VERMILION BANCORP, INC.




                          1999 ANNUAL REPORT

                           TO STOCKHOLDERS

                          TABLE OF CONTENTS

                                                                  Page

     President's Letter to Stockholders                             2

     Selected Consolidated Financial and Other Data                 3

     Management's Discussion and Analysis of Financial Condition
       and Results of Operations                                    5

     Independent Auditors' Report                                  19

     Consolidated Balance Sheet                                    20

     Consolidated Statements of Income                             21

     Consolidated Statements of Stockholders' Equity               22

     Consolidated Statements of Cash Flows                         23

     Notes to Consolidated Financial Statements                    24

     Directors and Executive Officers                              43

     Banking Locations, Stockholder Information, and               44
       Market Prices and Dividends
























                            (1)




Dear Stockholders:


Vermilion Bancorp, Inc. continues its operations as an independent
single bank holding company for American Savings Bank of Danville.

American Savings Bank has continued modest growth in deposits and loans.
Deposits grew about five percent and loans grew by about eight percent.

With our first branch opening in November 1998, we have enjoyed better
community recognition and have increased services to our customers.

Vermilion Bancorp's consolidated loss of twenty-one cents per share for
the year ending September 30, 1999 was primarily the result of a one
time cost of settling litigation filed in 1992. The new operating costs
associated with the branch were also significant. There were also
several substantial costs associated with changing data processing
providers completing the preparations for Year 2000.

For the new fiscal year end September 30, 2000, we expect continued
operating profits without the onetime expenses of last year.

In February 1999, Vermilion Bancorp, Inc. repurchased ten percent of the
amount of the original public offering which increased the book value
per share. The market for small financial institutions stocks remains
weak in general. The directors continue looking at alternatives to
increase value to the stockholders.

The directors and I continue to appreciate the customer and stockholder
support. We are optimistic that the future of Vermilion Bancorp, Inc.
remains strong.



Sincerely,


/s/Merrill G. Norton

Merrill G. Norton
President and Chief
Executive Officer



                         (2)




SELECTED CONSOLIDATED FINANCIAL AND OTHER DATA

The following selected consolidated financial and other data
of  the  Company does not purport to be complete and is
qualified in  its  entirety  by  reference to the more
detailed  financial information, including the Consolidated
Financial Statements  and Related Notes, appearing elsewhere
herein.
                                  At September 30,
                              1999   1998     1997     1996     1995
                                     (Dollars in Thousands)
Selected Financial Condition
Data:
 Total assets               $43,763 $43,216  $37,816  $35,459  $33,977
 Cash and cash equivalents    1,175   1,742    1,138      789      571
 Interest-bearing time
   deposits                      20      20       99       99       99
 Securities
  Available for sale          1,494   2,785    3,116    2,222    1,486
  Held to maturity            1,522   2,312    3,000    4,337    6,816
 Loans, net                  37,234  34,226   29,411   26,936   23,954
 Premises and equipment       1,488   1,356      461      467      495
 Federal Home Loan Bank of
   Chicago stock, at cost       321     350      283      269      255
 Deposits                    31,639  30,044   29,098   30,724   31,331
 Federal Home Loan
   Bank advances              6,400   6,400    2,600    2,000      --
 Total equity capital         5,588   6,321    5,955    2,355    2,442
 Full service offices             2       1        1        1        1


                                      Year Ended September 30,
                              1999    1998     1997     1996     1995
                                          (In Thousands)
Selected Operating Data:
  Total interest income      $3,221 $ 3,070  $ 2,803  $ 2,634  $ 2,375
  Total interest expense      1,883   1,818    1,741    1,778    1,588
                              -----   -----    -----    -----    -----
   Net interest income        1,338   1,252    1,062      856      787
  Provision for
     losses on loans             63      75       17       80       13
                              -----   -----    -----    -----    -----
   Net interest income after
    provision for losses
      on loans                1,275   1,177    1,045      776      774
  Non-interest income           111      55       42       45       51
  Non-interest expense        1,568     843      761      889(1)   710
                              -----   -----    -----    -----    -----
   Income (loss) before taxes  (181)    389      326      (68)     115
  Provision for income taxes   (110)    144       74        3       15
                              -----   -----    -----    -----    -----
   Net income (loss)            (71)    244      252      (71)     100
  Net income per share         (.21)    .66      N/A      N/A      N/A
  Book value per share        17.23   17.04    16.21      N/A      N/A
  Dividends per share        $ 0.00 $  0.00     0.00      N/A      N/A

(1) Includes a special assessment of $206,000 to recapitalize the
Savings Association Insurance Fund ("SAIF").


                               (3)




                              At or For the Year Ended September 30,
                            1999   1998    1997   1996       1995
Other Data:
 Profitability:
  Return on average assets  (.16)%  .06%   0.67% (0.20)%(4)  0.29%
  Return on average equity (1.20)  3.99    5.07  (2.89)(4)   4.18
  Interest rate spread for
               period(1)    2.63   2.75    2.20    2.17      2.11
  Net interest margin(2)    3.23   3.18    2.92    2.48      2.39
  Non-interest expenses to
            average assets  3.60(5)2.07    2.03    2.49      2.08
  Average interest-earning
   assets to average
   interest bearing
   liabilities            113.08 114.98  115.18  106.05    104.04
 Capital Ratios:
  Average equity to
   average assets          13.67  15.07   13.26    6.90      7.02
 Asset Quality:
  Non-performing assets
to total assets(3)          1.57   0.90    1.28    0.93      0.64
  Net chargeoffs
  (recoveries) to
   average loans             .11   0.24    0.03    0.04      0.03
  Allowance for loan
   losses to total loans     .48   0.45    0.52    0.53      0.31
  Allowance for loan
   losses to
   non-performing loans    26.02  50.99   31.34   43.60     34.26


Capital Ratios of the Bank
Tier 1 risk-based          16.30  22.40   26.50   14.45     14.59
Total risk-based           17.00  23.00   27.30   15.33     15.03
Tier 1 leverage             9.20% 12.40%  13.50%   6.61%     7.11%


(1) The  interest  rate spread represents the difference  between
the  average yield on interest-earning assets and the average
rate paid on interest-bearing liabilities.

(2) The  net  interest  margin  represents  net  interest  income
divided by average interest-earning assets.

(3) Non-performing  assets  include non-accrual  loans,  accruing
loans delinquent 90 days or more and real estate owned.

(4) When  calculated  without the special  SAIF  assessment,  the
return  on  average assets and the return on  average  equity
would have been 0.24% and 3.01%, respectively.

(5) Includes litigation settlement expense of $500,000 which
represents 1.15%.



                            (4)




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

General

Vermilion  Bancorp,  Inc.  (the "Company")  is  the  holding
company  for  American Savings Bank of Danville(the  "Bank").
The operating results of the Company depend upon the operating
results of the Bank.  The results of the Bank are primarily
dependent upon  its net  interest  income,  which  is determined
by  the  difference between interest income on interest-earning
assets, which consist principally of loans, investment securities
and other investments, and interest expense on interest-bearing
liabilities, which consist principally of deposits and borrowed
money. The Bank's net income also is affected by its provision
for loan losses, as well as the level of its other income,
including loan fees and service charges and miscellaneous items,
and its other expenses, including compensation and other employee
benefits, premises and occupancy costs, federal deposit insurance
premiums, data processing expense, net loss on real estate owned
and other miscellaneous expenses, and income taxes.

On March 25, 1997, the Bank completed its conversion from the
mutual to the stock form (the "Conversion") and was acquired by
the Company. In the Conversion, the Company issued 396,750
shares of common stock, which resulted in net proceeds to the
Company, after costs and employee stock ownership plan shares, of
approximately $3.3 million.

In addition to historical information, forward-looking statements
are contained herein that are subject to risks and uncertainties
that could cause actual results to differ materially from those
reflected  in   the   forward-looking statements.  Factors that
could cause future results to vary from current expectations,
include, but are not limited to, the impact of  economic conditions
(both generally and more specifically  in the  markets  in  which  the
Company operates),  the  impact  of competition  for the Company's
customers from other providers  of financial  services,  the  impact of
government  legislation  and regulation  (which changes from time to
time and over  which  the Company has no control), and other risks
detailed in this  Annual Report  and  in  the  Company's  other
Securities  and  Exchange Commission  filings.  Readers are cautioned
not  to  place  undue reliance  on  these  forward-looking  statements,
which  reflect management's  analysis only as of the date hereof.   The
Company undertakes no obligation to publicly revise these forward-
looking statements,  to reflect events or circumstances that arise
after the  date  hereof.   Readers  should carefully  review  the  risk
factors described in other documents the Company files from  time
to  time  with the Securities and Exchange Commission,  including
the Quarterly Reports on Form 10-Q to be filed by the Company  in
1999 and any Current Reports on Form 8-K filed by the Company.



                          (5)





Changes in Financial Condition


General. Total assets of the Bank increased by $547,000, or 1.3%, to
$43.8 million at September 30, 1999 from $43.2 million at September 30,
1998. The increase in total assets during 1999 was due primarily to a
$3.0 million increase in net loans, an increase of $131,000 in premises
and equipment, and a $83,000 increase in other assets, partially offset
by a $2.08 million reduction in total investment securities and a
$566,000 reduction in cash and cash equivalents.

Cash and cash equivalents.  Cash and cash equivalents, which consist of
cash and due from banks and interest-bearing demand deposits at other
institutions, decreased by $566,000, or 32.5%, to $1.2 million at
September 30, 1999 compared to $1.7 million at September 30, 1998.  The
decrease in cash and cash equivalents in fiscal 1999 was primarily the
result of funding loan originations. At September 30, 1999, cash and
cash equivalents amounted to 2.7% of the Company's total assets. Cash
and cash equivalents may be utilized to fund deposit withdrawals or as a
source of funds for new loan originations or for the purchase of
investment or mortgage-backed securities.

Net Loans.  The Company's net loans amount to $37.2 million at September
30, 1999, a $3.0 million, or a 8.8% increase over net loans at September
30, 1998.  The increase was due primarily to originations of residential
mortgage loans.

Investment securities.  The Company's investment securities amounted to
$3.0 million at September 30, 1999 compared to $5.1 million at September
30, 1998.  The decrease in investment securities was the result of a
$790,000 decrease in investment securities held to maturity and a $1.3
million decrease in investments available for sale. The decrease in
investments securities was due to sales and maturities being used to
fund a stock repurchase and loan growth.

