems on
   September 18, 1998. At that time, nine offices in Illinois located in the
   St. Louis metropolitan area joined Mercantile Bank N.A. and the remaining
   banks became part of Mercantile Bank of Illinois. All prior period
   financial results have been restated to reflect the poolings with CBT and
   Firstbank.

<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------

EXHIBIT 4
ACQUISITIONS
($ IN THOUSANDS)

<CAPTION>
                                                                                                CONSIDERATION
                                                                                              -----------------
                                                                                                         GROSS      ACCOUNTING
                                                         DATE         ASSETS     DEPOSITS     CASH       SHARES       METHOD
                                                         ----         ------     --------     ----       ------     ----------
<S>                                                 <C>             <C>         <C>          <C>       <C>         <C>
BANK ACQUISITIONS COMPLETED
First Financial Bancorporation                      Sept. 28, 1998  $  558,483  $  477,573   $     --   3,139,069  Pooling<F1>
Financial Services Corporation of the Midwest       Aug. 3, 1998       514,051     414,350          4   2,071,448  Pooling<F1>
CBT Corporation                                     July 1, 1998     1,006,384     695,923         34   5,123,214  Pooling
Firstbank of Illinois Co.                           July 1, 1998     2,285,146   1,969,600         64  13,352,641  Pooling
HomeCorp, Inc.                                      Mar. 2, 1998       335,137     309,157         14     854,760  Pooling<F1>
Horizon Bancorp, Inc.                               Feb. 2, 1998       536,507     454,230          2   2,549,970  Pooling<F1>
Roosevelt Financial Group, Inc.                     July 1, 1997     7,251,985   5,317,514    374,477  18,948,884  Purchase
Mark Twain Bancshares, Inc.                         Apr. 25, 1997    3,227,972   2,519,474         73  24,088,713  Pooling
Regional Bancshares, Inc.                           Mar. 5, 1997       171,979     135,954     12,300     900,625  Purchase

NONBANK ACQUISITION COMPLETED
Bruno, Stolze & Company, Inc.                       Sept. 30, 1998                            <F2>        <F2>     Purchase

<FN>
<F1> The Corporation's historical financial statements were not restated for
     the acquisition due to the immateriality of the acquiree's financial
     condition and results of operations to those of Mercantile.

<F2> Terms of the transaction not disclosed.
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      12

<PAGE>
<PAGE>
   On August 3, 1998, Mercantile acquired Financial Services Corporation of the
   Midwest, a $514 million one-bank holding company headquartered in Rock
   Island, Illinois. The company's subsidiary bank, The Rock Island Bank N.A.
   has the leading market share position in Rock Island County, which forms the
   eastern half of the Quad Cities metropolitan area. On September 28, 1998,
   the Corporation completed its acquisition of First Financial Bancorporation,
   headquartered in Iowa City, Iowa. First Financial is the $558 million
   one-bank holding company for First National Bank Iowa, which operates in ten
   locations in the Iowa City / Cedar Rapids corridor. Both of these banks will
   be merged into Mercantile banks in November 1998 and their systems will be
   converted at the same time. These acquisitions meet the requirements for
   treatment as poolings-of-interests; however, due to the immateriality of
   their financial condition and results of operations to that of Mercantile,
   the historical financial statements of the Corporation were not restated.
   Finally, on September 30, 1998, Mercantile announced the completion of the
   acquisition of St. Louis-based Bruno, Stolze & Company, Inc., by Mercantile
   Investment Services, Inc., the Corporation's broker-dealer subsidiary. This
   acquisition accelerates Mercantile's expansion into the fast-growing
   discount brokerage business. There are currently no acquisitions pending.

   Mercantile's acquisition of Roosevelt on July 1, 1997 was accounted for as a
   purchase. Thus, historical financial statements were not restated and
   Roosevelt's results of operations are included in Mercantile's financial
   results only from July 1, 1997 forward. This accounting makes year-to-date
   1997 and 1998 comparisons somewhat difficult.

   Net interest income was up 6.3% to $821,102,000 for the first nine months of
   1998 yet decreased 3.8% to $273,079,000 for the third quarter of 1998 when
   compared with the third quarter of 1997. The net interest rate margin
   stabilized at 3.51% this quarter compared with 3.53% in the second quarter
   of 1998 and 3.79% for the third quarter of 1997, while the year-to-date
   margin was 3.56% compared with 4.13% last year. The third quarter 1997
   acquisition of Roosevelt, continued competitive pricing for both loans and
   deposits, accelerated mortgage asset refinancings and prepayments, the flat
   yield curve, and the divestiture of selected credit card portfolios
   significantly impacted the Corporation's mix of earning assets and costing
   sources of funds, and thus lowered the rate margin. Average earning
   assets for the first three quarters of 1998 of $31.3 billion were 23.0%
   higher than the $25.5 billion reported last year, as average loan volume
   increased by 16.5%.

   For the first nine months of 1998, other income was $413,541,000, an
   increase of $108,418,000 or 35.5% from last year. Included in 1998 other
   income was a $48,051,000 gain on the sale of two Firstbank subsidiaries that
   were divested due to state restrictions on deposit concentration and
   $1,649,000 in securities losses due to portfolio restructurings of several
   recently acquired banks. Additionally, Mercantile recorded a $23,155,000
   pre-tax gain on the sale of mortgage servicing rights in the first quarter
   of 1998. Excluding these items non-interest income grew by 12.7% in 1998.

   Adjusted third quarter non-interest expenses were $221,960,000 compared with
   $219,637,000 last year, an increase of 1.1%. Excluding the one-time
   adjustments, year-to-date operating expenses were up by 11.8%, due largely
   to the inclusion of Roosevelt in three quarters of 1998 but only one quarter
   of 1997 through September 30.

   The Corporation is committed to reducing its cost base and has engaged a
   consultant to assist it in its analysis of this issue. Certain one-time
   charges will be incurred in this restructuring effort. At a minimum, a
   $15,000,000 charge relating to staff rightsizing will be taken in the fourth
   quarter of 1998. Significant additional charges resulting from
   centralization and branch closings, consolidation of back office functions
   and possible further staff rightsizing may be taken in the fourth quarter
   as well, following completion by the Corporation of such analysis.

   The provision for possible loan losses for the third quarter of 1998 was
   $23,871,000 compared with $29,209,000 the prior year, and was $39,752,000
   for the first nine months of 1998 compared with $78,728,000 in 1997. The
   provision in 1998 and 1997 included $19,600,000 and $20,340,000,
   respectively, in acquisition-related expense. Net charge-offs were
   $30,703,000 versus $70,584,000 last year, and on an annualized basis were
   .19% of average loans compared with .51% last year. The lower provision and
   charge-offs were primarily due to the decrease in average credit card loans,
   which was caused by the sale of non-strategic credit card receivables in the
   third quarter of 1997 and first quarter of 1998. Partially offsetting this
   decrease was $5,600,000 of charge-offs in the third quarter of 1998 related
   to recently acquired banks. At September 30, 1998, the reserve for possible
   loan losses was $308,869,000 and provided coverage of 231.98% of
   non-performing loans compared with 241.91% at year-end and 217.65% last
   September 30.

                                      13

<PAGE>
<PAGE>
   Non-performing loans (i.e., non-accrual and renegotiated loans) as of
   September 30, 1998 were $133,145,000 or .61% of total loans compared with
   $120,765,000 or .55% at June 30, 1998 and $131,422,000 or .62% at September
   30, 1997. Foreclosed assets totaled $16,276,000 at September 30, 1998
   compared with $23,293,000 at June 30, 1998 and $21,203,000 last September
   30.

   Consolidated assets of $34.6 billion were up 4.4% from a year ago. Total
   deposits decreased by .5% to $24.5 billion, loans were $22.0 billion, up
   3.9% from last year, and shareholders' equity of $3.1 billion was 13.3%
   higher than at September 30, 1997. All measures of capital adequacy remained
   adequate. Tier I capital to risk-adjusted assets was 9.87% while total
   capital to risk-adjusted assets at September 30, 1998 was 12.75%.

   The following financial commentary presents a more thorough discussion and
   analysis of the results of operations and financial position of the
   Corporation for the third quarter and first nine months of 1998.

NET INTEREST INCOME

   Net interest income for the third quarter of 1998 was $273,079,000, a 3.8%
   decrease from the $283,722,000 earned last year, and for the first nine
   months of 1998 was $821,102,000, 6.3% higher than last year. For the
   quarter, the net interest rate margin was 3.51% compared with 3.79% last
   year, and the year-to-date margin was 3.56% compared with 4.13% last year.
   The acquisition of Roosevelt caused a significant shift in the mix of
   earning assets and funding sources. These shifts, combined with the cost of
   debt issued to acquire Roosevelt and the sale of the former co-branded
   credit card portfolio, resulted in an estimated 60-basis-point decline in
   the net interest rate margin during the second half of 1997. The third
   quarter and year-to-date 1998 net interest rate margins dropped further due
   to competitive pressures on both deposit and loan pricing, accelerated
   mortgage asset prepayments and refinancings, the flat yield curve, and the
   divestiture of selected portions of the Corporation's remaining credit card
   portfolio. It is possible that margins could continue to decline in the
   fourth quarter and 1999 for these same reasons.


