TRANSMITTAL LETTER                     
                     
Central Fidelity Banks, Inc.          
1021 East Cary Street                     
Richmond, Virginia 23219                     
(804) 782-4000                     
                     
March 25, 1996                     
                     
BY EDGAR SYSTEM                     
---------------                     
                     
Securities and Exchange Commission                     
450 Fifth Street                     
Washington, D.C. 20549-1004                     
                     
Attn:  Filing Desk                     
         
                     
Re:  Central Fidelity Banks, Inc. Form 10-K Filing                     
     ---------------------------------------------                     
                     
Ladies and Gentlemen:                     
                     
     On behalf of Central Fidelity Banks, Inc., I enclose for filing    
the Company's Annual Report on Form 10-K with exhibits for the year    
ended December 31, 1995.          
                     
      This report was prepared on the integrated basis and meets the    
requirements of Exchange Act Rules 14a-3 as to the furnishing of annual    
report to security holders.  Accordingly, these copies are also    
submitted to satisfy the 14-a3(c) requirements under said rules.    
                     
      In accordance with the provisions of the Lockbox Rule, Rule 3a of    
the Commission's Rules of Practice, as effective April 26, 1993, the    
annual filing fees in the amount of $250.00 were wired from the    
Registrant's account at Central Fidelity National Bank, Richmond,    
Virginia, to the Commission's lockbox depository at the Mellon Bank in    
Pittsburgh.    
                     
Sincerely yours,          
                     
/s/ Vivian Y. Woo          
                     
Vivian Y. Woo          
Vice President and Assistant Controller          
                     
Enclosures          
   
   
<PAGE>    
   
SECURITIES AND EXCHANGE COMMISSION     
Washington, D.C. 20549     
     
FORM 10-K     
      
ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE      
ACT 1934     
     
For the fiscal year ended December 31, 1995     
     
COMMISSION FILE NUMBER 0-8829     
     
CENTRAL FIDELITY BANKS, INC.     
(Exact name of registrant as specified in its charter)     
     
          Virginia				          54-1091649     
(State or other jurisdiction                     (I.R.S. Employer     
of incorporation or organization)                Identification No.)     
     
1021 East Cary Street, P. O. Box 27602, Richmond, Virginia 23261     
   (Address of Principal Executive Offices)                (Zip Code)     
     
(804) 782-4000     
(Registrant's telephone number, including area code)     
     
SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:     
     
Common Stock at $5 par value, with Preferred Purchase Rights attached     
(Title of class)     
     
     Common shares outstanding as of March 1, 1996 - 40,207,198     
     
     Indicate by check mark whether the registrant (1) has filed all      
reports required to be filed by Section 13 or 15(d) of the Securities      
Exchange Act of 1934 during the preceding 12 months and (2) has been      
subject to such filing requirements for the past 90 days.     
     
            Yes   X                                     No     
     
     The registrant's Proxy Statement for use at the Annual Meeting of      
Shareholders on May 8, 1996, is incorporated by reference in Part III      
of this Form 10-K. Said Proxy Statement also contains information with      
respect to compliance with item 405 of Regulation S-K.     
     
     The aggregate market value of the registrant's voting stock held by      
nonaffiliates as of March 1, 1996 was $1,347,392,000.     
     
     No action has been taken on the part of the Securities and Exchange      
Commission to approve or disapprove of this Form 10-K and Annual Report      
to Shareholders or to pass upon its accuracy or adequacy.     
     
     
     
    
   
    
<PAGE>         
<TABLE>         
         
CONSOLIDATED BALANCE SHEET         
-----------------------------------------------------------------------         
Central Fidelity Banks, Inc. and Subsidiaries         
(In Thousands, except share date) December 31,         
         
<CAPTION>         
                                                1995           1994         
<S>                                         <C>            <C>         
-----------------------------------------------------------------------         
Assets         
-----------------------------------------------------------------------         
Cash and due from banks (note 4)               $338,580       $274,813         
Temporary investments:                                
  Federal funds sold and securities purchased         
    under agreements to resell                  157,734        196,859         
  Interest-bearing deposits in other banks       50,000             --         
  Trading account securities                        422          1,417         
------------------------------------------  ---------------------------         
      Total temporary investments               208,156        198,276         
------------------------------------------  ---------------------------         
Assets available for sale:         
  Securities (note 5):         
    U.S. Government and agencies              2,342,541      2,516,781         
    States and political subdivisions           124,380        142,530         
    Other                                     1,187,966        827,070         
------------------------------------------  ---------------------------         
      Total securities available for sale     3,654,887      3,486,381         
------------------------------------------  ---------------------------         
  Loans                                          15,653          2,186         
------------------------------------------  ---------------------------         
      Total assets available for sale         3,670,540      3,488,567         
------------------------------------------  ---------------------------         
Loans (note 6):                                       
  Commercial and commercial real estate       1,984,393      1,879,499         
  Construction                                  290,184        305,457         
  Residential real estate                     1,609,998      1,556,243         
  Consumer second mortgage                      613,097        552,301         
  Installment                                 1,046,536        871,115         
  Bank card                                     756,952        605,292         
------------------------------------------  ---------------------------         
      Total loans                             6,301,160      5,769,907         
  Allowance for loan losses (note 7)           (110,000)      (110,000)         
------------------------------------------  ---------------------------         
      Net loans                               6,191,160      5,659,907         
------------------------------------------  ---------------------------         
Accrued interest receivable                      67,436         59,933         
Premises and equipment, net (note 8)            152,879        147,177         
Due from customers on acceptances                18,741         13,663         
Other assets (notes 6, 9 and 12)                163,482        211,836         
------------------------------------------  ---------------------------         
      Total assets                          $10,810,974    $10,054,172         
------------------------------------------  ============    ==========         
         
