<PAGE>

                                    FORM 10-K

                       SECURITIES AND EXCHANGE COMMISSION
                             Washington, D.C.  20549

              ANNUAL REPORT PURSUANT TO SECTION 13 or 15(d) OF THE
                 SECURITIES EXCHANGE ACT OF 1934 (FEE REQUIRED)

                   For the fiscal year ended December 31, 1996
                          Commission file number 0-8597

                           THE REPUBLIC CORPORATION
             ------------------------------------------------------ 
             (Exact name of registrant as specified in its charter)

                TEXAS                                          74-0911766    
     -------------------------------                      -------------------
     (State or other jurisdiction of                       (I.R.S. Employer
      incorporation or organization)                      Identification No.)

     5340 Weslayan, P.O. Box 270462
              Houston, Texas                                     77277   
 ----------------------------------------                     ---------- 
 (Address of principal executive offices)                     (Zip Code)

       Registrant's telephone number, including area code:  (713) 993-9200

           Securities registered pursuant to Section 12(b) of the Act:

    TITLE OF EACH CLASS             NAME OF EACH EXCHANGE ON WHICH REGISTERED 
    -------------------             ----------------------------------------- 
           None                                         None                  
    -------------------             ----------------------------------------- 

           Securities registered pursuant to Section 12(g) of the Act:

     750,000 SHARES COMMON STOCK, PAR VALUE $1 PER SHARE, OF WHICH 356,844   
     ARE OUTSTANDING INCLUDING 23,119 HELD IN TREASURY.                      
     ---------------------------------------------------------------------   

     Indicate by check mark whether this registrant (1) has filed all reports 
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 
1934 during the preceding 12 months (or for such shorter period that the 
registrant was required to file such reports), and (2) has been subject to 
such filing requirements for the past 90 days.

                              Yes  X      No        
                                -------     ------- 

     Indicate by check mark if disclosure of delinquent filers pursuant to 
Item 405 of Regulation S-K (&229.405 of this chapter) is not contained 
herein, and will not be contained, to the best of registrant's knowledge, in 
definitive proxy or information statements incorporated by reference in Part 
III of this Form 10-K or any amendment to this Form 10-K. (X)

     State the aggregate market value of the voting stock held by 
non-affiliates of the registrant:

                         $624,115 as of January 31, 1997

     Indicate the number of shares outstanding of each of the registrant's 
classes of common stock as of the latest practicable date:

                       Common Stock par value $1 per share
               333,725 shares outstanding as of December 31, 1996

                       DOCUMENTS INCORPORATED BY REFERENCE
                                      NONE

<PAGE>

                              REPUBLIC CORPORATION
                                    FORM 10-K
                                      INDEX

                                                                       PAGE 
                                                                       ---- 
IMPORTANT TERMS.....................................................   

PART I

      ITEM 1.   BUSINESS............................................   1-12

      ITEM 2.   PROPERTIES..........................................   12

      ITEM 3.   LEGAL PROCEEDINGS...................................   12

      ITEM 4.   SUBMISSION OF MATTERS TO A VOTE
                OF SECURITIES HOLDERS...............................   12

PART II
      
      ITEM 5.   MARKET FOR REGISTRANT'S COMMON EQUITY
                AND RELATED STOCKHOLDER MATTERS.....................   12

      ITEM 6.   SELECTED FINANCIAL DATA.............................   13

      ITEM 7.   MANAGEMENT'S DISCUSSION AND ANALYSIS OF
                FINANCIAL CONDITION AND RESULTS OF OPERATIONS.......   14-19

      ITEM 8.   FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA.........   20-40

      ITEM 9.   CHANGES AND DISAGREEMENTS WITH ACCOUNTANTS ON
                ACCOUNTING AND FINANCIAL DISCLOSURE.................   41

PART III

      ITEM 10.  DIRECTORS AND EXECUTIVE OFFICERS
                OF THE REGISTRANT...................................   42

      ITEM 11.  EXECUTIVE COMPENSATION..............................   43

      ITEM 12.  SECURITY OWNERSHIP OF CERTAIN
                BENEFICIAL OWNERS AND MANAGEMENT....................   44

      ITEM 13.  CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS......   45

PART IV

      ITEM 14.  EXHIBITS, FINANCIAL STATEMENT SCHEDULES,
                AND REPORTS ON FORM 8-K.............................   46-47

      SIGNATURES....................................................   48

      SUPPLEMENTAL INFORMATION......................................   49


<PAGE>
                                IMPORTANT TERMS


"Registrant" - THE REPUBLIC CORPORATION, a Texas Corporation whose sole 
purpose is the holding and managing of The First National Bank in Trinidad.  

"Bank" - The First National Bank in Trinidad is a commercial bank located in 
Trinidad, Colorado and Walsenburg, Colorado, also referred to as the 
"Subsidiary Bank".

"FRB" - The Board of Governors of the Federal Reserve System, the Agency 
which has responsibility for administering the Bank Holding Company Act of 
1956, as amended.


<PAGE>

                                   PART I

ITEM I.   Business

                            THE REPUBLIC CORPORATION

     GENERAL.  On January 11, 1955, the Registrant was chartered under the 
laws of the State of Texas as Columbia General Investment Corporation, 
conducting business in mortgage banking until 1963.  In 1960, Columbia 
General Investment Corporation acquired The Republic Corporation.  Shortly 
thereafter, the name Columbia General Investment Corporation was changed to 
The Republic Corporation. Also in 1960, the Registrant acquired 75% of the 
outstanding stock of the First National Bank in Trinidad, Colorado.  In 1961, 
an additional 23% of the stock was purchased, and since then, only qualifying 
shares for directors and officers of the Bank have been held by other than 
the Registrant.

     Since discontinuing mortgage banking operations in 1963, the Registrant 
has carried on no significant operations other than as an advisor to the 
Bank.  In this advisory position, the Registrant coordinates general policies 
and activities, and assumes primary responsibility for all major decisions of 
the Bank.

     SUPERVISION AND REGULATION.  THE REGISTRANT is a registered bank holding 
company under the Bank Holding Company Act of 1956 (the "Act"), and is 
subject to the supervision of, and regulation by, the Board of Governors of 
the Federal Reserve System (the "Board").  Under the Act, a bank holding 
company may engage in banking, managing or controlling banks, furnishing or 
performing services for banks it controls, and conducting activities that the 
Board has determined to be closely related to banking.  The Registrant must 
obtain approval of the Board before acquiring control of a bank or acquiring 
more than 5 percent of the outstanding voting shares of a company engaged in 
a "bank-related" business. Under the Act and state laws, the Registrant is 
subject to certain restrictions as to states in which the Registrant can 
acquire a bank.  National banks are subject to the supervision of, and are 
examined by the Comptroller of the Currency.  State banks are subject to the 
supervision of the regulatory authorities of the states in which they are 
located.  The subsidiary bank of the Registrant is a member of the Federal 
Deposit Insurance Corporation, and as such is subject to examination thereby. 
In private, the primary federal regulator makes regular examinations of the 
subsidiary bank subject to its regulatory review or participates in joint 
examinations with other federal regulators. Areas subject to regulation by 
federal and state authorities include the allowance for credit losses, 
investments, loans, mergers, issuance of securities, payment of dividends, 
establishment of branches and other aspects of operations.

                                     1 
<PAGE>

     BUSINESS.  The Registrant is a holding company whose sole business 
purpose is to hold the stock of the Bank.  The operation of the Bank is 
described as follows:

                       FIRST NATIONAL BANK IN TRINIDAD
                               SUBSIDIARY BANK


BUSINESS.

     OPERATION OF THE SUBSIDIARY BANK.  The Board of Directors and officers of
the subsidiary bank are responsible for its operation.  However, the Republic
Corporation, as the controlling stockholder, coordinates the establishment of
goals, objectives and policies for the entire organization, assists the
subsidiary bank in the attainment of these objectives and monitors adherence to
established policies.  The company also monitors adherence to lending and
accounting policies, budgetary goals and long-range plans.


     The bank provides the following services:


     COMMERCIAL BANKING SERVICES.  The Bank provides a broad range of 
financial services to a diversified group of commercial, industrial and 
financial customers in Southern Colorado.  Services provided to commercial 
customers include short and medium term loans, revolving credit arrangements, 
trade financing, energy related financing, real estate construction lending, 
capital equipment financing and letters of credit.

     CONSUMER SERVICES.  The Bank provides a diverse range of personal 
services to individuals including savings and time deposit accounts, 
installment lending, bank check guarantee cards, checking accounts, N.O.W. 
accounts, mortgage loans, safe deposit facilities, IRA services, money market 
deposits, and automatic teller facilities.

EMPLOYEES.  The Bank had 47 full time equivalent employees on December 31, 
1996.

                                        2 
<PAGE>

COMPETITION

     The Bank's primary market area is Trinidad, Colorado, Walsenburg, 
Colorado and the surrounding communities.  In this market are two other banks 
and a savings and loan association.  The deposits of the Bank are larger than 
those of the savings and loan and larger than those of the other banks.  The 
Bank competes with these institutions in obtaining new deposits, making 
loans, and providing additional banking services.

     The principal methods of competition in the industry are price (i.e. 
interest rates and fees) and service.  Inasmuch as rate and fee structures at 
all local competitors are somewhat similarly constrained by net interest 
income objectives, competitive pressure and the restraint that must 
necessarily be exercised in smaller communities of modest means, the primary 
arena for competition is service.  Community banks are uniquely able to 
provide the type of personal service that is typically of greatest value in 
smaller, less populated markets such as Las Animas and Huerfano Counties.  
The ability of the bank to successfully market this type of service delivery, 
along with a reasonable selection of more modern and less personal means of 
access, will determine its ultimate competitive success.

MONETARY POLICY.

     The earnings and growth of the banking industry and of the Bank are 
affected not only by general economic conditions, but also by the credit 
policies of monetary authorities, particularly the Federal Reserve System.  
An important function of the Federal Reserve System is to regulate the 
national supply of bank credit in order to combat recession and curb 
inflationary pressures.  Among the instruments of monetary policy used by the 
Federal Reserve System to implement these objectives are open market 
operations in U.S. Government securities, changes in the discount rate on 
member bank borrowings and changes in reserve requirements against member 
bank deposits.  These means are used in varying combinations to influence 
overall growth of bank loans, investments and deposits and may also affect 
interest rates charged on loans or paid for deposits.

     The monetary policies of the Federal Reserve System have had a 
significant effect on the operating results of commercial banks in the past 
and are expected to continue to do so in the future.  Because of changing 
conditions in the national and international economy and in the money 
markets, and as a result of actions by monetary and fiscal authorities, 
including the Federal Reserve System, interest rates, credits and 
availability and deposit levels may change due to circumstances beyond the 
control of The Republic Corporation or the Bank.


STATISTICAL DATA.  The following sets forth certain statistical data 
regarding the Republic Corporation.

I.   DISTRIBUTION OF ASSETS, LIABILITIES AND STOCKHOLDERS' EQUITY: INTEREST 
     RATES AND DIFFERENTIAL


BALANCE SHEET ANALYSIS

     The following three tables present the consolidated monthly average 
balance sheet, taxable equivalent interest revenue, interest expense, and 
average yields and rates.

                                        3 
<PAGE>

     Interest income on non-taxable investment securities has been adjusted to
reflect the tax benefit of tax exempt income at a marginal rate of 38% for each
year presented.

     Non-accruing loans are included for purposes of the analysis of interest
earnings on loans.

