VERMILION BANCORP, INC.




                       1997 ANNUAL REPORT

                        TO STOCKHOLDERS

                       TABLE OF CONTENTS

                                                             Page

President's Letter to Stockholders                             1

Selected Consolidated Financial and Other Data                 2

Management's Discussion and Analysis of Financial Condition
  and Results of Operations                                    4

Consolidated Financial Statements:                            17
    Independent Auditors' Report                              18
    Consolidated Statements of Financial Condition            19
    Consolidated Statements of Income                         20
    Consolidated Statements of Shareholders' Equity           21
    Consolidated Statements of Cash Flows                     22
    Notes to Consolidated Financial Statements                23

Directors and Executive Officers                              37

Banking Locations                                             38

Stockholder Information                                       39





Dear Stockholders:

Changes during 1997 have been the most exciting events in over 
100 years we have provided successful banking services in the 
Danville area.

Vermilion Bancorp, Inc. was created as a holding company for
American Savings Bank of Danville in March 1997 to build a 
stronger locally managed banking organization to serve our
area customers.

With the addition of 3.3 Million dollars in net corporate 
capital from stock sales, Vermilion Bancorp, Inc and American 
Savings Bank of Danville welcome the opportunities offered by
this financial strength.

As a small highly capitalized bank holding company we are 
examining new alternatives for growth in customer services and 
building on our strength in personal banking relations.  We
continue to enjoy healthy growth in all lending areas.

New computer applications have increased the efficiency of all
areas of lending and new account origination, allowing the 
Bank to enhance the productivity of our dedicated staff.

As President of Vermilion Bancorp, Inc.  I have enjoyed the 
support of an effective and active Board of Directors.  Em-
bracing the needs of stockholder value and investment returns
in each planning decision is a new priority for the Board and 
Officers.

Following the March 25, 1997 stock conversion date the holding 
company enjoyed profits of over $200,000 in the last six 
months of our fiscal year.  Overall profits for the fiscal
year ended September 30, 1997 of $252,012 were a substantial
improvement over the $71,168 September 30, 1996 loss which
included the one time FDIC charge of $155,000 net of income
taxes.

I wish to thank all stockholders of Vermilion Bancorp, Inc.
for their confidence and encouragement shown by investing
in our future in community banking.



                                Sincerely,


                                /s/ Merrill G. Norton

                                Merrill G. Norton
                                President and Chief
                                Executive Officer




                              (1)





         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,                              
                                    1997     1996     1995     1994     1993
                                          (Dollars in Thousands)
Selected Financial Condition                                              
Data:
 Total assets                      $37,816  $35,459  $33,977  $33,198  $33,591
 Cash and cash equivalents           1,138      789      571      699    1,288
 Interest-bearing time
                  deposits              99       99       99      694    1,181
 Securities(1)                                                         
  Available for sale                 3,116    2,222    1,486       --       --
  Held to maturity                   3,000    4,337    6,816    9,205   13,082
 Loans, net                         29,411   26,936   23,954   21,627   18,235
 Premises and equipment                461      467      495      468      483
 Federal Home Loan Bank of
     Chicago stock, at cost            283      269      255      236      236
 Deposits                           29,098    30,724   31,331   30,698   31,158
 Federal Home Loan Bank advances     2,600     2,000       --       --       --
 Total equity capital                5,955     2,355    2,442    2,341    2,185
 Full service offices                    1         1        1        1        1
                                  
                                  
                                Year Ended September 30,
                                  
                                     1997     1996     1995     1994     1993
                                              (In Thousands)
Selected Operating Data:                                                  
  Total interest income             $ 2,803  $ 2,634  $ 2,375  $ 2,279  $ 2,390
  Total interest expense              1,741    1,778    1,588    1,355    1,521
    Net interest income               1,062      856      787      924      869
  Provision for losses on loans          17       80       13      105        8
  Net interest income after                                               
  provision for losses on loans       1,045      776      774      819      861
  Non-interest income                    42       45       51       49       82
  Non-interest expenses                 761      889(2)   710      700      763
  Income (loss) before taxes            326      (68)     115      168      180
  Provision for income taxes             74        3       15       13       59
  Net income (loss)                     252   $  (71)     100  $   155  $   121
  Net income per share                  N/A      N/A      N/A      N/A      N/A
  Book value per share                16.21      N/A      N/A      N/A      N/A
  Dividends per share               $  0.00      N/A      N/A      N/A      N/A


(1) The  Bank  adopted the provisions set forth in  Statement  of
    Financial  Accounting Standards No. 115 on October  1,  1994,
    which   requires  entities  to  carry  securities  that   are
    available for sale at their market value while continuing  to
    carry   securities  that  are  held  to  maturity  at   their
    amortized  cost.   See  Note 1 to the Consolidated  Financial
    Statements.

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


                                 (2)





                                      At or For the Year Ended September 30,
                                         
                                       1997     1996     1995    1994    1993
                                                                          
Other Data:                                                                  
  Profitability:                                                             
    Return on average assets           0.67% (0.20)%(4)  0.29%   0.46%   0.36%
    Return on average equity           5.07   (2.89)(4)  4.18    6.86    5.78
    Interest rate spread for               
                 period(1)             2.20    2.17      2.11    2.59    2.42
    Net interest margin(2)             2.92    2.48      2.39    2.83    2.64
    Non-interest expenses to                     
                average assets         2.03    2.49      2.08    2.13    2.26
    Average interest-earning assets                                          
    to average interest bearing 
                        liabilities  115.18  106.05    104.04  104.78  104.81
  Capital Ratios:                                                            
    Average equity to average assets  13.26    6.90      7.02    6.76    6.22
  Asset Quality:                                                             
    Non-performing assets to total
    assets(3)                          1.28    0.93      0.64   0.26    1.64
    Net chargeoffs (recoveries) to 
    average loans                      0.03    0.04      0.03   0.76   (0.01) 
    Allowance for loan losses to
    total loans                        0.52    0.53      0.31   0.29    0.60
    Allowance for loan losses to
    non-performing loans              31.34   43.60     34.26  73.26   19.78
               
                                                                             
Capital Ratios of the Bank(5)                                                
Tier 1 risk-based capital ratio       26.50   14.45     14.59  15.98   16.32   
Total risk-based capital ratio        27.30   15.33     15.03  16.44   17.14   
Tier 1 leverage capital ratio         13.50%   6.61%     7.11%  6.92%   6.50%  
     

(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) Prior  to  fiscal  [1994],  the Bank  operated  as  a  mutual
    savings  and loan association.  As such, the Bank was subject
    to   the   capital  requirements  of  the  Office  of  Thrift
    Supervision  ("OTS")  and not those of  the  Federal  Deposit
    Insurance  Corporation  ("FDIC") and  was  at  all  times  in
    compliance therewith.
     