Liabilities                                     1995           1994         
-----------------------------------------------------------------------         
Deposits:         
  Demand                                     $1,037,906       $953,655         
  Interest checking                             687,505        649,310         
  Regular savings                               727,951        770,663         
  Consumer certificates                       4,134,031      3,630,232         
  Money market accounts                       1,050,158        976,188         
  Certificates of deposit $100,000 and over     348,347        247,196         
------------------------------------------  ---------------------------         
    Total deposits                            7,985,898      7,227,244         
------------------------------------------  ---------------------------         
Borrowings:         
  Federal funds purchased and securities sold         
    under agreements to repurchase (note 10)  1,041,951      1,040,870         
  Other short-term borrowings (note 10)          88,045         61,998         
  Medium-term notes (note 11)                   252,250        561,500         
  Federal Home Loan Bank borrowings (note 11)   350,700        236,500         
  Long-term debt (note 11)                      150,386        150,440         
  Capitalized lease obligations (note 8)          7,746          8,167         
------------------------------------------  ---------------------------         
    Total borrowings                          1,891,078      2,059,475         
------------------------------------------  ---------------------------         
Dividends payable                                12,052         11,001         
Accrued interest payable                         37,911         36,211         
Bank acceptances outstanding                     18,741         13,663         
Accounts payable and accrued liabilities          
  (note 14)                                      38,747         83,506         
------------------------------------------  ---------------------------         
    Total liabilities                         9,984,427      9,431,100         
------------------------------------------  ---------------------------         
Shareholders' Equity         
-----------------------------------------------------------------------         
Preferred stock, none issued (note 13)               --             --         
Common stock, par value $5 per share, authorized          
  100,000,000 shares, shares issued 1995 - 40,192,879;          
  1994 - 39,324,228 (notes 13 and 15)           200,964        196,621         
Capital surplus                                 195,151        180,458         
Retained earnings (note 2)                      406,567        348,219         
Unrealized gains (losses) on securities          
  available for sale, net of income taxes        23,865       (102,226)         
------------------------------------------  ---------------------------         
    Total shareholders' equity                  826,547        623,072         
------------------------------------------  ---------------------------         
Commitments and contingent liabilities (notes 8, 14 and 17)         
    Total liabilities and shareholders'         
      equity                                $10,810,974    $10,054,172         
------------------------------------------  ============    ==========         
-----------------------------------------------------------------------         
The notes are an integral part of the financial statements.          
</TABLE>         
         
                 
                  
<PAGE>                  
<TABLE>                  
                  
STATEMENT OF CONSOLIDATED INCOME                  
-------------------------------------------------------------------------------------    
Central Fidelity Banks, Inc. and Subsidiaries                  
(In Thousands, except share and per share data) Year Ended December 31,                  
                  
<CAPTION>                  
                                                     1995        1994        1993                  
<S>                                               <C>         <C>         <C>                  
-------------------------------------------------------------------------------------    
Income From Earning Assets                                                       
-------------------------------------------------------------------------------------    
Interest and fees on loans                          $527,965    $441,728    $359,504                  
Interest on securities available for sale:                  
  U.S. Government and agencies                       166,436     160,822      45,869    
  States and political subdivisions                    7,430       8,205       2,059    
  Other                                               66,040      49,173      11,886    
Interest on loans available for sale                     403         432         690    
Interest on investment securities:                  
  U.S. Government and agencies                            --          --     102,028    
  States and political subdivisions                       --          --       6,943    
  Other                                                   --          --      79,221    
Interest on money market investments                   4,652       5,433       5,752    
Interest on trading account securities                    63          41          34    
-------------------------------------------------------------------------------------    
    Total income from earning assets                 772,989     665,834     613,986    
-------------------------------------------------------------------------------------    
Interest Expense                  
-------------------------------------------------------------------------------------    
Interest on deposits (note 16)                       319,725     243,632     239,178    
Interest on federal funds purchased and securities    
  sold under agreements to repurchase                 57,678      44,171      31,752    
Interest on other short-term borrowings                3,359       1,663         663    
Interest on medium-term notes                         19,311      25,403       9,949    
Interest on Federal Home Loan Bank borrowings         20,539       6,406          --    
Interest on long-term debt                            10,978       8,681       7,405    
Interest on capitalized lease obligations                705         735         784    
-------------------------------------------------------------------------------------    
    Total interest expense                           432,295     330,691     289,731    
-------------------------------------------------------------------------------------    
Net interest income                                  340,694     335,143     324,255    
Provision for loan losses (note 7)                    26,713      24,359      79,509    
-------------------------------------------------------------------------------------    
    Net income from earning assets                   313,981     310,784     244,746    
-------------------------------------------------------------------------------------    
Noninterest Income    
-------------------------------------------------------------------------------------    
Trust income                                          14,943      13,926      13,621    
Deposit fees and charges                              35,150      34,557      33,898    
Profits (losses) on securities available for sale                   
  and trading account securities (note 5)              3,253     (25,984)      3,695    
Investment securities gains, net (note 5)                 --          --      50,680    
Other income (note 16)                                25,424      35,860      23,909    
-------------------------------------------------------------------------------------    
    Total noninterest income                          78,770      58,359     125,803    
-------------------------------------------------------------------------------------    
Noninterest Expense     
------------------------------------------------------------- -----------------------    
Personnel expense (note 14)                          133,186     127,683     115,917    
Occupancy and equipment expense                       42,979      41,653      38,752    
FDIC insurance expense                                11,164      14,910      14,612    
Other real estate expense                              1,500      11,786      15,108    
Other expense (note 16)                               49,500      49,191      38,909    
-------------------------------------------------------------------------------------    
    Total noninterest expense                        238,329     245,223     223,298    
-------------------------------------------------------------------------------------    
Earnings    
------------------------------------------------------------- -----------------------    
Income before income taxes                           154,422     123,920     147,251    
Income tax expense (note 12)                          49,052      39,056      44,334    
-------------------------------------------------------------------------------------    
Net Income                                          $105,370     $84,864    $102,917    
--------------------------------------------------  ========    ========    ========    
Earnings Per Share    
-------------------------------------------------------------------------------------    
Net income                                             $2.65       $2.17       $2.66    
Average shares outstanding                        39,784,750  39,163,599  38,737,447    
-------------------------------------------------------------------------------------    
The notes are an integral part of the financial statements.    
</TABLE>                  
                  
                  
    
<PAGE>    
<TABLE>    
    
STATEMENT OF CONSOLIDATED CASH FLOWS    
--------------------------------------------------------------------------------------    
Central Fidelity Banks, Inc. and Subsidiaries    
(In Thousands) Year Ended December 31,     
    