                                    TABLE #1

Year Ended December 31, 1996                Average     Interest     Yield/
(Dollars in Thousands)                      Balance     Rev./Exp.    Rate

ASSETS
    Investment securities:
        Taxable. . . . . . . . . . . .      $ 10,006    $  653         6.5%
        Tax exempt . . . . . . . . . .             -         -         -
    Loans. . . . . . . . . . . . . . .        68,841     6,184         9.0%
        Less: Reserve for loan loss. .          (956)         
    Funds sold . . . . . . . . . . . .        27,844     1,483         5.3%
                                            --------    ------         --- 
        Total Earning Assets . . . . .       105,735     8,320         7.9%
                                            --------    ------         --- 
    Cash and due from banks. . . . . .         2,776    
    Other assets . . . . . . . . . . .         3,486    
                                            --------    

        TOTAL ASSETS . . . . . . . . .      $111,997
                                            --------    
                                            --------    

LIABILITIES AND STOCKHOLDERS' EQUITY
    Interest bearing demand deposits .      $ 29,339    $1,004         3.4%
    Savings deposits . . . . . . . . .         9,703       268         2.8%
    Time deposits. . . . . . . . . . .        49,773     2,852         5.7%
                                            --------    ------         --- 
        TOTAL INTEREST BEARING
        LIABILITIES. . . . . . . . . .        88,815     4,124         4.6%
                                            --------    ------         --- 

NET INTEREST REVENUE . . . . . . . . .                  $4,196         3.3%
                                                        ------         
                                                        ------         
NET INTEREST REVENUE TO EARNING ASSETS                                 4.0%

    Demand deposits (non-interest
        bearing) . . . . . . . . . . .     $  12,596 
    Other liabilities. . . . . . . . .         1,338 
    Stockholders' equity . . . . . . .         9,248 
                                            -------- 
        TOTAL LIABILITIES AND
        STOCKHOLDERS' EQUITY . . . . .      $111,997 
                                            -------- 
                                            -------- 


                                      4 
<PAGE>

                                    TABLE #2
                                    --------

Year Ended December 31, 1995                Average     Interest     Yield/
(Dollars in Thousands)                      Balance     Rev./Exp.    Rate

ASSETS
    Investment securities:
        Taxable. . . . . . . . . . . . .    $  9,091    $  516         5.7%
        Tax exempt . . . . . . . . . . .           -         -         -
    Loans. . . . . . . . . . . . . . . .      56,938     5,006         8.8%
        Less: Reserve for loan loss. . .        (907)
    Funds sold . . . . . . . . . . . . .      36,503     2,126         5.8%
                                            --------    ------         --- 
        Total Earning Assets . . . . . .     101,625     7,648         7.5%
                                            --------    ------         --- 
    Cash and due from banks. . . . . . .       2,061 
    Other assets . . . . . . . . . . . .       3,158 
                                            -------- 

        TOTAL ASSETS . . . . . . . . . .    $106,844 
                                            -------- 
                                            -------- 

LIABILITIES AND STOCKHOLDERS' EQUITY
    Interest bearing demand deposits . .    $ 28,010    $1,037         3.7%
    Savings deposits . . . . . . . . . .       9,411       256         2.7%
    Time deposits. . . . . . . . . . . .      49,731     2,875         5.8%
                                            --------    ------         --- 
        TOTAL INTEREST BEARING
        LIABILITIES. . . . . . . . . . .      87,152     4,168         4.8%
                                            --------    ------         --- 

NET INTEREST REVENUE . . . . . . . . . .                $3,480         2.7%
                                                        ------ 
                                                        ------ 

NET INTEREST REVENUE TO EARNING ASSETS .                               3.4%

    Demand deposits (non-interest
     bearing). . . . . . . . . . . . . .    $  9,600 
    Other liabilities. . . . . . . . . .       1,202 
    Stockholders' equity . . . . . . . .       8,890 
                                            -------- 
        TOTAL LIABILITIES AND
        STOCKHOLDERS' EQUITY . . . . . .    $106,844 
                                            -------- 
                                            -------- 
















                                        5 
<PAGE>

                                    TABLE #3
                                    --------


Year Ended December 31, 1994                Average     Interest     Yield/
(Dollars in Thousands)                      Balance     Rev./Exp.    Rate


ASSETS
    Investment securities:
        Taxable. . . . . . . . . . . . .     $ 6,995    $  296         4.2%
        Tax exempt . . . . . . . . . . .           5         5        10.0%
    Loans. . . . . . . . . . . . . . . .      43,109     3,760         8.7%
        Less: Reserve for loan loss. . .        (942)         
    Funds sold . . . . . . . . . . . . .      32,638     1,389         4.3%
                                             -------    ------        ---- 
        Total Earnings Assets. . . . . .      81,805     5,450         6.7%
                                             -------    ------        ---- 

    Cash and due from banks. . . . . . .       2,816 
    Other assets . . . . . . . . . . . .       2,813 
                                             -------

        TOTAL ASSETS . . . . . . . . . .     $87,434 
                                             -------
                                             -------

LIABILITIES AND STOCKHOLDERS' EQUITY
    Interest bearing demand deposits . .     $27,068    $  812         3.0%
    Savings deposits . . . . . . . . . .       9,414       320         3.4%
    Time deposit . . . . . . . . . . . .      30,277     1,341         4.4%
                                             -------    ------        ---- 
        TOTAL INTEREST BEARING
        LIABILITIES. . . . . . . . . . .      66,759     2,473         3.7%
                                             -------    ------        ---- 

NET INTEREST REVENUE . . . . . . . . . .                $2,973         3.0%
                                                        ------ 
                                                        ------ 

NET INTEREST REVENUE TO EARNING ASSETS .                               3.6%

    Demand deposits (non-interest
     bearing). . . . . . . . . . . . . .     $11,855 
    Other liabilities. . . . . . . . . .         661 
    Stockholders' Equity . . . . . . . .       8,159 
                                             ------- 
        TOTAL LIABILITIES AND
        STOCKHOLDERS' EQUITY . . . . . .     $87,434 
                                             ------- 
                                             ------- 














                                        6 
<PAGE>

    The following table presents statistical information regarding the 
components of net interest income of the Registrant and an analysis of the 
changes in net interest income due to changes in volume and rates.

Analysis of Changes in Components of Net Interest Income
(Dollars in thousands)

                                    TABLE #4
                                    --------

                                   1996 VS 1995           1995 VS 1994      
                              ---------------------  ---------------------- 
                                    Yield/                Yield/            
                              Volume  Rate   Total   Volume   Rate   Total  
--------------------------------------------------------------------------- 
Increase (decrease) in 
 interest income on:
Loans. . . . . . . . . . . .  $1,064  $ 114  $1,178  $1,203  $  43  $1,246 
Investment securities. . . .      62     75     137     105    114     219 
Federal funds sold . . . . .    (500)  (143)   (643)    219    518     737 
                              ------  -----  ------  ------  -----  ------ 
                                 626     46     672   1,527    675   2,202 
                              ------  -----  ------  ------  -----  ------ 

Increase (decrease) in 
    interest expense on:
Demand deposits. . . . . . .      51    (84)    (33)     27    134     161 
Savings. . . . . . . . . . .       3      9      12       -      -       - 
Time deposits. . . . . . . .      26    (49)    (23)  1,030    504   1,534 
                              ------  -----  ------  ------  -----  ------ 
                                  80   (124)    (44)  1,057    638   1,695 
                              ------  -----  ------  ------  -----  ------ 

Net interest income. . . . .     546    170     716     470     37     507 
                              ------  -----  ------  ------  -----  ------ 
                              ------  -----  ------  ------  -----  ------ 



    The volume/rate variance was allocated to rate based on the percentage 
increase or decrease in relation to the total previous year rates with the 
remainder allocated to volume.

                                        7 
<PAGE>

II.  INVESTMENT PORTFOLIO

     The following table shows the classification of investment securities 
with fixed maturities held at December 31, in each of the past three years 
(including investments held for sale):

                                    TABLE #5
                                    --------

December 31
(Dollars in thousands)                           1996      1995     1994   
-------------------------------------------------------------------------- 
U.S. Government Securities. . . . . . . . . . . $10,006   $ 9,978   $6,997 
States and political subdivisions . . . . . . .       -         -        5 
Other bonds, notes and securities . . . . . . .      24        24       24 
                                                -------   -------  ------- 
     TOTAL                                      $10,030   $10,002   $7,026 
                                                -------   -------  ------- 
                                                -------   -------  ------- 

     The following is a table which shows the maturity distribution of 
investment securities and the average taxable equivalent yield by each range. 
Dollars presented are in thousands.

                                    TABLE #6
                                    --------

                                                  States and      Federal    
                               U.S. Government    Political     Reserve Bank 
                                 Securities      Subdivisions      Stock     
                               ---------------   ------------   ------------ 
                                Amount/Yield     Amount/Yield   Amount/Yield 
                                -------------    ------------   ------------ 
Within one year. . . . . . .    $10,006  5.5%     $ -      -%    $ -      -%
After one year
     through five years. . .       -       -%       -      -%      -      -%
After five years
     through ten years . . .       -       -%       -      -%      -      -%
After ten years. . . . . . .       -       -%       -      -%     24    7.5%
                                -------  ---      ---    ---     ---    --- 
     TOTAL                      $10,006  5.5%     $ -      -%    $24    7.5%
                                -------  ---      ---    ---     ---    --- 
                                -------  ---      ---    ---     ---    --- 

III. LOAN PORTFOLIO

     Domestic loans by category are listed below (dollars in thousands):

                                    TABLE #7
                                    --------

                                                December 31,   December 31, 
                                                    1996           1995     
                                                ------------   ------------ 
     Commercial. . . . . . . . . . . . . . .      $ 5,716         $ 4,892  
     Agricultural. . . . . . . . . . . . . .        3,787           3,676  
     Real Estate - Construction. . . . . . .        3,087           1,584  
     Real Estate - Mortgage. . . . . . . . .       50,228          44,594  
     Installment loans to individuals. . . .        8,775           8,679  
                                                  -------         -------  
         TOTAL                                    $71,593         $63,425  
                                                  -------         -------  
                                                  -------         -------  

     There were no foreign loans at December 31, 1996 or December 31, 1995.  





                                        8 
<PAGE>

     Commercial, agricultural and real estate - construction loans at December
31, 1996 are presented by maturity as follows (dollars in thousands):

                                    TABLE #8
                                    --------

                                                  Due After
                                Due in One         One Year        Due After  
                               Year or Less   Through Five Years   Five Years 
                               ------------   ------------------   ---------- 
Commercial:
     Fixed rates. . . . . . .     4,161                 -               -
     Adjustable rates . . . .     1,555                 -               -
Agricultural:
     Fixed rates. . . . . . .     3,172                 -               -
     Adjustable rates . . . .         -                60             555
Real Estate - Construction:
     Fixed rates. . . . . . .       257                 -               -
     Adjustable rates . . . .       459                 -               -

     Within the loan portfolio are loans which are considered non-performing. 
Included in the table below are past due loans which are defined as past due 
(1) single payment notes - these are considered past due 15 days or more 
after maturity; (2) single payment loans, with interest payable at stated 
intervals, and demand notes - these are considered past due when an interest 
payment is due and unpaid for 15 days; (3) consumer, mortgage, or term 
business installment loans - these loans are past due in whole after one 
installment is due and unpaid for 30 days or one month.  When an installment 
payment is past due, the entire unpaid balance is past due; (4) overdrafts 
are considered past due when not paid in 15 days.  Such loans remain in past 
due status until all past due payments are made.

                                    TABLE #9
                                    --------

December 31 (Dollars in thousands)                             1996   1995   
---------------------------------------------------------------------------- 
Non-accrual loans. . . . . . . . . . . . . . . . . . . . . .   $ 759  $183 
Loans which are contractually past due 90 days or more 
     as to interest or principal, but have not been put
     on a non-accrual basis (See discussion below) . . . . .       -     - 
Loans restructured to provide concessions to the        
     borrower in order to maximize the recovery
     possibility of the bank . . . . . . . . . . . . . . . .   2,148   593 

     Foregone interest on restructured loans in 1996 was 19 thousand on 
recognized income of 137 thousand.  1995 interest included was 36 thousand 
with foregone interest of 14 thousand.

     Past due and renegotiated loans as described above are defined as 
non-performing loans for purposes of this discussion.

     Non-accrual loans are defined as loans on which, in the opinion of 
management, the collection of interest has become uncertain.  Management 
places loans on non-accrual status when loans become past due thirty days or 
if, in their judgment, the ability of the borrower to service the debt has 
become impaired.

                                        9 
<PAGE>

     Interest is not taken into income unless received in cash or until such 
time as the borrower demonstrates the ability to pay interest and principal. 
Placing a loan on non-accrual status for the purpose of income recognition is 
not by itself a reliable indicator of potential loss of principal.  Other 
factors, such as the value of the collateral securing the loan and the 
financial condition of the borrower, serve as more reliable indicators of 
potential loss.