                                (3)

     
     


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

General

     Vermilion  Bancorp,  Inc.  (the "Company")  is  the  holding
company  for  the  American  Bank (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, 1996, 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
1998 and any Current Reports on Form 8-K filed by the Company.





                              (4)








Changes in Financial Condition

     
     General. Total assets of the Bank increased by $2.4 million, 
or 6.7%, to $37.8 million at September 30, 1997 from $35.5 million at 
September 30, 1996. The increase in total assets during 1997 was due 
primarily to a $2.5 million increase in net loans, and a $349,000 
increase in cash and cash equivalents, partially offset by a $442,000 
reduction in total investment securities.

     Cash and cash equivalents.  Cash and cash equivalents, 
which consist of cash and due from banks and interest-bearing demand 
deposits at other institutions, increased by $349,000, or 44.2%, to 
$1.1 million at September 30, 1997 compared to $789,000 at September 30, 
1996.  The increase in cash and cash equivalents in fiscal
1997 was primarily the result of receipt of proceeds from 
issuance of stock by the Company in connection with the 
conversion of the Bank from the mutual to stock form of ownership.
At September 30, 1997, cash and cash equivalents amounted to 3.0%
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 $29.4
million at September 30, 1997, a $2.5 million, or a 9.3% increase
over net loans at September 30, 1996.  Such increase was due
primarily to originations of residential mortgage loans.

     Investment securities.  The Company's investment securities
amounted to $6.1 million at September 30, 1997 compared to $6.6
million at September 30, 1996.  The decrease in investment
securities was primarily the result of a $1.3 million decrease in
investment securities held to maturity, offset by an $894,000 
increase in investments available for sale.

     Deposits.  The Company's total deposits amounted to $29.1
million at September 30, 1997 compared to $30.7 million at 
September 30, 1996.  During 1997, the Company's total deposits 
decreased by $1.6 million, or 5.2%.

     Federal Home Loan Bank Advances.  The Company's total 
advances from the FHLB of Chicago amounted to $2.6 million at 
September 30, 1997, compared to $2.0 million at September 30, 1996,
an increase of 30.0%.  The proceeds of these advances were used
to fund growth in the Company's loan portfolio during 1997.



                           (5)



    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
                                   1997     Year Ended September 30, 1997  
                                                                              
                                   Yield/   Averag                 Yield/
                                    Rate    Balance    Interest     Rate  
                                                              
Interest-earning assets:
  Loans, net(1)                     8.37%   $28,290    $ 2,324      8.24%
     Interest-bearing deposits
     with financial institutions    5.72      2,252        100      4.44
     Securities(2)                  5.70      2,477        149      6.02
     Mortgage-backed securities     6.53      3,564        230      6.48

   Total interest-earning assets    7.89     36,583      2,803      7.68

     Non-interest-earning assets                926

   Total assets                              37,509
Interest-bearing liabilities:
     Deposits:
     Now                            1.64        471          8      1.70
     Money market investment        3.03      1,016         32      3.15
     Savings and retirement         4.41      5,304        263      4.96
     Certificates                   5.67     22,820      1,315      5.76
      Total deposits                5.31     29,611      1,618      5.32 
     FHLB advances                  5.87      2,150        123      5.88

Total interest-bearing liabilities  5.37     31,761      1,741      5.48

Non-interest bearing liabilities                776

      Total liabilities                      32,537

Equity capital                                4,972
      Total liabilities and
            equity capital                  $37,509
Net interest income; interest
                rate spread(3)      2.52               $ 1,062      2.20
Net interest margin(4)                                              2.92
Ratio of interest-earning                                         
assets to average interest-
bearing liabilities               116.95%                         115.18%




                                  (6)







                                      Year Ended September 30, 1996       
                                         Average            Yield/
                                         Balance  Interest   Rate

Interest-earning assets:                                                      
  Loans, net(1)                         $25,869   $ 2,118    8.19% 
    Interest-bearing deposits with                                            
       financial institutions             1,330        67    5.04
    Securities(2)                         3,531       204    5.78
    Mortgage-backed securities            3,811       245    6.43       

  Total interest-earning assets          34,541     2,634    7.63 

    Non-interest-earning assets           1,117                                

  Total assets                          $35,658                                 
Interest-bearing liabilities:                                                  
    Deposits:                                                                   
    NOW accounts                        $   469   $    10    2.13 
    Money market investment               1,355        38    2.80  
    Savings and retirement                5,161       236    4.57
    Certificates                         23,672     1,387    5.86

      Total deposits                     30,657     1,671    5.45 

    FHLB advances                         1,917       107    5.58

  Total interest-bearing liabilities     32,574     1,778    5.46

Non-interest bearing liabilities            624                

  Total liabilities                      33,198                  

Equity capital                            2,460                 

  Total liabilities and equity capital  $35,658
Net interest income; interest                     
                        rate spread(3)            $   856    2.17% 
Net interest margin(4)                                       2.48% 
Ratio of interest-earning   
assets to average interest- 
  bearing liabilities                                      106.05%





                                   (7)







                                      Year Ended September 30, 1995
                                        Average            Yield/
                                        Balance  Interest   Rate

Interest-earning assets:
  Loans, net(1)                         $22,399   $ 1,757   7.84%
    Interest-bearing deposits with
          financial institutions          1,381        80   5.80
  Securities(2)                           4,670       256   5.48
  Mortgage-backed securities              4,510       282   6.25

 Total interest earning assets           32,960     2,375   7.21

  Non-interest-earning assets             1,112    

 Total assets                           $34,072
Interest-bearing liabilities:
  Deposits:
  Now accounts                          $   516   $    13   2.52
  Money market investment                 1,685        55   3.26
  Savings and retirement                  5,124       234   4.57
  Certificates                           23,842     1,286   5.39

 Total deposits                          31,167     1,588   5.10

  FHLB advances                             --        --     --

 Total interest-bearing liabilities      31,167     1,588   5.10

Non-interest-bearing liabilities            513

 Total liabilities                       31,680

Equity Capital                            2,392

 Total liabilities and equity capital   $34,072
Net interest income; interest
                     rate spread(3)               $   787   2.11%

Net interest margin(4)                                      2.39%

Ratio of interest-earning assets to
average interest-bearing liabilities                      104.04%



    
(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.