   Average earning assets for the first nine months of 1998 grew by $5.9
   billion or 23.0% when compared with 1997, and average loans grew by $3.1
   billion or 16.5%. This growth was funded by an increase of $3.0 billion or
   15.7% in average core deposits, a $291 million increase in purchased
   deposits, a $770 million increase in short-term borrowed funds and $650
   million of long-term debt issued in the first half of 1997. The net result
   of these funding changes likewise caused a reduction in the rate margin.

<TABLE>
-------------------------------------------------------------------------------

EXHIBIT 5
LOANS AND LEASES
($ IN THOUSANDS)

<CAPTION>
                                      SEPTEMBER 30
                                   1998         1997          CHANGE
                                   ----         ----          ------
<S>                             <C>          <C>             <C>
Commercial                      $ 5,654,349  $ 4,789,208       18.1%
Real estate--commercial           3,902,864    3,530,393       10.6
Real estate--construction           813,529      714,861       13.8
Real estate--residential
  mortgage                        8,239,045    8,793,386       (6.3)
Real estate--home equity
  credit loans                      540,294      581,300       (7.1)
Consumer                          2,819,513    2,477,695       13.8
Credit card loans issued            431,850      695,178      (37.9)
Securitized credit card loans      (400,000)    (400,000)        --
                                -----------  -----------
  Total Loans and Leases        $22,001,444  $21,182,021        3.9
                                ===========  ===========
-------------------------------------------------------------------------------
</TABLE>

   Investment securities averaged $9.1 billion in the first nine months of
   1998, and increased by 42.1% from 1997. Roosevelt increased investment
   securities by approximately $2.7 billion. The held-to-maturity and
   available-for-sale portfolios as of September 30, 1998 consisted of 67.56%
   in U.S. and other government agency securities, including 33.52% in
   mortgage-related issues, 5.24% in state and municipal securities, and 27.20%
   of other miscellaneous securities. The comparable distribution at September
   30, 1997 was 62.96%, 27.17%, 6.95% and 30.09%, respectively. State and
   municipal securities decreased from $555 million at September 30, 1997 to
   $481 million this year due to paydowns and the lack of attractive
   reinvestment opportunities. Miscellaneous securities are largely
   privately issued mortgage-backed securities and collateralized mortgage
   obligations. Total investment securities declined on average by 2.4% from
   the second to the third quarter of 1998 due to paydowns on mortgage
   securities, sales from portfolio restructurings and the lack of reinvestment
   opportunities.

   Year-to-date average commercial loans increased by $648 million or 13.5%,
   while average commercial real estate mortgage loans increased by $186
   million or 5.4% and construction loans increased by $96 million or 15.1%.

                                      14

<PAGE>
<PAGE>

   Year-to-date average residential real estate mortgage loans increased by
   $2.4 billion or 38.9%. The Roosevelt acquisition added approximately $3.9
   billion in volume on July 1, 1997, thereby more than accounting for this
   loan growth. Quarterly average residential mortgage loans declined however
   for the third consecutive quarter. These declines resulted from both
   prepayments and customer refinancings to fixed-rate residential mortgage
   loans that Mercantile generally sells. Home equity credit loans averaged
   $559 million in the first nine months of 1998, a 15.2% increase over the
   prior year, again reflecting the impact of the Roosevelt acquisition. Home
   equity credit loans likewise have declined for three consecutive quarters
   for the same reasons.

   Consumer loans increased on average by $283 million or 11.9% over the first
   nine months of 1997. Over 40% of the growth was in the indirect loan
   portfolio of Mercantile Bank N.A. Average credit card loans were down $591
   million or 78.5% in 1998. The largest part of the decline was due to the
   sale of $405 million in loans related to co-branded cards on September 25,
   1997. Prior to that date, the Corporation had managed to a $224 million
   decline due to more aggressive risk-based pricing of the cards, as well as
   transferring $123 million of loans to the investment portfolio as required
   by FAS 125. Partially offsetting the sale, the managed decline and the FAS
   125 transfer was the addition of $112 million in Roosevelt credit card loans
   on July 1, 1997; the out-of-territory Roosevelt credit card loans were
   subsequently sold in March 1998.

   Average core deposits increased by $3.0 billion or 15.7% in the first nine
   months of 1998. At September 30, 1998, Mercantile was substantially core
   funded at 90.70% of total deposits and 70.34% of earning assets. As
   anticipated, Mercantile has experienced certificate of deposit run-off from
   former Roosevelt depositors, largely due to changed pricing policies and
   intense competition in major markets. Additionally, the low rate environment
   in 1998 has not made certificates of deposit attractive to certain
   customers, thereby causing further deposit run-off. Changes in average core
   deposits for the past seven quarters are shown in the Consolidated Quarterly
   Average Balance Sheet on pages 25 and 26 of this report.

   Average non-interest bearing deposits increased by $516 million or 15.5%
   over the first nine months of 1997. Some of the growth occurred due to the
   Roosevelt acquisition and part of the remaining growth came from the U.S.
   Government, a significant cash management customer of Mercantile Bank N.A.
   that pays for services rendered via compensating balances. These average
   balances have increased from $691 million in the first nine months of 1997
   to $752 million in 1998. Partially offsetting this increase was growth of
   $170 million in cash and due from banks; this growth was minimized by both
   float and reserve reduction efforts.

   Year-to-date average interest bearing demand, savings, money market accounts
   and consumer time certificates under $100,000 increased by 6.1%, 20.5%,
   18.6% and 17.8%, respectively, largely due to the Roosevelt acquisition.
   Roosevelt had a greater percentage of consumer time certificates in its
   total core deposits, and as a result, Mercantile's year-to-date average of
   consumer time certificates to total core deposits increased to 42.98% from
   42.20% in 1997, even though certificates of deposit continued to decline.

   Average short-term borrowings increased by $770 million or 28.9% over the
   first nine months of 1997; this increase funded earning asset growth and
   replaced the decline in bank notes outstanding. In the second quarter of
   1998, Mercantile established a $3.0 billion bank note offering program that
   is now an available funding source to the five largest affiliate banks,
   however, no funding was outstanding from the new bank note program as of
   September 30, 1998. Year-to-date average long-term debt increased by $2.1
   billion. The increase was due to long-term FHLB advances acquired in the
   Roosevelt transaction and subsequent borrowings incurred to lower wholesale
   borrowing costs and improve liquidity. In addition, long-term debt was
   issued by the Corporation in the first half of 1997 to fund the acquisition
   of Roosevelt. Average shareholders' equity increased by $523 million or
   21.9%, due to net earnings retained, shares issued in acquisitions and a
   favorable adjustment in the fair value of available-for-sale securities.

   The factors discussed above are consistent with Mercantile's overall
   corporate policy relative to rate sensitivity and liquidity, which is to
   produce the optimal yield and maturity mix consistent with interest rate
   expectations and projected liquidity needs. The Consolidated Quarterly
   Average Balance Sheet, with rates earned and paid, is summarized by quarter
   on pages 25 and 26.

                                      15

<PAGE>
<PAGE>

OTHER INCOME

   Non-interest income increased 44.1% during the third quarter of 1998 to
   $161,839,000, and for the nine months was $413,541,000 compared with
   $305,123,000 a year ago, an improvement of 35.5%. In September 1998,
   Firstbank divested its two Missouri banks due to state restrictions on
   deposit concentrations. These banks had total assets of approximately $300
   million. A pre-tax gain of $48,051,000 was recorded in the third quarter of
   1998. Additionally, Mercantile recorded a $23,155,000 gain on the sale of
   mortgage servicing rights in the first quarter of 1998. Excluding these two
   items, other income for the nine months ended September 30, 1998 was 12.2%
   higher than in the year-earlier period.

   Deposit service charges were the largest source of non-interest income in
   1998, and were $87,815,000 compared with $79,941,000 during 1997, an
   increase of 9.8%. For the quarter, service charge revenue was up 2.4% from a
   year ago. The increase was generated by additional deposits and fees from
   acquired customer bases, partially offset by attrition.

   Trust fees were the second largest source of non-interest income in 1998,
   and for the nine months of 1998 were $84,386,000 compared with $77,535,000
   during 1997, an increase of 8.8%. Personal trust fees earned by Mercantile
   Trust Company N.A. were the largest source of trust revenue and increased
   slightly from last year. Income from Mississippi Valley Advisors Inc., the
   investment management subsidiary of Mercantile, rose by 17.1%. Mississippi
   Valley Advisors Inc. manages 17 proprietary mutual funds--the ARCH funds,
   which had assets of $4.1 billion at September 30, 1998 compared with $3.5
   billion last year. Quarterly trust fees grew only by 2.1% over 1997 due to
   less favorable market conditions. Increases in the value of assets managed
   and successful new business development efforts accounted for the
   year-to-date growth in trust fees. Partially offsetting these increases was
   the reduction in trust fees caused by the sales of Mercantile's document
   custody business and Mark Twain's corporate trust division.