     Management has no information that would indicate that any loans on hand 
at December 31, 1996 that are not currently included as non-performing loans 
have possible credit problems that would cause serious doubts as to their 
ability to comply with the current repayment terms or contain uncertainties 
which would have a material impact on future operations or financial position.

IV   SUMMARY OF LOAN LOSS EXPERIENCE

     The table below presents selected information analyzing the allowance 
for loan losses (dollars in thousands):

                                    TABLE #10
                                    --------
                                                           1996       1995  
                                                         -------    ------- 
Balance - Beginning of year. . . . . . . . . . . . . .   $   868    $   926 
                                                         -------    ------- 
Charge-offs:
     Commercial. . . . . . . . . . . . . . . . . . . .        48          - 
     Agricultural. . . . . . . . . . . . . . . . . . .        25          - 
     Real Estate - Construction. . . . . . . . . . . .        76          - 
     Real Estate - Mortgage. . . . . . . . . . . . . .        68          - 
     Installment loans to individuals. . . . . . . . .       106         73 
                                                         -------    ------- 
                                                         $   323    $    73 
                                                         -------    ------- 
Recoveries:
     Commercial. . . . . . . . . . . . . . . . . . . .   $     4    $     4 
     Agricultural. . . . . . . . . . . . . . . . . . .         -          - 
     Real Estate - Construction. . . . . . . . . . . .        10          - 
     Real Estate - Mortgage. . . . . . . . . . . . . .         -          - 
     Installment loans to individuals. . . . . . . . .        12         11 
                                                         -------    ------- 
                                                         $    26    $    15 
                                                         -------    ------- 

Net Charge-offs (recoveries) . . . . . . . . . . . . .   $   297    $    58 
                                                         -------    ------- 

Provision - Charged to operations. . . . . . . . . . .   $   393    $  -    
                                                         -------    ------- 

Balance - End of Year. . . . . . . . . . . . . . . . .   $   964    $   868 
                                                         -------    ------- 
                                                         -------    ------- 

Average loan balance outstanding . . . . . . . . . . .   $68,841    $56,938 
                                                         -------    ------- 
                                                         -------    ------- 

Percentage of net charge offs to average loans 
  outstanding. . . . . . . . . . . . . . . . . . . . .        .4%        .1%
                                                         -------    ------- 
                                                         -------    ------- 

     In 1996, provision was made based on higher charge offs and an increase 
in problem loans in relation to the previous period.

     There was no provision for loan losses in 1995 due to the continued 
reduction of loss exposure in the loan portfolio.

                                       10 
<PAGE>

     The allocation of the allowance is as follows (dollars in thousands):

                                    TABLE #11
                                    ---------

                            December 31, 1996            December 31, 1995     
                         -------------------------   ------------------------- 
                                  Percent of Loans            Percent of Loans 
                                  in Each Category            in Each Category 
                         Amount    to Total Loans    Amount    to Total Loans  
                         ------   ----------------   ------   ---------------- 
Commercial. . . . . . .   $ 15           8.0%         $ 11           7.7%
Agricultural. . . . . .     93           5.3%            9           5.8%
Real Estate-
  Construction. . . . .      4           4.3%            -           2.5%
Real Estate-Mortgage. .     34          70.2%            3          70.3%
Installment Loans . . .     88          12.2%           23          13.7%
Unallocated . . . . . .    730           N/A           822           N/A 
                          ----          ----          ----          ----
                          $964           100%         $868           100%
                          ----          ----          ----          ----
                          ----          ----          ----          ----

     The large, unallocated allowance for loan losses is being maintained in 
recognition of several risk factors inherent in the bank's loan portfolio. 
Foremost among these is the large concentration of loans of all types secured 
by real property.  While the vast majority of these loans are performing and 
not in need of an allocated allowance, there has been significant growth in 
this area and a noticeable increase in appraised values has occurred.  
(Please see Table #7, P-8).  Another significant area of concern is 
agricultural purpose loans. This grouping consists largely of livestock 
growers in the bank's market area and is uniquely vulnerable to adverse 
weather, crop or livestock disease and market price decline.  Borrowers of 
this type that have required restructured terms or that have been 
non-performing receive an allocation of the bank's allowance.  Those 
remaining, however, still represent a significant potential for loss should 
circumstances in that sector deteriorate further.  At the time of this 
writing, estimated charge-offs for the coming year are not expected to exceed 
$100,000.00 and will be concentrated in the commercial and installment areas.

V.   DEPOSITS

     The average amount of deposits and the average rates paid are presented 
in the balance sheet analysis shown previously.

     At December 31, 1996, there existed outstanding time certificates of 
deposit in amounts of $100,000 or more of $11,965,011.  The deposits by time 
remaining until maturity were (dollars in thousands):

                                    TABLE #12
                                    ---------
     3 months or less                             $ 3,638 
     Over 3 through 6 months                        4,611 
     Over 6 through 12 months                       1,683 
     Over 12 months                                 2,033 
                                                  ------- 
                                                  $11,965 
                                                  ------- 
                                                  ------- 

     As required by the Monetary Control Act of 1980, the reserve balance held 
against deposits at December 31, 1996 was $908,000.

                                       11 
<PAGE>

                                    TABLE #13
                                    ---------
For the year ended December 31                       1996   1995   1994 
------------------------------                       ----   ----   ---- 
Return on Assets (Net income divided by         
  average total assets) . . . . . . . . . . . . . .    .8     .9%    .6%
Return on Equity (Net income divided by
  average equity) . . . . . . . . . . . . . . . . .   9.1%   9.2%   6.9%
Dividend Payout Ratio (Dividends declared per
  share divided by net income per share). . . . . .     0%     0%     0%
Equity to Assets Ratio (Average equity
  divided by average total assets). . . . . . . . .   8.3%   8.3%   9.3%

ITEM 2.    Properties:

      The subsidiary Bank owns a building and annex at 100 East Main Street, 
and the motor-bank facility, 122 East First Street, in which the banking 
operations are carried on in Trinidad, Colorado.  Approximately one-third 
(1/3) of the building is utilized by the bank.  The remaining space is leased 
to other businesses.  Additionally, a bank building in Walsenburg, Colorado 
was acquired in 1992.  Banking operations at this location began in October 
of 1993.  In 1996, two automatic teller locations were added.  One is in 
Trinidad and the other is in La Veta, Colorado.  Properties held as other 
real estate owned consist of real property that has been acquired by the Bank 
through foreclosure on real estate pledged as collateral on loans made by the 
Bank.  

ITEM 3.    Legal Proceedings:

      Not applicable.

ITEM 4.    Submission of Matters to a Vote of Securities Holders:

      Not applicable.
                                     PART II

ITEM 5.    Market for The Republic Corporation's stock.

      (a)  The Articles of Incorporation do not restrict the marketability of
           the Republic Corporation stock.  However, due to the limited number
           of shares outstanding, it is not anticipated that an active market
           for the shares will develop.  Shares may be purchased by The Republic
           Corporation, but there is no assurance that the Corporation will do
           so.

      (b)  There were approximately 1,757 shareholders as of the date of this
           annual report.

           Holders of Republic Corporation shares are entitled to their pro-rata
           share of any dividends paid on the shares.  However, because the
           Corporation has no income other than distributions received on its
           equity in The First National Bank in Trinidad, Colorado, its ability
           to pay dividends depends upon its receipt of Bank distributions. 
           Decisions as to the declaration and payment of dividends, subject to
           the availability of funds for this purpose, rest exclusively with The
           Republic Corporation Board of Directors.

      (c)  No dividends have been declared in 1996 or 1995 and management has no
           intention to declare dividends in the immediate future.

                                       12 
<PAGE>

ITEM 6. Selected financial data:

    The following table presents certain key financial information.

                                    TABLE #14
                                    ---------
Selected Financial Data 
Year Ended December 31
(Dollars in thousands)                1996    1995    1994    1993    1992  
----------------------------------------------------------------------------
Interest income. . . . . . . . . . . $8,320  $7,648  $5,445  $4,347  $4,785 
Interest expense . . . . . . . . . .  4,124   4,168   2,473   1,808   2,473 
                                     ------  ------  ------  ------  ------ 
    Net interest income. . . . . . .  4,196   3,480   2,972   2,539   2,312 
Provision for Loan Losses. . . . . .    393       -       -     115     115 
                                     ------  ------  ------  ------  ------ 
    Net interest income after
        Provision for loan losses. .  3,803   3,480   2,972   2,424   2,197 
Non-interest income. . . . . . . . .    473     389     357     325     360 
Securities gains . . . . . . . . . .      -       -       -     192     864 
Non-interest expense:
    Personnel expenses . . . . . . .  1,391   1,266   1,137   1,000     917 
    Other expenses . . . . . . . . .  1,510   1,388   1,329   1,289   1,049 
                                     ------  ------  ------  ------  ------ 
Income before income taxes . . . . .  1,375   1,215     863     654   1,455 
Applicable income taxes. . . . . . .    514     378     284     230     485 
                                     ------  ------  ------  ------  ------ 
Income before reduction for 
 minority interest or security 
 gains or losses . . . . . . . . . .    861     837     579     424     970 
Less minority interest . . . . . . .     20      20      14       9     (20)
                                     ------  ------  ------  ------  ------ 

Net Income . . . . . . . . . . . . . $  841  $  817  $  565  $  415  $  950 
                                     ------  ------  ------  ------  ------ 
                                     ------  ------  ------  ------  ------ 

Net income per common share (2). . . $ 2.52  $ 2.44  $ 1.69  $ 1.24  $ 2.84 
                                     ------  ------  ------  ------  ------ 
                                     ------  ------  ------  ------  ------ 

Dividends declared per common 
 share(2). . . . . . . . . . . . . . $    0  $    0  $    0  $    0  $    0 
                                     ------  ------  ------  ------  ------ 
                                     ------  ------  ------  ------  ------ 

(2) Net income per common share and dividends declared per common share are in
actual dollars, not thousands.

Selected Year End Balances:
(Dollars in thousands)                1996     1995     1994    1993    1992  
----------------------------------------------------------------------------- 
Loans. . . . . . . . . . . . . . . .  71,593   63,425  49,138  36,482  30,454 
Total assets . . . . . . . . . . . . 114,963  109,018  97,616  75,648  71,270 
Long-term debt . . . . . . . . . . .     -0-      -0-     -0-     -0-     -0- 
















                                       13 
<PAGE>

ITEM 7.   Management's discussion and analysis of financial condition and 
          results of operations:

     FINANCIAL CONDITION

     ASSET QUALITY

                                    TABLE #15
                                    ---------
December 31 (dollars in thousands)        1996   1995    1994    1993    1992 
------------------------------------------------------------------------------

Nonaccrual loans. . . . . . . . . . . .    759     183     217     313    499 
Past-due loans* . . . . . . . . . . . .      -       -       -       -      - 
Restructured loans. . . . . . . . . . .  2,148     593     668     546    569 
                                         -----     ---     ---     ---  ----- 
    Total problem loans . . . . . . . .  2,907     776     885     859  1,068 

Foreclosed Assets
    Real estate . . . . . . . . . . . .    300       -       -       -     91 
    In-substance foreclosures . . . . .      -       -       -       -    105 
    Other . . . . . . . . . . . . . . .     34       -       -       -      - 
                                         -----     ---     ---     ---  ----- 
        Total problem assets. . . . . .  3,241     776     885     859  1,264 

Total problem loans as a
  percentage of total loans . . . . . .    4.1%    1.2%    1.8%    2.4%   3.5%

Total problem assets as a percentage of
  total loans and foreclosed assets . .    4.5%    1.2%    1.8%    2.4%   4.1%

Reserve coverage ratio ** . . . . . . .   33.2%  112.0%  104.6%  111.3%  76.8%


*   Past due loans which are still accruing interest but are contractually
    ninety or more days delinquent as to principal or interest payments

**  Allowance for loan losses divided by problem loans

    Drought conditions and depressed livestock prices which prevailed 
throughout most of 1996 placed a significant financial burden on stock 
growers in the bank's market area.  Approximately 48% of the increase in 
nonaccruing loans in 1996 consisted of livestock loans made to one customer.  
Also, approximately 66% of the increase in restructured loans in 1996 
consisted of livestock loans made to this and one other customer of the bank. 
Both of these customers have made their required payments for the year and 
there has, as of this writing, been a noticeable improvement in related 
weather and market conditions.  (Please see Table #15, P-14)

    The bank has also experienced an increase in foreclosure and repossession 
activity in 1996.  At the time of this writing the bank is in possession of 
signed contracts for the sale of two properties which represent approximately 
89% of total foreclosed real estate and, in each case, for amounts in excess 
of current book value.  (Please see Table #15, P-14)

    In light of the increased charge-off activity in 1996, and in view of the 
residual impact remaining from the 1995 closure of a local coal mine, the 
bank is continuing a monthly loan loss provision in 1997.  (Please see Table 
#10, P-10)

                                       14 
<PAGE>

    Positive factors that should improve economic conditions in the bank's 
market area going forward include the completion of a private prison facility 
in Huerfano County in October of 1997 and the hoped for commencement of 
construction of a State prison facility in Las Animas County in September of 
1997.  These projects, coupled with continued growth in light manufacturing, 
retail and tourist sector businesses, should provide a noticeable improvement 
in employment levels which will surely be a welcomed change in this region.