Deposits.  The Company's total deposits amounted to $31.6 million at
September 30, 1999 compared to $30.0 million at September 30, 1998.
During 1999, the Company's total deposits increased by $1.6 million, or
5.3%. Demand deposits increased $413,000, savings and retirement
accounts increased $216,000 and certificates of deposits increased
$965,000 from 1998 to 1999.



                             (6)






Average Balances, Net Interest Income and Yields Earned and Rates
Paid.

The following  table presents for the periods indicated the total
dollar amount of interest income from average interest-earning
assets and the resultant yields, as well as the total dollar
amount of interest expense on average interest-bearing liabilities
and the resultant rates, and the net interest margin. The table
does not reflect any effect of income taxes.  All average balances
are based on average monthly balances during the periods.





                                     At
                                 Sept. 30
                                   1999   Year Ended September 30, 1999
                                             (Dollar in Thousands)
                                   Yield/   Average               Yield/
                                    Rate    Balance    Interest    Rate

Interest-earning assets:
  Loans, net(1)                     7.63%   $35,730    $ 2,867     8.02%
     Interest-bearing deposits
     with financial institutions    4.95      2,557        135     5.28
     Investment Securities(2)       6.34      1,570        106     6.75
     Mortgage-backed securities     7.23      1,554        113     7.27
   Total interest-earning assets    7.49     41,411      3,221     7.82
     Non-interest-earning assets              2,166
   Total assets                             $43,577

Interest-bearing liabilities:
     Deposits:
     Now                            1.98        668         14     2.10
     Money market investment        2.72        904         28     3.10
     Savings and retirement         3.92      5,387        224     4.16
     Certificates                   5.20     23,209      1,283     5.53
      Total deposits                4.82     30,168      1,549     5.13
     FHLB advances                  5.14      6,400        334     5.22
Total interest-bearing liabilities  4.88     36,568      1,883     5.15
Non-interest bearing liabilities              1,054
      Total liabilities                      37,622

Equity capital                                5,955
      Total liabilities and
            equity capital                  $43,577
Net interest income; interest
                rate spread(3)      2.61               $ 1,338     2.63
Net interest margin(4)                                             3.23
Ratio of interest-earning
assets to average interest-
bearing liabilities               113.24%                        113.08%




                                (7)


                                     At
                                 Sept. 30
                                 1998     Year Ended September 30, 1998
                                           (Dollar in Thousands)
                                 Yield/   Average                Yield/
                                  Rate    Balance    Interest     Rate

Interest-earning assets:
  Loans, net(1)                   7.92%   $32,128    $ 2,624      8.17%
     Interest-bearing deposits
     with financial institutions  4.38      2,030         87      4.29
     Investment Securities(2)     5.67      2,115        132      6.24
     Mortgage-backed securities   7.15      3,120        227      7.28
 Total interest-earning assets    7.48     39,393      3,070      7.79
   Non-interest-earning assets              1,251
   Total assets                           $40,644
Interest-bearing liabilities:
     Deposits:
     Now                          0.79      1,229         10      0.81
     Money market investment      3.59        856         33      3.86
     Savings and retirement       4.33      5,119        238      4.65
     Certificates                 5.62     22,238      1,282      5.76
      Total deposits              5.09     29,442      1,563      5.31
     FHLB advances                5.14      4,820        255      5.29
Total interest-bearing
 liabilities                      5.10     34,262      1,818      5.31
Non-interest bearing liabilities              257
      Total liabilities                    34,519

Equity capital                              6,125
      Total liabilities and
            equity capital                $40,644
Net interest income; interest
                rate spread(3)    2.38               $ 1,252      2.48
Net interest margin(4)                                            3.18
Ratio of interest-earning
assets to average interest-
bearing liabilities             114.33%                         114.98%


(1) Includes loans on which the Bank has discontinued accruing interest.

(2)  Includes securities available for sale and held to maturity and
excludes mortgage-backed securities. The average balance of securities
available for sale is computed based on the average of the historical
amoratized cost balances without the effects of the fair value
adjustment.

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

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



                                   (8)










     Rate/Volume  Analysis.  The following table describes the extent
to  which changes  in interest rates and changes in volume of interest-
related assets  and liabilities have affected the Bank's interest income
and interest expense during the  periods  indicated.   For  each
category  of  interest-earning  assets  and interest-bearing
liabilities, information is provided on changes attributable to
(i)  changes  in volume (change in volume multiplied by prior year
rate),  (ii) changes  in  rate  (change in rate multiplied by prior year
volume),  and  (iii) total  change in rate and volume.  The combined
effect of changes in  both  rate and  volume has been allocated
proportionately to the change due to rate and the change due to volume.





                                    Year Ended September 30,
                                          1999 vs 1998
                                         Increase
                                        (Decrease)         Total
                                          Due To          Increase
                                     Rate      Volume     Decrease
                                          (In Thousands)
Interest-earning assets:
  Interest-bearing deposits with
           financial institutions  $  23       $  25       $  48
  Loans, net                         (47)        290         243
  Investment Securities               10         (36)        (26)
  Mortgage-backed securities          (0)       (114)       (114)

  Total change in interest income     (6)        157         151
Interest-bearing liabilities:
  Deposits:
    Now accounts                      10          (6)          4
    Money market investment            7           2          (5)
    Savings and retirement           (26)        (12)        (14)
    Certificates                     (54)         55           1
  FHLB advances                       (4)         83          79

  Total change in interest expense   (55)        120          65

Net change in net interest income  $  49       $  37       $  86





                               (9)





                                      Year Ended September 30,
                                          1998 vs 1997
                                         Increase
                                        (Decrease)         Total
                                          Due To          Increase
                                     Rate      Volume    (Decrease)
                                          (In Thousands)
Interest-earning assets:
  Interest-bearing deposits with
           financial institutions  $  (3)      $ (10)      $ (13)
  Loans, net                         (20)        320         300
  Investment Securities                5         (22)        (17)
  Mortgage-backed securities          25         (28)         (3)

  Total change in interest income      7         260         267
Interest-bearing liabilities:
  Deposits:
    Now accounts                       1           1           2
    Money market investment            6          (5)          1
    Savings and retirement           (16)         (9)        (25)
    Certificates                      --         (33)        (33)
  FHLB advances                       (9)        141         132

  Total change in interest expense   (18)         95          77

Net change in net interest income  $  25       $ 165       $ 190







Results of Operations

    Net Income(loss) The company reported a net loss of $71,000 and net
income of $244,000 during the years ended September 30, 1999 and
1998,respectively.

    Net Interest Income. Net interest income is determined by interest
rate spread (i.e., the difference between the yields earned on its
interest-earning assets and the rates paid on its interest-bearing
liabilities) and the relative amounts of interest-earning assets and
interest-bearing liabilities. The Bank's average interest-rate spread
was 2.63% and 2.48% during the years ended September 30, 1999 and 1998,
respectively. The Bank's net interest margin (i.e., net interest income
as a percentage of average interest-earning assets) was 3.23% and 3.18%
during the years ended September 30, 1999 and 1998 respectively.

    Net interest income increased by $86,000, or 6.9%, during the year
ended September 30, 1999 to $1.33 million compared to $1.25 million for
the year ended September 30, 1998. The primary reasons for this increase
were a $243,000 increase in interest income from loans, a $47,000
increase in interest income from deposits with financial institutions,
and a $13,000 decrease in deposit interest expense offset by a $139,000
decrease in interest income from investment securities, and an increase
in interest expense from FHLB borrowings of $78,000.



                             (10)







 Interest Income. Total interest income increased by $152,000 or 4.9% in
the year ended September 30, 1999. Interest income on loans amounted to
$2.9 million in fiscal 1999 compared to $2.6 million in fiscal 1998. The
average balance of the Bank's total loans increased by $3.6 million, or
11.2%, in fiscal 1999 compared to fiscal 1998 and the average yield
earned on loans decreased by 15 basis points (with 100 basis points
being equal to 1.0%). Interest income on investment securities decreased
by $139,000 or 38.7% in fiscal 1999 compared to fiscal 1998 due
primarily to a $545,000 decrease in the average balance of investment
securities and a $1.6 million decrease in the average balance of
mortgage backed investment securities. Interest income on interest-
bearing deposits increased by $47,000, or 54.1%, in fiscal 1999 compared
to fiscal 1998 due primarily to a $527,000 increase in the average
balance in interest-bearing deposits. The average rate on interest-
bearing deposits increased by 99 basis points.

    Interest Expense. The primary component of interest expense during
all periods presented is interest on deposits. Deposit interest expense
decreased by $13,000, or 0.8%, during the year ended September 30, 1999
compared to the year ended September 30, 1998. The decrease was due
primarily to a decrease in the rate paid on total deposits held by the
institution from 5.31% to 5.14%. Certificates of deposit (including
certificates of deposit of $100,000 or more) constituted 74.9% of the
Bank's total deposits at September 30, 1999 compared to 75.6% at
September 30, 1998.  The average balance of the Bank's certificates
increased by $971,000 or 4.4% from fiscal year 1999 to 1998.

       Provisions for Losses on Loans. Provisions for losses on loans
are charged to earnings to bring the total allowance for loan losses to
a level considered appropriate by management based on a methodology
implemented by the Bank which is designed to assess, among other things,
experience, the volume and type of lending conducted by the Bank,
overall portfolio mix, the amount of the Bank's classified assets, the
status of past due principal and interest payments, loan-to-value ratios
of loans in the Bank's loan portfolio, general economic conditions,
particularly as they relate to the Bank's market area, and other factors
related to the collectibility of the Bank's loan portfolio. Management
of the Bank assesses the allowance for loan losses on a monthly basis
and will make provisions for loan losses as deemed appropriate by
management in order to maintain the adequacy of the allowance
for loan losses.

       The Bank's provisions for loan losses decreased to $63,000 in
fiscal 1999, compared to $75,000 in fiscal 1998.  At September 30, 1999,
the Bank's allowance for loan losses amounted to 26.0% of total non-
performing loans and to 0.48% of total loans receivable.

       Non-interest Income. Non-interest income increased $57,000 or
104.4% for the year ended September 30, 1999 compared to the year ended
September 30, 1998. The increase is primarily due to a $11,000 gain on
the sale of investment securities by the Company to fund the February
1999 stock repurchase, a $14,000 or 129.2% increase in loan fees, and a
$26,000 or 275.9% increase in service charges collected on deposit
accounts.