<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
EXHIBIT 6
OTHER INCOME
($ IN THOUSANDS)

<CAPTION>
                                                                        THIRD QUARTER                       NINE MONTHS
                                                                 1998       1997        CHANGE      1998       1997        CHANGE
                                                                 ----       ----        ------      ----       ----        ------
<S>                                                            <C>        <C>          <C>        <C>        <C>           <C>
Trust                                                          $ 27,442   $ 26,888         2.1%   $ 84,386   $ 77,535         8.8%
Service charges                                                  30,498     29,770         2.4      87,815     79,941         9.8
Retail brokerage revenue                                          4,624      5,130        (9.9)     14,818      8,916        66.2
Other investment banking                                          5,136      5,707       (10.0)     15,834     19,105       (17.1)
Mortgage banking                                                  6,149      7,819       (21.4)     21,051     14,691        43.3
Gain on sale of mortgage servicing rights                            --         --          --      23,155         --          --
Credit card fees                                                  3,045      5,836       (47.8)      9,128     16,927       (46.1)
Securitization revenue                                            5,775      3,357        72.0      14,818     15,374        (3.6)
Securities gains                                                  2,297      2,131         7.8       9,584      5,248        82.6
Gain on sale of subsidiaries                                     48,051         --          --      48,051         --          --
Miscellaneous                                                    28,822     25,706        12.1      84,901     67,386        26.0
                                                               --------   --------                --------   --------
    Total Other Income                                         $161,839   $112,344        44.1    $413,541   $305,123        35.5
                                                               ========   ========                ========   ========
-----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

   In January 1998, the Corporation sold $1.9 billion in loan servicing which
   reduced originated mortgage servicing assets by approximately $3.2 million.
   A pre-tax gain of $23,155,000 was recognized in the first quarter of 1998.
   This sale was consistent with the Corporation's goals to "right size" the
   servicing portfolio as all Mercantile servicing operations were consolidated
   in Nevada, Missouri. The sale also lowered the prepayment risk associated
   with the servicing portfolio and helped to fund the Corporation's systems
   cost to become Year 2000 compliant. All other mortgage banking income was
   $21,051,000 in the first nine months of 1998 versus $14,691,000 the prior
   year. The growth was attributable to Roosevelt's servicing volume and the
   higher than expected level of refinancing activity in 1998. Mortgages
   serviced totaled $11.4 billion at September 30, 1998 compared with $13.9
   billion at September 30, 1997. Total originated and purchased mortgage
   servicing rights on the balance sheet at September 30, 1998 totaled $48
   million. The Corporation recorded a $2,700,000 valuation reserve on
   purchased mortgage servicing rights in the third quarter of 1998 due to
   accelerated refinancing activity. In this current low interest rate
   environment, the value of servicing rights will be carefully monitored in
   future quarters.

                                      16

<PAGE>
<PAGE>

   Year-to-date retail brokerage revenue was $14,818,000 compared with
   $8,916,000 last year. Roosevelt's customer base had a positive impact on
   this source of revenue. Comparative third quarter revenue was down by
   $506,000 or 9.9% due to unfavorable market conditions in 1998. Other
   investment banking income for the first nine months of 1998 was 17.1% lower
   than last year due to lower levels of activity in institutional fixed income
   sales and the exit from the international currency bond business.

   For the first nine months and third quarter of 1998, credit card income was
   significantly less than the comparable 1997 periods. Credit card income
   primarily represents interchange fees received on transactions of Mercantile
   cardholders and cardholders' miscellaneous fees. The two aforementioned
   portfolio sales largely accounted for the decline in credit card income.

   Securitization revenue for the first nine months of 1998 was $14,818,000
   compared with $15,374,000 last year, and represents amounts accruing to
   Mercantile on the $400 million in credit card loans securitized in the
   Mercantile Credit Card Master Trust during May 1995, as well as $2,200,000
   recognized in 1997 under FAS 125 for investor certificate loans that were
   sold and reclassified to the investment portfolio. Excluding that one-time
   accounting gain, securitization revenue increased by $1,644,000 or 12.5%.
   For securitized loans, amounts that would otherwise have been reported as
   interest income, interest expense, credit card fees and provision for loan
   losses are instead netted in non-interest income as securitization revenue.

   Year-to-date miscellaneous income of $84,901,000 was 26.0% higher than in
   1997. The corporate trust business of Mark Twain was sold in the first
   quarter of 1998 at a $2,002,000 gain. Mercantile had previously sold its
   comparable corporate trust business during 1996. The Corporation also sold
   the out-of-market Roosevelt credit card portfolio in the first quarter of
   1998 at a gain of $2,658,000. Excluding these two 1998 gains and the 1997
   gain of $2,300,000 on the sale of Mark Twain's merchant credit card
   processing business, year-to-date miscellaneous income increased by 23.3%
   over 1997. Credit life and other insurance product sales, loan syndication
   fees, operating lease income, and ATM, official check and debit card fees
   accounted for the increase. Net securities gains of $9,584,000 were realized
   through September 30, 1998 on the restructuring of the available-for-sale
   investment portfolio compared with $5,248,000 in gains last year. Net
   securities gains in the third quarter of 1998, net of $1,649,000 in
   nonrecurring losses, totaled $2,297,000 versus $2,131,000 in 1997.

OTHER EXPENSE

   For the first nine months of 1998, expenses other than interest expense and
   the provision for possible loan losses were $756,416,000, a 1.5% decrease
   from the 1997 level. If the nonrecurring merger-related expenses of
   $89,192,000 in 1998 and $121,393,000 in 1997, and the $50,000,000 loss on
   the sale of the credit card portfolio in 1997 are excluded, adjusted other
   expense increased by $70,360,000 or 11.8% over 1997. The adjusted efficiency
   ratio was 55.58% compared with 54.69% in 1997 while the operating expense to
   average asset ratio improved to 2.59% from 2.87%.

   Year-to-date salary expenses increased by $31,772,000 or 11.3% from last
   year. The impact of Roosevelt on salaries for the first nine months of 1998
   was estimated to be $12,000,000. Additionally, temporary help salaries rose
   by $9,333,000 and were primarily utilized in operations, mortgage banking
   and in the Year 2000 effort. The decline in year-to-date 1998 employee
   benefit expense was due largely to the Corporation's decision to modify its
   defined benefit pension plan to a cash balance plan, cost-effective changes
   to 401(k) and employee welfare plans, an increase in temporary help salaries
   for which few benefits are paid, and a general decline in the Corporation's
   stock price, which is the basis for certain employee benefit expenses.

   Occupancy and equipment costs through September 30, 1998 increased by 18.0%
   from the prior year, reflecting the costs of maintaining additional offices
   and a consistent program of upgrading systems and equipment to improve
   customer service and enhance employee efficiency. A new deposit system that
   has been installed throughout most of the Corporation also increased
   equipment expense in 1998 over 1997.

   Exhibit 7 details the composition of all other operating expenses. General
   increases reflect the impact of Roosevelt through September 30 in the
   Corporation's results for nine months of 1998 versus three months in 1997.
   Credit card expense declined by $3,672,000 or 45.8%, due primarily to the
   absence of the costs associated with the portfolios that were sold.
   Mercantile contributed $1,600,000 to its charitable foundation in the first
   quarter of 1998, which increased miscellaneous expense. Additionally,

                                      17

<PAGE>
<PAGE>
   there was $559,000 in foreclosure expense in the first nine months of 1998
   compared with recoveries related to foreclosed property of $5,490,000 in
   1997.

<TABLE>
----------------------------------------------------------------------------------------------------------------------------------
EXHIBIT 7
OTHER EXPENSE
($ IN THOUSANDS)

<CAPTION>
                                                                        THIRD QUARTER                       NINE MONTHS
                                                                 1998       1997        CHANGE      1998       1997        CHANGE
                                                                 ----       ----        ------      ----       ----        ------
<S>                                                            <C>        <C>          <C>        <C>        <C>          <C>
Salaries                                                       $106,007   $101,728         4.2%   $312,385   $280,613        11.3%
Employee benefits                                                18,148     22,800       (20.4)     58,727     64,595        (9.1)
                                                               --------   --------                --------   --------
    Total Personnel Expense                                     124,155    124,528         (.3)    371,112    345,208         7.5
Net occupancy                                                    17,448     17,018         2.5      49,647     45,373         9.4
Equipment                                                        21,160     18,307        15.6      63,273     50,318        25.7
Postage and freight                                               6,918      6,827         1.3      20,798     20,030         3.8
Marketing/business development                                    4,283      5,085       (15.8)     12,906     13,013         (.8)
Office supplies                                                   4,371      4,153         5.2      13,060     11,775        10.9
Communications                                                    4,816      4,758         1.2      14,084     12,204        15.4
Data processing                                                   4,040      4,751       (15.0)     13,471     14,241        (5.4)
Legal and professional                                            3,806      3,300        15.3      11,741     10,343        13.5
Credit card                                                       1,276      3,194       (60.1)      4,353      8,025       (45.8)
FDIC insurance                                                    1,382      1,050        31.6       4,204      2,692        56.2
Foreclosed property expense (recoveries)                            647     (1,296)         --         559     (5,490)         --
Miscellaneous                                                    13,347     12,686         5.2      44,647     43,952         1.6
                                                               --------   --------                --------   --------
    Adjusted Other Expense Before Intangible Asset
      Amortization                                              207,649    204,361         1.6     623,855    571,684         9.1
Intangible asset amortization                                    14,311     15,276        (6.3)     43,369     25,180        72.2
                                                               --------   --------                --------   --------
    Adjusted Other Expense                                      221,960    219,637         1.1     667,224    596,864        11.8
Nonrecurring merger-related expense                              89,192     69,530       (28.3)     89,192    121,393       (26.5)
Loss on sale of credit card loans                                    --     50,000          --          --     50,000          --
                                                               --------   --------                --------   --------
    Total Other Expense                                        $311,152   $339,167        (8.3)   $756,416   $768,257        (1.5)
                                                               ========   ========                ========   ========
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

   Intangible asset amortization was $43,369,000 in the first nine months of
   1998 compared with $25,180,000 in 1997. The increase was caused by
   additional amortization on goodwill recorded on 1997 purchase acquisitions
   that are being amortized using the straight-line method over 15 years.