    Loans secured by real estate represented 74% of total loans on December 
31, 1996.  All of the real property serving as collateral for these loans 
lies within Las Animas, Huerfano or adjacent counties, with 67% consisting of 
1-4 family homes, 28% commercial properties and 5% farm and ranch properties. 
The bank does not sell any of its loans in the secondary market and does not 
buy or sell participation loans.  (Please see Table #7, P-8)

SOURCES AND USES OF FUNDS

    Deposit growth for 1996 was  $5,125, 253.00, slightly over one half the 
growth experienced in 1995 and slightly under one fourth the growth 
experienced in 1994.  This continued decline is, in the opinion of 
management, a partial result of the continuing boom in the equities markets 
and the relative attractiveness of the bank's deposit rates.  (Please see 
STATEMENT OF CASH FLOWS, P-24, and BALANCE SHEET, P-22) This deposit growth, 
coupled with a $2,614,181.00 decrease in cash and cash equivalents and 
$1,131,305.00 provided by operating activities, was largely deployed into 
continued loan growth of $8,785,526.00. (Please see STATEMENT OF CASH FLOWS, 
P-24)

LIQUIDITY

    Since loan growth continued to exceed deposit growth in 1996, liquidity 
continued its' decline.  Average 1996 holdings of cash and due from banks, 
readily marketable securities and federal funds sold totaled approximately 
40% of average liabilities.  This is down significantly from 49% in 1995 and 
54% in 1994.  (Please see tables 1-3, P-4-6)

                                       15 
<PAGE>

                                    TABLE #16
                                    ---------
                            INTEREST RATE SENSITIVITY

December 31, 1996 (dollars in thousands)                                      
------------------------------------------------------------------------------
                                             3 Mo     3-12    1-5     Over   
                                            Or Less  Months  Years   5 Years 
                                            -------  ------  -----   ------- 
Rate Sensitive Assets
(Assets that can be repriced
within x months/years)

Loans *. . . . . . . . . . . . . . . . .    18,967   43,290   8,293     244 

Federal Funds Sold . . . . . . . . . . .    27,125      -0-     -0-     -0- 

Taxable Securities** . . . . . . . . . .       -0-   10,006     -0-     -0- 

Municipal Bonds. . . . . . . . . . . . .       -0-      -0-     -0-     -0- 
    
    TOTAL. . . . . . . . . . . . . . . .    46,092   53,296   8,293     244 

Rate Sensitive Liabilities
(Liabilities that can be
repriced within x months/years)

Time Certificates of Deposit . . . . . .    16,445   27,230   7,409     -0-

NOW Accounts . . . . . . . . . . . . . .     1,934      -0-     -0-     -0-

Super NOW Accounts . . . . . . . . . . .    19,772      -0-     -0-     -0-

Savings Accounts . . . . . . . . . . . .     9,689      -0-     -0-     -0-

MMDA Accounts. . . . . . . . . . . . . .     6,579      -0-     -0-     -0-

    TOTAL. . . . . . . . . . . . . . . .    54,419   27,230   7,409     -0-

Interest Rate Sensitivity Gap. . . . . .    (8,327)  26,066     884     244

Cumulative Interest Rate
    Sensitivity Gap. . . . . . . . . . .    (8,327)  17,739  18,623  18,867

*  Does not include $759 thousand in nonaccruing loans and $40 thousand in
overdrafts.

** Does not include $24 thousand in Federal Reserve Bank Stock.

    While the asset heavy gap numbers in Table 16 would normally cause an 
increase in earnings should interest rates rise, and vice versa, there are 
significant reasons why management believes the earnings shift would be de 
minimus.  This asset heavy profile must be modified by the bank's practice 
and intention of minimizing or deferring rate adjustments to loan accounts.  
The resulting gap profile would therefore be more in balance if adjusted in 
this fashion.


                                       16 
<PAGE>

INVESTMENT SECURITIES

                                    TABLE #17
                                    ---------
                                AND FOOTNOTES 1-2
                                -----------------

<TABLE>
                                     Carrying    Unrealized   Unrealized     Market   
                                      Value        Gains        Losses        Value   
                                    ----------   ----------   ----------   ---------- 
<S>                                 <C>          <C>           <C>          <C>          
DECEMBER 31, 1996
(1) Held-to-Maturity:
    U.S. Treasury Securities        10,006,368            -       21,993    9,984,375 
    Other                                    -            -            -            - 
(2) Available-for-Sale Securities
    Carried at Fair Value:
    U.S. Treasury Securities                 -            -            -            - 
    Other                               24,000            -            -       24,000 
                                    ----------   ----------   ----------   ---------- 
                                    10,030,368            -       21,993   10,008,375 
                                    ----------   ----------   ----------   ---------- 
DECEMBER 31, 1995           
(1) Held-to-Maturity:
    U.S. Treasury Securities         9,977,841       31,534            -   10,009,375 
    Other                                    -            -            -            - 
(2) Available-for-Sale Securities          
    Carried at Fair Value:
    U.S. Treasury Securities                 -            -            -            - 
    Other                               24,000            -            -       24,000 
                                    ----------   ----------   ----------   ---------- 
                                    10,001,841       31,534            -   10,033,375 
                                    ----------   ----------   ----------   ---------- 

DECEMBER 31, 1994           
(1) Held to Maturity
    U.S. Treasury Securities         6,997,049            -       49,549    6,947,500 
    Other                                5,009            -          309        4,700 
(2) Available-for-Sale Securities 
    Carried at Fair Value:
    U.S. Treasury Securities                 -            -            -            - 
    Other                               24,000            -            -       24,000 
                                    ----------   ----------   ----------   ---------- 
                                     7,026,058            -       49,858    6,976,200 
                                    ----------   ----------   ----------   ---------- 
</TABLE>

(1) Securities which the Bank has the ability and intent to hold to maturity. 
These securities are stated at cost, adjusted for amortization of premiums 
and accretion of discounts, computed by the interest method.  Because 
securities are purchased for investment purposes and quoted market values 
fluctuate during the investment period, gains and losses are recognized upon 
disposition or at such time as management determines that a permanent 
impairment of value had occurred. Cost of securities sold is determined on 
the specific identification method.

                                       17 
<PAGE>

(2) Securities that the bank may sell in response to changes in market 
conditions or in the balance sheet objectives of the bank.  Securities in 
this category will be reported at the fair market value.  Unrealized gains or 
losses (net of tax) will be reported as a separate item in the shareholder's 
equity section of the balance sheet.  Adjustments will be recorded at least 
quarterly.

    Current securities holdings consist of one $10,000,000.00 par value, U.S. 
TREASURY NOTE, which matures within 8 months.  The bank has pledged the 
majority of this asset to the State of Colorado in order to collateralize 
uninsured public deposits in accordance with State law. A similar security 
will be purchased prior to the August, 1997 maturity to serve as a 
replacement.  (Please see Table #17, P-17 and Note 2, P-29-30) 

CAPITAL

    Tier 1 and total risk based capital ratios ended 1996 at 14.90% and 
16.15%, respectively, compared with 14.73% and 15.99% in 1995 and 16.29% and 
17.55% in 1994.  This decline between 1994 and 1995, a reflection of asset 
growth exceeding retained earnings growth and a significant asset shift from 
low risk, cash equivalents to higher risk loan balances, has been partially 
reversed in the 1995 to 1996 time frame.  Declining asset growth, slightly 
higher earnings and a slower rate of loan growth are responsible for this 
reversal.  The leverage ratio stood at 8.42% at year end, 1996, compared with 
8.09% in 1995 and 8.19% in 1994.

RESULTS OF OPERATIONS

NET INTEREST INCOME

    Some improvement in net interest income has been experienced in 1996. 
This was true in dollar terms and when expressed as a percentage of average 
earning assets.  (Please see Table #14, P-13 and Tables 1-3, P-4-6).  The 
information in Table #4 on page 7 reveals that the primary cause for this 
improvement is the volume driven increase in interest earned on loans.  
Interest expense on deposits remained stable, with small, volume driven 
increases substantially offset by small declines in deposit rates.

OTHER INCOME AND EXPENSE

    With the exception of advertising expense and FDIC insurance expense, 
increases in non-interest expense occurred in 1996 across all categories.  
The total increase was $247,000.00 and is tied primarily to growth factors 
and increased legal fees incurred in collecting delinquent loans.  The 
$84,000.00 increase in non-interest income was also largely a result of 
growth.  In this instance, volume driven increases in fee income play the 
major role.  (Please see Table #14, P-13 and STATEMENT OF INCOME, P-23)

                                       18 
<PAGE>

    Management is not aware of any regulatory recommendations or other 
trends, events or uncertainties that would have or would reasonably be likely 
to have a material effect on liquidity, capital resources or operations of 
the company.






















                                       19 
<PAGE>

ITEM 8.   Financial statements and supplementary data.

     Index to Financial Statements of
          The Republic Corporation and Subsidiary                     PAGE

     Accountant's Report. . . . . . . . . . . . . . . . . . . .       21

     Balance Sheets as of December 31, 1996 and 1995. . . . . .       22
     
     Statement of Income for the three years ended
          December 31, 1996 . . . . . . . . . . . . . . . . . .       23

     Statement of Cash Flows for the three years ended
          December 31, 1996 . . . . . . . . . . . . . . . . . .       24-25

     Statement of Changes in Stockholders' Equity
          for the three years ended December 31, 1996 . . . . .       26

     Notes to Financial Statements. . . . . . . . . . . . . . .       27-40










                                       20 
<PAGE>

                                  [LETTERHEAD]



                          INDEPENDENT AUDITOR'S REPORT



The Board of Directors
The Republic Corporation


We have audited the consolidated balance sheets of The Republic Corporation 
as of December 31, 1996 and 1995, and the related consolidated statements of 
income and stockholders' equity and cash flows for each of the three years in 
the period ending December 31, 1996.  These financial statements are the 
responsibility of the Corporation's management.  Our responsibility is to 
express an opinion on these 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 financial statements referred to above present fairly, in 
all material respects, the financial position of The Republic Corporation at 
December 31, 1996 and 1995, and the results of its operations and its cash 
flows, for each of the three years in the period ending December 31, 1996, in 
conformity with generally accepted accounting principles.