        Non-interest Expenses. Total non-interest expenses were $1.6
million in the year ended September 30, 1999 which amounted to a
$725,000 or 86.1% increase compared to the year ended September 30,
1998. The primary reason for the increase was due to the increase



                              (11)







 litigation settlement expense of $500,000 that relates to a one time
settlement with a prior employee, a $110,000 or 30.3% increase in salary
and employee benefits expense that reflects the opening of the new
branch, a $58,000 or 65.4% increase in net occupancy expense that
reflects the opening of the new branch, a $31,000 or 55.1% increase in
data processing expense that reflects Y2K adjustments, a $10,000 or
71.7% increase in office supplies, an $8,000 or 53.6% increase in
advertising and promotion expense and a $9,000 or 12.5% increase in
director and committee fees which reflects the cost of the Company's
Recognition and Retention Plan.

     Income Taxes. The Bank realized a $110,000 income tax benefit for
the year ended September 30, 1999, as compared to an expense of $144,000
for fiscal 1998. The benefit in fiscal 1999 was due to a net loss.


Asset and Liability Management

       The ability to maximize net interest income is largely dependent
upon the achievement of a positive interest rate spread that can be
sustained during fluctuations in prevailing interest rates. Interest
rate sensitivity is a measure of the difference between amounts of
interest-earning assets and interest-bearing liabilities which either
reprice or mature within a given period of time. The difference, or the
interest rate repricing "gap", provides an indication of the extent to
which an institution's interest rate spread will be affected by changes
in interest rates. A gap is considered positive when the amount of
interest-rate sensitive assets exceeds the amount of interest-rate
sensitive liabilities, and is considered negative when the amount of
interest-rate sensitive liabilities exceeds the amount of interest-
rate sensitive assets during a given time period. Generally, during a
period of rising interest rates, a negative gap within shorter
maturities would adversely affect net interest income, while a positive
gap within shorter maturities would result in an increase in net
interest income, and during a period of falling interest rates, a
negative gap within shorter maturities would result in an increase in
net interest income while a positive gap within shorter maturities would
have the opposite effect.  As of September 30, 1999, the amount of the
Bank's interest-bearing liabilities which were estimated to mature or
reprice within one year exceeded the Bank's interest-earning assets with
the same characteristics by $3.5 million or 8.01% of the Bank's total
assets.

      The Bank's actions with respect to interest rate risk and its
asset/liability gap management are reviewed periodically by the Bank's
Board of Directors. As part of the Board's review, it sets interest rate
risk targets and reviews the Bank's current composition of assets and
liabilities in light of the prevailing interest rate environment.

      The Bank has historically emphasized the origination of fixed-rate
long-term residential real estate loans for retention in its portfolio.
At September 30, 1999, $28.7 million or 87.2% of the Bank's total loan
portfolio due one year or more, consisted of one-to-four-family
residential mortgage loans. Although the Bank anticipates that a
substantial portion of its loan portfolio will continue to consist of
residential mortgage loans, a majority of such loans have a term of 15
years or less. The Bank has also attempted to mitigate the interest rate
risk of holding a significant portion of fixed-rate loans in its
portfolio through the origination of one-to-four family fixed-rate
balloon loans with terms of one or three years. At the end of a balloon



                               (12)






loan's term, the entire balance is due. The borrower has the option of
repaying the loan on the due date or, subject to satisfying the Bank's
underwriting criteria, accepting the modified loan rate which is then
offered by the Bank for such loans. In the latter case, the renewed loan
is a new balloon loan with the same term as the initial balloon loan.
The Bank has generally offered rates on such renewed loans at 1/4 of 1%
to 1/2 of 1% higher than rates then offered on its new balloon
residential real estate loans. Renewed balloon loans are amortized over
the remaining life of the original amortization period. At September 30,
1999, $5.3 million or 14.2% of the Bank's total loan portfolio consisted
of one-to-four family fixed-rate balloon loans.


      In addition, the Bank has also invested new funds or reinvested
funds from maturing securities into shorter-term securities and
variable-rate mortgage-backed securities in order to increase the
interest-rate sensitivity of its assets. As of September 30, 1999, the
Bank had $1.2 million of variable-rate mortgage-backed securities and
had $589,000 of investments in various and federal agency government
securities with terms to maturity of less than five years. As of
September 30, 1999, $1.5 million of the Bank's investment securities
portfolio were classified as available for sale, which will permit the
Bank to sell such securities if deemed appropriate in response to, among
other things, changes in interest rates.

      The Bank's deposits have included a relatively high amount of
certificates, which are generally higher costing and more interest-rate
sensitive than "core" deposits. At September 30, 1999, $23.7 million, or
74.9% of the Bank's total deposits were comprised of certificates of
deposit (including certificates of deposit of $100,000 or more) and
$15.7 million, or 49.7% of the Banks total deposits consisted of
certificates which are scheduled to mature within one year. Certificates
generally are costlier and a more volatile source of funds than
transaction accounts. In addition, certificates are more likely to be
invested in other instruments than are transaction accounts.
Notwithstanding the foregoing, management believes that most of its
certificates will remain at the Bank upon maturity. The Bank does
not accept brokered deposits.

      The general interest rate environment and the condition in the
Bank's market change. The Bank will continue to monitor the interest-
rate sensitivity of its assets and liabilities. In order to continue to
improve the Bank's interest-rate gap position, it plans to continue to
focus on increasing consumer and commercial business lending and
investing in shorter-term and variable-rate securities.





                            (13)






       The following table sets forth the amounts of interest-earning assets
and interest-bearing liabilities outstanding at September 30, 1999, which are
anticipated by the Bank, based upon certain assumptions, to reprice or mature
in each of the future time periods shown (the "GAP Table"). Except as stated
below, the amount of assets and liabilities shown which reprice or mature
during a particular period were determined in accordance with the earlier of
term to repricing or the contractual maturity of the asset or liability. The
table sets forth an approximation of the projected repricing of assets and
liabilities at September 30, 1999, on the basis of contractual maturities,
anticipated prepayments, and scheduled rate adjustments within a six month
period and subsequent selected time intervals.

                                                      More Than
                         Within  Six to  More Than    Three Years  Over
                          six    Twelve  One Year to  to five      Five
                         Months  Months  Three Years    Years      Years   Total

                                                    (Dollars in Thousands)

Interest-earning assets:
  Investment
   Securities(1)(2)    $ 1,007  $  534  $   115     $   --       $ 1,365 $ 3,021
  Loans, net(3)          5,494   5,495   16,485       3,253        6,507  37,234
  Interest-bearing
   deposits(4)           1,082      10       10         --           --    1,102
                         -------------------------------------------------------
Total interest-earning
 assets                  7,583   6,039   16,610       3,253        7,872  41,357
                         -------------------------------------------------------
Interest-bearing
 liabilities:
  Deposits(5):
    NOW accounts           187     186      373         --           --      746
    Money market
     investment acct.      252     253      505         --           --    1,010
    Savings and
     retirement acct.      276     276    1,102       1,102        2,756   5,512
    Certificates         7,860   7,860    7,598         374          --   23,692
                         -------------------------------------------------------
Total interest-
 bearing deposits        8,575   8,575    9,578       1,476        2,756  30,960
  Advances from FHLB      --      --        --        2,500        3,900   6,400
                         -------------------------------------------------------
Total interest-
 bearing liabilities     8,575   8,575    9,578       3,976        6,656  37,360

Excess (deficiency)
 of interest-earning
 assets over int.-
bearing liabilities       (992) (2,536)   7,032        (723)       1,216   3,997
Cumulative excess
 (deficiency)of
 interest-earning
assets over interest-
 bearing liabilities      (992) (3,528)   3,504       2,781        3,997   3,997
Cumulative excess
 (deficiency) of
 interest-earning
 assets over interest-
 bearing
 liabilities as a
 percent of total
 assets                  (2.27)% (8.06)%   8.01%      6.35%         9.13%  9.13%



                                                (14)



 (1) Reflects repricing, contractual maturity or anticipated call date.

(2) Includes securities available for sale and held to maturity and FHLB of
Chicago stock.

(3) Fixed-rate loans, including balloon loans, are included in the periods in
which they are scheduled to be repaid, based on scheduled amortization, adjusted
to take into account estimated prepayments. Therefore, for purposes of the
table, all of the Bank's balloon loans are deemed to have a term equal to the
initial amortization period.

(4) Includes interest-bearing demand and interest-bearing time deposits.

(5) Deposit accounts are assumed to have the following annual decay rates NOW
accounts - 50%; money market investment accounts - 50%; savings accounts - 20%;
and retirement accounts - 10%.




                                   (15)




     Certain assumptions based on regional, state and local  data for  savings
associations in the state of Illinois and on the Bank's historical experience
are contained in the above table which affect the presentation therein.
Although certain  assets and liabilities may have similar maturities or periods
of repricing, they  may react in different degrees to changes in market interest
rates.  The interest rates on certain  types of assets and liabilities may
fluctuate in advance of changes in market interest rates, while interest rates
of other types of assets and liabilities lag behind changes in market
interest rates. Certain assets, such as adjustable-rate loans, have features
which restrict changes in interest rates on a short-term basis and over the
life of the asset. In the event of a change in interest rates, prepayment and
early withdrawal levels would likely  deviate significantly from those
assumed in calculating the table.

Liquidity and Capital Resources

      The Bank's liquidity, represented by cash and cash equivalents,  is  a
product of its operating, investing and financing activities. The Bank's
primary sources of funds are deposits, amortization, prepayments and maturities
of outstanding loans and mortgage-backed securities, maturities of investment
securities and other short-term investments and funds provided from
operations. While scheduled payments from the amortization of loans and
mortgage-backed securities and maturing investment securities and short-term
investments are relatively predictable sources of funds, deposit flows and
loan prepayments are greatly influenced by general interest rates, economic
conditions and competition.
In addition, the Bank invests excess funds in overnight deposits and other
short-term interest-earning assets that provide liquidity to meet lending
requirements. The Bank used cash from cash and cash equilalents, from deposit
growth, and from maturing securities in its investment portfolio to fund loan
originations.  As of September 30, 1999, the Bank had the ability to borrow up
to $22.0 million from the FHLB.