   During 1997, Mercantile recorded adjustments related to the acquisitions of
   Roosevelt, Mark Twain and Regional Bancshares, Inc. These adjustments
   totaled $121,393,000 and were originally recorded as an accrued liability.
   Of that original liability, $102,541,000 has been utilized at September 30,
   1998 and $18,852,000 remains to absorb future cash payments. These
   nonrecurring expenses included: 1) investment banking and other professional
   services; 2) change in control and severance payments; 3) contract
   penalties; 4) a loss incurred on the sale of unnecessary Roosevelt interest
   rate floors; 5) write-downs of duplicative branches and equipment held for
   sale to fair market value; 6) transition and duplicative costs related to
   systems, etc; and 7) other adjustments to conform the acquirees' accounting
   policies to those of Mercantile. Of the comparable $89,192,000 liability
   recorded in the third quarter of 1998 for this year's acquisitions,
   $31,347,000 has been utilized at September 30, 1998 and $57,845,000 remains
   to absorb future payments.

INCOME TAXES

   For the nine months ended September 30, 1998, the Corporation recorded
   income tax expense of $153,325,000 compared with 1997 expense of
   $89,245,000. Both years included tax benefits recorded on the nonrecurring
   charges. Excluding those benefits, the adjusted effective tax rate decreased
   to 33.61% in 1998 from 35.18% in 1997. The implementation of various
   business strategies that included the realignment of corporate entities
   consistent with the plan of reducing bank charters resulted in a $7,000,000
   tax benefit in the second quarter of 1998 and an additional $8,000,000
   benefit in the third quarter of 1998. A comparable tax benefit is expected
   to be recorded in the fourth quarter of 1998.


                                      18

<PAGE>
<PAGE>

RESERVE FOR POSSIBLE LOAN LOSSES

   The reserve for possible loan losses was $308,869,000 or 1.40% of loans
   outstanding at September 30, 1998 compared with $284,165,000 or 1.33% at
   year's end and 1.35% at September 30, 1997. Approximately 40% of the
   Corporation's total loan portfolio is invested in residential real estate
   loans for which the loan loss experience averaged only .03% for the past
   five years. If residential mortgages and its allocated reserve are excluded,
   the reserve represents 2.07% of outstanding loans at September 30, 1998. In
   addition, the Corporation does not engage in lending to emerging markets or
   invest in hedge funds.

   The year-to-date 1998 provision for possible loan losses was $39,752,000,
   which included a nonrecurring provision of $19,600,000 that was made
   largely to conform the credit policies of recently acquired entities to
   those of Mercantile. The provision for possible loan losses exceeded
   year-to-date 1998 net charge-offs of $30,703,000 by $9,049,000 or 29.5%. The
   annualized ratio of net charge-offs to average loans for the first nine
   months of 1998 declined to .19% from .51% last year. The lower 1998
   charge-off ratio was due to improvement in overall credit quality and the
   decline in average credit card loans from portfolio sales in late 1997 and
   early 1998. Net charge-offs in the third quarter of 1998 included $5,600,000
   related to recently acquired banks.

   Mercantile evaluates the reserves of all banks on a quarterly basis to
   ensure the timely charge-off of loans and to determine the adequacy of those
   reserves. Management believes the consolidated reserve as of September 30,
   1998 was adequate based on the risks identified at such date in the
   respective portfolios.

<TABLE>
---------------------------------------------------------------------------------------------------------------------------------

EXHIBIT 8
RESERVE FOR POSSIBLE LOAN LOSSES
($ IN THOUSANDS)

<CAPTION>
                                                                   THIRD QUARTER              NINE MONTHS
                                                                 1998         1997         1998         1997
                                                                 ----         ----         ----         ----
<S>                                                           <C>          <C>          <C>          <C>
BEGINNING BALANCE                                                $292,795     $263,237     $284,165     $257,718

PROVISION<F*>                                                      23,871       29,209       39,752       78,728

Charge-offs                                                       (20,588)     (29,681)     (48,027)     (87,944)
Recoveries                                                          4,892        4,660       17,324       17,360
                                                                 --------     --------     --------     --------
    NET CHARGE-OFFS                                               (15,696)     (25,021)     (30,703)     (70,584)

Acquired Reserves                                                   7,899       18,617       15,655       20,180
                                                                 --------     --------     --------     --------
ENDING BALANCE                                                   $308,869     $286,042     $308,869     $286,042
                                                                 ========     ========     ========     ========
LOANS AND LEASES
    September 30 balance                                      $22,001,444  $21,182,021  $22,001,444  $21,182,021
                                                              ===========  ===========  ===========  ===========
    Average balance                                           $21,673,393  $21,587,546  $21,690,744  $18,621,892
                                                              ===========  ===========  ===========  ===========

RATIOS
    Reserve balance to outstanding loans                             1.40%        1.35%        1.40%        1.35%
    Reserve balance to non-performing loans                        231.98       217.65       231.98       217.65
    Net charge-offs to average loans                                  .29          .46          .19          .51

<FN>
<F*>Includes nonrecurring provision of $19,600,000 and $20,340,000 in the first nine months of 1998 and 1997,
    respectively.
----------------------------------------------------------------------------------------------------------------------------------
</TABLE>

NON-PERFORMING ASSETS

   Non-performing loans (non-accrual and renegotiated loans) were $133,145,000
   or .61% of total loans outstanding at September 30, 1998. By the
   Corporation's definition, all non-accrual and renegotiated
   commercial-related loans are considered impaired as defined by FAS 114,
   "Accounting by Creditors for Impairment of a Loan," as amended by FAS 118.
   Impaired loans totaled $59,612,000 at September 30, 1998 and averaged
   $66,296,000 for the first nine months of 1998. Foreclosed assets at
   September 30, 1998 were $16,276,000. The ratio of non-performing loans and
   foreclosed assets to outstanding loans and foreclosed assets was .68% at
   September 30, 1998 compared with .66% at June 30, 1998 and .72% last year.



                                      19

<PAGE>
<PAGE>

   Non-accrual loans increased by $10,502,000 from the June 30, 1998 level,
   largely reflecting the conforming of acquirees' accounting policies to
   those of Mercantile. Foreclosed property decreased by $7,017,000 from the
   prior quarter due to sales. As of September 30, 1998, Mercantile had only
   eight non-accrual loans with balances in excess of $1,000,000; the largest
   totaled $4,912,000. As significant, the Corporation held only one foreclosed
   asset with a book value in excess of $1,000,000. Over 40% of the
   Corporation's non-accrual loans are residential mortgage loans for which
   losses have averaged only .03% for the past five years.

   All loans classified as renegotiated were paying in accordance with their
   modified terms at September 30, 1998. Over one-half of the loans past due 90
   days or more and still accruing interest consisted of consumer loans and
   residential real estate mortgage loans. Exhibit 9 details the composition of
   loans past due 90 days and over.

<TABLE>
-----------------------------------------------------------------------------------

EXHIBIT 9
NON-PERFORMING ASSETS
($ IN THOUSANDS)

<CAPTION>
                                     SEPT. 30    DEC. 31   SEPT. 30
                                       1998       1997       1997
                                     --------    -------   --------
<S>                                  <C>        <C>        <C>
NON-ACCRUAL LOANS
  Commercial                         $ 26,888   $ 42,602   $ 47,964
  Real estate--commercial              28,232     18,362     20,881
  Real estate--construction             2,620      1,948      3,045
  Real estate--residential
    mortgage                           55,768     42,870     47,626
  Real estate--home equity
    credit loans                        1,799        228         66
  Consumer                             11,343      7,124      6,972
                                     --------   --------   --------
    Total Non-accrual Loans           126,650    113,134    126,554

RENEGOTIATED LOANS                      6,495      4,335      4,868
                                     --------   --------   --------
TOTAL NON-PERFORMING LOANS            133,145    117,469    131,422

FORECLOSED ASSETS
  Foreclosed real estate               12,717     16,869     17,810
  Other foreclosed assets               3,559      4,229      3,393
                                     --------   --------   --------
TOTAL FORECLOSED ASSETS                16,276     21,098     21,203
                                     --------   --------   --------
TOTAL NON-PERFORMING LOANS AND
  FORECLOSED ASSETS<F1>               149,421    138,567    152,625

Impaired investment securities         68,253     85,887     35,599
                                     --------   --------   --------
TOTAL NON-PERFORMING ASSETS          $217,674   $224,454   $188,224
                                     ========   ========   ========
PAST-DUE LOANS
  (90 DAYS OR MORE)<F2>
  Commercial                         $  8,722   $  5,656   $  5,284
  Real estate--commercial               4,195        467        572
  Real estate--construction               856         --         74
  Real estate--residential
    mortgage                            7,760      3,587      3,556
  Real estate--home equity
    credit loans                          576      1,856        712
  Consumer                              6,956      5,355      3,639
  Credit card                             418      5,411      5,788
                                     --------   --------   --------
    Total Past-due Loans             $ 29,483   $ 22,332   $ 19,625
                                     ========   ========   ========
RATIOS<F2>
  Non-performing loans to
    outstanding loans                     .61%       .55%       .62%
  Non-performing loans and
    foreclosed assets to
    outstanding loans and
    foreclosed assets                     .68        .65        .72
  Non-performing assets to
    total assets                          .63        .67        .57

<FN>

<F1> Excludes insured FHA and government-guaranteed VA loans that were acquired
     primarily in the Roosevelt transaction and are contractually past due more
     than 90 days. Since these loans are fully insured or guaranteed for the
     payment of both principal and interest by the U.S. Government, the
     Corporation does not consider these loans to be non-performing assets,
     consistent with Roosevelt's past disclosure for these loans. The total of
     such insured or guaranteed loans was $28,836,000 at September 30, 1998,
     $37,677,000 at December 31, 1997, and $40,596,000 at September 30, 1997.