<CAPTION>    
                                                        1995       1994       1993    
<S>                                                          <C>        <C>        <C>    
--------------------------------------------------------------------------------------    
Operating Activities    
--------------------------------------------------------------------------------------    
Net income                                             $105,370    $84,864   $102,917    
Adjustments to reconcile net income to net cash provided by     
  operating activities:    
    Provision for loan losses                            26,713     24,359     79,509    
    Depreciation of premises and equipment               15,792     15,248     13,879    
    Net amortization of premium and accretion of discount on investment     
      securities and securities available for sale       (5,860)     1,132     19,727    
    Gains on investment securities                           --         --    (50,680)    
    (Gains) losses on securities available for sale      (3,822)    25,292     (4,182)    
    Deferred income taxes                                 2,024      1,272     (5,168)    
    (Increase) decrease in trading account securities       995         88       (761)    
    Originations of loans available for sale            (71,511)   (24,220)  (127,263)    
    Purchases of loans available for sale               (54,528)   (24,510)   (81,075)    
    Proceeds from sales of loans available for sale     112,646     84,164    170,490    
    (Increase) decrease in accrued interest receivable   (7,503)     5,821      2,355    
    Increase in accrued interest payable                    892     11,063      8,288    
    Other, net                                          (38,234)   (77,235)   136,411    
--------------------------------------------------------------------------------------    
      Net cash provided by operating activities          82,974    127,338    264,447    
--------------------------------------------------------------------------------------    
Investing Activities    
--------------------------------------------------------------------------------------    
Purchases of securities available for sale           (1,033,292)(2,436,679)(1,745,356)    
Proceeds from sales of securities available for sale    582,085  2,266,537    532,910    
Proceeds from maturities and repayments of securities available     
  for sale                                              486,370    529,629    503,839    
Purchases of investment securities                           --         --   (617,998)    
Proceeds from sales of investment securities                 --         --    626,426    
Proceeds from maturities and repayments of investment    
  securities                                                 --         --    608,655    
Net increase in loans                                  (561,865)(1,020,589)  (938,099)    
Purchases of premises and equipment                     (19,725)   (16,548)   (13,469)    
Proceeds from the disposition of premises and equipment     539        960        657    
Proceeds from the disposition of foreclosed properties   13,743     26,917     25,794    
Net cash received in acquisitions                       413,022         --         --    
--------------------------------------------------------------------------------------    
      Net cash used by investing activities            (119,123)  (649,773)(1,016,641)    
--------------------------------------------------------------------------------------    
Financing Activities    
--------------------------------------------------------------------------------------    
Net increase (decrease) in demand, interest checking and regular    
  savings deposits                                       79,733    (79,038)   256,887    
Net increase (decrease) in consumer certificates         51,227    874,145     (2,752)    
Net increase (decrease) in money market accounts         73,970    (33,389)  (170,690)    
Net increase (decrease) in certificates of deposit     
  $100,000 and over                                     101,151   (190,490)   (99,882)    
Net increase (decrease) in short-term borrowings         27,128   (381,386)   282,512    
Proceeds from medium-term notes and FHLB borrowings     114,200    386,500    411,500    
Payments on medium-term notes and FHLB borrowings      (309,250)        --         --    
Proceeds from long-term debt                                 --        100         --    
Payments on long-term debt and capitalized lease     
  obligations                                              (433)    (1,396)    (7,871)    
Proceeds from issuance of common stock                   19,036      4,044     14,322    
Cash dividends                                          (45,971)   (42,645)   (37,110)    
--------------------------------------------------------------------------------------    
      Net cash provided by financing activities         110,791    536,445    646,916    
--------------------------------------------------------------------------------------    
      Increase (decrease) in cash and cash equivalents   74,642     14,010   (105,278)    
      Cash and cash equivalents at beginning of year    471,672    457,662    562,940    
--------------------------------------------------------------------------------------    
      Cash and cash equivalents at end of year         $546,314   $471,672   $457,662    
-----------------------------------------------------  ========   ========   ========    
--------------------------------------------------------------------------------------    
The notes are an integral part of the financial statements.    
</TABLE>    
    
    
<PAGE>    
<TABLE>    
    
STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS' EQUITY    
----------------------------------------------------------------------------------------------    
Central Fidelity Banks, Inc. and Subsidiaries    
(In Thousands)    
    
<CAPTION>    
                                                                       Unrealized    
                                                                      Gains (Losses)    
                                                                      on Securitie   Total    
                                   Common   Common   Capital Retained  Available  Shareholders    
                                   Shares    Stock   Surplus Earnings   for Sale     Equity    
<S>                               <C>      <C>      <C>      <C>      <C>         <C>    
----------------------------------------------------------------------------------------------    
Year Ended December 31, 1993    
----------------------------------------------------------------------------------------------    
Balance at beginning of year        38,432 $192,159 $166,554 $243,274         $--    $601,987    
Net income                              --       --       --  102,917          --     102,917    
Common stock issued under Plans        591    2,955   11,367       --          --      14,322    
Cash dividends declared on    
  common stock ($1.00 per share)        --       --       --  (38,942)         --     (38,942)    
Unrealized gains on securities available    
  for sale, net of income taxes of    
  $24,690                               --       --       --       --      45,853      45,853    
----------------------------------------------------------------------------------------------    
Balance at end of year              39,023  195,114  177,921  307,249      45,853     726,137    
----------------------------------------------------------------------------------------------    
Year ended December 31, 1994    
----------------------------------------------------------------------------------------------    
Net income                              --       --       --   84,864          --      84,864    
Common stock issued under Plans        301    1,507    2,537       --          --       4,044    
Cash dividends declared on    
  common stock ($1.12 per share)        --       --       --  (43,894)         --     (43,894)    
Change in unrealized gains on securities    
  available for sale, net of income taxes    
  of $79,735                            --       --       --       --    (148,079)   (148,079)    
----------------------------------------------------------------------------------------------    
Balance at end of year              39,324  196,621  180,458  348,219    (102,226)    623,072    
----------------------------------------------------------------------------------------------    
Year ended December 31, 1995    
----------------------------------------------------------------------------------------------    
Net income                              --       --       --  105,370          --     105,370    
Common stock issued under Plans        869    4,343   14,693       --          --      19,036    
Cash dividends declared on    
  common stock ($1.18 per share)        --       --       --  (47,022)         --     (47,022)    
Change in unrealized losses on securities    
  available for sale, net of income taxes    
  of $67,895                            --       --       --       --     126,091     126,091    
----------------------------------------------------------------------------------------------    
Balance at end of year              40,193 $200,964 $195,151 $406,567     $23,865    $826,547    
----------------------------------  ====== ======== ======== ========    ========    ========    
----------------------------------------------------------------------------------------------    
The notes are an integral part of the financial statements.    
</TABLE>    
    
<PAGE>    
<TABLE>    
    
COMBINED BALANCE SHEET    
---------------------------------------------------------------------    
Subsidiary Banks of Central Fidelity Banks, Inc.    
    