(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,
                                          1997 vs 1996
                                         Increase
                                        (Decrease)         Total
                                          Due To          Increase
                                     Rate      Volume     Decrease
                                          (In Thousands)
Interest-earning assets:
  Interest-bearing deposits with 
           financial institutions  $  (9)      $  42       $  33
  Loans, net                          13         193         206
  Securities(1)                        9         (64)        (55)
  Mortgage-backed securities           2         (17)        (15)

  Total change in interest income     15         154         169
Interest-bearing liabilities:
  Deposits:
    Now accounts                      (2)         --          (2)
    Money market investment            5         (11)         (6)
    Savings and retirement            20           7          27
    Certificates                     (23)        (49)        (72)
  FHLB advances                        5          11          16

  Total change in interest expense     5         (42)        (37)

Net change in net interest income  $  10       $ 196       $ 206


                                       Year Ended September 30,
                                           1996 vs. 1995            
                                         Increase                       
                                        (Decrease)      Total  
                                          Due To       Increase
                                                                          
                                      Rate     Volume  (Decrease)
                                           (In Thousands)
Interest-earning assets:                                                       
  Interest-bearing deposits with                                               
  financial institutions             $(10)     $ (3)    $(13)
  Loans, net                           80       281      361
  Securities(1)                        13      (65)     (52)
  Mortgage-backed securities            8      (45)     (37)

  Total change in interest income      91       168      259
Interest-bearing liabilities:                                                   
    Deposits:                                                                   
            NOW accounts               (2)       (1)      (3)
            Money market investment    (7)      (10)     (17)
            Savings and retirement     --         2        2
            Certificates              110        (9)      101
    FHLB advances                      --       107       107

    Total change in interest expense  101        89       190
                                                                 
Net change in net interest income    $(10)     $ 79      $ 69


(1) Includes  securities  available for sale and held  to  maturity.   Does  not
    include mortgage-backed securities.




                                  (9)





Results of Operations

      Net Income. The Company reported net income of $252,000, and 
a loss of $71,000 during the years ended September 30, 1997 and 1996,
respectively. The income reflects higher interest margins due to the increase
in capital of which a majority had been interest earning deposits prior to
the March 25, 1997 conversion.  The Bank reported a net loss of $71,000
during the year ended September 30, 1996. The primary reason for the net loss 
reported in fiscal 1996 was the increase in deposit insurance expense from
$71,000 in fiscal 1995 to $277,000 in fiscal 1996 due to a special assessment
of $206,000.

      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 2.20% and 2.17%
during the years ended September 30, 1997 and 1996, respectively. The Bank's 
net interest margin (i.e., net interest income as a percentage of average
interest-earning assets) was 2.92 % and 2.48% during the years ended
September 30, 1997 and 1996 respectively.

    Net interest income increased by $206,000, or 24.1%, during the year
ended September 30, 1997 to $1.1 million compared to $856,000 for the year 
ended September 30, 1996. The primary reasons for this increase were a 
$206,000 increase in net interest income from loans, a $53,000 decrease in
deposit interest expense offset by a $70,000 decrease in interest income
from investment securities.

    Interest Income. Total interest income increased by $169,000 or 6.4% in 
the year ended September 30, 1997. Interest income on loans amounted to
$2.3 million fiscal 1997 compared to $2.1 million in fiscal 1996. The
average balance of the Bank's total loans increased by $2.4 million, or
9.4%, in fiscal 1997 compared to fiscal 1996 and the average yield earned
on loans increased by 5 basis points (with 100 basis points being equal to
1.0%). Interest income on mortgage-backed securities decreased by $15,000 or
6.1% in fiscal 1997 compared to fiscal 1996 due primarily to a $247,000 
decrease in the average balance of mortgage backed securities. Interest 
income on securities and interest-bearing deposits decreased by $22,000, 
or 8.1%, in fiscal 1997 compared to fiscal 1996 due primarily to a decrease
in average balance of securities.

    Interest Expense. The primary component of interest expense during all
periods presented is interest on deposits. Total interest expense decreased
by $37,000, or 2.1%, during the year ended September 30, 1997 compared to the
year ended September 30, 1996. The decrease was due primarily to a decrease
in the average balance of certificares of deposit held by the institution
from $23.7 million to $22.8 million, offset by an increase in the average
rate paid on savings and retirement accounts from 4.57% to 4.96%.
Certificates of depost (including certificates of deposit of $100,000 or more)
constituted 76.8% of the Bank's total deposits at September 30, 1997 
compared to 77.3% at September 30, 1996.  The average balance of the
Bank's certificates decreased by $852,000 or 3.6% from fiscal year 1997 to 
1996, while the average cost of certificates decreased by 10 basis points in 
fiscal 1997.

       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 $17,000 in fiscal
1997, compared to $80,000 in fiscal 1996.  At September 30, 1997, the Bank's
allowance for loan losses amounted to 31.3% of total non-performing loans and
to 0.5% of total loans receivable.

       Non-interest Income. Non-interest income decreased $3,000 or 6.7% for
the year ended September 30, 1997 compared to the year ended September 30,
1996.

        Non-interest Expenses. Total non-interest expenses were $761,000 in   
the year ended September 30, 1997 which amounted to a $128,000 or 14.4%  
decrease compared to the year ended September 30, 1996. The primary reason 
for the decrease was due to the decrease in deposit insurance expense,
because a special assessement of $206,000 (before tax) was imposed in fiscal
1996 as a part of the recaptilization of the SAIF. The decrease was partially
offset by a $104,000 increase in salaries and employee benefits. 



                                  (10)





     Income Taxes. The Bank incurred income tax expense of $74,000 for the
year ended September 30, 1997, as compared to $3,000 for fiscal 1996. The
Company's effective tax rate amounted to 22.7% for fiscal 1997.

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, 1997, 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 $11.0 million or 29.2% 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, 1997, $18.4 million or 74.5% of the Bank's total loan portfolio
due one year or more after September 30, 1997, consisted of one-to-four-
family fixed-rate long-term residential mortgage loans. Although the Bank 
anticipates that a substantial portion of its loan portfolio will continue to
consist of fixed-rate long-term loans, the Bank has limited the term of such
loans originated since 1983 to no more than 20 years with a substantial 
majority of such loans having 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 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, 1997, $2.8 million or 9.5% of
the Bank's total loan portfolio consisted of one-to-four family fixed-rate 
balloon loans.