/s/  Dixon, Waller & Co.
Trinidad, Colorado
February 5, 1997








                                       21 

<PAGE>

                       REPUBLIC CORPORATION AND SUBSIDIARY
                                  Balance Sheet

December 31                                          1996          1995     
-------------------------------------------------------------------------------
Assets

Cash and due from banks (demand). . . . . . . .  $  3,273,580 $  2,362,761
Investment securities:
    Held to maturity
        Market value at 12-31-96 -  9,984,375 
        Market value at 12-31-95 - 10,009,375      10,006,368    9,977,841
    Available for Sale. . . . . . . . . . . . .        24,000       24,000
                                                 ------------ ------------
                                                   13,303,948   12,364,602
                                                 ------------ ------------

Loans . . . . . . . . . . . . . . . . . . . . .    71,592,533   63,425,397
    Plus:  Uncollected earned interest. . . . .       629,677      537,718
    Less:  Allowance or losses. . . . . . . . .      (964,057)    (868,026)
                                                 ------------ ------------
        NET LOANS AND OTHER RECEIVABLES . . . .    71,258,153   63,095,089
                                                 ------------ ------------

Federal funds sold. . . . . . . . . . . . . . .    27,125,000   30,650,000
Property, equipment and vehicles (Net). . . . .     1,651,386    1,801,814
Other real estate . . . . . . . . . . . . . . .       300,025            -
Goodwill. . . . . . . . . . . . . . . . . . . .       436,079      436,079
Other assets. . . . . . . . . . . . . . . . . .       888,369      670,495
                                                 ------------ ------------

    Total Assets. . . . . . . . . . . . . . . .  $114,962,960 $109,018,079
                                                 ----------   ------------
                                                 ----------   ------------

Liabilities and Stockholders' Equity

Deposits (Domestic):
    Demand (noninterest bearing). . . . . . . . $  12,464,933 $ 10,768,809
    Savings, time and demand (interest bearing)    90,933,080   87,503,951
                                                 ----------   ------------
                                                  103,398,013   98,272,760
                                                 ----------   ------------
Accounts payable and accrued interest payable .       834,013    1,008,148
Accrued taxes payable . . . . . . . . . . . . .       559,450      425,902
                                                 ----------   ------------

    Total liabilities . . . . . . . . . . . . .   104,791,476   99,706,810
                                                 ----------   ------------

Minority Interest in Consolidated Subsidiary. .       216,826      197,478
                                                 ----------   ------------

Stockholders' Equity
    Common stock (par value $1; 750,000 shares
        authorized, 356,844 shares issued
        including stock held in treasury. . . .       356,844      356,844
    Additional paid-in capital. . . . . . . . .       234,931      234,931
    Less cost of treasury stock (23,119 shares
        at 12/31/96, 23,119 shares at 12/31/95)       (91,303)     (91,303)
                                                 ------------ ------------
            Total contributed capital . . . . .       500,472      500,472
                                                 ------------ ------------
Retained earnings . . . . . . . . . . . . . . .     9,454,186    8,613,319
                                                 ------------ ------------
    Stockholders' equity. . . . . . . . . . . .     9,954,658    9,113,791
                                                 ------------ ------------
        Total liabilities and
            stockholders' equity. . . . . . . .  $114,962,960 $109,018,079
                                                 ------------ ------------
                                                 ------------ ------------

The accompanying notes are an integral part of these financial statements.

                                       22
<PAGE>

                       REPUBLIC CORPORATION AND SUBSIDIARY
                               Statement of Income

Year Ended December 31                       1996        1995        1994    
-------------------------------------------------------------------------------

Interest income:
    Interest and fees on loans. . . . .   $6,184,010  $5,005,568  $3,760,091
    Interest on federal funds sold. . .    1,483,240   2,126,113   1,389,369
    Interest and dividends on
    investments:
        Securities of U.S.
            government agencies . . . .      652,786     516,366     296,316
    Obligations of states, political
        subdivisions and other obli-
        gations secured by the
        government. . . . . . . . . . .            -         125         267 
                                          ----------  ----------  ----------
        Total interest on investments .      652,786   2,642,604   1,685,952 
                                          ----------  ----------  ----------

        Total interest income . . . . .    8,320,036   7,648,172   5,446,043 
                                          ----------  ----------  ----------

Interest expense:
    Interest on deposits. . . . . . . .    4,124,629   4,168,021   2,473,418 
                                          ----------  ----------  ----------
        Total interest expense. . . . .    4,124,629   4,168,021   2,473,418 
                                          ----------  ----------  ----------
        Net interest income . . . . . .    4,195,407   3,480,151   2,972,625
Provision for loan losses . . . . . . .      392,703        -          -     
                                          ----------  ----------  ----------
    Net interest income after
        provision for loan losses . . .    3,802,704   3,480,151   2,972,625
Other income:
    Service charges on deposit accounts      185,218     157,384     150,627
    Other service charges,
        commissions and fees. . . . . .      191,527     162,998     131,574
    Gain on sale of securities. . . . .         -           -            -
    Net Income - Other Real Estate. . .         -           -            -
    Other income. . . . . . . . . . . .       96,293      68,375      74,509 
                                          ----------  ----------  ----------
        Total other income. . . . . . .      473,038     388,757     356,710 
                                          ----------  ----------  ----------
Other expenses:
    Salaries and wages. . . . . . . . .    1,217,215   1,092,575     979,191
    Employee benefits . . . . . . . . .      173,827     173,784     158,185
    Net occupancy expenses. . . . . . .      119,604      92,527      78,494
    Furniture and equipment expense . .      108,633      81,683      77,084
    Depreciation other than
        rental property . . . . . . . .      227,772     177,414     189,842
    Operating Loss. . . . . . . . . . .         -           -           -
    Computer service center . . . . . .      119,105      93,759      73,186
    FDIC Insurance. . . . . . . . . . .         -        102,024     156,816
    Professional services . . . . . . .      121,272      88,200      87,809
    Advertising . . . . . . . . . . . .      102,069     111,998      78,749
    Other operating expenses. . . . . .      711,316     639,879     587,128 
                                          ----------  ----------  ----------
        Total other expenses. . . . . .    2,900,813   2,653,843   2,466,484 
                                          ----------  ----------  ----------
        Income before income taxes. . .    1,374,929   1,215,065     862,851 
                                          ----------  ----------  ----------
Less applicable income taxes (Current).      513,814     378,289     283,718 
                                          ----------  ----------  ----------
    Income before reduction
        for minority interest . . . . .      861,115     836,776     579,133
Less minority interest in income             (20,248)    (19,667)    (14,157)
                                          ----------  ----------  ----------
    Net income. . . . . . . . . . . . .      840,867     817,109     564,976 
                                          ----------  ----------  ----------
                                          ----------  ----------  ----------
    Earnings per share. . . . . . . . .        $2.52       $2.44       $1.69 
                                          ----------  ----------  ----------
                                          ----------  ----------  ----------

The accompanying notes are an integral part of these financial statements.

                                       23

<PAGE>

                         REPUBLIC CORPORATION AND SUBSIDIARY
                               STATEMENT OF CASH FLOWS

December 31                                1996        1995        1994    
-------------------------------------------------------------------------------

Cash flows and operating activities:  
Net income (loss). . . . . . . . . .  $   840,867  $   817,109  $   564,976
Adjustments to reconcile net income
  to net cash provided by operating
  activities:
    Depreciation . . . . . . . . . .      233,578      183,216      195,832
    Provision for loan losses. . . .      392,703         -           -
    Amortization (accretion) of 
        discounts and premiums . . .      (14,464)     (48,752)       6,717
    Other real estate gains/net. . .          -         (1,000)        -
    Re-appraisal - other real 
      estate . . . . . . . . . . . .        9,693         -            -
    Gain on sale of securities . . .         -            -            -
    (Decrease) increase in
        interest payable . . . . . .     (174,135)     409,444      290,867
    (Increase) Decrease in 
        interest receivable. . . . .      (91,959)    (153,834)     (61,166)
    (Increase) decrease in 
        other assets . . . . . . . .     (217,874)    (178,374)       3,383
    Increase (decrease) in 
        other liabilities. . . . . .      152,896      119,394       85,243 
                                       ----------   ----------   ----------
            Total adjustments. . . .      290,438      330,094      520,876 
                                       ----------   ----------   ----------
Net cash provided by (used in)
  operating activities . . . . . . .    1,131,305    1,147,203    1,085,852 
                                       ----------   ----------   ----------

Cash flows from investing activities:
Proceeds from sales of investment
    securities . . . . . . . . . . .        5,000         -          -
Proceeds from maturities of
    investment securities. . . . . .   10,005,000    7,005,000    7,000,000
Purchase of investment securities. .  (10,024,063)  (9,932,031)  (6,989,063)
Loans made to customers-net
    cash activity. . . . . . . . . .   (8,785,526) (14,344,477) (12,686,557)
Capital expenditures . . . . . . . .      (83,150)    (443,971)    (113,425)
Proceeds from sale
    of other real estate . . . . . .       12,000         -           -     
                                       ----------   ----------   ----------
Net cash provided by
  (used in) investing activities . .   (8,870,739) (17,714,479)  12,789,045 
                                       ----------   ----------   ----------

Cash flows from financing activities:
Net increase in demand deposits, NOW
  accounts, savings accounts and
  certificates of deposit. . . . . .    5,125,253   10,056,464   21,026,279
Purchase of treasury stock . . . . .         -            -          -      
                                       ----------   ----------   ----------
Net cash provided by (used in) 
  financing activities . . . . . . .    5,125,253   10,056,464   21,026,279 
                                       ----------   ----------   ----------

Net increase (decrease) in cash
  and cash equivalents . . . . . . .   (2,614,181)  (6,510,812)   9,323,086

(Continued)


The accompanying notes are an integral part of these financial statements.

                                       24
<PAGE>

                       REPUBLIC CORPORATION AND SUBSIDIARY
                             STATEMENT OF CASH FLOWS

December 31                               1996        1995         1994      
-------------------------------------------------------------------------------
Cash and cash equivalents
at beginning of year:
    Cash and due from banks. . . .     2,362,761     3,073,573    2,525,487
    Federal funds sold . . . . . .    30,650,000    36,450,000   27,675,000 
                                      ----------    ----------   ----------
Cash and cash equivalents
    at beginning of year . . . . .    33,012,761    39,523,573   30,200,487 
                                      ----------    ----------   ----------

Cash and cash equivalents
at end of year:
    Cash and due from banks. . . .     3,273,580     2,362,761    3,073,573
    Federal funds sold . . . . . .    27,125,000    30,650,000   36,450,000
                                      ----------    ----------   ----------
Cash and cash equivalents
    at end of year . . . . . . . .    30,398,580    33,012,761   39,523,573
                                      ----------    ----------   ----------
                                      ----------    ----------   ----------

Supplemental disclosures of 
cash flow information
    Cash paid for interest . . . .     4,298,764     3,758,577    2,182,551 
                                      ----------    ----------   ----------
                                      ----------    ----------   ----------
    Cash paid for income tax . . .       468,289       403,718      285,621 
                                      ----------    ----------   ----------
                                      ----------    ----------   ----------



The accompanying notes are an integral part of these financial statements.

                                       25

<PAGE>

                          REPUBLIC CORPORATION AND SUBSIDIARY
                     Statement of Changes in Stockholders' Equity


For three                 Additional
years ended      Capital   Paid in    Treasury  Contributed  Retained   Total
December 31,      Stock    Capital     Stock      Capital    Earnings   Equity 
-------------------------------------------------------------------------------

Balance at
   12-31-93       356,844   234,931  (91,303)   500,472    7,231,234  7,731,706

Net income           -         -        -          -         564,976    564,976

Market value
   adjustment-
   Securities        -         -        -          -            -          -

Addition to 
   treasury
   stock             -         -        -          -            -          -   
                 --------  -------- --------   --------   ---------- ----------
Balance at
   12-31-94       356,844   234,931  (91,303)   500,472    7,796,210  8,296,682

Net income           -         -        -          -         817,109    817,109

Market value
   adjustment-
   Securities        -         -        -          -            -          -

Addition to
   treasury
   stock             -         -        -          -            -          -   
                 --------  -------- --------   --------   ---------- ----------
Balance at
   12-31-95       356,844  234,931   (91,303)   500,472    8,613,319  9,113,791

Net Income           -        -         -          -         840,867    840,867

Market value
   adjustment-
   Securities        -        -         -          -            -          -

Addition to
   treasury
   stock             -        -         -          -            -          -   
                 --------  -------- --------   --------   ---------- ----------
Balance at
   12-31-96      $356,844  $234,931 $(91,303)  $500,472   $9,454,186 $9,954,658 
                 --------  -------- --------   --------   ---------- ----------
                 --------  -------- --------   --------   ---------- ----------


The accompanying notes are an integral part of these financial statements.

                                       26

<PAGE>

                     THE REPUBLIC CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements


1.   Summary of Significant Accounting Policies.

          PRINCIPLES OF CONSOLIDATION.  The consolidated financial statements
     include The Republic Corporation, (Company) and its majority-owned
     subsidiary, The First National Bank in Trinidad (Bank).  All major items of
     income and expense are recorded on the accrual basis of accounting, and all
     significant intercompany accounts and transactions have been eliminated.

          INVESTMENT SECURITIES.  The investment securities are classified and
     accounted for as follows:

          -  Held to Maturity - investment debt securities for which the Bank
     has the ability and intent to hold to maturity.  These securities are
     stated at cost, adjusted for amortization of premiums and accretion of
     discounts, computed by the interest method.