(In Thousands) December 31,    
<CAPTION>    
                                                  1995       1994    
<S>                                           <C>         <C>    
---------------------------------------------------------------------    
Assets    
---------------------------------------------------------------------    
Cash and due from banks (note 4)                 $338,497   $274,746    
Temporary investments:    
  Federal funds sold and securities    
    purchased under agreements to resell          120,130    166,831    
   Interest-bearing deposits in other banks        50,000         --    
  Trading account securities                          422      1,417    
---------------------------------------------------------------------    
    Total temporary investments                   170,552    168,248    
---------------------------------------------------------------------    
Assets available for sale:    
  Securities                                    3,644,102  3,480,617    
  Loans                                            15,653      2,186    
---------------------------------------------------------------------    
    Total assets available for sale             3,659,755  3,482,803    
---------------------------------------------------------------------    
Loans (note 6)                                  6,301,160  5,769,907    
  Allowance for loan losses (note 7)             (110,000)  (110,000)    
---------------------------------------------------------------------    
    Net loans                                   6,191,160  5,659,907    
---------------------------------------------------------------------    
Accrued interest receivable                        67,399     59,915    
Premises and equipment, net (note 8)              152,879    147,177    
Due from customers on acceptances                  18,741     13,663    
Other assets (notes 6, 9 and 12)                  144,603    184,946    
---------------------------------------------------------------------    
    Total assets                              $10,743,586 $9,991,405    
---------------------------------------------- ========== ==========    
Liabilities    
---------------------------------------------------------------------    
Deposits:    
  Demand                                       $1,037,911   $953,665    
  Interest checking                               687,505    649,310    
  Regular savings                                 727,951    770,663    
  Consumer certificates                         4,134,031  3,630,232    
  Money market accounts                         1,050,158    976,188    
  Certificates of deposit $100,000 and over       348,347    247,196    
---------------------------------------------------------------------    
    Total deposits                              7,985,903  7,227,254    
---------------------------------------------------------------------    
Borrowings:     
  Federal funds purchased and securities    
    sold under agreements to repurchase         1,058,465  1,060,229    
  Other short-term borrowings                      54,963     36,801    
  Medium-term notes (note 11)                     252,250    561,500    
  Federal Home Loan Bank borrowings (note 11)     350,700    236,500    
  Note payable to parent company                  150,000    150,000    
  Long-term debt (note 11)                            386        440    
  Capitalized lease obligations (note 8)            7,746      8,167    
---------------------------------------------------------------------    
    Total borrowings                            1,874,510  2,053,637    
---------------------------------------------------------------------    
Accrued interest payable                           37,884     36,190    
Bank acceptances outstanding                       18,741     13,663    
Accounts payable and accrued liabilities (note 14) 38,947     82,054    
---------------------------------------------------------------------    
    Total liabilities                           9,955,985  9,412,798    
---------------------------------------------------------------------    
Shareholder's Equity    
---------------------------------------------------------------------    
Common stock                                      167,275    167,275    
Capital surplus                                   174,376    174,376    
Retained earnings (note 2)                        422,085    339,182    
Unrealized gains (losses) on securities available for sale,    
  net of income taxes                              23,865   (102,226)    
---------------------------------------------------------------------    
    Total shareholder's equity                    787,601    578,607    
---------------------------------------------------------------------    
Commitments and contingent liabilities (notes 8, 14 and 17)    
    Total liabilities and shareholder's equity$10,743,586 $9,991,405    
---------------------------------------------- ========== ==========    
---------------------------------------------------------------------    
The notes are an integral part of the financial statements.    
</TABLE>    
                  
                  
    
<PAGE>  
         
NOTES TO FINANCIAL STATEMENTS  
-----------------------------------------------------------------------  
Central Fidelity Banks, Inc. and Subsidiaries  
         
NOTE 1. Nature of Operations and Significant Accounting  
Policies  
         
     Central Fidelity Banks, Inc. ("Central Fidelity" or the "Company")  
and its subsidiaries operate within the commercial banking industry.  
The Company serves the marketplace primarily through its wholly-owned  
banking subsidiary, Central Fidelity National Bank, a national banking  
association (the "Bank"). The Company, through the Bank and its other  
subsidiaries, provides a wide range of financial services, including a  
variety of deposit accounts, as well as, commercial, consumer and mortgage  
lending. The Company also engages in limited international banking  
activities, primarily in connection with foreign trade financing for  
Virginia based companies.  In addition to commercial activities, the  
Company generates noninterest income by sales of trust and fiduciary  
services, and other investment services.  
         
     The consolidated financial statements include the accounts and  
results of operations of Central Fidelity and its subsidiaries, all of  
which are wholly owned. The Combined Balance Sheet includes the accounts  
of the bank subsidiaries only.  
         
     The accounting and reporting policies used in preparing these  
financial statements conform to generally accepted accounting principles  
and to general practices within the industry. Of necessity, certain  
amounts in the financial statements are based upon management's estimates  
and assumptions. Actual results could differ from those estimates.  
         
ACCOUNTING CHANGES - During the fourth quarter of 1995, the Company  
prospectively adopted Statement of Financial Accounting Standards No. 122,  
"Accounting for Mortgage Servicing Rights" (SFAS 122). SFAS 122 requires  
that the cost of mortgage loans originated or purchased with a definitive  
plan to sell the loans and retain the mortgage servicing rights be  
allocated between the loans and the servicing rights based on their  
estimated fair values at the date of origination, purchase, or sale. The  
impact of adopting SFAS 122 was not material to the consolidated financial  
statements as of and for the year ended December 31, 1995.  
         