                                  (11)






      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, 1997, the Bank had $1.3 million of 
variable-rate mortgage-backed securities and had $3.1 million of investments
in various and federal agency government securities with terms to maturity of
less than five years. As of September 30, 1997, $3.1 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, 1997, $22.3 million, or 
76.8% of the Bank's total deposits were comprised of certificates of deposit 
(including certificates of deposit of $100,000 or more) and  $14.4 million,
or 50.0% 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 Bank believes that its current interest-rate pricing gap is within 
a range acceptable to the Commissioner and consistent with the Bank's 
internal guidelines. However, as 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. Moreover, the 
Bank believes that the additional capital it will raise as a result of the 
sale of the Common Stock will enhance its flexibility to operate within a 
wider range of interest-rate gap scenarios.



                              (12)






       The following table sets forth the amounts of interest-earning assets 
and interest-bearing liabilities outstanding at September 30, 1997, 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, 1997, 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:
  Securities(1)(2)   $  --   $  --     $ 2,316     $   797    $   365 $ 3,478  
  Loans, net(3)        2,803   1,789     3,920       2,063     18,836  29,411   
  Interest-bearing                                                 
deposits(4)            1,182      99       --          --         --    1,281
  Mortgage-backed                                                  
securities               691     793       956         --         198   2,638
    Total interest-
earning assets         4,676   2,681     7,192       2,860     19,399  36,808  
  Interest-bearing                                                   
liabilities:
Deposits(5):                                                       
  NOW accounts           113     114       227         --         --      454  
  Money market     
investment accounts      224     224       448         --         --      896  
  Savings accounts       206     207       830         830        --    2,073   
Retirement accounts      150     150       600         600      1,495   2,995   
  Certificates         8,133   6,273     7,305         638        --   22,349   
    Total interest-                                                
bearing deposits       8,826   6,968     9,410       2,068      1,495  28,767
Advances from FHLB     2,000     600       --          --         --    2,600   
      Total interest-                                              
bearing liabilities   10,826   7,568     9,410       2,068      1,495  31,367
Excess (deficiency)                                                
of interest-earning
  assets over
interest-bearing
liabilities           (6,150) (4,887)   (2,218)        792     17,904   5,441
Cumulative excess                                                  
(deficiency) of                                                    
 interest-earning                                                  
assets over interest-
 bearing liabilities  (6,150)(11,037)  (13,255)    (12,463)     5,441   5,441
Cumulative excess                                                  
(deficiency) of
  interest-earning
assets over interest-
  bearing
liabilities as a
percent of
  total assets        (16.26)%(29.19)% (35.05)%    (32.96)%    14.39%  14.39%


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

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

(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.
    Annual prepayment rates for adjustable-rate and fixed-rate residential
    loans are assumed to be 5%.

(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%.




                                    (13)




     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
which  provide liquidity to meet lending requirements.  The  Bank
has  been  able to generate sufficient cash through its  deposits
and  has  had  a limited use of borrowings as a source  of  funds
during  the  past five years.  As loan originations and  deposits
remained  stable, the Bank used cash from maturing securities  in
its  investment  portfolio  to  fund  loan  originations.  As  of
September  30,  1997, the Bank had the ability to  borrow  up  to
$15.5 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, 1997 the total  approved
loan commitments outstanding amounted to $578,000.  At
the  same  date,  the Bank had commitments of  $23,000  under
unused  letters of credit.  Certificates scheduled to  mature  in
one  year  or  less  at  September 30, 1997  totaled  $14.4
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 relevant 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  at least 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, 1997, the Bank was in
compliance with applicable regulatory capital requirements.


                          (14)





Recent Accounting Pronouncements



      In  February 1997, the FASB issued SFAS No. 128,  "Earnings
Per Share."  SFAS No. 128 establishes standards for computing and
presenting earnings per share (EPS) and applies to entities  with
publicly  held common stock or potential common stock.  SFAS  No.
128  simplifies previous standards for computing EPS.   SFAS  No.
128  is  effective  for financial statements issued  for  periods
ending  after  December  15,  1997,  including  interim  periods;
earlier  application  is not permitted.  SFAS  No.  128  requires
restatement  of all prior period EPS data presented.   Accordingly,
the Company will adopt Statement 128 during the fiscal quarter
ending December 31, 1997.  Management does not anticipate that 
this will have a material impact on its EPS disclosures.

      In February 1997, the FASB issued SFAS No. 129, "Disclosure
of  Information about Capital Structure." SFAS No. 129 summarizes
previously  issued  disclosure  guidance  contained  within   APB
Opinions No. 10 and 15 as well as SFAS No. 47.  There will be  no
changes to the Company's disclosures pursuant to the adoption  of
SFAS   No.  129.   This  statement  is  effective  for  financial
statements issued for periods ending after December 15, 1997.
Accordingly, the Company will adopt Statement 129 during fiscal 1998.

      In  June  1997,  the FASB issued SFAS No.  130,  "Reporting
Comprehensive Income," which establishes standards for  reporting
and  display of comprehensive income and its components in a full
set   of  general-purpose  financial  statements.   Comprehensive
income  is  defined  as  "the change  in  equity  of  a  business
enterprise during a period from transactions and other events and
circumstances from nonowner sources.  It includes all changes  in
equity during a period except those resulting from investment  by
owners  and  distributions to owners."  The comprehensive  income
and  related  cumulative  equity impact of  comprehensive  income
items will be required to be disclosed prominently as part of the
notes to the financial statements.  Only the impact of unrealized
gains  or losses on securities available for sale is expected  to
be  disclosed as an additional component of the Company's  income
under  the  requirements  of SFAS No.  130.   This  statement  is
effective for fiscal years beginning after December 15, 1997.
The Company will adopt Statement 130 during fiscal year 1999.


     Disclosures About Segments of an Enterprise.  Also in 1997,
the FASB issued Statement No. 131, Disclosures about Segments of 
an Enterprise and Related Information, which supersedes SFAS 14,
"Financial Reporting for Segments of a Business Enterprise", 
establishes standards for the way that public enterprises report
information about operating segments in annual financial 
statements and requires reporting of selected information about
operating segments in annual financial statements issued to the
public.  It also establishes standards for disclosures regarding
products and services, geographic area and major customers.  SFAS
131 defines operating segments as components of an enterprise about
which separate financial information is available that is evaluated
regularly by the chief operating decision maker in deciding how to 
allocate resources and in assessing performance.