     Liquidity management is both a daily and long-term function of business
management. Excess liquidity is generally invested in short-term investments
such as overnight deposits.  On a longer-term basis, the Bank maintains a
strategy of investing in various lending products.  The Bank uses its sources of
funds primarily to meet its ongoing commitments, to pay maturing savings
certificates and  savings withdrawals, fund loan commitments and maintain a
portfolio of mortgage-backed and investment securities.  At September 30,
1999 the total approved loan commitments outstanding amounted to $343,000.
At the same date, the Bank had commitments of $22,000 under unused letters of
credit.  Certificates scheduled to mature in one year or less at September
30, 1999 totaled $15.7 million. Management believes that  a significant
portion of maturing deposits will remain with the Bank. The Bank anticipates
that even with interest rates at lower levels than have been experienced
in recent years, which has caused a disintermediation of funds, it will continue
to have sufficient funds together with borrowings, to meet its current
commitments. The mixture of deposit liabilities and borrowings will depend on
the relative cost of each of these sources of funds.

     Federally-insured state-chartered banks are required to maintain  minimum
levels of regulatory capital. Under current FDIC regulations, insured state-
chartered banks generally must maintain (i) a ratio of Tier 1 leverage capital
to total assets of atleast 3.0% (4.0% to 5.0% for all but the most highly rated
banks) and (ii) a ratio of Tier 1 capital to risk weighted assets of at least
4.0% and a ratio of total capital risk weighted assets of at least 8.0%.  At
September 30, 1999, the Bank was in compliance with applicable regulatory
capital requirements.


Recent Accounting Pronouncements

In June 1998, the Financial Accounting Standards Board ("FASB") issued SFAS
No. 133, "Accounting for Derivative Instruments and Hedging Activities." This
Statement requires companies to record derivatives on the balance sheet at
their fair value. Statement No. 133 also acknowledges that the method of
recording a gain or loss

                                 (16)





depends on the use of the derivative. The New Statement applies to all entities.
If hedge accounting is elected by the entity, the method of assessing the
effectiveness of the hedging derivative and the measurement approach of
determining the hedge's ineffectiveness must be established at the inception of
the hedge. Statement No. 133 amends Statement No. 52 and supercedes Statements
No. 80, 105, and 119. Statement No. 107 is amended to include the disclosure
provisions about the concentrations of credit risk from Statement No. 105.
Several Emerging issues Task Force consensuses's are also changed or modified
by the provisions of Statement No. 133.

Statement No. 137 deferred the effective date of Statement No. 133 to all
fiscal years beginning after June 15, 2000. The Statement may not be applied
retroactively to financial statements of prior periods. The Statement's
adoption will have no material impact on the Corporation's financial
condition or result of operations.

Also in 1998, the FASB issued Statement No. 134 "Accounting for Mortgage-Backed
Securities Retained after the Securitization of Mortgage Loans Held for Sale by
a Mortgage Banking Enterprise." This statement establishes accounting standards
for certain activities of mortgage banking enterprises and for other enterprises
with similar mortgage operations. This Statement amends SFAS No. 65 which as
previously amended by SFAS Nos. 115 and 125, required a mortgage banking
enterprise to classify a mortgage-backed security as a trading security
following the securitization of the mortgage loan held for sale. This
Statement further amends SFAS No. 65 to require that after the securitization
of mortgage loans held for sale, an entity engaged in mortgage banking
activities must classify the resulting mortgage-backed security or
other retained interests based on the entity's ability and intent to sell or
hold those investments. The determination of the appropriate classification for
securities retained after the securitization of mortgage loans by a mortgage
banking enterprise now conforms to SFAS No. 115. The only new requirement is
that if an entity has a sales commitment in place, the security must be
classified into trading. This Statement is effective for the first fiscal
quarter beginning after December 15, 1998. The Statement's adoption had no
impact on the bank's financial condition and results of operations.



Year 2000 Compliance

	The Year 2000 compliance issue exists because many computer systems and
applications currently use two digit fields to designate a year.  As the
century date change occurs, date sensitive systems may either fail or not
operate properly unless the underlying programs are modified or replaced.
	   The Bank's lending and deposit activities, like those of most financial
institutions, depend significantly upon computer systems to process and record
transactions.  The Company is aware of the potential Year 2000 problems that
may affect the operating systems that control our computers as well as those of
our third-party data service providers that maintain many of our records.  In
1997, the Bank began the process of identifying Year 2000 related problems that
may affect the Bank's computer systems. A task force of Bank officers was
established to address the issues related to these problems. Outside consultants
were utilized when required to complete this project.
	   The task force analyzed the Bank's operations and both identified those
functions that would be affected by Year 2000 issues and determined which of
these functions were mission critical (i.e. vital to the day-to-day operations
of the Bank).  A time table was established for completion of the various
sections of the project.
	   The Bank is working with the companies that supply or service the Bank's
computer systems that rely on computers to identify and remedy any Year 2000
related systems.  The Board of Directors is monitoring the Bank's progress in
addressing Year 2000 issues.
	   The Bank converted to a new data processor during May 1999 and completed
its year 2000 testing of the system in July 1999 with no apparent year 2000
related problems being found.
	   Inventory and testing of the Bank's computer equipment is complete. No new
equipment purchases are anticipated because of the Year 2000 issue. The direct



                                 (17)





expense to date (other than officer's salaries involved in the project) has
been less than $40,000.
	   Although the Company believes it is taking the necessary steps to address
the Year 2000 compliance issue, no assurances can be given that some problems
will not occur or that we will not incur significant additional expenses in
future periods.  In the event that the Bank incurs substantial expenses to make
the Bank's current systems, programs and equipment Year 2000 compliant, the
Company's net income, and financial condition could be adversely affected.
	   Because the Bank's loan portfolio to individual borrowers is diversified
and its market area does not depend significantly upon one employer or industry,
the Bank does not expect any Year 2000 related difficulties to significantly
affect the Company's net earnings or cash flow.
	The Bank has developed a contingency plan to deal with Year 2000 related
issues.  This program provides for dealing with situations that might occur
that are both related to the Bank's operations (e.g. computer systems or
equipment, liquidity) and those beyond the Bank's control (e,g. power failure,
phone/communication line failure).  The plan includes methods to deal with
these situations and continue to service the Bank's customers despite Year 2000
problems arising.



Impact of Inflation and Changing Prices

     The Financial Statements of the Company and related notes presented herein
have been prepared in accordance with GAAP which require the measurement of
financial position and operating results in terms of historical dollars, without
considering changes in the relative purchasing power of money over time due to
inflation.

     Unlike most industrial companies, substantially all of the assets and
liabilities of a financial institution are monetary in nature.  As a result,
interest rates have a more significant impact on a financial institution's
performance than the effects of general levels of inflation.  Interest rates do
not necessarily move in the same direction or in the same magnitude as the
prices of goods and services, since such prices are affected by inflation to a
larger extent than interest rates. In the current interest rate environment,
liquidity and the maturity structure of the Bank's assets and liabilities are
critical to the maintenance of acceptable performance levels.  Over the three
most recent fiscal years, interest rates have been relatively low and stable and
such environment has generally had a positive impact on the Company's revenues
and income.



                               (18)







Independent Auditor's Report


To the Stockholders and
Board of Directors
Vermilion Bancorp, Inc. and Subsidiary
Danville, Illinois


We have audited the accompanying consolidated balance sheet of Vermilion
Bancorp, Inc. and subsidiary as of September 30, 1999 and 1998, and the related
consolidated statements of income, stockholders' equity, and cash flows for the
years then ended.  These consolidated financial statements are the
responsibility of the Company's management.  Our responsibility is to express
an opinion on these consolidated financial statements based on our audits.

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

In our opinion, the consolidated financial statements described above present
all material respects, the consolidated financial position of Vermilion
Bancorp, Inc. and subsidiary as of September 30, 1999 and 1998, and the
results of their operations and their cash flows for the years then ended,
in conformity with generally accepted accounting principles.





Decatur, Illinois
October 8, 1999



                                    (19)





                       VERMILION BANCORP, INC.
                           AND SUBSIDIARY
                      Consolidated Balance Sheet

September 30                          1999           1998
Assets
  Cash and due from banks          $   93,054     $    53,430
  Interest-bearing demand deposits  1,082,406       1,688,212
                                    ---------       ---------
    Cash and cash equivalents       1,175,460       1,741,642
  Interest-bearing deposits            20,000          20,000
  Investment securities
    Available for sale              1,493,750       2,784,515
    Held to maturity (fair value of
      $1,537,648 and $2,358,553)    1,522,407       2,312,447
                                    ---------       ---------
      Total investment securities   3,016,157       5,096,962
  Loans, net of allowance for loan
   losses of $179,420 and $154,199 37,233,535      34,225,943
  Premises and equipment            1,487,666       1,356,263
  Federal Home Loan Bank stock        321,400         350,000
  Other assets                        509,063         425,628
                                   ----------      ----------
      Total assets                $43,763,281     $43,216,438
                                   ==========      ==========
Liabilities
  Deposits
    Noninterest bearing           $   678,971     $   669,725
    Interest bearing               30,960,093      29,374,750
                                   ----------      ----------
      Total deposits               31,639,064      30,044,475
  Federal Home Loan
    Bank borrowings                 6,400,000       6,400,000
  Other liabilities                   135,677         450,681
                                   ----------      ----------
      Total liabilities            38,174,741      36,895,156
                                   ----------      ----------
Commitments and Contingent Liabilities

Stockholders' Equity
  Preferred stock, $.01 par value
   Authorized and
    unissued - 400,000 shares
  Common stock, $. 01 par value
   Authorized - 1,600,000 shares
   Issued and
    outstanding - 396,750 shares       3,968           3,968
  Additional paid-in-capital       3,653,868       3,627,258
  Retained earnings                2,795,510       2,866,968
  Accumulated other comprehensive
   income (loss)                      (2,947)         24,826
  Management retention plan payable                   56,587
                                   ---------       ---------
                                   6,450,399       6,579,607
Less:
  Unearned incentive
   compensation - 10,145 shares
    for 1999                        (129,410)
  Unearned employee stock
   ownership plan shares - 22,658
    and 25,832 shares               (226,585)       (258,325)
  Treasury stock, at cost -
    39,675 shares for 1999          (505,864)
                                     -------         -------
    Total stockholders' equity     5,588,540       6,321,282
                                  ----------      ----------
    Total liabilities and
      stockholders' equity       $43,763,281     $43,216,438
                                  ==========      ==========
See notes to consolidated financial statements.