<F2> Past-due loans 90 days or more are not included in non-performing asset
     totals or ratios.
-----------------------------------------------------------------------------------
</TABLE>

   The Corporation's impaired investment securities were primarily acquired in
   the Roosevelt transaction, and have decreased from June 30, 1998 by
   $5,656,000 due to paydowns. During 1998, impaired investment securities have
   declined by $17,634,000. Roosevelt owned pools of privately issued
   mortgage-backed securities. The current yield on the net book value of
   these impaired securities was 6.24% at September 30, 1998.

CAPITAL RESOURCES

   Mercantile maintains a capital base which provides a foundation for
   anticipated future asset growth and promotes depositor and investor
   confidence. Capital management is a continuous process at Mercantile, and is
   focused on ensuring that adequate capital is provided for both current needs
   and anticipated growth. This strategy has enabled Mercantile to profitably
   expand its balance sheet, while maintaining capital ratios that exceed
   minimum regulatory capital requirements.

   At September 30, 1998, shareholders' equity was $3.1 billion, an increase of
   13.3% from September 30, 1997. This increase was derived primarily from the
   four 1998 bank acquisitions accounted for as poolings without restatement
   and a $43,007,000 favorable FAS 115 adjustment, partially offset by
   dividends and share repurchases. As of September 30, 1998, the balance of
   the valuation on available-for-sale securities increased shareholders'
   equity by $71 million.

                                      20

<PAGE>
<PAGE>

   In the first nine months of 1998, the Corporation repurchased 1,806,250
   shares of its common stock via designated broker-dealers at an average cost
   of $55.20 per share. Only 28,125 shares were repurchased in each the second
   and third quarters of 1998 to match systematic pattern needs. The remaining
   1,750,000 shares were purchased in the first quarter and have been reissued
   since then. As of September 30, 1998, Mercantile had only 76,443 treasury
   shares and none were tainted for pooling-of-interests accounting purposes.

   The Parent Company's double leverage ratio, which measures the extent to
   which the equity capital of its subsidiaries is supported by Parent Company
   debt rather than equity, improved to 122.83% at September 30, 1998 compared
   with 125.38% at year-end 1997. Intangible assets totaled $795 million at
   September 30, 1998 compared with $854 million a year ago. Intangible assets
   consisted primarily of $737 million in goodwill and $48 million in mortgage
   servicing rights. The decrease largely reflects the impact of the Roosevelt
   goodwill amortization for the past twelve months.

   The tangible equity to tangible assets ratio improved to 6.70% at September
   30, 1998 from 5.72% at September 30, 1997, exceeding the 6.00% goal the
   Corporation established during the third quarter of 1997. Additionally, all
   regulatory capital ratios have improved since year-end 1997 and
   significantly exceed regulatory minimums.

   On August 11, 1998, the Board of Directors declared a quarterly cash
   dividend of $.31 per share of common stock. This dividend was paid October
   1, 1998 to shareholders of record at the end of business September 10,
   1998. Book value per common share was $19.45 at September 30, 1998 compared
   with $18.18 a year earlier, an increase of 7.0%. Exhibit 10 details
   significant capital ratios. Public debt ratings of the Corporation and
   Mercantile Bank N.A. are shown in Exhibit 11.

<TABLE>
-------------------------------------------------------------------------------

EXHIBIT 10
RISK-BASED CAPITAL
($ IN MILLIONS)

<CAPTION>
                                      SEPT. 30      DEC. 31     SEPT. 30
                                        1998         1997         1997
                                      --------      -------     --------
<S>                                  <C>          <C>          <C>
Capital
  Tier I                              $ 2,383      $ 2,104      $ 2,028
  Total                                 3,079        2,779        2,725
Risk-adjusted assets                   24,147       22,373       21,696

Tier I capital to
  risk-adjusted assets                   9.87%        9.40%        9.35%
Total capital to
  risk-adjusted assets                  12.75        12.42        12.56

Leverage                                 7.12         6.52         6.30
Tangible equity to
  tangible assets                        6.70         5.92         5.72
Double leverage                        122.83       125.38       126.63
-------------------------------------------------------------------------------
</TABLE>


<TABLE>
-------------------------------------------------------------------------------------------------------------------

EXHIBIT 11
DEBT RATINGS

<CAPTION>
                                                                                    SEPTEMBER 30, 1998
                                                                        -------------------------------------------
                                                                                    FITCH      THOMSON     STANDARD
                                                                        MOODY'S     IBCA      BANKWATCH    & POOR'S
                                                                        -------     -----     ---------    --------
<S>                                                                     <C>         <C>       <C>          <C>
Mercantile Bancorporation Inc.
  Issuer rating                                                                                   B
  Commercial paper                                                                   F1         TBW-1
  6.800% senior notes, due 2001                                           A2                                 BBB+
  7.050% senior notes, due 2004                                           A2                                 BBB+
  7.625% subordinated notes, due 2002                                     A3                     BBB+         BBB
  7.300% subordinated notes, due 2007                                     A3                                  BBB
  Floating rate capital trust pass-through securities(SM)                 a2                                 BBB-

MERCANTILE BANK N.A.
  Bank notes (long-term/short-term)                                     A1/P-1                    A         A-/A-2
  6.375% subordinated notes, due 2004                                     A2          A           A-         BBB+
  9.000% mortgage-backed notes, due 1999                                  Aaa
  Certificates of deposit (long-term/short-term)                                                TBW-1       A-/A-2
  Letters of credit                                                                             TBW-1       A-/A-2
-------------------------------------------------------------------------------------------------------------------
</TABLE>

                                      21

<PAGE>
<PAGE>
YEAR 2000

   Financial institutions are particularly vulnerable to Year 2000 issues
   because of heavy reliance in the industry on electronic data processing and
   funds transfer systems. In 1996, the Corporation initiated a formal and
   centralized Year 2000 Program with the objective of addressing all aspects
   of the Year 2000 issue. All business units of the organization were brought
   into the Program through the creation of a Year 2000 Operational Task Force.
   A Program Manager, who provides monthly Year 2000 status reports to executive
   management and quarterly reports to the Board of Directors, was appointed.

   The Corporation has completed the assessment, analysis and planning
   phases of its Year 2000 Program and is well into the execution phase. A
   comprehensive Year 2000 Program Plan was developed and implemented in the
   third quarter of 1997. The Plan addresses both Information Technology ("IT")
   projects, such as insuring that data processing and data network applications
   are Year 2000 compliant,  and non-IT projects, such as insuring that all
   building facilities and security systems having "embedded technology" will be
   operational when Year 2000 arrives. Of the projects identified, approximately
   52% have been completed, and approximately 47% more are currently in
   progress. It is planned and expected that 97% of all identified projects will
   be completed by December 31, 1998.

   As part of its Plan, Mercantile identified those systems and business
   applications which are "mission critical," that is, systems and business
   applications which, if they failed, would render Mercantile incapable of
   performing core business processes. As of September 30, 1998, renovation of
   such identified mission-critical applications was estimated to be 93%
   complete. In fact, approximately 90% of all business applications already
   have been reintroduced to production, or are in testing. It is the goal of
   the Program to have all mission-critical applications renovated and
   substantially tested "2000 compliant" by no later than December 31, 1998.

   As a financial institution, Mercantile's Year 2000 efforts are subjected to
   regulation and monitoring by bank and bank holding company regulatory
   agencies. These agencies, under the auspices of the Federal Financial
   Institutions Examination Council ("FFIEC"), have established specific
   guidelines and interim deadlines for achieving Year 2000 compliance.
   Mercantile's Program has met all of the deadlines and complied with all
   guidelines to date, and fully intends and expects to continue to do so.

   In addition to Year 2000 compatibility of all Mercantile applications,
   Mercantile's Year 2000 program addresses third party Year 2000 issues.
   Mercantile has numerous customers, vendors, service providers, counterparties
   and other business relationships with third parties. Failure of any of these
   parties to address Year 2000 issues could result in significant and in some
   cases material disruptions of business and costs to Mercantile. Mercantile
   has undertaken an assessment of all third-party relationships and thus far
   has completed its evaluation of such relationships which are considered
   to be material. Follow up plans have been put in place to deal with
   relationships which have been identified as "high risk". Loan loss reserves
   have been set aside where appropriate. In addition, all customers with whom
   Mercantile exchanges electronic data have received notification of Year
   2000-related date format impacts. Finally, plans are being finalized now to
   perform Year 2000 date testing with a representative sample of third party
   customers and others in 1999. Review of third party relationships will be an
   ongoing process throughout 1999.