          -  Available for sale - securities not classified as securities to be
     held to maturity.  Unrealized holding gains or losses, net of tax, are
     reported as a separate component of shareholders' equity until realized.

          LOANS.  Interest on all loans is credited to interest income as earned
     on the principal amount outstanding.  Loans to individuals for household,
     family and other consumer expenditures are principally written at the
     amount disbursed, and interest income is accrued on the outstanding
     principal balance.

          USE OF ESTIMATES.  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 revenues and expenses during the reporting period.  Actual
     results could differ from those estimates.

          Material estimates that are particularly susceptible to 
     significant change relate to the determination of the allowance for losses
     on loans and the valuation of foreclosed real estate.  In connection with
     the determination of the estimated losses on loans and foreclosed real
     estate, management obtains independent appraisals for significant
     properties.

          While management uses available information to recognize losses 
     on loans and foreclosed real estate, further reductions in the carrying
     amounts of loans and foreclosed assets may be necessary based on changes in
     local economic conditions.  In addition, regulatory agencies, as an
     integral part of their examination process, periodically review the
     estimated losses on loans and foreclosed real estate.  Such agencies may
     require the Company to recognize additional losses based on their judgments
     about information available to them at the time of their examination. 
     Because of these factors, it is reasonably possible that the estimated
     losses on loans and foreclosed real estate may change materially in the
     near term.  However, the amount of the change that is reasonably possible
     cannot be estimated.


                                       27

<PAGE>

                     THE REPUBLIC CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements

          INCOME RECOGNITION ON IMPAIRED LOANS.  Interest income generally 
     is not recognized on specific impaired loans unless the likelihood of
     further loss is remote.  Interest payments received on such loans are
     applied as a reduction of the loan principal balance.  Interest income on
     other impaired loans is recognized only to the extent of interest payments
     received. 

          ALLOWANCE FOR LOAN LOSSES.  The allowance for loan losses is 
     established through charges to earnings in the form of provisions for loan
     losses.  Loan losses or recoveries are charged or credited directly to the
     allowance.  In general, the amount charged to earnings each year by the
     Bank is based on management's judgment which takes into consideration a
     number of factors, including (1) loss experience in relation to outstanding
     loans and the existing level of the valuation allowance, (2) a continuing
     review of problem loans and overall portfolio quality, (3) regular
     examinations and appraisals of loan portfolios conducted by Federal
     supervisory authorities, and (4) current and expected economic conditions.

          GOODWILL.  The excess of the purchase cost over the net assets of the
     Bank purchased represents goodwill.  APB 17, which addresses the
     amortization of intangible assets such as goodwill, is not to be applied
     retroactively to assets acquired before November 1, 1970.  Since the
     acquisition of the Bank was made prior to November 1, 1970, the goodwill
     acquired is considered to have continuing value over an indefinite period
     and, therefore, is not being amortized.

          LONG-LIVED ASSETS.  The undiscounted future net cash flows of the 
     Company are expected to be greater than the net book value of long-lived
     assets (including goodwill) so that recoverability is not determined to be
     impaired.

          PROPERTY AND EQUIPMENT.  Bank property and equipment are stated at
     cost less accumulated depreciation.  The building and improvements are
     depreciated on the straight-line, declining balance, ACRS and MACRS methods
     over estimated useful lives of 30 years.  There is not a material
     difference between the expense recognized using the ACRS and MACRS methods
     and the expense that would be recognized using a method acceptable under
     generally accepted accounting principles.  Automobiles are depreciated
     primarily on the straight-line basis over estimated useful lives of 3-4
     years.  Other equipment is depreciated on the straight-line, ACRS and MACRS
     methods over estimated useful lives of 5-10 years.

          The accounting policy is to charge maintenance, repairs, minor
     renewals and betterments of property and equipment to expense in the year
     incurred.  Major expenditures for renewals and betterments are capitalized
     and depreciated or amortized over their estimated useful lives.  On
     disposal or retirement, the related cost and accumulated depreciation are
     eliminated from the accounts and gain or loss on the transaction is
     reflected in the statement of income.


                                       28

<PAGE>

                     THE REPUBLIC CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements


          FORECLOSED REAL ESTATE.  Foreclosed real estate includes formally 
     foreclosed properties.

          At the time of foreclosure, foreclosed real estate is recorded at 
     the lower of the carrying amount or fair value less cost to sell, which
     becomes the property's new basis.

          LOAN ORIGINATION FEES AND COSTS.  Loan origination fees are of an
     immaterial nature and are recognized as income upon receipt.

          INCOME TAXES.  The Company files a consolidated federal income tax
     return with the Bank.  The corresponding amount of income tax expense has
     been reflected in the financial statements.  All expense recognized is
     current due to the fact that temporary differences in the recognition of
     income and expense for tax and financial statement purposes have created an
     immaterial deferred credit not reflected in the accompanying financial
     statements.

          EMPLOYEE BENEFIT PLANS.  The Bank makes payments into a 401K employee
     benefit plan.  All employees of the bank are covered, with the Bank paying
     a discretionary percentage of the employee's earnings to the plan.  An
     employee can contribute an additional percentage of his/her earnings if so
     desired.  The plan is overseen by a board of trustees composed of Bank
     officers.

          EARNINGS PER SHARE COMPUTATIONS.  Earnings per share computations are
     based on the weighted average number of common shares outstanding during
     each year.

2.   Investment Securities, including investments held for sale.

          A schedule of securities is as follows:

<TABLE>
                      December 31, 1996                     December 31, 1995
             -----------------------------------   -----------------------------------
             Principal     Book         Market     Principal       Book       Market
               Amount      Value         Value       Amount        Value       Value
             ----------  ----------   ----------   ----------   ----------   ----------  
<S>          <C>         <C>          <C>          <C>          <C>           <C>
Government
Securities   10,000,000  10,006,368    9,984,375   10,000,000    9,977,841   10,009,375 

Obligations
of states
and polit-
ical sub-
divisions           -           -            -            -            -            -    

Other            24,000      24,000       24,000       24,000       24,000       24,000  
             ----------  ----------   ----------   ----------   ----------   ----------  
                         10,030,368   10,008,375                10,001,841   10,033,375  
                         ----------   ----------                ----------   ----------  
                         ----------   ----------                ----------   ----------  
</TABLE>






                                       29
<PAGE>

                     THE REPUBLIC CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements



          The approximate amortized cost of investment securities pledged by the
     Bank to secure public funds on deposit amounted to $9,506,050 at December
     31, 1996 and $9,478,949 at December 31, 1995.  Additionally, $500,318 was
     pledged to the Federal Reserve Bank in order to secure treasury, tax and
     loan remittances at December 31, 1996.

          Net gains on the sale of securities were as follows:

                                                        1996       1995  
                                                       -------    -------
     GAINS
          U.S. Government Securities                      -          -   
                                                       -------    -------
     LOSSES
          U.S. Government Securities                      -          -   
                                                       -------    -------
     NET GAINS ON SALE OF SECURITIES                      -          -   
                                                       -------    -------
                                                       -------    -------

     Unrealized gains and losses in the securities portfolio were as follows:

                                 Carrying  Unrealized  Unrealized   Market
                                  Value       Gain       Loss        Value   
                                ---------- ----------  ----------   -------
     DECEMBER 31, 1996
     -----------------
     U.S. Treasury Securities   10,006,368      -       21,993    9,984,375
     Obligations of States
          and Political
          Subdivisions. . . .         -        -          -            -
     Other. . . . . . . . . .       24,000     -          -          24,000
                                ----------  -------     ------   ----------
                                10,030,368     -        21,993   10,008,375
                                ----------  -------     ------   ----------
                                ----------  -------     ------   ----------

     DECEMBER 31, 1995
     -----------------
     U.S. Treasury Securities    9,977,841   31,534       -      10,009,375
     Obligations of States
          and Political
          Subdivisions. . . .        -         -          -           -
     Other. . . . . . . . . .       24,000     -          -          24,000
                                ----------  -------     ------   ----------
                                10,001,841   31,534       -      10,033,375
                                ----------  -------     ------   ----------
                                ----------  -------     ------   ----------

3.   Loans and Other Receivables

          Loans and other receivables are summarized as follows:

                                                         December 31,      
                                                  -------------------------
     TYPE                                             1996          1995   
     -----                                        -----------   -----------
     Real estate. . . . . . . . . . . . . .       $53,315,567   $46,178,005
     Commercial and industrial. . . . . . .         5,715,555     4,892,134
     Agriculture. . . . . . . . . . . . . .         3,787,250     3,676,333
     Loans to individuals for household,
          family and other consumer goods .         8,734,360     8,651,779
     Other. . . . . . . . . . . . . . . . .            39,801        27,146
                                                  -----------   -----------
          TOTAL                                   $71,592,533   $63,425,397
                                                  -----------   -----------
                                                  -----------   -----------




                                       30

<PAGE>

                     THE REPUBLIC CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements

     The changes in the allowance for loan losses are as follows:

                                                      December 31,       
                                             ----------------------------
                                               1996      1995      1994  
                                             --------  --------  --------

     Balance at beginning of year. . . . .   $868,026  $925,572  $956,000
     Provision charged to
          operating expenses . . . . . . .    392,703      -         -   
     Loans charged off . . . . . . . . . .    322,659    73,040    46,489
     Recoveries on loans
          previously charged off . . . . .     25,987    15,494    16,061
                                             --------  --------  --------
     Balance at end of year. . . . . . . .   $964,057  $868,026  $925,572
                                             --------  --------  --------
                                             --------  --------  --------

     At December 31, 1996 and 1995, the total recorded investment in impaired
     loans, all of which had allowances determined in accordance with SFAS No.
     114 and No. 118, amounted to approximately $2,907,000 and $776,000
     respectively.  The average recorded investment in impaired loans amounted
     to approximately $2,286,000 and $867,000 for the years ended December 31,
     1996 and 1995, respectively.  The allowance for loan losses related to
     impaired loans amounted to approximately $199,890 and $167,482 at December
     31, 1996 and 1995, respectively.  Interest income on impaired loans of
     $159,830 and $48,675 was recognized for cash payments received in 1996 and
     1995 respectively.

4.   Property and equipment.

          Property and equipment are summarized as follows:

                                                      December 31,         
                                         ----------------------------------
                                              1996       1995       1994  
                                         ----------  ----------  ----------

     Land. . . . . . . . . . . . . .     $  114,751  $  114,751  $   49,681
     Buildings . . . . . . . . . . .      2,029,738   2,029,738   1,945,220
     Furniture and equipment . . . .      1,370,580   1,287,430     993,047
                                         ----------  ----------  ----------
                                          3,515,069   3,431,919   2,987,948
     Less accumulated depreciation .      1,863,683   1,630,105   1,446,889
                                         ----------  ----------  ----------
          Net. . . . . . . . . . . .      1,651,386  $1,801,814  $1,541,059
                                         ----------  ----------  ----------
                                         ----------  ----------  ----------

          Depreciation expense for 1996, 1995 and 1994 was $233,578, $183,216
     and $195,832, respectively.

5.   Income Taxes.

          The components of the income tax provisions (benefits) are as follows:





                                       31

<PAGE>

                     THE REPUBLIC CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements

5.   (Continued)
                                                       December 31,        
                                             ------------------------------
                                                1996      1995       1994  
                                             --------   --------   --------
     Federal provision:
          Current. . . . . . . . . . . .     $478,584   $352,561   $262,050
          Deferred . . . . . . . . . . .         -          -          -   
                                             --------   --------   --------
                                              478,584    352,561    262,050
     State provision . . . . . . . . . .       35,230     25,728     21,668
                                             --------   --------   --------
          Total. . . . . . . . . . . . .     $513,814   $378,289   $283,718
                                             --------   --------   --------
                                             --------   --------   --------

          The difference between the total expected income tax expense applying
     the Federal tax rates and the effective tax rate applicable to income are
     as follows (dollars in thousands):

                                       1996          1995          1994    
                                  ------------- ------------- -------------
                                          % of          % of          % of
                                         Pretax        Pretax        Pretax
                                  Amount Income Amount Income Amount Income
                                  ------ ------ ------ ------ ------ ------
     Statutory tax rate Federal .  467     34    413     34     293     34
     State income tax . . . . . .   35      2     25      2      22      3
     Tax exempt revenue . . . . .   (5)     -     (5)    -       (4)    (1)
     Accrual to cash adjustment .    -      -    (21)    (2)    (21)    (3)
     Provision for loan loss. . .   33      2    (20)    (2)     (3)     -
     Other (net). . . . . . . . .  (16)    (1)   (14)    (1)     (3)     -  
                                  ----    ----  ----   ----    ----   ----
          Total . . . . . . . . .  514     37    378     31     284     33 
                                  ----    ----  ----   ----    ----   ----
                                  ----    ----  ----   ----    ----   ----

6.   Service Commitments.

          Computer and data processing services are provided to the Bank by an
     outside service center.  Expenses incurred for such services during 1996,
     1995 and 1994 were $119,105, $93,759 and $73,186, respectively.