                             (20)



                       VERMILION BANCORP, INC.
                           AND SUBSIDIARY
                   Consolidated Statement of Income
Year Ended September 30                      1999            1998
Interest Income
  Loans receivable                      $  2,867,236    $  2,623,857
  Investment securities
    Taxable                                  202,300         341,211
    Tax exempt                                17,373          17,373
  Deposits with financial institutions       134,508          87,282
                                           -------------------------
      Total interest income                3,221,417       3,069,723
                                           -------------------------
Interest Expense
  Deposits                                 1,549,427       1,562,329
  Federal Home Loan Bank borrowings          333,630         255,390
                                           -------------------------
      Total interest expense               1,883,057       1,817,719
                                           -------------------------
Net Interest Income                        1,338,360       1,252,004
  Provision for loan losses                   63,004          75,000
                                           -------------------------
Net Interest Income After
 Provision for Loan Losses                 1,275,356       1,177,004
                                           -------------------------
Other Income
  Loan fees                                   25,279          11,029
  Net realized gains on sales of
   available-for-sale securities              10,786
  Other income                                75,366          43,476
                                           -------------------------
      Total other income                     111,431          54,505
                                           -------------------------
Other Expenses
  Salaries and employee benefits             472,330         362,604
  Net occupancy and equipment expenses       147,915          89,424
  Data processing fees                        86,430          55,727
  Deposit insurance expense                   17,993          18,059
  Printing and office supplies                24,286          14,146
  Legal and professional fees                104,023          97,877
  Advertising and promotion                   22,745          14,812
  Director and committee fees                 77,031          68,483
  Litigation settlement                      500,000
  Other expenses                             115,489         121,701
                                           -------------------------
Total other expenses                       1,568,242         842,833
                                           -------------------------
Income (Loss) Before Income Tax             (181,455)        388,676
Income tax expense (benefit)                (109,997)        144,224
                                           -------------------------
Net Income (Loss)                         $  (71,458)     $  244,452
                                           =========================
Earnings Per Share
  Basic
    Net income (loss)                     $    (0.21)     $     0.66
    Average number of shares                 345,129         369,342
  Diluted
    Net income (loss)                     $    (0.21)     $     0.66
    Average number of shares                 345,129         370,575

See notes to consolidated financial statements.



                              (21)



                  VERMILION BANCORP, INC. AND SUBSIDIARY
              Consolidated Statement of Stockholders' Equity


                                                                    Accumulated
                                                                          Other
                           Common Paid-in  Comprehensive Retained  Comprehensive
                           Stock   Capital  Income (Loss) Earnings Income (Loss)
--------------------------------------------------------------------------------
Balance, Oct. 1, 1997      $3,968 $3,614,922               $2,622,516   $  6,437
  Comprehensive income
    Net income                                  $ 244,452     244,452

    Other comprehensive
      income (loss),
        net of tax

      Unrealized gains on
        securities                                 18,389                 18,389
                                                ---------
  Comprehensive income                          $ 262,841
                                                =========
  Management retention plan
    compensation

  Employee stock ownership
    plan shares allocated             12,336
                        --------------------------------------------------------
Balance, Sept. 30, 1998    3,968  3,627,258               2,866,968      24,826
  Comprehensive
   income (loss)

    Net loss                                    $ (71,458)   (71,458)

    Other comprehensive
      income (loss),
        net of tax

      Unrealized losses on
        securities                                (27,773)              (27,773)
                                                  --------
  Comprehensive income (loss)                   $ (99,231)
                                                  ========
  Purchase of stock for
    management retention plan

  Purchase of treasury stock

  Employee stock ownership
    plan shares allocated             3,016

  Management retention plan
    shares earned                    23,594
                        --------------------------------------------------------
Balance, Sept. 30, 1999   $3,968 $3,653,868              $2,795,510   $ (2,947)


                                                   Unearned
                            Management             Employee
                            Retention  Unearned      Stock
                              Plan    Incentive    Ownership Treasury
                             Payable Compensation Plan Shares  Stock    Total
--------------------------------------------------------------------------------
Balance, Oct. 1, 1997                             $(292,711)         $5,955,132
  Comprehensive income

    Net income                                                          244,452
    Other comprehensive
      income (loss),
        net of tax

      Unrealized gains on
        securities                                                       18,389

  Comprehensive income

  Management retention plan
    compensation           $ 56,587                                      56,587

  Employee stock ownership
    plan shares allocated                            34,386              46,722
                           -----------------------------------------------------
Balance, Sept. 30, 1998      56,587                (258,325)          6,321,282

  Comprehensive income (loss)
    Net loss                                                            (71,458)

    Other comprehensive
      income (loss),
        net of tax

      Unrealized losses on
        securities                                                      (27,773)

  Comprehensive income (loss)

  Purchase of stock for
  management retention plan (56,587)$ (145,758)                        (202,345)

  Purchase of treasury stock                                $(505,864) (505,864)

  Employee stock ownership
    plan shares allocated                            31,740              34,756

  Management retention plan
    shares earned                       16,348                           39,942
                           ----------------------------------------------------
Balance, Sept. 30, 1999    $      0  $(129,410)   $(226,585)$(505,864)$5,588,540
                           ====================================================

See notes to consolidated financial statements.




                                  (22)



                         VERMILION BANCORP, INC
                             AND SUBSIDIARY
                   Consolidated Statement of Cash Flows

Year Ended September 30                                  1999            1998
--------------------------------------------------------------------------------
Operating Activities
 Net income (loss)                                   $ (71,458)      $  244,452
 Adjustments to reconcile net income (loss) to net
  cash provided (used) by operating activities:
  Provision for loan losses                             63,004           75,000
  Investment securities gains                          (10,786)
  Deferred income tax                                   (8,211)         (26,623)
  Investment securities amortization, net               (3,307)           5,551
  Depreciation                                          74,705           36,514
  Compensation expense related to ESOP and MRP          74,698          103,309
  Change in
    Other assets                                       (58,752)        (103,019)
    Other liabilities                                 (315,004)         287,422
                                                     ---------------------------
Net cash provided (used) by operating activities      (255,111)         622,606
                                                     ---------------------------
Investing Activities
 Net change in interest bearing deposits                                 79,000
 Purchases of securities available for sale           (999,096)
 Proceeds from maturities of securities
  available for sale                                 1,750,442          333,647
 Proceeds from sales of securities
  available for sale                                   508,203
 Proceeds from maturities of securities
  held to maturity                                     791,104          710,176
 Net change in loans                                (3,070,596)      (4,889,515)
 Purchases of premises and equipment                  (206,108)        (932,160)
 Purchase of Federal Home Loan Bank stock                               (66,800)
 Proceeds from sale of Federal Home Loan Bank stock     28,600
                                                     ---------------------------
Net cash used by investing activities               (1,197,451)      (4,765,652)
                                                     --------------------------
Financing Activities
 Net change in deposits                              1,594,589          946,791
 Proceeds of Federal Home Loan Bank borrowings                        3,800,000
 Purchase of common stock for
  management retirement plan                          (202,345)
 Purchase of treasury stock                           (505,864)
                                                     --------------------------
Net cash provided by financing activities              886,380        4,746,791
                                                     --------------------------
Net Change in Cash and Cash Equivalents               (566,182)         603,745
Cash and Cash Equivalents, Beginning of Year         1,741,642        1,137,897
                                                     --------------------------
Cash and Cash Equivalents, End of Year              $1,175,460      $ 1,741,642
                                                     ==========================
Additional Cash Flows Information

 Interest paid                                       $1,891,553      $ 1,800,515

 Income tax paid                                        199,191            9,601

See notes to consolidated financial statements.




                                 (23)



                         VERMILION BANCORP, INC.
                            AND SUBSIDIARY

                 Notes to Consolidated Financial Statements


Note 1 - Nature of Operations and Summary of Significant Accounting Policies

The accounting and reporting policies of Vermilion Bancorp, Inc. (Company) and
its wholly owned subsidiary, American Savings Bank of Danville (Bank),
conform to generally accepted accounting principles and reporting practices
followed by the thrift industry.  The Bank has a wholly owned subsidiary, GBW
Service Corporation, whose principal activity is servicing contract sales of
real estate.  The more significant of the policies are described below.

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

The Company is a bank holding company whose principal activity is the
ownership and management of the Bank.  The Bank operates under a state thrift
charter and provides full banking services.  As a state-chartered thrift, the
Bank is subject to regulation by the State of Illinois Office of Banks and
Real Estate and the Federal Deposit Insurance Corporation.

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

Consolidation - The consolidated financial statements include the accounts of
the Company and the Bank after elimination of all material intercompany
transactions and accounts.

Investment Securities - Debt securities are classified as held to maturity
when the Company has the positive intent and ability to hold the securities
to maturity.  Securities held to maturity are carried at amortized cost.
Debt securities not classified as held to maturity are classified as available
for sale.  Securities available for sale are carried at fair value with
unrealized gains and losses reported separately as accumulated other
comprehensive income in stockholders' equity, net of tax.

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




                                     (24)





VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


Loans are carried at the principal amount outstanding.  Interest income is
accrued on the principal balances of loans.  The accrual of interest on
impaired loans is discontinued when, in management's opinion, the borrower
may be unable to meet payments as they become due.   When interest accrual is
discontinued, all unpaid accrued interest is reversed when considered
uncollectible.  Interest income is subsequently recognized only to the extent
cash payments are received.  Certain loan fees and direct costs are being
deferred and amortized as an adjustment of yield on the loans.

Allowance for loan losses is maintained to absorb loan losses based on
management's continuing review and evaluation of the portfolio and its
judgment as to the impact of economic conditions on the portfolio.  The
evaluation by management includes consideration of past loss experience,
changes in the composition of the portfolio, and the current condition and
amount of loans outstanding, and the probability of collecting all amounts due.
Impaired loans are measured by the present value of expected future cash flows,
or the fair value of the collateral of the loan, if collateral dependent.

The determination of the adequacy of the allowance for loan losses and the
valuation of real estate is based on estimates that are particularly
susceptible to significant changes in the economic environment and market
conditions.  Management believes that as of September 30, 1999, the allowance
for loan losses and the valuation of real estate are adequate based on
information currently available.  A worsening or protracted economic decline
in the area within which the Bank operates would increase the likelihood of
additional losses due to credit and market risks and could create the need
for additional loss reserves.

Premises and equipment are carried at cost net of accumulated depreciation.
Depreciation is computed using both the straight-line and accelerated methods
based on the estimated useful lives of the assets.  Maintenance and repairs
are expensed as incurred while major additions and improvements are capitalized.
Gains and losses on dispositions are included in current operations.