   Mercantile estimates that its total costs related to Year 2000 remediation
   will be approximately $30,000,000. Year-to-date expenses of the Program are
   $11,212,000. Personnel costs for internal personnel and outside consultants
   working on the program, and the cost of setting up testing environments are
   the largest components of the total program cost. Other costs include costs
   for training, and for required hardware and software replacement, upgrade or
   renovation. Year 2000 expenditures are expensed as incurred. It is not
   expected that Year 2000 costs or activities will have a material adverse
   impact on operations of the Corporation.

   The principal risks associated with the Year 2000 problem can be grouped
   into two categories. The first is the risk that Mercantile does not
   successfully ready its operations for the next century. The second is the
   risk of disruption of Mercantile operations due to operational failures of
   third parties. The first category includes those risks which are largely
   under Mercantile's control. As set forth above, Management believes it will
   be able to make the necessary corrections to its internal systems on time and


                                      22
 <PAGE>
<PAGE>

   therefore that there is little risk of any internal critical system or asset
   not being Year 2000 ready by the end of 1999. In the unlikely event that
   Mercantile does not successfully complete its remediation on time, it could
   be materially adversely affected as a result of disruption of core business
   processes.

   The second risk category is largely outside of Mercantile's control.
   Computer failure of third parties may jeopardize Mercantile operations. The
   most serious impact on Mercantile operations from Year 2000 failures of
   others would result if basic services such as telecommunications, electric
   power and service provided by other financial institutions and governmental
   agencies were disrupted. Similarly, operational failures affecting
   Mercantile's sources of major funding, larger borrowers and capital market
   counterparties could affect the ability of such parties to continue to
   provide funding or meet obligations when due. Significant public disclosure
   of the state of readiness among basic infrastructure and other suppliers,
   funding sources and counterparties has not generally been available. Although
   inquiries are underway to assess this potential risk, Mercantile does not yet
   have the necessary information to estimate the likelihood of such significant
   disruptions. An initial plan is being developed to address funding issues and
   will be completed in early 1999. The review of this plan will be an ongoing
   process throughout 1999. There can be no assurance that Year 2000 failures
   of third parties will not have a material adverse impact on Mercantile.

   Mercantile is developing remediation contingency plans and business
   resumption contingency plans specific to the Year 2000 issues. Remediation
   contingency plans address the actions to be taken if the current approach to
   remediating a system is falling behind schedule or otherwise appears in
   jeopardy of failing to deliver a Year 2000 ready system when needed.
   Business resumption contingency plans address the actions that would be
   taken if core business processes and critical business functions cannot be
   carried out in the normal manner upon entering the next century due to
   system or supplier failure. Remediation contingency plans with trigger dates
   for review and implementation have been developed for mission-critical
   applications. The effort to develop business resumption contingency plans
   is in progress. The first two phases of this effort, Organizational Planning
   Guidelines and Business Impact Analysis, are complete. The third and fourth
   phases, Plan Development and Method for Validation of Plans, are
   approximately 10% and 5% complete, respectively. These phases are due to be
   completed in the first six months of 1999, as required by FFIEC guidelines.
   The review of these plans will be an ongoing process throughout 1999.

                                      23
<PAGE>
<PAGE>
<TABLE>
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES
CONDENSED CONSOLIDATED QUARTERLY STATEMENT OF INCOME
($ IN THOUSANDS EXCEPT PER SHARE DATA)

<CAPTION>
                                                                       1997                                    1998
                                                   1ST QTR.    2ND QTR.    3RD QTR.   4TH QTR.   1ST QTR.    2ND QTR.    3RD QTR.
                                                   --------    --------    --------   --------   --------    --------    --------
<S>                                                <C>         <C>         <C>        <C>        <C>        <C>          <C>
    INTEREST INCOME
      Interest and fees on loans and leases        $365,300    $376,819    $462,063   $447,634   $442,332    $445,880    $443,631
      Investments in debt and equity securities      84,566      86,635     131,622    136,714    144,117     149,856     146,296
      Short-term investments                          4,767       6,103       8,727      7,728      6,731       8,351       7,334
                                                   --------    --------    --------   --------   --------    --------    --------
          Total Interest Income                     454,633     469,557     602,412    592,076    593,180     604,087     597,261
      Tax-equivalent adjustment                       4,575       4,708       4,477      4,324      4,235       4,191       3,906
                                                   --------    --------    --------   --------   --------    --------    --------
          TAXABLE-EQUIVALENT INTEREST INCOME        459,208     474,265     606,889    596,400    597,415     608,278     601,167

    INTEREST EXPENSE
      Deposits                                      177,308     180,066     244,202    241,373    237,420     237,267     231,983
      Borrowed funds                                 35,284      42,724      74,488     75,495     83,039      91,518      92,199
                                                   --------    --------    --------   --------   --------    --------    --------
          Total Interest Expense                    212,592     222,790     318,690    316,868    320,459     328,785     324,182
                                                   --------    --------    --------   --------   --------    --------    --------
          TAXABLE-EQUIVALENT NET INTEREST INCOME    246,616     251,475     288,199    279,532    276,956     279,493     276,985

    PROVISION FOR POSSIBLE LOAN LOSSES               20,090      29,429      29,209      7,627      8,537       7,344      23,871

    OTHER INCOME
      Trust                                          24,716      25,931      26,888     26,393     28,128      28,816      27,442
      Service charges                                25,178      24,993      29,770     29,117     28,244      29,073      30,498
      Investment banking and brokerage                8,721       8,463      10,837     10,160     11,066       9,826       9,760
      Mortgage banking                                3,515       3,357       7,819     11,934     29,098       8,959       6,149
      Securities gains (losses)                       1,046       2,071       2,131      2,401      4,453       2,834       2,297
      Other                                          33,182      31,606      34,899     29,065     35,962      35,243      85,693
                                                   --------    --------    --------   --------   --------    --------    --------
          Total Other Income                         96,358      96,421     112,344    109,070    136,951     114,751     161,839

    OTHER EXPENSE
      Personnel expense                             109,973     110,707     124,528    121,782    125,178     121,779     124,155
      Net occupancy and equipment                    29,733      30,633      35,325     36,278     37,042      37,270      38,608
      Other                                          47,020     101,024     179,314     60,061     58,318      65,677     148,389
                                                   --------    --------    --------   --------   --------    --------    --------
          Total Other Expense                       186,726     242,364     339,167    218,121    220,538     224,726     311,152
                                                   --------    --------    --------   --------   --------    --------    --------
    TAXABLE-EQUIVALENT INCOME BEFORE INCOME
      TAXES                                         136,158      76,103      32,167    162,854    184,832     162,174     103,801

    INCOME TAXES
      Income taxes                                   46,270      28,641      14,334     53,131     65,738      50,836      36,751
      Tax-equivalent adjustment                       4,575       4,708       4,477      4,324      4,235       4,191       3,906
                                                   --------    --------    --------   --------   --------    --------    --------
        Adjusted Income Taxes                        50,845      33,349      18,811     57,455     69,973      55,027      40,657
                                                   --------    --------    --------   --------   --------    --------    --------
          NET INCOME                               $ 85,313    $ 42,754    $ 13,356   $105,399   $114,859    $107,147    $ 63,144
                                                   ========    ========    ========   ========   ========    ========    ========
    PER SHARE DATA
      Basic earnings per share                         $.64        $.33        $.09       $.71       $.76        $.71        $.41
      Diluted earnings per share                        .63         .32         .09        .70        .75         .69         .41

    SIGNIFICANT RATIOS
      Return on assets                                 1.38%        .67%        .16%      1.27%      1.35%       1.23%        .74%
      Return on equity                                15.25        7.97        1.93      15.39      16.03       14.88        8.48
</TABLE>

                                      24
 <PAGE>
<PAGE>
<TABLE>
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEET
($ IN MILLIONS)