7.   Other Real Estate.

          Other real estate consists of properties acquired through foreclosure
     and loans that are classified as in-substance foreclosed for  which the
     underlying collateral is real estate.  There were no gains or losses on
     sales of properties for the year ended December 31, 1996.

          There was a $1,000 gain on other real estate sold in 1995.
     transactions.

          No gains or losses were incurred in 1994 on other real estate
     transactions.


                                       32

<PAGE>

                     THE REPUBLIC CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements



8.   Certificates of Deposit.

          The Bank has time certificates of deposit in amounts of $100,000 or
     more amounting to $11,965,011 and $11,692,086 at December 31, 1996 and
     1995, respectively.  Interest expense for the years ended December 31,
     1996, 1995 and 1994 on this type of deposit was $619,605, $596,555, and
     $246,698, respectively.

          The deposits by time remaining until maturity were (dollars in 
thousands).

                                  3 months or less     $ 3,638
                                  3 to 6 months          4,611
                                  6 to 12 months         1,683
                                  over 12 months         2,033
                                                       -------
                                                        11,965
                                                       -------
                                                       -------
9.   Regulatory Matters.

          The Bank, as a National Bank, is subject to the dividend restrictions
     set forth by the Comptroller of the Currency.  Under such restrictions, the
     Bank may not, without the prior approval of the Comptroller of the
     Currency, declare dividends in excess of the sum of the current year's
     earnings (as defined) plus the retained earnings (as defined) from the
     prior two years.  The dividends, as of December 31, 1996, that the Bank
     could declare, without the approval of the Comptroller of the Currency,
     amounted to approximately $1,694,000.  The Bank is also required to
     maintain minimum amounts of capital to total "risk weighted" assets, as
     defined by the banking regulators.  As of December 31, 1996, Banks are
     required to have minimum Tier 1 and Total capital ratios of 4.00% and
     8.00%, respectively.  The Bank's actual ratios at December 31, 1996 were
     $14.90% and 16.15%, respectively.  The Bank's Tier 1 leverage ratio at
     December 31, 1996 was 8.42%.  The minimum required leverage ratio for the
     Bank at December 31, 1996, was 3.00%.


10.  Supplemental Cash Flow Information

          In 1996 and 1994, the Bank recorded amounts of other real estate
     acquired through foreclosure of $321,718 and $5,500.  Of total sales of
     other real estate during 1994, $5,300 of the purchase price was financed by
     the Bank, taking the other real estate as security.  Loans charged off in
     1996, 1995 and 1994 amounted to $322,659, $73,040 and $46,489.  These
     noncash transactions have been excluded from the consolidated statement of
     cash flows.


11.  Financial Position and Results of Operations - Republic Corporation.

          The financial position and results of operations of The Republic
     Corporation (parent only) are as follows:



                                       33

<PAGE>

                            THE REPUBLIC CORPORATION
                                  Balance Sheet

(Note 11 Continued)
December 31                                         1996           1995    
------------------------------------------------------------------------------

Assets

Cash in Bank. . . . . . . . . . . . . . . . .   $   22,102      $   22,500
Investment in subsidiary - equity method. . .    9,855,952       9,015,379
Vehicles and equipment (net). . . . . . . . .          -               108
Receivable - due from subsidiary. . . . . . .       20,000          19,200
Other assets. . . . . . . . . . . . . . . . .       56,604          56,604
                                                ----------      ---------- 
    Total assets. . . . . . . . . . . . . . .    9,954,658      $9,113,791
                                                ----------      ---------- 
                                                ----------      ---------- 

Liabilities . . . . . . . . . . . . . . . . .   $    -          $     -   
                                                ----------      ---------- 

Stockholders' Equity

Common stock, par value $1.00; authorized
    750,000 shares, issued 356,844 shares
    including stock held in treasury of
    23,119 and 23,119 for 1996 and 1995,
    respectively. . . . . . . . . . . . . . .      356,844         356,844
Additional paid in capital. . . . . . . . . .      234,931         234,931
Less cost of treasury stock (23,119 shares
    at 12-31-96, 23,119 shares at 12-31-95) .      (91,303)        (91,303)
                                                ----------      ----------
        Total contributed capital . . . . . .      500,472         500,472 
                                                ----------      ----------
Retained earnings . . . . . . . . . . . . . .    9,454,186       8,613,319 
                                                ----------      ----------
    Total stockholders' equity. . . . . . . .    9,954,658       9,113,791 
                                                ----------      ----------
    Total liabilities and 
    stockholders' equity. . . . . . . . . . .   $9,954,658      $9,113,791 
                                                ----------      ----------
                                                ----------      ----------





                                       34

<PAGE>

                            THE REPUBLIC CORPORATION
                               Statement of Income

(Note 11 Continued)
Year Ended December 31                         1996     1995      1994   
---------------------------------------------------------------------------
Income

Investment income in subsidiary
    Dividends received from
        subsidiary bank. . . . . . . . . .   $ 39,100   $ 39,100   $ 39,100
    Other income . . . . . . . . . . . . .       -          -          -    
                                             --------   --------   --------
        Total income . . . . . . . . . . .   $ 39,100   $ 39,100   $ 39,100 
                                             --------   --------   --------

Expenses

Salaries and employee benefits . . . . . .     41,073     41,073     41,073
Depreciation . . . . . . . . . . . . . . .        108        107        107
Examination and legal fees . . . . . . . .      9,826      8,127      6,375
Miscellaneous. . . . . . . . . . . . . . .         90        140     13,384
Office . . . . . . . . . . . . . . . . . .      4,406      3,729      3,726
Taxes. . . . . . . . . . . . . . . . . . .      3,303      3,310      3,315
Travel . . . . . . . . . . . . . . . . . .       -           -          200 
                                             --------   --------   --------
    Total expenses . . . . . . . . . . . .     58,806     56,486     68,180 
                                             --------   --------   --------
Income (Loss) before equity in
    undistributed net income of subsidiary    (19,706)   (17,386)   (29,080)

Less applicable income (taxes) benefit . .     20,000     19,200     18,100 
                                             --------   --------   --------
                                                  294      1,814    (10,980)

Equity in undistributed net income
    (loss) of subsidiary . . . . . . . . .    840,573    815,295    575,956 
                                             --------   --------   --------
    Net income (loss). . . . . . . . . . .   $840,867   $817,109   $564,976 
                                             --------   --------   --------
                                             --------   --------   --------
Earnings per share
    Weighted average number of 
        shares outstanding . . . . . . . .    333,725    333,725    333,725 
                                             --------   --------   --------
                                             --------   --------   --------
    Net income (loss) per common share . .   $   2.52   $   2.44   $   1.69 
                                             --------   --------   --------
                                             --------   --------   --------


                                       35
<PAGE>

                            THE REPUBLIC CORPORATION
                             Statement of Cash Flows

(Note 11 Continued)
Year Ended December 31                          1996       1995       1994 
---------------------------------------------------------------------------
Cash flows from operating activities:

Net income. . . . . . . . . . . . . . . .   $ 840,867  $ 817,109  $ 564,976
Adjustments to reconcile net income to
    net cash provided by operating
    activities:
    Depreciation. . . . . . . . . . . . .         108        107        107
    Dividends received - subsidiary . . .     (39,100)   (39,100)   (39,100)
    (Increase) in investment in
        subsidiary-held on the 
        equity method . . . . . . . . . .    (840,573)  (815,295)  (557,573)
    (Increase) decrease in receivable
        from subsidiary-income 
        tax benefit . . . . . . . . . . .        (800)    (1,100)       700
    Increase (decrease) in current
        liabilities . . . . . . . . . . .        -          -          -    
                                            ---------   --------   --------
Net cash (used in) operating activities .     (39,498)   (38,279)   (30,890)
                                            ---------   --------   --------

Cash flows from investing activities-
    Dividends received. . . . . . . . . .      39,100     39,100     39,100 
                                            ---------   --------   --------
Cash flows from financing activities-
    Purchase of treasury stock. . . . . .        -          -          -    
                                            ---------   --------   --------
Net increase (decrease) in cash . . . . .        (398)       821      8,210

Cash - beginning of year. . . . . . . . .      22,500     21,679     13,469
                                            ---------   --------   --------
Cash - end of year. . . . . . . . . . . .      22,102     22,500     21,679
                                            ---------   --------   --------
                                            ---------   --------   --------
Supplemental disclosures of cash
flow information:
    Cash paid for interest. . . . . . . .        -          -          -    
                                            ---------   --------   --------
                                            ---------   --------   --------
    Cash paid for income taxes. . . . . .        -          -          -    
                                            ---------   --------   --------
                                            ---------   --------   --------


                                       36

<PAGE>


                            THE REPUBLIC CORPORATION
                  Statement of Changes in Stockholders' Equity

(Note 11 Continued)
For the Three                    Additional               Total
Year Ended              Capital   Paid in   Treasury   Contributed   Retained
December 31              Stock    Capital    Stock       Capital     Earnings 
------------------------------------------------------------------------------
Balance at December
    31, 1993. . . . .   $356,844  $234,931  $(91,303)   $500,472    $7,231,234*

Net income. . . . . .       -         -        -            -          564,976

Additions to
    treasury stock. .       -         -        -            -             - 
                        --------  --------  --------    --------    ----------

Balance at December
    31, 1994. . . . .    356,844   234,931   (91,303)    500,472     7,796,210*

Net income. . . . . .       -         -        -            -          817,109

Additions to
    treasury stock. .       -         -        -            -              - 
                        --------  --------  --------    --------    ----------

Balance at December
    31, 1995. . . . .    356,844   234,931   (91,303)    500,472     8,613,319*

Net income. . . . . .       -         -        -            -          840,867

Additions to
    treasury stock. .       -         -        -            -             -    
                        --------  --------  --------    --------    ----------

Balance at December
    31, 1996            $356,844  $234,931  $(91,303)   $500,472    $9,454,186*
                        --------  --------  --------    --------    ----------
                        --------  --------  --------    --------    ----------

    *On December 31, 1993, 1994, 1995 and 1996 the portion of retained earnings
resulting from Republic Corporation's equity in the undistributed income of its
subsidiary was $6,422,432, $6,982,005, $7,797,300 and 8,637,872 respectively.

12. Contingent Liabilities and Commitments.

    The consolidated financial statements do not reflect various commitments and
contingent liabilities which arise in the normal course of business and which
involve elements of credit risk, interest rate risk and liquidity risk.  These
commitments and contingent liabilities are commitments to extend credit and
standby letters of credit.  A summary of the Bank's commitments and contingent
liabilities at December 31, 1996, is as follows:

                                                                 National
                                                                  Amount
                                                                 ---------
    Commitments to extend credit                                 3,472,000
    Standby letters of credit                                      253,000




                                       37

<PAGE>

                     THE REPUBLIC CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements


12. (Continued)

    Commitments to extend credit and standby letters of credit all include
exposure to some credit loss in the event of nonperformance of the customer. 
The Bank's credit policies and procedures for credit commitments and financial
guarantees are the same as those for extensions of credit that are recorded on
the consolidated statements of condition.  Because these instruments have fixed
maturity dates, and because many of them expire without being drawn upon, they
do not generally present any significant liquidity risk to the Bank.