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

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

Income tax in the consolidated statement of income includes deferred income tax
provisions or benefits for all significant temporary differences in recognizing
income and expenses for financial reporting and income tax purposes.  The
Company files consolidated income tax returns with its subsidiary.





                                       (25)




VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


Earnings Per Share - Basic earnings per share have been computed based upon the
weighted average common shares outstanding during each year.  Diluted earnings
per share reflects the potential dilution that could occur if securities or
other contracts to issue common stock were exercised or converted into common
stock or resulted in the issuance of common stock that then shared in the
earnings of the Company.

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

Stock Option Plan - Stock options are granted for a fixed number of shares to
employees with an exercise price equal to the fair value of the shares at the
date of grant.  The Company accounts for and will continue to account for stock
option grants in accordance with APB Opinion No. 25, Accounting for Stock Issued
to Employees, and, accordingly, recognizes no compensation expense for the stock
option grants.


Note 2 - Investment Securities


                                                      1999
                            -------------------------------------------------
                                             Gross      Gross
                              Amortized   Unrealized Unrealized    Fair
September 30                    Cost         Gains     Losses      Value
-----------------------------------------------------------------------------
Available for sale
 U.S. Treasury               $  499,053 $    2,297              $  501,350
 Federal agencies               999,096              $ (6,696)     992,400
                              --------------------------------------------
Total available for sale      1,498,149      2,297     (6,696)   1,493,750

Held to maturity
 State and municipal            364,104        425       (441)     364,088
 Mortgage-backed securities   1,158,303     16,499     (1,242)   1,173,560
                              --------------------------------------------
Total held to maturity        1,522,407     16,924     (1,683)   1,537,648
                              --------------------------------------------
Total investment securities  $3,020,556 $   19,221   $ (8,379)  $3,031,398
                              ============================================




                                       (26)



VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements



                                                    1998
                            -------------------------------------------------
                                             Gross      Gross
                              Amortized   Unrealized Unrealized    Fair
September 30                    Cost         Gains     Losses      Value
-----------------------------------------------------------------------------
Available for sale
 U.S. Treasury               $1,744,669 $   39,166               $1,783,835
 Federal agencies             1,000,000        680                1,000,680
                              ---------------------------------------------
Total available for sale      2,744,669     39,846                2,784,515
                              ---------------------------------------------
Held to maturity
 State and municipal            363,128     11,134                  374,262
 Mortgage-backed securities   1,949,319     36,180   $ (1,208)    1,984,291
                              ---------------------------------------------
Total held to maturity        2,312,447     47,314     (1,208)    2,358,553
                              ---------------------------------------------
Total investment securities  $5,057,116 $   87,160   $ (1,208)   $5,143,068
                              =============================================

The amortized cost and fair value of securities available for sale and held to
maturity at September 30, 1999, by contractual maturity, are shown below.
Expected maturities will differ from contractual maturities because issuers may
have the right to call or prepay obligations with or without call or
prepayment penalties.



                                Available for Sale       Held to Maturity
                              ---------------------------------------------
                               Amortized    Fair    Amortized      Fair
                                 Cost      Value      Cost        Value
---------------------------------------------------------------------------
One to five years             $  499,053 $  501,350
Five to ten years                999,096    992,400 $  364,104  $  364,088
                              ---------------------------------------------
                               1,498,149  1,493,750    364,104     364,088
Mortgage-backed securities                           1,158,303   1,173,560
                              ---------------------------------------------
         Totals               $1,498,149 $1,493,750 $1,522,407  $1,537,648
                              =============================================

There were no pledged securities at September 30, 1999 or 1998.

Proceeds from the sale of securities available for sale during 1999 were
$508,203.  A gross gain of $10,786 was realized on the sale.  The tax effect of
the gain was approximately $3,670.  There were no sales of securities available
for sale during 1998.  There were no sales of securities held to maturity.

There were no securities transferred between classifications during 1999 or
1998.




                                   (27)




VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


Note 3 - Loans and Allowance

September 30                         1999                   1998
--------------------------------------------------------------------------
Real estate mortgage loans

 One-to-four family              $31,932,833            $28,182,333
 Multi-family                        711,606                882,000
Commercial real estate loans       1,098,240              1,581,000
Real estate sold on contract         227,072                227,000
Real estate construction loans       225,403                492,000
Commercial business loans          1,004,646                997,000
Consumer loans                     2,079,765              1,921,744
Other loans                           18,505
                                 -----------------------------------
                                  37,298,070             34,283,077


Deferred loan costs                  114,885                 97,065
Allowance for loan losses           (179,420)              (154,199)
                                 -----------------------------------
Total loans                      $37,233,535            $34,225,943
                                 ===================================

Year Ended September 30             1999                    1998
-------------------------------------------------------------------------
Allowance for loan losses
Balances, October 1              $   154,199            $   151,868
Provision for losses                  63,004                 75,000
Recoveries on loans                   12,142                  5,333
Loans charged off                    (49,925)               (78,002)
                                 -----------------------------------
Balances, September 30           $   179,420            $   154,199
                                 ===================================

The Company's loan portfolio consists primarily of smaller balance, homogeneous
loans which are principally one-to-four family residential loans.  The Company
did not have any loans it considered impaired at September 30, 1999 or 1998 or
during the years then ended.





                                   (28)





VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


Note 4 - Premises and Equipment

September 30                       1999                    1998
-----------------------------------------------------------------------
Land                             $  662,607            $  209,431
Office building                   1,017,143               689,604
Furniture and fixtures              548,498               338,900
Construction in progress                                  784,205
                                 ---------------------------------
     Total cost                   2,228,248             2,022,140
Accumulated depreciation           (740,582)             (665,877)
                                 ---------------------------------
     Net                         $1,487,666            $1,356,263
                                 =================================

Note 5 - Other Assets and Other Liabilities

September 30                       1999                    1998
----------------------------------------------------------------------
Other assets
 Interest receivable             $  216,358            $  214,340
 Cash value of life
  insurance annuity                  47,243                49,194
 Deferred income tax asset           74,072                48,989
 Federal income tax receivable      145,030
 Other real estate                                         86,553
 Prepaid expenses and other          26,360                26,552
                                 ---------------------------------
     Total                       $  509,063            $  425,628
                                 =================================
Other liabilities
 Interest payable on deposits    $   14,091            $   22,587
 Interest payable on borrowings      27,422                27,422
 Deferred compensation payable       76,408                75,866
 Federal income tax payable                               152,955
 Accounts payable                    16,768               142,082
 Other                                  988                29,769
                                 ---------------------------------
     Total                       $  135,677            $  450,681
                                 =================================




                                (29)




VERMILION BANCORP, INC
AND SUBSIDIARY
Notes to Consolidated Financial Statements


Note 6 - Deposits

September 30                        1999                    1998
-----------------------------------------------------------------
Demand deposits                  $ 2,435,255         $  2,021,812
Savings and retirement accounts    5,511,837            5,295,784
Certificates of deposit of
 $100,000 or more                  4,214,711            3,334,764
Other certificates of deposit     19,477,261           19,392,115
                                 ---------------------------------
     Total deposits              $31,639,064          $30,044,475


Certificates maturing in years ending September 30:

2000                                                  $15,719,857
2001                                                    6,912,025
2002                                                      685,752
2003                                                      285,340
2004                                                       88,998
                                                      ------------
                                                      $23,691,972
                                                      ============

Note 7 - Long-Term Debt

September 30                       1999                     1998
-------------------------------------------------------------------
Federal Home Loan Bank
 advances, rates ranging
 from 5.03% to 6.02%,
 due at various dates
 through May 29, 2006          $6,400,000             $6,400,000
                               ==================================

The terms of security agreements with the FHLB require the Company to pledge as
collateral for the advances qualifying first mortgage loans in an amount equal
to at least 167 percent of the advances and all stock in the FHLB.  Advances
are subject to restriction or penalties in the event of prepayment.

Maturities in year ending September 30,
 2003                          $2,500,000
 2004
 Thereafter                     3,900,000
                               -----------
                               $6,400,000
                               ===========





                                           (30)






VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


Note 8 - Loan Servicing

Loans serviced for others are not included in the accompanying consolidated
balance sheet.  The unpaid principal balances of loans serviced for others
totaled $11,845 and $181,000 at September 30, 1999 and 1998.

Note 9 - Income Tax

Year Ended September 30                       1999              1998
---------------------------------------------------------------------------
Income tax expense (benefit)
  Current federal                          $ (82,906)        $ 165,458
  Current state                              (18,880)            5,389
  Deferred federal                            (8,211)          (26,623)
                                           -----------------------------
     Total income tax expense (benefit)    $(109,997)        $ 144,224
                                           =============================
Reconciliation of federal statutory to
  actual tax expense (benefit)


  Federal statutory income tax at 34%      $ (61,695)        $ 132,150
  ESOP                                         3,587             2,938
  Effect of state income taxes               (12,460)            3,557
  Change in tax rate applicable
   to deferred taxes                                            (5,177)
  Other                                      (39,429)           10,756
                                           ----------------------------
     Actual tax expense (benefit)          $(109,997)        $ 144,224
                                           ============================

A cumulative net deferred tax asset is included in other assets.  The
components are as follows:

September 30                                  1999              1998
-----------------------------------------------------------------------
Assets
  Differences in accounting
   for loan losses                         $  66,073         $  54,367
  Deferred compensation                       58,399            51,259
  Unrealized loss or securities
   available for sale                          1,452
                                           ----------------------------
     Total assets                            125,924           105,626
                                           ----------------------------
Liabilities
  Differences in depreciation methods          7,346             2,260
  Unrealized gain on securities
   available for sale                                           15,420
  Deferred loan costs                         44,506            37,564
  Other                                                          1,393
                                           ----------------------------
Total liabilities                             51,852            56,637
                                           ----------------------------
                                           $  74,072         $  48,989
                                           ============================



                                  (31)





VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


There was no state income tax expense for 1998 or 1997.

Retained earnings at September 30, 1999 and 1998, include approximately $995,000
for which no deferred income tax liability has been recognized.  This amount
represents an allocation of income to bad debt deductions as of September 30,
1988, for tax purposes only.  Reduction of amounts so allocated for purposes
other than tax bad debt losses or adjustments arising from carryback of net
operating losses would create income for tax purposes only, which income tax
liability on the above amounts was approximately $338,300 at September 30,
1999 and 1998.