<CAPTION>
                                                                                     1997
                                                  1ST QTR.                2ND QTR.              3RD QTR.              4TH QTR.
                                             -------------------    ------------------    ------------------    ------------------
                                             VOLUME     RATE<F1>    VOLUME    RATE<F1>    VOLUME    RATE<F1>    VOLUME    RATE<F1>
                                             ------     --------    ------    --------    ------    --------    ------    --------
<S>                                        <C>          <C>        <C>        <C>        <C>        <C>        <C>        <C>
ASSETS
    Earning Assets
      Loans and leases, net of unearned
        income
        Commercial                           $ 4,666       8.55%   $ 4,861       8.66%   $ 4,858       8.57%   $ 4,907        8.59%
        Real estate--commercial                3,407       8.57      3,451       8.73      3,550       8.69      3,550        8.65
        Real estate--construction                584       8.89        640       8.94        684       8.82        736        8.84
        Real estate--residential
          mortgage                             4,728       7.96      4,813       7.99      8,738       7.84      8,765        7.76
        Real estate--home equity credit
          loans                                  442       9.55        446       9.84        566       9.68        585        9.71
        Consumer                               2,312       9.06      2,354       9.11      2,453       9.17      2,493        9.12
        Credit card                              820      13.31        703      13.33        738      12.83        286       10.03
                                             -------               -------               -------               -------
          Total Loans and Leases              16,959       8.65     17,268       8.76     21,587       8.59     21,322        8.42
      Investments in debt and equity
        securities
        Trading                                   69       6.81         93       7.00        101       6.41        155        6.68
        Taxable                                4,978       6.17      5,046       6.23      7,520       6.58      7,750        6.60
        Tax-exempt                               485       8.16        469       8.18        465       8.08        462        8.10
                                             -------               -------               -------               -------
          Total Investments in Debt and
             Equity Securities                 5,532       6.35      5,608       6.41      8,086       6.67      8,367        6.68
      Short-term investments                     350       5.45        428       5.64        535       6.39        498        6.08
                                             -------               -------               -------               -------
          Total Earning Assets                22,841       8.15     23,304       8.16     30,208       7.97     30,187        7.84
    Non-earning assets                         1,883                 2,098                 2,822                 2,910
                                             -------               -------               -------               -------
          Total Assets                       $24,724               $25,402               $33,030               $33,097
                                             =======               =======               =======               =======
LIABILITIES
    Acquired Funds
      Deposits
        Non-interest bearing                 $ 3,065               $ 3,412               $ 3,522               $ 3,636
        Interest bearing demand                2,911       2.12      2,884       2.07      2,945       1.95      2,997        1.90
        Money market accounts                  3,050       3.96      3,056       4.01      3,854       4.07      3,879        4.04
        Savings                                1,326       2.31      1,336       2.31      1,636       2.43      1,582        2.48
        Consumer time certificates under
          $100,000                             7,141       5.49      7,092       5.50     10,287       5.56     10,006        5.60
        Other time                               201       4.93        205       4.60        207       4.16        208        4.82
                                             -------               -------               -------               -------
          Total Core Deposits                 17,694       4.20     17,985       4.20     22,451       4.41     22,308        4.41
        Time certificates $100,000 and
          over                                 1,538       5.53      1,482       5.57      1,808       5.71      1,868        5.71
        Foreign                                  344       5.48        469       5.67        529       5.70        487        5.66
                                             -------               -------               -------               -------
          Total Purchased Deposits             1,882       5.54      1,951       5.62      2,337       5.73      2,355        5.71
                                             -------               -------               -------               -------
          Total Deposits                      19,576       4.36     19,936       4.37     24,788       4.56     24,663        4.55
      Short-term borrowings                    1,980       5.06      2,283       5.23      3,703       5.60      3,725        5.34
      Bank notes                                 175       5.81        175       5.95        175       6.01        175        5.99
      Long-term debt<F2>                         420       7.33        554       7.07      1,145       6.42      1,345        6.41
                                             -------               -------               -------               -------
          Total Acquired Funds                22,151       4.52     22,948       4.57     29,811       4.81     29,908        4.79
    Other liabilities                            335                   307                   452                   450
SHAREHOLDERS' EQUITY                           2,238                 2,147                 2,767                 2,739
                                             -------               -------               -------               -------
          Total Liabilities and
             Shareholders' Equity            $24,724               $25,402               $33,030               $33,097
                                             =======               =======               =======               =======
SIGNIFICANT RATIOS
      Net interest rate spread                             3.63%                 3.59%                 3.16%                  3.05%
      Net interest rate margin                             4.38                  4.33                  3.79                   3.67

<FN>

<F1> Taxable-equivalent basis.

<F2> Includes company-obligated mandatorily redeemable preferred securities of
     Mercantile Capital Trust I.
</TABLE>

                                      25
 <PAGE>
<PAGE>
<TABLE>
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEET
($ IN MILLIONS)
<CAPTION>
                                                                                        1998
                                                            1ST QTR.                  2ND QTR.                  3RD QTR.
                                                        --------------------      ---------------------     --------------------
                                                        VOLUME      RATE<F1>      VOLUME       RATE<F1>     VOLUME      RATE<F1>
                                                        ------      --------      ------       --------     ------      --------
<S>                                                   <C>          <C>          <C>           <C>         <C>           <C>
ASSETS
    Earning Assets
      Loans and leases, net of unearned income
        Commercial                                     $ 5,152         8.48%     $ 5,608         8.38%     $ 5,566         8.19%
        Real estate--commercial                          3,585         8.53        3,631         8.47        3,750         8.58
        Real estate--construction                          729         8.86          726         8.78          742         8.69
        Real estate--residential mortgage                8,742         7.66        8,505         7.60        8,203         7.60
        Real estate--home equity credit loans              579         9.64          562         9.65          536         9.63
        Consumer                                         2,550         9.15        2,655         9.08        2,763         9.04
        Credit card                                        248         9.30          126         6.76          113         2.51
                                                       -------                   -------                   -------
          Total Loans and Leases                        21,585         8.22       21,813         8.20       21,673         8.21
      Investments in debt and equity securities
        Trading                                            125         6.67          169         6.69          115         6.24
        Taxable                                          8,404         6.47        8,728         6.47        8,560         6.49
        Tax-exempt                                         434         8.38          417         8.47          411         7.94
                                                       -------                   -------                   -------
          Total Investments in Debt and Equity
             Securities                                  8,963         6.57        9,314         6.56        9,086         6.56
      Short-term investments                               479         5.62          600         5.51          517         5.55
                                                       -------                   -------                   -------
          Total Earning Assets                          31,027         7.81       31,727         7.69       31,276         7.63
    Non-earning assets                                   3,012                     3,214                     2,984
                                                       -------                   -------                   -------
          Total Assets                                 $34,039                   $34,941                   $34,260
                                                       =======                   =======                   =======
LIABILITIES
    Acquired Funds
      Deposits
        Non-interest bearing                           $ 3,746                   $ 4,003                   $ 3,801
        Interest bearing demand                          3,128         1.98        3,136         1.90        3,009         1.82
        Money market accounts                            3,884         4.11        3,979         4.08        3,960         4.06
        Savings                                          1,647         2.50        1,762         2.62        1,774         2.72
        Consumer time certificates under $100,000        9,836         5.60        9,685         5.57        9,420         5.53
        Other time                                         196         5.93          196         5.50          174         5.20
                                                       -------                   -------                   -------
          Total Core Deposits                           22,437         4.41       22,761         4.36       22,138         4.33
        Time certificates $100,000 and over              1,908         5.62        1,928         5.62        1,837         5.65
        Foreign                                            541         5.63          441         5.60          397         5.61
                                                       -------                   -------                   -------
          Total Purchased Deposits                       2,449         5.64        2,369         5.63        2,234         5.65
                                                       -------                   -------                   -------
          Total Deposits                                24,886         4.55       25,130         4.50       24,372         4.47
      Short-term borrowings                              3,876         5.40        3,570         5.31        2,860         5.32
      Bank notes                                           152         6.13           25         5.82           25         5.85
      Long-term debt<F2>                                 1,823         6.23        2,911         5.87        3,641         5.69
                                                       -------                   -------                   -------
          Total Acquired Funds                          30,737         4.82       31,636         4.77       30,898         4.75
    Other liabilities                                      436                       424                       383
SHAREHOLDERS' EQUITY                                     2,866                     2,881                     2,979
                                                       -------                   -------                   -------
          Total Liabilities and Shareholders'
             Equity                                    $34,039                   $34,941                   $34,260
                                                       =======                   =======                   =======
SIGNIFICANT RATIOS
      Net interest rate spread                                         2.99%                     2.92%                     2.88%
      Net interest rate margin                                         3.62                      3.53                      3.51


<FN>
<F1> Taxable-equivalent basis.

<F2> Includes company-obligated mandatorily redeemable preferred securities of
     Mercantile Capital Trust I.<PAGE>
<CAPTION>
MERCANTILE BANCORPORATION INC. AND SUBSIDIARIES
CONSOLIDATED QUARTERLY AVERAGE BALANCE SHEET (CONTINUED)
($ IN MILLIONS)

                                                               1997                      1998
                                                            NINE MONTHS               NINE MONTHS
                                                        --------------------      --------------------
                                                        VOLUME      RATE<F1>      VOLUME      RATE<F1>
                                                        ------      --------      ------      --------
<S>                                                  <C>          <C>          <C>          <C>
ASSETS
    Earning Assets
      Loans and leases, net of unearned income
        Commercial                                     $ 4,796         8.59%     $ 5,443         8.34%
        Real estate--commercial                          3,470         8.66        3,656         8.53
        Real estate--construction                          636         8.88          732         8.78
        Real estate--residential mortgage                6,108         7.89        8,481         7.62
        Real estate--home equity credit loans              485         9.69          559         9.64
        Consumer                                         2,374         9.12        2,657         9.09
        Credit card                                        753        13.16          162         7.08
                                                       -------                   -------
          Total Loans and Leases                        18,622         8.65       21,690         8.21
      Investments in debt and equity securities
        Trading                                             88         6.72          136         6.56
        Taxable                                          5,857         6.35        8,565         6.48
        Tax-exempt                                         473         8.14          421         8.27
                                                       -------                   -------
          Total Investments in Debt and Equity
             Securities                                  6,418         6.49        9,122         6.56
      Short-term investments                               438         5.90          532         5.56
                                                       -------                   -------
          Total Earning Assets                          25,478         8.08       31,344         7.71
    Non-earning assets                                   2,271                     3,070
                                                       -------                   -------
          Total Assets                                 $27,749                   $34,414
                                                       =======                   =======
LIABILITIES
    Acquired Funds
      Deposits
        Non-interest bearing                           $ 3,334                   $ 3,850
        Interest bearing demand                          2,914         2.04        3,091         1.90
        Money market accounts                            3,323         4.02        3,941         4.08
        Savings                                          1,434         2.36        1,729         2.62
        Consumer time certificates under $100,000        8,185         5.52        9,645         5.57
        Other time                                         204         4.56          188         5.55
                                                       -------                   -------
          Total Core Deposits                           19,394         4.29       22,444         4.37
        Time certificates $100,000 and over              1,611         5.61        1,891         5.63
        Foreign                                            448         5.63          459         5.62
                                                       -------                   -------
          Total Purchased Deposits                       2,059         5.63        2,350         5.64
                                                       -------                   -------
          Total Deposits                                21,453         4.44       24,794         4.51
      Short-term borrowings                              2,662         5.36        3,432         5.35
      Bank notes                                           175         5.92           67         6.05
      Long-term debt<F2>                                   709         6.77        2,798         5.87
                                                       -------                   -------
          Total Acquired Funds                          24,999         4.65       31,091         4.78
    Other liabilities                                      364                       414
SHAREHOLDERS' EQUITY                                     2,386                     2,909
                                                       -------                   -------
          Total Liabilities and Shareholders'
             Equity                                    $27,749                   $34,414
                                                       =======                   =======
SIGNIFICANT RATIOS
      Net interest rate spread                                         3.43%                     2.93%
      Net interest rate margin                                         4.13                      3.56

<FN>
<F1> Taxable-equivalent basis.