This standard is effective for financial statments periods beginning
December 15, 1997 and requires comparative information for earlier
years to be restated.  Due to recent issuance of this standard, 
management has been unable to fully evaluate the impact, if any, 
they may have on the Company's future financial statement disclosures.




                             (15)




Impact of Inflation and Changing Prices

     The  Financial  Statements of the  Bank  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 Bank's revenues and income.




                             (16)

                                
                                
                                
            
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                                
                     Vermilion Bancorp, Inc.
                         and Subsidiary
                                
                Consolidated Financial Statements
                   September 30, 1997 and 1996



                  Vermilion Bancorp, Inc.
                      and Subsidiary
                     Table of Contents


                                                          Page
                                                            
Independent Auditor's Report                                18
                                                            
Financial Statements                                        
                                                            
Consolidated balance sheet                                  19
                                                            
Consolidated statement of income                            20
                                                            
Consolidated statement of changes in stockholder's equity   21
                                                            
Consolidated statement of cash flows                        22
                                                            
Notes to consolidated financial statements                  23





                              (17)
                                
                                
                                
                                
                                
                                
                  Independent Auditor's Report
  
  
  
  Board of Directors
  Vermilion Bancorp, Inc. and Subsidiary
  Danville, Illinois
  
  
  We   have  audited  the  consolidated  balance  sheet   of
  Vermilion  Bancorp, Inc. and subsidiary  as  of  September
  30,   1997   and   1996,  and  the  related   consolidated
  statements  of  income,  changes in 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 fairly, in all material respects,
  the  consolidated financial position of Vermilion Bancorp,
  Inc.  and  subsidiary as of September 30, 1997  and  1996,
  and  the results of their operations and their cash  flows
  for  the  years  then ended, in conformity with  generally
  accepted accounting principles.
  
  
  /s/ Geo. S. Olive & Co. LLC  
  
  
  Champaign, Illinois
  October 17, 1997
  

                                (18)





                       Vermilion Bancorp, Inc.
                           and Subsidiary
                     Consolidated Balance Sheet
September 30                                        1997        1996
Assets                                                      
Cash and due from banks                          $    55,354 $   359,747
Interest-bearing demand deposits                   1,082,543     429,451
   Cash and cash equivalents                       1,137,897     789,198
Interest-bearing time deposits                        99,000      99,000
Investment securities                                       
  Available for sale                               3,115,652   2,221,693
  Held to maturity                                 3,000,155   4,336,559
      Total investment securities                  6,115,807   6,558,252
Loans                                             29,563,296  27,079,584
  Allowance for loan losses                         (151,868)   (143,349)
      Net loans                                   29,411,428  26,936,235
Premises and equipment                               460,617     466,928
Federal Home Loan Bank stock                         283,200     269,000
Other assets                                         308,126     340,599
                                                            
Total assets                                     $37,816,075 $35,459,212
                                                                 
Liabilities                                                 
  Deposits                                                    
   Noninterest bearing                           $   285,753 $   165,593 
   Interest bearing                               28,811,931  30,558,460
   Total deposits                                 29,097,684  30,724,053
Federal Home Loan Bank borrowings                  2,600,000   2,000,000
Other liabilities                                    163,259     380,010
      Total liabilities                           31,860,943  33,104,063
         
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 - 396,750                                            
    Outstanding - 367,479                              3,968     
  Paid-in-capital                                  3,614,922
  Retained earnings - substantially restricted     2,622,516   2,370,504
  Net unrealized gain (loss) on securities                    
  available for sale                                   6,437     (15,355)

  Less:                                                       
   Unearned employee stock ownership plan shares -             
    29,271 shares                                   (292,711)
     Total stockholders' equity                    5,955,132   2,355,149
                                                            
     Total liabilities and stockholders' equity  $37,816,075 $35,459,212

See notes to consolidated financial statements.

                                       (19)


                       Vermilion Bancorp, Inc.
                           and Subsidiary
                  Consolidated Statement of Income
                                                                
Year Ended September 30                             1997        1996
                                                            
Interest Income                                             
  Loans                                         $2,324,161  $2,118,137
  Investment securities                            378,710     448,729
  Deposits with financial institutions             100,052      67,274
      Total interest income                      2,802,923   2,634,140
                                                            
Interest Expense                                            
  Deposits                                       1,617,919   1,670,717
  Federal Home Loan Bank borrowings                122,927     107,113
  Total interest expense                         1,740,846   1,777,830
                         
                                                            
Net Interest Income                              1,062,077     856,310
  Provision for loan losses                         17,000      80,000
                                                            
Net Interest Income After Provision for                     
Loan Losses                                      1,045,077     776,310
                                                  
                                                            
Noninterest Income                                          
  Loan fees                                            216      11,551
  Net realized gains on sales of 
    available-for-sale securities                      938       
  Other income                                      40,387      33,343
       Total noninterest income                     41,541      44,894
                                                            
Noninterest Expenses                                        
  Salaries and employee benefits                   380,308     275,741
  Net occupancy and equipment expenses              83,216      96,895
  Data processing fees                              44,668      40,568
  Deposit insurance expense                         14,901     277,093
  Printing and office supplies                      15,954      15,710
  Legal and professional fees                       42,346      36,569
  Advertising and promotion                         12,370      28,525
  Director and committee fees                       49,360      41,107
  Other expenses                                   117,944      77,281
       Total noninterest expenses                  761,067     889,489
                                                            
Income (Loss) Before Income Tax                    325,551     (68,285)
  Income tax expense                                73,539       2,883
                                                            
Net Income (Loss)                                 $252,012    $(71,168)

See notes to consolidated financial statements.