Note 10 - Other Comprehensive Income


                                                         1999
                                    --------------------------------------------
                                                          Tax
                                     Before-Tax         Expense      Net-of-Tax
Year Ended September 30                Amount          (Benefit)       Amount
--------------------------------------------------------------------------------
Unrealized gains (losses)
 on securities:
  Unrealized holding gains
   (losses) arising during the year $ (33,459)       $  (12,805)    $  (20,654)
  Less: reclassification adjustment
   for gains (losses)
    realized in net income             10,786             3,667          7,119
                                    -------------------------------------------
     Net unrealized losses            (44,245)          (16,472)       (27,773)
                                    -------------------------------------------
     Other comprehensive loss       $ (44,245)       $  (16,472)    $  (27,773)
                                    ===========================================

                                                         1998
                                    --------------------------------------------
                                                          Tax
                                     Before-Tax         Expense      Net-of-Tax
Year Ended September 30                Amount          (Benefit)       Amount
--------------------------------------------------------------------------------
Unrealized gains (losses)
 on securities:
  Unrealized holding gains
   (losses) arising during the year $  30,126        $   11,737     $   18,389
  Less: reclassification adjustment
   for gains (losses)
    realized in net income
                                    --------------------------------------------
     Net unrealized gains              30,126            11,737         18,389
                                    --------------------------------------------
     Other comprehensive income     $  30,126        $   11,737     $   18,389







                                    (32)




VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


Note 11 - Commitments and Contingent Liabilities

In the normal course of business there are outstanding commitments and
contingent liabilities, such as commitments to extend credit and standby
letters of credit, which are not included in the accompanying financial
statements.  The Bank's exposure to credit loss in the event of nonperformance
by the other party to the financial instruments for commitments to extend credit
and standby letters of credit is represented by the contractual or notional
amount of those instruments.  The Bank uses the same credit policies in making
such commitments as it does for instruments that are included in the
consolidated balance sheet.

Financial instruments whose contract amount represents credit risk as of
September 30 were as follows:


                                                       1999           1998
-------------------------------------------------------------------------------
Mortgage loan commitments at fixed rates            $ 326,653      $ 371,000
Construction, home improvement and other loan
 commitments at fixed rates                            39,861         29,000
Standby letters of credit                              22,000         22,000


At September 30, 1999, mortgage loan commitments have terms up to 30 days and
rates ranging from 7.0% to 10.0% while construction and home improvement loan
commitments have terms up to six months and rates ranging from 9.5% to 14.0%.

At September 30, 1998, mortgage loan commitments have terms up to 30 days and
rates ranging from 6.75% to 7.75%.  Construction and home improvement loan
commitments have terms up to 6 months and rates ranging from 10.5% to 16%.

Commitments to extend credit are agreements to lend to a customer as long as
there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination
clauses and may require payment of a fee.  Since many of the commitments are
expected to expire without being drawn upon, the total commitment amounts do
not necessarily represent future cash requirements.  The Bank evaluates each
customer's credit worthiness on a case-by-case basis.  The amount of collateral
obtained, if deemed necessary by the Bank upon extension of credit, is based
on management's credit evaluation.  Collateral held varies, but may include
residential real estate, income-producing commercial properties, or other
assets of the borrower.

Standby letters of credit are conditional commitments issued by the Bank to
guarantee the performance of a customer to a third party.






                                (33)





VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


On December 30, 1992, a former employee filed a lawsuit against the Bank
which involved various accusations.  A summary judgement was issued by the
court in favor of the Bank on each count.  The former employee appealed
several of the judgements and the Appellate Court reversed the entry of
summary judgement.  In May 1999, the Bank settled with the former employee
for $500,000.  As a result of the settlement, the Bank was released from
all other obligations related to the lawsuit.

In addition, the Company and Bank are also subject to other claims and
lawsuits which arise primarily in the ordinary course of business.  It is
the opinion of management that the disposition or ultimate determination
of such possible claims or lawsuits will not have a material adverse effect
on the consolidated financial position of the Company.


Note 12 - Year 2000

Like all entities, the Company and subsidiary are exposed to risks associated
with the Year 2000 Issue, which affects computer software and hardware;
transactions with customers, vendors, and other entities; and equipment
dependent upon microchips.  The Company has begun, but not yet completed,
the process of identifying and remediating potential Year 2000 problems.
It is not possible for any entity to guarantee the results of its own
remediation efforts or to accurately predict the impact of the Year 2000
Issue on third parties with which the Company and subsidiary does business.
If remediation efforts of the Company and subsidiary or third parties with
which Company and subsidiary does business are not successful, the Year
2000 Issue could have negative effects on the Company's financial condition
and results of operations in the near term.


Note 13 - Restriction on Dividends

The Company is regulated by the Federal Reserve Board which has enforcement
powers over bank holding companies to prevent or remedy actions that
represent unsafe or unsound practices or violations of applicable statutes
and regulations.  Among these powers is the ability to prescribe the
payments of dividends by bank holding companies.

In addition, Delaware general corporate law would allow the Company to pay
dividends only out of its surplus or, if the Company has no such surplus,
out of its net profits for the fiscal year in which the dividend is
declared and/or the preceding fiscal year.






                           (34)





VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


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

At the time of conversion, a liquidation account was established in an
amount equal to the Bank's net worth as reflected in the latest
statement of condition used in its final conversion offering circular.
The liquidation account is maintained for the benefit of eligible
deposit account holders who maintain their deposit accounts in the
Bank after conversion.  In the event of a complete liquidation (and
only in such event), each eligible deposit account holder will be
entitled to receive a liquidation distribution from the liquidation
account in the amount of the then current adjusted subaccount
balance for deposit accounts then held, before any liquidation
distribution may be made to stockholders.  Except for the repurchase
of stock and payment of dividends, the existence of the liquidation
account will not restrict the use or application of net worth.  The
initial balance of the liquidation account was $2,439,000.


Note 14 - Regulatory Capital

The Company and Bank are subject to various regulatory capital requirements
administered by the federal banking agencies and are assigned to a capital
category.  The assigned capital category is largely determined by three
ratios that are calculated according to the regulations: total risk
adjusted capital, Tier 1 capital, and Tier 1 leverage ratios.  The ratios
are intended to measure capital relative to assets and credit risk
associated with those assets and off-balance sheet exposures of the
entity.  The capital category assigned to an entity can also be affected
by qualitative judgments made by regulatory agencies about the risk
inherent to the entity's activities that are not part of the calculated
ratios.

There are five capital categories defined in the regulations, ranging from
well capitalized to critically undercapitalized.  Classification of a bank
in any of the undercapitalized categories can result in actions by
regulators that could have a material effect on a bank's operations.
At September 30, 1999 and 1998, the Company and its Bank are categorized
as well capitalized and met all subject capital adequacy requirements.
There are no conditions or events since September 30, 1999 that management
believes have changed the Company's and Bank's classification.






                              (35)





VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


The Bank's actual and required capital amounts (in thousands) and ratios
are as follows:


                                                 1999
                              ----------------------------------------------
                                              Required for     To Be Well
                                  Actual    Adequate Capital 1 Capitalized 1
                              ----------------------------------------------
September 30                  Amount  Ratio   Amount  Ratio   Amount  Ratio
----------------------------------------------------------------------------
Total risk-based capital 1
(to risk-weighted assets)  $4,177,000 17.0% $1,967,000 8.0% $2,459,000 10.0%
Tier 1 capital 1 (to
risk-weightedassets)        3,998,000 16.3%    984,000 4.0%  1,475,000  6.0%
Tier 1 capital 1 (to
adjusted total assets)      3,998,000  9.2%  1,745,000 4.0%  2,181,000  5.0%




                                                 1998
                              ----------------------------------------------
                                              Required for     To Be Well
                                  Actual    Adequate Capital 1 Capitalized 1
                              ----------------------------------------------
September 30                  Amount  Ratio   Amount  Ratio   Amount  Ratio
----------------------------------------------------------------------------
Total risk-based capital 1
(to risk-weighted assets)  $5,379,000 23.0% $1,870,000 8.0% $2,340,000 10.0%
Tier 1 capital 1 (to
risk-weighted assets)       5,225,000 22.4%    936,000 4.0%  1,404,000  6.0%
Tier 1 capital 1 (to
adjusted total assets)      5,225,000 12.4%  1,687,000 4.0%  2,108,000  5.0%


1 As defined by regulatory agencies








Note 15 - Benefit Plans

The Bank has a deferred compensation plan for directors whereby participating
directors can elect to defer directors' fees in return for inclusion in a
deferred compensation plan which pays benefits to such participating directors
upon retirement or death.  The Bank purchased a deferred annuity, which is
included in other assets, to fund the deferred compensation plan benefits;
however, this annuity is not restricted for that purpose.  A deferred
compensation liability has been calculated and recorded in other liabilities,
which represents the present value of future benefits to be paid at retirement
for each participating director.  Deferred compensation plan expense included
in the financial statements was $13,678 and $4,000 for 1999 and 1998.





                              (36)






VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


During 1997, the Bank established an employee stock ownership plan (ESOP)
for the benefit of substantially all employees.  The ESOP borrowed $317,400
from the Company and used those funds to acquire 31,740 shares of the
Company's stock at $10 per share.

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

Stock totaling 3,174 and 3,439 shares for 1999 and 1998 with an average
fair value of $10.95 and $13.59 per share, respectively, were committed
to be released, resulting in ESOP compensation expense of $34,756 and
$46,722.  Shares held by the ESOP at September 30 are as follows:


                                            1999             1998
---------------------------------------------------------------------------
Allocated shares                            9,082            5,908
Unallocated shares                         22,658           25,832
                                          -------------------------
     Total ESOP shares                     31,740           31,740
                                          =========================
Fair value of unallocated
 shares at September 30                  $226,585         $309,984
                                          =========================

During May 1998, the Company adopted a management retention plan (MRP)
as a method of providing directors, employees and officers of the Bank
with a proprietary interest in the Company and to encourage such
persons to remain with the Bank.

The MRP covers key employees and directors and is authorized to acquire
and grant 15,870 shares of the Company's common stock or 4% of the
shares issued in the Company's initial public offering.  The funds used
to acquire these shares will be contributed by the Bank.  Participants
in the incentive plan vest over three years, commencing on the date of
grant. As of September 30, 1999, 7,110 shares authorized under the plan
had been granted with fair market value date of grant at $16.875 per
share.  During 1999, the Company purchased 15,870 shares of the Company's
stock at a price of $12.75 per share.  As of September 30, 1999, 5,725
shares have been earned.  No shares were distributed as of September 30,
1999.  None of these shares were forfeited during 1999 or 1998.  For the
year ended September 30, 1999 and 1998, $39,942 and $56,587, respectively,
were recorded as compensation expense under the plan.