13. Disclosures about the Fair Value of Financial Instruments

    The following disclosures of the estimated fair value of financial
instruments are made in accordance with the requirements of SFAS No. 107,
DISCLOSURES ABOUT FAIR VALUE OF FINANCIAL INSTRUMENTS.  The estimated fair value
amounts have been determined by the Bank using available market information and
valuation methodologies.  The fair value estimates presented are not necessarily
indicative of the amounts the company could realize in a current market
exchange.  The use of different market assumptions and/or estimation
methodologies may have a material impact on the estimated fair value amounts. 
SFAS No. 107 excludes certain financial instruments and all non-financial
instruments including intangible assets from its disclosure requirements. 
Therefore the aggregate fair value amounts presented herein are not indicative
of the underlying value of the Bank.

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

    -   CASH AND DUE FROM BANKS

        The current carrying amount is a reasonable estimate of fair value.

    -   FEDERAL FUNDS SOLD

        The current carrying amount is a reasonable estimate of fair value.

    -   INVESTMENT SECURITIES

        An estimate of the fair value for investment securities is made
        utilizing quoted market prices for publicly traded securities, where
        available.  A third-party pricing service that specializes in "matrix
        pricing" and modeling techniques provides estimated fair values for
        securities not actively traded.



                                       38

<PAGE>

                     THE REPUBLIC CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements


13. (Continued)

    -   LOANS

        The fair value of loans is estimated by discounting the future cash
        flows using the current rates at which similar loans would be made to
        borrowers with similar credit ratings and for the same remaining
        maturities.  Due to the small amount of nonaccrual loans at December 31,
        1996, these loans do not significantly impact the fair value of loans.


    -   DEPOSITS

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


    -   COMMITMENTS TO EXTEND CREDIT AND STANDBY LETTERS OF CREDIT

        The fair value of commitments is estimated using the fees currently
        charged to enter into similar agreements, taking into account the
        remaining terms of the agreements and the present creditworthiness of
        the customers.  For fixed-rate loan commitments, fair value also
        considers the difference between current levels of interest rates and
        the committed rates.  The estimated fair value of letters of credit is
        based on the fees currently charged for similar agreements.  The
        instruments were determined to have no positive or negative market value
        adjustments and are not listed in the following table.

        The estimated fair value of the Company's financial instruments is as
        follows:


                                                   December 31, 1996    
                                               ----------------------- 
                                               Carrying           Fair
                                                Amount           Value  
                                               --------          -----
                                                     (In Thousands)
        Financial assets:
            Cash and due from banks            $ 3,274           $ 3,274
            Held-to-maturity securities         10,006             9,984
            Other Securities                        24                24
            Federal funds sold                  27,125            27,125
            Loans, net of allowance             70,628            70,639

        Financial liabilities:
            Deposits                           103,398           103,417



                                       39

<PAGE>

                     THE REPUBLIC CORPORATION AND SUBSIDIARY
                   Notes to Consolidated Financial Statements

13. (Continued)

        The fair value estimates presented herein are based on pertinent
        information available to management as of December 31, 1996.  Although
        management is not aware of any factors that would significantly affect
        the estimated fair value amounts, such amounts have not been
        comprehensively revalued for purposes of the financial statements since
        that date and, therefore, current estimates of fair value may differ
        significantly from the amounts presented.








                                       40


<PAGE>

ITEM 9.  Changes in and Disagreements with Accountants on Accounting and 
         Financial Disclosure:

    Not applicable.
























































                                       41

<PAGE>
                                       
                                   PART III

ITEM 10.  Directors and executive officers of the Republic Corporation.

     The Republic Corporation's Board of Directors consists of Catherine G. 
Eisemann, J.E. Eisemann, IV and Roger Dean Eisemann.  All directors and 
officers are U.S. citizens.  Catherine G. Eisemann is the mother of J.E. and 
Roger Dean Eisemann.

                             TERM OF          PRINCIPAL OCCUPATIONS FOR THE
NAME AND TITLE          AGE  OFFICE                  LAST FIVE YEARS      
--------------          ---  --------  -----------------------------------------
Catherine G. Eisemann   70   33 Years  Catherine G. Eisemann has been a Director
                                       of The Republic Corporation for 33 years.
                                       Mrs. Eisemann was elected President of
                                       The Republic Corporation and began 
                                       serving December 11, 1981.

J.E. Eisemann, IV       49   20 Years  J.E. Eisemann, IV has served as a
                                       Director on The Republic Corporation
                                       Board for 20 years.  Mr. Eisemann has
                                       been the Vice-President and Director of
                                       the Subsidiary Bank for approximately 20
                                       years.  Mr. Eisemann has served as the
                                       Chairman of the Board of The Republic
                                       Corporation and Chairman of the Board 
                                       for the Subsidiary Bank for approximately
                                       15 years.

Roger Dean Eisemann     42   14 Years  Roger Dean Eisemann was elected Secretary
                                       and began serving as a director of The
                                       Republic Corporation in July, 1982.

     J.E. Eisemann, III was the President and Chairman of the Board of The
Republic Corporation for 25 years.  Mr. Eisemann passed away during 1981.






















                                       42

<PAGE>

ITEM 11.  Executive Compensation.
                                       
                 EXECUTIVE COMPENSATION SUMMARY COMPENSATION TABLE


                                                   Annual Compensation      
                                           ---------------------------------
Name & Principal Position                  Year       Salary         Bonus  
-------------------------                  ----     ---------      ---------
J.E. Eisemann, IV Chairman of the          1996     $54,193(1)     $3,881(2)
    Board of the Company, Vice             1995      52,716(1)      3,429(2)
    President of the Company,              1994      50,767(1)      2,076(2)
    Chairman of the Board & Vice
    President of the Subsidiary Bank

Catherine Eisemann President of the        1996     $30,000           -0-
    Company                                1995      30,000           -0-
                                           1994      30,000           -0-



                              Restricted    Stock
                                Stock      Options/     LTIP         All Other
Name & Principal Position       Awards     SARs(#)    Payouts($)   Compensation
-------------------------     ----------   -------    ---------    ------------
J.E. Eisemann, IV                -0-          -0-        -0-           -0-
    Chairman of the Board        -0-          -0-        -0-           -0-
    of the Company, Vice         -0-          -0-        -0-           -0-
    President of the 
    Company, Chairman of 
    the Board & Vice
    President of the
    Subsidiary Bank

Catherine Eisemann               -0-          -0-        -0-           -0-
    President of the             -0-          -0-        -0-           -0-
    Company                      -0-          -0-        -0-           -0-


(1) Includes amounts deferred under Section 401(K) of the Internal Revenue 
Code. Amounts deferred by Mr. Eisemann were $4,924 in 1994, $3,543 in 1995, 
and $3,920 in 1996.

(2) Includes amounts deferred under Section 401(K) of the Internal Revenue 
Code. Amounts deferred by Mr. Eisemann were $246 in 1994, $343 in 1995, and 
$353 in 1996.

                                       
                      STOCK OPTIONS/SAR GRANTS IN 1996-NONE
         AGGREGATED STOCK OPTIONS/SAR EXERCISES IN 1996 AND OPTIONS/SAR
                      VALUES AS OF DECEMBER 31 1996 - NONE
                LONG-TERM INCENTIVE PLANS - AWARDS IN 1996 - NONE
                            COMPENSATION OF DIRECTORS
             Director fees are not paid to directors of the Company.
                     EMPLOYMENT CONTRACTS AND TERMINATION OF
                         EMPLOYMENT ARRANGEMENTS - NONE
                   REPORT ON REPRICING OF OPTIONS/SARS - NONE





                                       43
<PAGE>

ITEM 12.  Security ownership of certain beneficial owners and management.


     (a)  Security ownership of certain beneficial owners.
          The following schedule reflects security ownership of persons who are
          the beneficial owners of more than 5% of any class of voting
          securities of The Republic Corporation.

                                                      Amount and
                                                      Nature of     Percent
          Name of                        Title of     Beneficial      of
          Person (1)                      Class      Ownership (2)   Class
          ----------                   ------------  -------------  --------
          Catherine G. Eisemann        Common Stock     193,702     58.0424
          3350 McCue, #904
          Houston, Texas  77056

          (1)  All persons shows are officers or directors of The Republic 
               Corporation.

          (2)  Shares of The Republic Corporation have not been pledged by 
               the officers or directors of the corporation.


     (b)  Security ownership of management.
          The following schedule reflects security ownership of the officers and
          directors of The Subsidiary Bank:

                                                      Amount and
                                                      Nature of     Percent
          Name of Director               Title of     Beneficial       of
          or Officer                       Class      Ownership      Class
          ----------------             ------------   ----------    -------
          The Republic Corporation(1)  Common Stock     39,100       97.75
          Catherine G. Eisemann        Common Stock        100         .25
          J.E. Eisemann, IV            Common Stock        100         .25
          R. Dean Eisemann             Common Stock        100         .25
          Ralph Gagliardi              Common Stock        100         .25
          Opal Gahm                    Common Stock        100         .25
          Johnny Niccoli               Common Stock        100         .25
          Charles Latuda               Common Stock        100         .25
          John Davis                   Common Stock        100         .25
          James Cummings               Common Stock        100         .25

          (1)  Catherine G. Eisemann owns 58.0424 percent of The Republic
               Corporation.

     (c)  Changes in control.

          The Republic Corporation has the option of repurchasing its own stock,
          thus increasing the ownership percentages of the remaining
          shareholders.


                                      44

<PAGE>


ITEM 13.  Certain relationships and related transactions.

          There have been no transactions with management or other related
     parties that would require disclosure under current Securities and Exchange
     Commission regulations.  Additionally, no business relationships that would
     require disclosure exist.  A director was indebted to the subsidiary bank
     during 1996 on a loan made in the ordinary course of business made on
     substantially the same terms as those prevailing at the time for comparable
     transactions with other persons and did not involve more than the normal
     risk of collectibility.  At no time was the amount of the loan in excess of
     $60,000.


















                                      45

<PAGE>


                                     PART IV

ITEM 14.  Exhibits, financial statement, schedules, and reports on 
          Form 8-K.

     (a)  1.   The following financial statements and financial statement
               schedules are included in Part II of this report:

               Consolidated statements of the parent and subsidiary bank:

                    Accountant's Report. . . . . . . . . . . . .      21

                    Balance Sheets as of December
                         31, 1996 and 1995 . . . . . . . . . . .      22

                    Statements of Income - years ended
                         December 31, 1996, 1995 and 1994. .  . .     23

                    Statement of Cash Flows -
                         Years ended December 31,
                         1996, 1995 and 1994. . . . . . . . . . .     24-25

                    Statement of Changes in Stockholders'
                         Equity-years ended December 31,
                         1996, 1995 and 1994. . . . . . . . . . .     26

                    Notes to Financial Statements . . . . . . . .     27-40

          2.   All other schedules are omitted because they are not applicable,
               are not required, or because the required information is included
               in the consolidated financial statements or notes thereto.









                                       46

<PAGE>

          3.   List of Exhibits.

               The following documents were filed as exhibits to Registration
               Statement Form 10 (which was filed with the Securities and
               Exchange Commission under The Securities Exchange Act of 1934)
               dated August 23, 1977.

               Exhibit
                 No.
               -------
                 3       The Republic Corporation, Articles of Incorporation and
                         By-Laws

               22(a)     Subsidiary of the Registrant.

               The First National Bank in Trinidad, Colorado.
               Incorporated in Colorado

     (b)  Reports on Form 8-K

          There were no reports on Form 8-K for the three months ended December
          31, 1996.















                                       47


<PAGE>

                                SIGNATURES


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


REPUBLIC CORPORATION




   /s/ J.E. Eisemann, IV                Chairman of the          03/19/97
------------------------------          Board, Director,         --------
      J.E. Eisemann, IV                 Chief Executive            Date
                                        Officer, Chief
                                        Financial and
                                        Accounting Officer


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


Signature                               Title                    Date
---------                               -----                    ----

                                        Chairman of the          03/19/97
                                        Board, Director,
   /s/ J.E. Eisemann, IV                Chief Executive
------------------------------          Officer, Chief
      J.E. Eisemann, IV                 Financial and
                                        Accounting Officer



  /s/ Catherine G. Eisemann             President of the         03/19/97
------------------------------          Board and a Director
      Catherine G. Eisemann  



                                       48
<PAGE>

                            SUPPLEMENTAL INFORMATION



The Republic Corporation will send the shareholders an annual report and proxy
materials subsequent to the filing of this report.






                                       49