                                    (20)

<TABLE>

                              Vermilion Bancorp, Inc. and Subsidiary
                                                 
                     Consolidated Statement of Changes in Stockholders' Equity
                                                                               
                                                                              

                                                                          Net       Unearned
                                                                       Unrealized   Employee
                                  Common Stock                             Gain       Stock
                                                                        (Loss) on   Ownership
                                                                        Securities     Plan      
                                Shares              Paid-in   Retained  Available     Shares      
                              Outstanding  Amount   Capital   Earnings   for Sale                  Total

<S>                             <C>        <C>    <C>        <C>         <C>        <C>       
Balance, October 1, 1995                                     $2,441,672  $    737               $2,442,409
 Net loss for 1996                                              (71,168)                           (71,168)
 Net  change  in unrealized                                                                 
  gain (loss) on securities                                                        
  available for sale                                                      (16,092)                 (16,092)
                                                                                           
Balance, September 30, 1996                                   2,370,504   (15,355)               2,355,149
 Issuance of common stock       396,750    $3,968 $3,609,455                                     3,613,423
 Employee Stock Ownership                                                                   
  Plan shares acquired          (31,740)                                            $(317,400     (317,400)
 Employee Stock Ownership                                                                   
  Plan shares allocated           2,469                5,467                           24,689       30,156
 Net income for 1997                                            252,012                            252,012
Net  change  in unrealized                                                                 
 gain (loss) on securities 
 available for sale                                                        21,792                   21,792
                                                                                           
Balance, September 30, 1997     367,479    $3,968 $3,614,922 $2,622,516  $  6,437   $(292,711)  $5,955,132

See notes to consolidated financial statements.
</TABLE>
                                                               (21)


                       Vermilion Bancorp, Inc
                            and Subsidiary
                Consolidated Statement of Cash Flows
                                                                
Year Ended September 30                               1997       1996
                                                            
Operating Activities                                        
 Net income (loss)                                $  252,012 $    (71,168)
 Adjustments to reconcile net income (loss) to net           
  cash provided by operating activities:
  Provision for loan losses                           17,000       80,000
  Investment securities gains                           (938)      
  Deferred income tax                                 55,059      (41,577)
  Investment securities amortization, net             11,838       11,049
  Depreciation                                        26,139       33,594
  Compensation expense related to ESOP                30,156     
  Change in                                                    
   Other assets                                      (30,986)       7,250
   Other liabilities                                (216,751)     177,022
   Net cash provided by operating activities         143,529      196,170
                                                            
Investing Activities                                        
 Purchases of securities available for sale       (2,044,483)    (550,000)
 Proceeds from maturities of securities available 
  for sale                                           900,000    1,394,257
 Proceeds from sales of securities available for 
  sale                                               250,938   
 Purchases of securities held to maturity           (150,000)  
 Proceeds from maturities of securities held to 
  maturity                                          1,505,282     867,113
 Net change in loans                               (2,492,193) (3,062,278)
 Purchases of premises and equipment                  (19,828)     (5,271)
 Purchase of Federal Home Loan Bank stock             (14,200)    (14,000)
   Net cash used by investing activities           (2,064,484) (1,370,179)
                                                                   
Financing Activities                                        
 Net change in deposits                            (1,626,369)   (607,385)
 Proceeds of Federal Home Loan Bank borrowings        600,000   2,000,000
 Issuance of common stock, net of offering costs    3,613,423  
 Purchase of common stock for ESOP                   (317,400)
   Net cash provided by financing activities        2,269,654   1,392,615
                                                                               
Net Change in Cash and Cash Equivalents               348,699     218,606
Cash and Cash Equivalents, Beginning of Year          789,198     570,592
                                                            
Cash and Cash Equivalents, End of Year             $1,137,897    $789,198
                                                                                
Additional Cash Flows Information                           
 Interest paid                                     $1,735,675  $1,770,178
 Income tax paid                                       27,000      17,205

See notes to consolidated financial statements.


                                    (22)



                     Vermilion Bancorp, Inc.
                         and Subsidiary
                                
           Notes to Consolidated Financial Statements


  Nature  of  Operations  and Summary of  Significant  Accounting
  Policies

The  accounting and reporting policies of Vermilion Bancorp, Inc.
(the "Company") and its wholly owned subsidiary, American Savings
Bank  of  Danville  (the "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 savings and loan 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 Bank 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 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.


                             (23)


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. 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  estimated
that  are particularly susceptible to significant changes in  the
economic  environment and market conditions.  Management believes
that as of September 30, 1997, 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.

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.

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.


                              (24)


Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


Earnings  per  share  will be computed based  upon  the  weighted
average  common  and  common equivalent  shares  outstanding  for
periods  subsequent to the Bank's conversion to a  stock  savings
bank  on  March 25, 1997.  Earnings per share for  1997  are  not
meaningful.

Reclassifications  of  certain amounts in the  1996  consolidated
financial  statements  have been made  to  conform  to  the  1997
presentation.

Conversion to Stock Ownership
On  March  25, 1997, the Bank consummated its conversion  from  a
state  chartered  mutual savings bank to a state chartered  stock
savings   bank  pursuant  to  the  Bank's  Plan  of   Conversion.
Concurrent  with  the  formation  of  the  Company,  the  Company
acquired 100% of the stock of the Bank and issued 396,750  shares
of  Company  common  stock, with $.01 par value,  at  $10.00  per
share.  Net proceeds of the Company's stock issuance, after costs
and  Employee  Stock  Ownership Plan shares,  were  approximately
$3,296,000.

The acquisition of the Bank by the Company is being accounted for
in  a  manner  similar to "pooling-of-interests" under  generally
accepted  accounting principles.  The application of the pooling-
of-interests  method records the assets and  liabilities  of  the
merged  companies on a historical cost basis with no goodwill  or
other intangible assets being recorded.


  Investment Securities


                                                  1997
                                            Gross       Gross       
                               Amortized  Unrealized  Unrealized    Fair
September 30                     Cost       Gains       Losses     Value
                                                                      
Available for sale                                          
 U.S. Treasury                $1,741,182   $17,508               $1,758,690
 Federal agencies              1,364,750     1,529     $ (9,317)  1,356,962
  Total available for sale     3,105,932    19,037       (9,317)  3,115,652
                                                  
Held to maturity                                            
 State and municipal             362,153     6,390                  368,543
 Mortgage-backed securities    2,638,002    55,830       (5,271)  2,688,561
                                                            
  Total held to maturity       3,000,155    62,220       (5,271)  3,057,104
                                                                             
  Total investment securities $6,106,087   $81,257     $(14,588) $6,172,756


                                      (25)



Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


                                               1996
                                           Gross       Gross       
                              Amortized  Unrealized  Unrealized    Fair
September 30                    Cost       Gains      Losses      Value
                                                                            
Available for sale                                          
 U.S. Treasury               $  250,000   $  3,250               $
 Federal agencies             1,992,166      5,025   $(28,748)    1,968,443
  Total available for sale    2,242,166      8,275    (28,748)    2,221,693
                                                            
Held to maturity                                            
 Federal agencies               499,798                  (928)      498,870
 State and municipal            361,177                (6,759)      354,418
 Mortgage-backed securities   3,475,584     30,440    (32,713)    3,473,311
  Total held to maturity      4,336,559     30,440    (40,400)    4,326,599
                                                            
 Total investment securities $6,578,725    $38,715   $(69,148)   $6,548,292
                             

The  amortized  cost and fair value of securities  available  for
sale  and  held to maturity at September 30, 1997, 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            $3,105,932 $3,115,652            
Five to ten years                                  $  362,153  $  368,543
                              3,105,932  3,115,652    362,153     368,543
Mortgage-backed securities                          2,638,002   2,688,561 
                                       
    Totals                   $3,105,932 $3,115,652 $3,000,155  $3,057,104


There were no pledged securities at September 30, 1997 or 1996.