     On January 1, 1995, the Company adopted Statement of Financial  
Accounting Standards No. 114, "Accounting by Creditors for Impairment of a  
Loan" (SFAS 114), as amended by SFAS 118, "Accounting by Creditors for  
Impairment of a Loan--Income Recognition and Disclosures," collectively  
SFAS 114. SFAS 114 requires that impaired loans within the scope of the  
statements be presented in the financial statements at the present value  
of expected future cash flows or at the fair value of the loan's  
collateral. A valuation allowance is required to the extent that such  
measurement is less than the recorded investment. Under this standard a  
loan is considered impaired based on current information and events, if it  
is probable that the Company will be unable to collect the scheduled  
payments of principal and interest when due under the contractual terms of  
the loan agreement. Charge-offs for impaired loans occur when the loan, or  
portion of the loan is determined to be uncollectible, as is the case for  
all loans. The effect of the adoption of SFAS 114 was not material to the  
Company's consolidated financial statements as of and for the year ended  
December 31, 1995.  
         
     As of December 31, 1993, the Company adopted Statement of Financial  
Accounting Standards No. 115, "Accounting for Certain Investments in Debt  
and Equity Securities" (SFAS 115). SFAS 115 requires investments to be  
classified as held-to-maturity, trading, or available-for-sale securities.  
       
     During the first quarter of 1993, the Company adopted Statement of  
Financial Accounting Standards No. 109, "Accounting for Income Taxes"
(SFAS 109), retroactive to January 1, 1983. SFAS 109 changes the method of  
accounting for income taxes from the deferred method to the asset and  
liability method. The net cumulative effect of this change in accounting  
for income taxes was $1,948,000 as of January 1, 1983.  
         
     As of January 1, 1993, the Company adopted Statement of Financial  
Accounting Standards No. 106, "Employers" Accounting for Postretirement  
Benefits Other Than Pensions" (SFAS 106), for the Medicare carve-out  
health insurance coverage provided to its qualifying retirees. SFAS 106  
requires that the expected cost of postretirement benefits be charged to  
expense during the period that eligible employees render such service.  
        
CASH FLOW INFORMATION - For purposes of the Statement of Consolidated Cash  
Flows, the Company considers amounts due from banks and money market  
investments which have original maturities of three months or less to be  
cash equivalents. During the years ended December 31, 1995, 1994 and 1993,  
cash paid for interest was $430,595,000, $319,628,000 and $281,443,000,  
and cash paid for income taxes was $36,569,000, $41,372,000 and  
$53,485,000, respectively.  During 1995, 1994 and 1993, other assets  
increased as a result of loan foreclosures in the amount of $5,659,000,  
$6,059,000 and $40,408,000, respectively, representing non-cash investing  
activities for purposes of the Statement of Consolidated Cash Flows.  
         
MONEY MARKET INVESTMENTS - Money market investments are carried at cost,  
which approximates fair value. These assets are highly liquid short-term  
investments generally maturing within one year which arise from Central  
Fidelity's and its subsidiary banks' money market activities. They include  
the overnight investment of excess reserves, securities purchased under  
agreements to resell, and the investment in certificates of deposit of  
unrelated banks.  
         
TRADING ACCOUNT SECURITIES - Trading account securities are intended to be  
sold in the near term and are carried at fair value. Certain derivative  
financial instruments, such as interest rate futures, options, and forward  
contracts may be used in trading activities. Gains and losses arising from  
the sale of trading account securities and market adjustments are included  
in "Profits (losses) on securities available for sale and trading account  
securities."  
         
SECURITIES AVAILABLE FOR SALE - The Company's securities are classified as  
available for sale and are accounted for at fair value.  Unrealized gains  
and losses are reported in a separate component of shareholders' equity in  
the Consolidated Balance Sheet. Securities are used as part of the  
Company's asset/liability strategy and may be sold in response to changes  
in interest rates, prepayment risk, the need or desire to increase  
capital, satisfy regulatory requirements or other similar factors. Prior  
to the adoption of SFAS 115, certain securities were classified as  
investment securities and carried at cost adjusted for amortization of  
premiums and accretion of discounts.  Gains and losses arising from the  
sale of securities available for sale and declines in values determined to  
be other than temporary are included in "Profits (losses) on securities  
available for sale and trading account securities."
         
LOANS AVAILABLE FOR SALE - Loans available for sale are carried at the  
lower of aggregate cost or fair value. Realized gains and losses and  
adjustments to market are classified as other income.  
       
         
LOANS - Interest on loans is credited to income based on the principal  
amounts outstanding during the period. Origination and commitment fees and  
all related costs are deferred, and the net amount is amortized over the  
contractual or estimated life of the loans, if shorter.  
         
     The policy with respect to interest accruals specifies that interest  
will stop being accrued on any loan, except installment and bank card  
loans, when there appears to be no reasonable expectation that the  
borrower will be able to pay the interest up to date within a reasonable  
time period and the value of the collateral is not at least equal to the  
amount at which the loan plus all interest accrued is recorded. Interest  
income is recognized on these loans only when received in cash. A loan  
will remain on a nonaccrual status until the loan is current, as to  
payment of both interest and principal, and the borrower demonstrates the  
ability to pay and remain current. Since installment and bank card loan  
payments include both interest and principal, the policy with respect to  
installment and bank card loans requires that a loan be charged off when  
it is over 120 and 180 days past due, respectively.  Accruals of interest  
on these loans are not discontinued prior to charge off.  
         
ALLOWANCE FOR LOAN LOSSES - The allowance for loan losses consists of the  
cumulative effect of the provision for loan losses, less net loans charged  
off. The provision for loan losses charged to operating expense is the  
amount necessary, in management's judgment, to maintain the allowance at a  
level it believes sufficient to cover losses in collections of loans. The  
provision is based on such factors that, in management's judgment, warrant  
current recognition in providing an adequate allowance. Principal factors  
in management's analysis of the adequacy of the allowance are: specific  
knowledge and historical relationships among loans outstanding, loan loss  
experience and the current level of the allowance; a continuing evaluation  
of the present and anticipated future economic environment for the nation  
and for the various business sectors of the Company's trade area; and  
reviews of the loan portfolio quality by the Company's loan review staff,  
the regulatory authorities, and external auditors.  
         
PREMISES AND EQUIPMENT - Premises and equipment are stated at cost less  
accumulated depreciation and amortization. Additions, major replacements,  
and improvements to buildings and equipment are added to the asset  
accounts at cost.  
         