<F2> Includes company-obligated mandatorily redeemable preferred securities of
     Mercantile Capital Trust I.
</TABLE>

                                      26
<PAGE>
<PAGE>
SPECIAL NOTE ON FORWARD-LOOKING STATEMENTS

   Certain statements in this report that relate to the plans, objectives or
   future performance of Mercantile Bancorporation Inc. may be deemed to be
   forward-looking statements within the meaning of the Private Securities
   Litigation Reform Act of 1995. These forward-looking statements involve
   certain risks and uncertainties. For example, by accepting deposits at fixed
   rates, at different times and for different terms, and lending funds at
   fixed rates for fixed periods, a bank accepts the risk that the cost of
   funds may rise and the use of the funds may be at a fixed rate. Similarly,
   the cost of funds may fall, but a bank may have committed by virtue of the
   term of a deposit to pay what becomes an above-market rate. Investments may
   decline in value in a rising interest rate environment. Because the business
   of banking is highly regulated, decisions of governmental authorities, such
   as the rate of deposit insurance, can have a major effect on operating
   results. Unanticipated events associated with Year 2000 compliance, relating
   to required work on developments or modifications to the Corporation's
   computer systems and software, including work performed by suppliers or
   vendors or relating to the failure of third parties upon whom the Corporation
   relies, including customers, suppliers, governmental entities and others, to
   address their own Year 2000 issues, could affect Mercantile's future
   financial condition and operating results. Actual charges associated with
   completed acquisitions may prove to be greater than current estimates. In
   addition, management's objectives with respect to the Corporation's capital
   base and equity levels may not reach the targeted objectives within the
   targeted periods due to numerous factors, including those previously
   mentioned. All of these uncertainties, as well as others, are present in a
   banking operation and shareholders are cautioned that management's view of
   the future on which it prices it products, evaluates collateral, sets loan
   reserves and estimates costs of operation and regulation may prove to be
   other than as anticipated. Actual strategies and results in future periods
   may differ materially from those currently expected.

                                      27
 <PAGE>
<PAGE>
                          PART II--OTHER INFORMATION

Item 5. Other Information.

    The By-Laws of Mercantile provide that shareholder proposals, including
    nominations of directors, which do not appear in the proxy statement may
    be considered at a meeting of shareholders only if they involve a matter
    proper for shareholder action and written notice of the proposal is received
    by the Secretary of Mercantile not less than 60 and not more than 90 days
    prior to the anniversary of the preceding year's annual meeting; provided,
    however, that in the event that the date of the annual meeting is more than
    30 days before or more than 60 days after such anniversary date, notice by
    the shareholder to be timely must be so delivered not earlier than the 90th
    day prior to such annual meeting and not later than the later of the 60th
    day prior to such annual meeting or the 10th day following the day on which
    public announcement of the date of such meeting is first made by Mercantile.
    Pursuant to the By-Laws of Mercantile, the date by which written notice of
    a proposal must be received by Mercantile to be considered at the 1999
    Annual Meeting of Shareholders is February 22, 1999. Any such written
    notice of a shareholder proposal by a shareholder to the Secretary of
    Mercantile must include (a) a brief description of the business desired
    to be brought before the Annual Meeting and the reasons for conducting
    such business at the Annual Meeting, (b) the name and address, as they
    appear on Mercantile's books, of the shareholder proposing such business
    and the beneficial owner, if any, on whose behalf the proposal is made,
    (c) the class and number of shares of Mercantile which are owned
    beneficially and of record by the shareholder and such beneficial owner
    and (d) any material interest of the shareholder and such beneficial
    owner in such business.

Item 6. Exhibits and Reports on Form 8-K.

    (a) Exhibits

        27.1 Financial Data Schedule (September 30, 1998)

        27.2 Restated Financial Data Schedule (September 30, 1997)

    (b) Reports on Form 8-K:

        Registrant filed one (1) Current Report on Form 8-K during the quarter
        ended September 30, 1998. In a Report dated July 16, 1998, under Item
        5, Registrant disclosed that it had, effective July 1, 1998,
        consummated its acquisition of Firstbank of Illinois Co. ("Firstbank")
        through merger of Firstbank with and into a wholly owned subsidiary of
        Registrant, with the shareholders of Firstbank to receive an aggregate
        of approximately 13,786,135 shares of Registrant's common stock in
        exchange for their Firstbank shares.

        In addition, the Registrant filed a Current Report on Form 8-K dated
        October 7, 1998 under Item 5, which contained supplemental consolidated
        financial statements for the years ended December 31, 1997, 1996 and
        1995. Said statements restated Registrant's historical consolidated
        financial statements for those years to reflect the acquisitions of
        Firstbank and CBT Corporation ("CBT") on July 1, 1998. The Firstbank
        and CBT acquisitions were accounted for under the pooling-of-interests
        method of accounting. Registrant also filed Unaudited Interim
        Consolidated Financial Statements restating the Registrant's historical
        consolidated financial statements for the Firstbank and CBT
        transactions: 1) as of and for the three month periods ended March 31,
        1998 and 1997; and 2) as of June 30, 1998 and 1997, and for the three
        and six month periods ended June 30, 1998 and 1997.

        Under Item 7, Registrant filed the consent of KPMG Peat Marwick LLP to
        incorporation by reference of its report on the Supplemental Financial
        Statements into pending registration statements of the Registrant.


                                      28
<PAGE>
<PAGE>

        The October 7, 1998 Form 8-K included the financial statements, notes
        and auditor's report listed below:

          Independent Auditor's Report of KPMG Peat Marwick LLP dated October
          7, 1998.

          Supplemental Consolidated Statement of Income for the years ended
          December 31, 1997, 1996 and 1995.

          Supplemental Consolidated Balance Sheet as of December 31, 1997, 1996
          and 1995.

          Supplemental Consolidated Statement of Changes in Shareholders'
          Equity for the years ended December 31, 1997, 1996 and 1995.

          Supplemental Consolidated Statement of Cash Flows for the years ended
          December 31, 1997, 1996 and 1995.

          Notes to Supplemental Consolidated Financial Statements.

          Supplemental Interim Consolidated Statement of Income (Unaudited) for
          the three months ended March 31, 1998 and 1997.

          Supplemental Interim Consolidated Balance (Unaudited) as of March 31,
          1998 and 1997.

          Supplemental Interim Consolidated Statement of Changes in
          Shareholders' Equity (Unaudited) for the three months ended March 31,
          1998 and 1997.

          Supplemental Interim Consolidated Statement of Cash Flows (Unaudited)
          for the three months ended March 31, 1998 and 1997.

          Supplemental Interim Consolidated Statement of Comprehensive Income
          (Unaudited) for the three months ended March 31, 1998 and 1997.

          Supplemental Interim Consolidated Statement of Income (Unaudited) for
          the three months and six months ended June 30, 1998 and 1997.

          Supplemental Interim Consolidated Balance (Unaudited) as of June 30,
          1998 and 1997.

          Supplemental Interim Consolidated Statement of Changes in
          Shareholders' Equity (Unaudited) for the six months ended June 30,
          1998 and 1997.

          Supplemental Interim Consolidated Statement of Cash Flows (Unaudited)
          for the six months ended June 30, 1998 and 1997.

          Supplemental Interim Consolidated Statement of Comprehensive Income
          (Unaudited) for the three months and six months ended June 30, 1998
          and 1997.

                                      29
<PAGE>
<PAGE>
                                   SIGNATURE

Pursuant to the requirements 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.

                                             MERCANTILE BANCORPORATION INC.
                                                     (Registrant)

Date  November 13, 1998                          /s/  JOHN W. MCCLURE
      -----------------------            -------------------------------------
                                                    John W. McClure
                                                Chief Financial Officer

                                      30
 <PAGE>
<PAGE>

<TABLE>
                                              EXHIBIT INDEX

<CAPTION>
EXHIBIT NO.                                    DESCRIPTION                             LOCATION
-----------                                    -----------                             --------
 <C>          <S>                                                                   <C>
   27.1      Financial Data Schedule (September 30, 1998)                           Included herein

   27.2      Restated Financial Data Schedule (September 30, 1997)                  Included herein

</TABLE>

                                      31