Proceeds  from the sale of securities available for  sale  during
1997  were  $250,938.  A gross gain of $938 was realized  on  the
sale.  There were no sales of securities during 1996.

On  December  31,  1995, the Bank transferred certain  securities
from held to maturity to available for sale in accordance with  a
transition  reclassification allowed by the Financial  Accounting
Standards  Board.   Such  securities  had  a  carrying  value  of
$1,600,000 and a fair value of $1,592,598.


                             (26)


Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


  Loans and Allowance

September 30                                        1997         1996
Real estate mortgage loans                                  
 One-to-four family                             $24,835,129  $21,418,924
 Multi-family                                     1,083,000    1,236,140
Commercial real estate loans                      1,090,000      780,848
Real estate sold on contract                        300,000      373,846
Real estate construction loans                      116,000      341,793
Commercial business loans                           480,000      334,376
Consumer loans                                    1,567,878    2,581,152
   Total loans                                   29,472,007   27,067,079
Plus                                                        
Deferred loan costs                                  73,418       38,121
Less                                                        
  Undisbursed portion of loans                      (17,871)     (25,376)
  Unearned interest                                                 (240)
                                                            
                                                $29,563,296  $27,079,584
                                                            
Allowance for loan losses                                   
 Balances, October 1                               $143,349     $ 74,190
 Provision for losses                                17,000       80,000
 Recoveries on loans                                  1,469        1,296
 Loans charged off                                   (9,950)     (12,137)
                                                            
 Balances, September 30                            $151,868     $143,349


The  Company  adopted  SFAS No. 114 and No.  118,  Accounting  by
Creditors  for Impairment of a Loan and Accounting  by  Creditors
for Impairment of a Loan - Income Recognition and Disclosures  on
October 1, 1995.  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, 1997 and  1996  or
during the years then ended.


                              (27)



Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


  Loan Servicing

Mortgage  loans  serviced  for others are  not  included  in  the
accompanying  consolidated balance sheet.  The  unpaid  principal
balances totaled approximately $327,000 and $432,000 at September
30, 1997 and 1996.


  Premises and Equipment

September 30                                        1997      1996
                                                            
Land                                              $209,431    $209,431
Office building                                    574,192     568,593
Furniture and fixtures                             306,357     292,129
   Total cost                                    1,089,980   1,070,153
Accumulated depreciation                          (629,363)   (603,225)       
                                                            
   Net                                            $460,617    $466,928


  Other Assets and Other Liabilities

September 30                                        1997      1996
Other assets                                                
 Interest receivable                               $172,377  $147,719
 Cash value of  life insurance annuity               51,037    53,284
 Deferred income tax asset                           37,045    97,963
 Prepaid expenses and other                          47,667    41,633
                                                            
   Total                                           $308,126  $340,599
                                                            
Other liabilities                                           
 Interest payable on deposits                      $ 20,083  $ 17,917
 Interest payable on borrowings                      12,722     9,717
 Deferred compensation payable                       84,831    79,831
 Federal income tax payable                          21,709    30,229
 SAIF Assessment                                              207,307
 Other                                               23,914    35,009
                                                            
   Total                                           $163,259  $380,010


                                (28)



Vermilion Bancorp, Inc
and Subsidiary
Notes to Consolidated Financial Statements


  Deposits

                                                                
September 30                                        1997         1996
                                                            
Demand deposits                                 $ 1,680,835 $  1,619,923
Savings and retirement accounts                   5,067,584    5,350,222
Certificates of deposit of $100,000 or more       2,863,566    2,775,000
Other certificates of deposit                    19,485,699   20,978,908
                                                            
   Total deposits                               $29,097,684  $30,724,053


Certificates maturing in years ending September 30:         
                                                      1998   $14,406,148
                                                      1999     6,668,289
                                                      2000       636,646
                                                      2001       442,449
                                                      2002       195,733
                                            
                                                             $22,349,265


  Federal Home Loan Bank Borrowings

September 30                                        1997         1996
                                                            
Federal Home Loan Bank advances:                            
 At 6.02%; due October, 1997                      $  500,000  $  500,000
At 5.98%; due October, 1997                          500,000     500,000
At 5.66%; due November, 1997                       1,000,000   1,000,000
At 6.01%; due August, 1998                           600,000   
                                                            
Total FHLB borrowings                             $2,600,000  $2,000,000


The  terms of security agreements with the FHLB require the  Bank
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.


                              (29)




Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


  Income Tax

Year Ended September 30                             1997      1996
Income tax expense                                          
 Current federal                                   $18,480   $44,460
 Deferred federal                                   55,059   (41,577)
                                                            
Total income tax expense                           $73,539    $2,883
                                                            
Reconciliation of federal statutory 
to actual tax expense
 Federal statutory income tax at 34%              $110,687  $(23,217)
 Tax exempt interest                                (6,068)   (5,048)
 Graduated tax rates                               (27,985)    7,467
 Change in tax rate applicable to deferred taxes              18,404
 Other                                              (3,095)    5,277
                                                            
Actual tax expense                                $ 73,539  $  2,883


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

September 30                                        1997      1996
Differences in depreciation methods               $  1,295  $  (530)
Differences in accounting for loan losses           34,538   32,408
Deferred compensation                               21,208   19,958
Unrealized (gain) loss on securities available 
 for sale                                             (741)   5,118
Deferred loan costs                                (18,355)  (9,530)
SAIF assessment                                              51,439
Other                                                 (900)    (900)
                                                            
                                                  $ 37,045  $97,963
                                                            
Assets                                            $ 57,041 $108,923
Liabilities                                        (19,996) (10,960)
                                                            
                                                  $ 37,045  $97,963


                              (30)



Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


There was no state income tax expense for 1997 or 1996.