     Certain noncancellable leases, for the financing of premises and   
equipment, have been capitalized and are classified as premises and  
equipment in the accompanying balance sheets. Related amounts representing  
capitalized lease obligations are included in the accompanying balance  
sheets as a separate liability and are amortized using the interest method  
to allocate payments between principal reduction and interest expense. The  
initial carrying amounts represent the present value of the future rental  
payments, discounted at the lower of the incremental borrowing rate of the  
lessee or the interest rate implicit in the lease.  
         
     Depreciation and amortization are computed and charged to expense  
over the estimated useful lives of the assets, principally on a straight-  
line method. Rates of depreciation are based on the following lives:  
buildings, twenty to fifty years; leasehold improvements, five to twenty  
years; and furniture and equipment, three to fifteen years. Capital leases  
and leasehold improvements are amortized to expense over the terms of  
their respective leases or the estimated useful lives of the improvements,  
whichever is shorter. Gains and losses on dispositions are reflected in  
operations. Maintenance, repairs and minor replacements are charged to  
expense.  
         
FORECLOSED PROPERTIES - Foreclosed properties, classified in "Other  
assets" in the accompanying Consolidated Balance Sheet, consist primarily  
of real estate held for resale which was acquired through foreclosure on  
loans secured by real estate. Foreclosed properties are carried at the  
lower of cost or appraised market value less estimated disposal costs.  
Writedowns to market value at the date of foreclosure are charged to the  
allowance for loan losses. Subsequent declines in market value are charged  
to expense.  
         
DEPOSIT INTANGIBLES AND GOODWILL - Deposit base intangibles and goodwill  
are amortized over the expected periods of benefit on a straight-line  
basis, and classified as "Other assets" in the accompanying Consolidated  
Balance Sheet.  
         
MORTGAGE SERVICING RIGHTS - Upon adoption of SFAS 122 in the fourth  
quarter of 1995, the cost of mortgage loans originated or purchased with a  
definitive plan to sell the loans and retain the mortgage servicing rights  
are allocated between the loans and the servicing rights based on their  
estimated fair values at the date of origination, purchase or sale.  
Mortgage servicing rights are amortized in proportion to, and over the  
period of, estimated net servicing income, and classified as "Other  
assets" in the accompanying Consolidated Balance Sheet. Impairment is  
evaluated and measured based on a stratification of the mortgage servicing  
rights in accordance with the risk characteristics of the underlying  
loans, including loan type, location, term, and date of origination.  
       
DERIVATIVE FINANCIAL INSTRUMENTS - The Company mainly utilizes interest  
rate swaps to manage its interest rate exposure. Income or expense  
associated with interest rate swap agreements is recognized on the accrual  
basis over the life of the swap agreement as a component of interest  
income or interest expense. Gains and losses on early terminations of  
interest rate swap agreements are recognized over the remaining life of  
the underlying asset or liability. The Company did not terminate any  
interest rate swap agreements prior to contractual maturity in 1995, 1994  
or 1993.  
         
INCOME TAXES - Central Fidelity accounts for certain income and expense  
items differently for income tax purposes than for financial reporting  
purposes.  Provisions for deferred taxes are made in recognition of these  
timing differences. Central Fidelity and its subsidiaries file  
consolidated federal income tax returns.  
         
PENSION PLAN - The plan covers substantially all employees. Costs of the  
plan are determined by independent actuaries using the projected unit  
credit method. The plan is funded on a current basis to the extent  
deductible under existing federal tax regulations.  
         
STOCK OPTIONS - At the time options are exercised, the par value of the  
shares is credited to common stock, and the excess of the proceeds over  
the par value is credited to capital surplus. No charges or credits to  
income have been made with respect to the options since the option price  
was the same as fair value at the date of grant.  
         
EARNINGS PER SHARE - Earnings per share have been computed on the basis of  
the weighted average number of shares outstanding during the year. The  
assumed exercise of stock options has not been included in the  
computations because the resulting dilution is not material.  
         
     On January 13, 1993, the Board of Directors of the Company declared a  
3-for-2 stock split in the form of a dividend payable on February 22, 1993  
to shareholders of record January 29, 1993.  
         
DIVIDENDS - Dividends are paid to the Company by its subsidiaries in  
amounts sufficient to cover corporate expenses and dividends paid to  
shareholders. Dividends are subject to the financial condition of the  
subsidiaries, regulatory limitations, and management's judgment as to the  
desirability of utilizing alternative sources of funds.  
         
TRUST ASSETS AND INCOME - Assets held by one of the commercial banking  
subsidiaries in a fiduciary, agency or safekeeping capacity for customers  
are not included as assets in the accompanying Consolidated Balance Sheet.  
At December 31, 1995, such assets amounted to $7.8 billion. Trust service  
income is recognized primarily on the accrual basis.  
         
RECLASSIFICATIONS - Certain previously reported amounts have been  
reclassified to conform to current presentations.  
         
                  
                  
<PAGE>                  
<TABLE>                  
                  
NOTE 2. Parent Company Financial Information                  
                  
  Condensed financial information of Central Fidelity Banks, Inc.                  
(Parent Company) is presented below:                  
                  
Balance Sheet                  
(In Thousands)                  
December 31,                  
<CAPTION>                  
                                                                   1995          1994                  
<S>                                                            <C>             <C>                  
----------------------------------------------------------------------------------------                  
Assets:                  
  Cash                                                                 $21          $26                  
  Securities purchased under agreements to resell                  
    and other money market investments                              51,514       46,359                  
  Securities available for sale                                     10,785        5,764                  
  Investments in subsidiaries, at equity:                  
    Bank                                                           787,600      578,607                  
    Bank-related                                                     3,978        3,762                  
  Notes receivable from subsidiaries                               150,000      150,500                  
  Other assets                                                      21,276       28,830                  
-----------------------------------------------------------    ------------------------------                  
      Total assets                                              $1,025,174     $813,848                  
-----------------------------------------------------------      =========     ========                  
Liabilities:                  
  Commercial paper (note 10)                                       $33,082      $25,197                  
  Securities sold under agreements to repurchase                     1,260        1,460                  
  Long-term debt (note 11)                                         150,000      150,000                  
  Other liabilities                                                 14,285       14,119                  
-----------------------------------------------------------    ------------------------------                  
      Total liabilities                                            198,627      190,776                  
Shareholders' equity                                               826,547      623,072                  
-----------------------------------------------------------    ------------------------------                  
      Total liabilities and shareholders' equity                $1,025,174     $813,848                  
-----------------------------------------------------------      =========     ========                  
----------------------------------------------------------------------------------------                  
</TABLE>                  
                  