                             (37)





VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


Note 16 - Related Party Transactions

The Bank has entered into transactions with certain directors, executive
officers, significant stockholders and their affiliates or associates
(related parties).  Such transactions were made in the ordinary course
of business on substantially the same terms and conditions, including
interest rates and collateral, as those prevailing at the same time for
comparable transactions with other customers, and did not, in the
opinion of management, involve more than normal credit risk or present
other unfavorable features.

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

Balances, October 1, 1998                   $     100,886
Payments, etc., including renewals                (10,020)
                                            --------------
Balances, September 30, 1999                $       90,866
                                            ==============
Deposits from related parties held by the Banks at September 30, 1999 and
1998 totaled $890,104 and $720,846.


Note 17 - Stock Option Plan

Under the Company's stock option plan, which is accounted for in accordance
with APB No. 25, Accounting for Stock Issued to Employees, and related
interpretations, the Company grants selected executives and other key
employees stock option awards which vest and become fully exercisable at
the end of five years of continued employment.  During May 1998, the
Company authorized the grant of options for up to 39,675 shares of the
Company's common stock or 10% of the shares issued in the Company's initial
public offering, that expire ten years from the date of grant.  During 1998,
the Company granted 29,420 options at an exercise price of $16.88 per share
which vest over three years.  The exercise price of each option was equal
to the market price of the Company's stock on the date of grant; therefore,
no compensation expense was recognized.





                              (38)






VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


Although the Company has elected to follow APB No. 25, SFAS No. 123 requires
pro forma disclosures of net income and earnings per share as if the Company
had accounted for its employee stock options under that Statement.  The
fair value of each option grant was estimated on the grant date using an
option-pricing model with the following assumptions:


                                                               1998
                                                          --------------
Risk-free interest rate                                         5.25%
Dividend yield                                                  0.00%
Volatility factor of expected market price of common stock     28.00%
Weighted-average expected life of the options               9.6 years

Under SFAS No. 123, compensation cost is recognized in the amount of the
estimated fair value of the options and amortized to expense over the
options' vesting period.  The pro forma effect on net income and earnings
per share of this statement are as follows:



                                                    1999       1998
                                                  -----------------------
Net income (loss)          As reported         $ (71,458)   $ 244,452
                           Pro forma             (81,554)     240,245
Basic earnings per share   As reported         $   (0.21)   $    0.66
                           Pro forma               (0.24)        0.65
Diluted earnings per share As reported         $   (0.21)   $    0.66
                           Pro forma               (0.24)        0.65

The following is a summary of the status of the Company's stock option plan
and changes in that plan as of and for the years ended September 30, 1999
and 1998.


                                              1999             1998
---------------------------------------------------------------------------
                                            Weighted-             Weighted-
                                             Average               Average
                                            Exercise              Exercise
         Options                  Shares     Price     Shares      Price
---------------------------------------------------------------------------
Outstanding, beginning of year    29,420     $16.88
Granted                                                29,420      $16.88
                                 --------            ---------
Outstanding, end of year          29,420     $16.88    29,420      $16.88
                                 ========            =========
Options exercisable at year end   23,639               13,892
Weighted-average fair value of options
  granted during the year                                          $ 4.66






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VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


As of September 30, 1999, all 29,420 options outstanding have an exercise
price of $16.88 and a weighted-average remaining contractual life of 8.6
years.  No options were exercised, forfeited or expired during 1999.


Note 18 - Basic Earnings Per Share

Earnings per share (EPS) were computed as follows:


                                           Year Ended September 30, 1998
                                       ------------------------------------
                                                     Weighted    Per-Share
                                          Income      Average     Amount
                                                       Shares
                                       ------------------------------------
Basic Earnings Per Share                $244,452      369,342      $0.66
Income available to common stockholders

Effect of Dilutive Securities
MRP                                                     1,233
                                       ------------------------------------
Diluted Earnings Per Share
 Income available to common
  stockholders and assumed
  conversions                           $244,452      370,575      $0.66
                                       ====================================
Options to purchase 29,420 shares of common stock at $16.88 were
outstanding at September 30, 1999 and 1998, but were not included in the
computation of the diluted EPS because the options' exercise price was
greater than the average market price of the common shares.  MRP shares were
excluded in the year ended September 30, 1999 earnings per share calculation
as they were anti-dilutive due to the loss.


Note 19 - Fair Values of Financial Instruments

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

Cash and Cash Equivalents - The fair value of cash and cash equivalents
approximates carrying value.

Interest-Bearing Time Deposits - The fair value of interest-bearing time
deposits approximates carrying value.

Investment Securities - Fair values are based on quoted market prices.







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VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


Loans - For both short-term loans and variable-rate loans that reprice
frequently and with no significant change in credit risk, fair values
are based on carrying values.  The fair values for other loans are
estimated using discounted cash flows analyses using interest rates
currently being offered for loans with similar terms to borrowers of
similar credit quality.

Interest Receivable/Payable - The fair values of interest receivable/
payable approximate carrying values.

Federal Home Loan Bank Stock - Fair value of FHLB stock is based on
the price at which it may be resold to the FHLB.

Cash Surrender Value of Life Insurance - Fair value of life insurance
is based on cash values quoted by the insurance underwriter.

Deposits - The fair values of noninterest-bearing, interest-bearing
demand and savings accounts are equal to the amount payable on demand
at the balance sheet date.  Fair values for fixed-rate certificates
of deposit are estimated using a discounted cash flow calculation
that applies interest rates currently being offered on certificates
to a schedule of aggregated expected monthly maturities on such time
deposits.

Federal Home Loan Bank Borrowings - The fair value of these borrowings
are estimated using a discounted cash flow calculation, based on
current rates for similar debt.

Off-Balance Sheet Commitments - Commitments include commitments to
originate mortgage loans and standby letters of credit and are
generally of a short-term nature.  The fair value of such commitments
are based on fees currently charged to enter into similar agreements,
taking into account the remaining terms of the agreements and the
counterparties' credit standing.  The Bank currently does not charge
a commitment fee; accordingly, no value has been assigned to the Bank's
commitments to extend credit.





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VERMILION BANCORP, INC.
AND SUBSIDIARY
Notes to Consolidated Financial Statements


The estimated fair values of the Company's financial instruments
are as follows:


                                     1999                 1998
                           ---------------------------------------------
September 30                 Carrying      Fair      Carrying      Fair
                              Amount      Value       Amount      Value
------------------------------------------------------------------------
Assets
 Cash and cash equivalents $ 1,175,460 $ 1,175,460 $ 1,741,642 $ 1,741,642
 Interest-bearing
  time deposits                 20,000      20,000      20,000      20,000
 Investment securities
  available for sale         1,493,750   1,493,750   2,748,515   2,748,515
 Investment securities
  held to maturity           1,522,407   1,537,648   2,312,447   2,358,553
 Loans, net                 37,233,535  36,814,000  34,225,943  35,224,447
 Interest receivable           216,358     216,358     214,340     214,340
 Federal Home Loan
  Bank stock                   321,400     321,400     350,000     350,000
 Cash surrender value
  of life insurance             47,243      47,243      49,194      49,194

Liabilities
 Deposits                   31,639,064  30,663,000  30,044,475  30,054,000
 FHLB borrowings             6,400,000   5,713,000   6,400,000   6,223,000
 Interest payable               41,513      41,513      50,008      50,008

Off-Balance Sheet
 Assets (liabilities)
  Commitments to extend
   credit                            0           0           0           0
 Standby letters of credit           0           0           0           0





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DIRECTORS

Thomas B. Meyer                   Merrill G. Norton
Chairman of the Board of          President and Chief Executive
the Company, Attorney in        Officer
Private Practice                    of the Company, Director

Carl W. Busby                     Dr. Robert L. Ewbank.
Director, President of Busby      Director, Medical consultant,
Farms, Inc. and Busby Land and    retired oral and maxillofacial
Auction Co., Inc.                 surgeon

William T. Ingram
Secretary   and Director of the
Company,    Area    Businessman,
operator      of      Automobile
Diagnostics, Quick Air  Freight,
Ingram's  Quicklube and Ingram's
Apartments.




EXECUTIVE OFFICER


Merrill G. Norton
President and Chief Executive
Officer of the Company









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BANKING LOCATION

714 North Vermilion Street, Danville, Illinois 61832

412 S Gilbert Street, Danville, Illinois 61832



STOCKHOLDER INFORMATION

Vermilion  Bancorp,  Inc.  is a Delaware-incorporated  bank
holding  company  conducting business  through  its  wholly-owned
subsidiary, American Savings Bank (the "Bank").  The Bank  is  an
Illinois-chartered,  SAIF-insured stock  savings  bank  operating
through its office located in Danville, Illinois.

TRANSFER AGENT/REGISTRAR:

American Securities Transfer and Trust
938 Quail Street
Lakewood, Colorado 80215
(800) 962-4284


STOCKHOLDER REQUESTS:

Requests for annual reports, quarterly reports and  related
stockholder literature should be directed to Merrill  G.  Norton,
President  and Chief Executive Officer, Vermilion Bancorp,  Inc.,
714 North Vermilion Street, Danville, Illinois 61832.

Stockholders needing assistance with stock records, transfers
or lost certificates, please contact the Company's transfer
agent.



MARKET PRICES AND DIVIDENDS:

The Company's shares are listed on the National Daily Quotation
Service "pink sheets" published by the National Quotation Bureau,
Inc. At December 01, 1999, the Company had 128 stockholders of record.
The number of shares of common stock outstanding as of December 01,
1999 was 357,075. The table below sets forth the range of high and low
bid
information for the common stock for each quarter as well as dividends
paid
since March 25, 1998.

Quotations

                                           Dividend Amount
Quarter Ended         High Bid   Low Bid      Per Share

March 31, 1998          $16.25     $14.50         --
June 30, 1998            16.00      16.875        --
September 30, 1998       16.125     11.25         --
December 31, 1998        11.50      10.0625       --
March 31, 1999           12.75      11.00         --
June 30, 1999            12.75      11.00         --
September 30, 1999       11.25       9.00         --





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