Retained  earnings  at  September  30,  1997  and  1996,  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, 1997 and 1996.

  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:

                                                    1997      1996
                                                            
Mortgage loan commitments at fixed rates          $254,000  $576,000
Construction, home improvement and other loan               
commitments at fixed rates                         324,000   606,000
Standby letters of credit                           23,000    23,000


At September 30, 1997, mortgage loan commitments have terms up to
30 days and rates ranging from 7.25% to 7.625% while construction
and home improvement loan commitments have terms up to six months
and rates ranging from 8.25% to 10.0%.

At September 30, 1996, mortgage loan commitments have terms up to
30  days and rates ranging from 7.25% to 9.00%.  Construction and
home  improvement loan commitments have terms up to 6 months  and
rates ranging from 9.50% to 10.50%.

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.



                            (31)




Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


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

On  December 30, 1992, a former employee filed a lawsuit  against
the Bank which involves various accusations.  A summary judgement
has  been issued by the court in favor of the Bank on each count.
The  employee has appealed several of the judgements.   Based  on
the  current status of the litigation, the Bank's attorneys  have
advised that, while they are unable to express an opinion  as  to
the  ultimate disposition of the claim, they believe that  it  is
unlikely  that the former employee will prevail.  No accrual  for
loss  from  this  action has been recognized in the  accompanying
financial statements.

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.


  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.

Without  prior  approval of the State of Illinois law  Office  of
Banks and Real Estate, the Bank is restricted by regulation as to
the maximum amount of dividends it may pay in any fiscal year  to
50  percent  of its net profits for that year.  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.



                          (32)




Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


  Regulatory Capital

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

At  September 30, 1997, the management of the Bank believes  that
it  meets  all  capital  adequacy requirements  to  which  it  is
subject.  The most recent notification from the regulatory agency
categorized  the  Bank as well capitalized under  the  regulatory
framework  for  prompt corrective action.   There  have  been  no
conditions  or  events  since that notification  that  management
believes have changed this categorization.
<TABLE>
The Bank's actual and required capital amounts (in thousands) and
ratios are as follows:


                                          1997
                                                 Required for         To Be Well
                                   Actual      Adequate Capital1    Capitalized1
September 30                   Amount   Ratio   Amount     Ratio    Amount    Ratio
<S>                         <C>         <C>   <C>          <C>    <C>          <C> 
Total risk-based capital 1                                       
(to risk-weighted assets)   $5,198,000  27.3% $1,522,000   8.0%   $1,903,000   10.0%
Tier 1 capital 1 (to risk-                                       
weighted-assets)             5,046,000  26.5%    761,000   4.0%    1,142,000    6.0%
Tier 1 capital 1 (to                                             
adjusted total assets)       5,046,000  13.5%  1,497,000   4.0%    1,871,000    5.0%
                                                                 
1  As defined by regulatory agencies
</TABLE>

On  September  30, 1996, legislation was enacted to  recapitalize
the  Federal  Deposit Insurance Corporation's Savings Association
Insurance  Fund ("SAIF") as well as to provide regulatory  relief
to SAIF insured institutions.  As a result of this legislation, a
special  assessment  was levied on all SAIF  assessable  deposits
outstanding  on  March 31, 1995, at a rate of approximately  .657
percent  of deposits.  Accordingly, the Bank recorded an  expense
related to this special assessment of approximately $155,000  net
of taxes, on the date of enactment.



                                (33)



Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


  Benefit Plans

The  Bank  has a retirement savings Section 401(k) plan in  which
substantially  all  employees  may  participate.   Prior  to  its
conversion  in March 1997, the Bank contributed three percent  of
base  salary for each participant.  In addition, the Bank matched
100  percent of the first four percent of employees' base  salary
contributions and 50 percent of the next 4 percent of base salary
contributed  by the participants.  Upon formation of  the  Bank's
ESOP,  it  suspended  payments to the Bank's  401(k)  plan.   The
Bank's expense for the plan was approximately $8,900 for 1997 and
$19,000 for 1996.

The  Bank  also  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 $13,000 for both 1997 and 1996.

In  connection  with  the  conversion, 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  earning  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.

During 1997, 2,469 shares of stock with an average fair value  of
$12.21 per share were committed to be released, resulting in ESOP
compensation  expense of $30,156.  Shares held  by  the  ESOP  at
September 30 are as follows:

                                                              1997

Allocated shares                                             2,469
Unallocated shares                                          29,271
                                                            
Total ESOP shares                                           31,740
                                                            
Fair value of unallocated shares at September 30          $436,425



                               (34)




Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


  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.

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.



                          (35)




Vermilion Bancorp, Inc.
and Subsidiary
Notes to Consolidated Financial Statements


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

                                     1997                1996
September 30                  Carrying    Fair       Carrying    Fair
                               Amount     Value       Amount     Value
Assets                                                      
Cash and cash equivalents   $1,137,897  $1,137,897    $789,189    $789,189
Interest-bearing time 
 deposit                        99,000      99,000      99,000      99,000
Investme securities 
 available for sale          3,115,652   3,115,652   2,221,693   2,221,693
Investment securities 
 held to maturity            3,000,155   3,057,104   4,336,559   4,326,599
Loans, net                  29,411,428  31,965,000  26,936,235  27,000,354
Interest receivable            172,377     172,377     147,719     147,719
Federal Home Loan Bank stock   283,200     283,200     269,000     269,000
Cash  surrender value of life 
 insurance                      51,037      51,037      53,284      53,284
                                                            
Liabilities
Deposits                    29,097,684  29,037,000  30,724,053  30,852,791
FHLB borrowings              2,600,000   2,599,000   2,000,000   1,991,610
Interest payable                32,805      32,805      27,634      27,634
                                                            
Off-Balance Sheet Assets (liabilities)
Commitments to extend credit                                
Standby letters of credit                                   



                                      (36)                                




                 




                           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   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

BANKING LOCATION

714 North Vermilion 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, 
Registrar and Transfer Company.

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 12, 1997, the Company had 128 stockholders of record. The 
number of shares of common stock outstanding as of December 12, 1997 was
396,750 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, 1997 the date of the Bank's conversion from the mutual form of
ownership to the stock form of ownership.

                            Quotations               
                       
                                             Dividend Amount
  Quarter Ended         High Bid   Low Bid      Per Share
                                           
                                           
March 31, 1997           12.50      12.375        --                           
June 30, 1997            12.25      11.75         --                  
September 30, 1997       13.75      12.00         --