                  
<PAGE>                  
<TABLE>                  
                  
NOTE2                  
Statement of Income                  
                  
(In Thousands)                  
Year Ended December 31,                  
<CAPTION>                  
                                                    1995           1994          1993                  
<S>                                               <C>          <C>             <C>                  
----------------------------------------------------------------------------------------                  
Income:                  
  Dividends from subsidiary bank                   $24,000         $45,000      $45,084                  
  Other                                             15,683          14,581       13,972                  
---------------------------------------------------------------------------    --------------                  
      Total income                                  39,683          59,581       59,056                  
---------------------------------------------------------------------------    --------------                  
Expense:                  
  Interest                                          13,910          13,085       13,133                  
  Other                                              4,233           4,850        5,030                  
---------------------------------------------------------------------------    --------------                  
      Total expense                                 18,143          17,935       18,163                  
-----------------------------------------------------------    ------------    --------------                  
Income before income taxes and equity in                  
  undistributed net income of subsidiaries          21,540          41,646       40,893                  
Income tax benefit                                    (712)         (1,143)      (2,035)                  
---------------------------------------------------------------------------    --------------                  
Income before equity in undistributed                  
  net income of subsidiaries                        22,252          42,789       42,928                  
Equity in undistributed net income of subsidiaries  83,118          42,075       59,989                  
---------------------------------------------------------------------------    --------------                  
      Net income                                  $105,370         $84,864     $102,917                  
--------------------------------------------------========         =======     ========                  
----------------------------------------------------------------------------------------                  
</TABLE>                  
                  
                  
<PAGE>                  
<TABLE>                  
NOTE2                     
Statement of Cash Flows                  
                  
(In Thousands)                  
Year Ended December 31,                  
<CAPTION>                  
                                                                   1995          1994         1993    
<S>                                                            <C>             <C>          <C>     
-----------------------------------------------------------------------------------------------------    
Operating activities:                  
  Net income                                                      $105,370      $84,864     $102,917     
  Adjustments to reconcile net income to net cash provided     
    by operating activities:                  
      Equity in undistributed net income of subsidiaries           (83,118)     (42,075)     (59,989)    
      (Increase) decrease in other assets                            7,554       (6,340)         914    
      Other, net                                                      (885)        (362)       1,767     
-----------------------------------------------------------------------------  ----------------------     
        Net cash provided by operating activities                   28,921       36,087       45,609    
-----------------------------------------------------------------------------  ----------------------    
Investing activities:                  
  Purchase of securities available for sale                        (63,232)     (11,479)      (5,955)    
  Proceeds from sales of securities available for sale               9,145       10,965       11,962    
  Proceeds from maturities and repayments of securities                  
    available for sale                                              49,066          425        1,500    
  Purchase of investment securities                                     --           --       (7,565)    
  Proceeds from sales of investment securities                          --           --        5,890    
  Repayment of note receivable from subsidiary                         500           --           --    
-----------------------------------------------------------------------------  ----------------------    
        Net cash provided (used) by investing activities            (4,521)         (89)       5,832    
-----------------------------------------------------------------------------  ----------------------    
Financing activities:                  
  Net increase (decrease) in short-term borrowings                   7,685        7,822       (2,460)    
  Payments on long-term debt                                            --           --       (6,000)    
  Proceeds from issuance of common stock                            19,036        4,044       14,322    
  Cash dividends                                                   (45,971)     (42,645)     (37,110)    
-----------------------------------------------------------------------------  ----------------------    
        Net cash used by financing activities                      (19,250)     (30,779)     (31,248)    
-----------------------------------------------------------------------------  ----------------------    
        Increase in cash and cash equivalents                        5,150        5,219       20,193    
        Cash and cash equivalents at beginning of year              46,385       41,166       20,973    
-----------------------------------------------------------------------------  ----------------------    
        Cash and cash equivalents at end of year                   $51,535      $46,385      $41,166    
---------------------------------------------------------------   ========     ========     ========    
-----------------------------------------------------------------------------------------------------    
     Central Fidelity and each of its subsidiaries are affiliates within the meaning of Section     
23A of the Federal Reserve Act. Accordingly, they are subject to the limitations specified in     
such section on the making of loans or extension of credit to, or purchase of securities under     
repurchase agreement from, any of the subsidiaries within the affiliate group. Therefore,     
substantially all of the net assets of the affiliate group are restricted from use by the     
Company in the form of loans or advances. Dividends, however, may be paid to the Company by     
its bank subsidiary under formulas established by the appropriate regulatory authorities.     
These formulas contemplate that the current year earnings and earnings retained for the two     
preceding years may be paid to the Parent  Company without regulatory approval. In 1996, the     
subsidiary bank can initiate dividend payments without said regulatory approvals of $123,317,000,     
plus an additional amount equal to their net earnings for 1996 up to the date of any such    
dividend declaration. In addition, the limitations on dividends paid by the Company on                  
common stock to shareholders for the current and two immediately preceding years may not exceed                  
consolidated net income of the Company and its subsidiaries for the same period.                  
                  
     Substantially all of the retained earnings of the Parent Company are represented by     
undistributed earnings of subsidiaries.                  
                  
</TABLE>                  
        
        
<PAGE>        
        
NOTE 3. ACQUISITIONS        
        
     On June 9, 1995, the Bank acquired core deposits, other miscellaneous  
assets and liabilities of Household Bank, f.s.b. ("Household"), a Virginia  
subsidiary of Household International, Inc., a Chicago, Illinois based  
financial services company. Total deposits of approximately $453 million  
and a total of fourteen branch offices in Northern Virginia were acquired.  
The offices are located in the city of Alexandria, and counties of  
Arlington and Fairfax. The $36,272,000 excess of the fair value of  
liabilities assumed over the fair value of assets acquired and cash  
received from Household is classified as deposit intangibles in "Other  
assets" in the Consolidated Balance Sheet and is being amortized over  
fifteen years.  
        
        
        
<PAGE>          
          
NOTE 4. RESTRICTIONS ON CASH AND DUE FROM BANK ACCOUNTS  
          
      The Company is required to maintain average reserve balances with  
the Federal Reserve Bank.  The average amount of those reserve balances  
for the years ended December 31, 1995 and 1994 was $58,129,000 and  
$70,285,000, respectively.  
        
        
                  
                 
<PAGE>                 
<TABLE>                 
                 
NOTE 5. Securities Available for Sale                 
                 
     The following table shows amortized cost, fair value and gross unrealized                 
gains and losses of securities available for sale as of December 31, 1995 and 1994:                 
                 
(In Thousands)                 
<CAPTION>                 
-------------------------------------------------------------------------                 
                                U.S.     States &                 
                             Government  Political                 
                             & Agencies Subdivision   Other      Total                 
<S>                          <C>        <C>        <C>        <C>                 
-------------------------------------------------------------------------                 
December 31, 1995:                 
  Amortized cost             $2,319,928   $120,886 $1,177,358 $3,618,172                 
  Fair value                  2,342,541    124,380  1,187,966  3,654,887                 
  Gross unrealized gains         30,906      3,635     13,650     48,191                 
  Gross unrealized losses        (8,293)      (141)    (3,042)   (11,476)                 
                 
December 31, 1994:                 
  Amortized cost             $2,640,414   $145,111   $858,127 $3,643,652                 
  Fair value                  2,516,781    142,530    827,070  3,486,381                 
  Gross unrealized gains          1,169        887        263      2,319                 
  Gross unrealized losses      (124,802)    (3,468)   (31,320)  (159,590)                 
-------------------------------------------------------------------------                 
     Securities available for sale having a fair value of $1,190,594,000 at December     
31, 1995 were pledged to secure deposits and to meet other legal requirements.                 
</TABLE>                 
                 
                 
<PAGE>                 
<TABLE>                 
                 
     The amortized cost and fair value of securities available for sale at December 31, 1995 are                 
shown below by maturity.  The classification of mortgage-backed securities was based on                 
expected maturities, while contractual maturities were used for other debt securities. Expected                 
maturities differ from contractual maturities because borrowers may have the right to call or                 
prepay obligations with or without call or prepayment penalties.                 
                 
(In Thousands)                 
                 
<CAPTION>                 
-------------------------------------------------------------------------                 
                                         Amortized    Fair                 
                                           Cost       Value                 
<S>                                       <C>        <C>                 
-------------------------------------------------------------------------                 
Due in one year or less                   $395,940   $397,191                 
Due after one year through five years    2,450,925  2,479,276                 
Due after five years through ten years     752,703    758,370                 
Due after ten years                         18,604     20,050                 
---------------------------------------------------------------------                 
  Total                                 $3,618,172 $3,654,887                 
----------------------------------------========== ==========                 
-------------------------------------------------------------------------                 
  Proceeds from sales of securities available for sale were $582,085,000 for                 
1995, $2,266,537,000 for 1994 and $532,910,000 for 1993. Gross gains realized                 
on those sales were $6,039,000, $11,555,000 and $4,182,000 for 1995, 1994 and                 
1993, respectively. In 1995 and 1994,  there were $2,217,000 and $36,847,000 of                 
gross losses realized on the sales of securities available for sale, respectively.                 
                 
  During 1993, proceeds from sales of investment securities, carried at amortized cost,                 
were $626,426,000, which resulted in $51,307,000 gross gains and $627,000 gross losses.                 
                 
</TABLE>                 
                 
<PAGE>                 
<TABLE>                 
                 
NOTE 6. LOANS                 
                 
     Nonaccrual loans (principally commercial and construction loans) totalled                  
$48,763,000 at December 31, 1995 and $67,534,000 at December 31, 1994.                 
                 
     Interest on nonaccrual loans not recognized was $5,066,000 in 1995, $6,171,000                 
in 1994 and $5,794,000 in 1993. Interest collected and included in the results of                 
operations on such loans amounted to $1,582,000 in 1995,  $596,000 in 1994, and                 
$706,000 in 1993.                 
                 
     At December 31, 1995 and January 1, 1995, the recorded investment in loans                 
which have been identified as impaired, in accordance with SFAS 114, totalled                 
$47,893,000 and $65,935,000, respectively. SFAS 114 does not apply to                 
larger groups of homogeneous loans such as mortgage, installment and                 
bank card loans, as such loans are collectively evaluated for impairment.                 
The Company, therefore, applies SFAS 114 to commercial and construction                 
loans on a loan-by-loan basis in accordance with its ongoing credit review                 
procedures.                 
                 
     Impaired loans are comprised of:                 
                 
(In Thousands)                 
December 31,                                            1995                 
<CAPTION>                 
<S>                                                   <C>                 
---------------------------------------------------------------                 
Commercial and commercial real estate                  $27,064                 
Construction                                            20,829                 
---------------------------------------------------------------                 
  Total impaired loans                                 $47,893                 
------------------------------------------------------ =======                 
---------------------------------------------------------------                 
     Of total impaired loans, $18,232,000 related to loans with no valuation                 
allowance and $29,661,000 related to loans with a corresponding valuation                 
allowance of $7,316,000. All impaired loans were measured based on                 
the fair value of the collateral.                 
                 
     For the year ended December 31, 1995, the average recorded investment                 
in impaired loans was approximately $53,999,000. Total interest income                 
recognized on impaired loans was $1,679,000, of which $1,582,000 was                 
recognized on a cash basis.                 
                 
     In the ordinary course of business, the Company and its subsidiaries grant                 
loans to directors and executive officers of the Company and to their                 
associates. These loans are made on substantially the same credit terms,                 
including interest rates and collateral, as those prevailing at the time for                 
comparable transactions with unrelated persons, and do not involve more than                 
the normal risk of collectibility. The aggregate dollar amount of these loans was                 
$6,687,000 and $8,154,000 at December 31, 1995 and 1994,  respectively. During                 
1995, $509,000 of new loans were made and  repayments totalled $1,976,000.                 
                 
     As discussed in note 1, the Company adopted SFAS 122, "Accounting for                 
Mortgage Servicing Rights," during the fourth quarter of 1995. The                 
carrying amount and fair value of mortgage servicing rights at December                 
31, 1995 was $1,610,000 and $2,300,000, respectively. The fair value was                 
determined using a discounted cash flow method. Mortgage servicing rights are                 
carried at cost, and classified as "Other assets" in the accompanying                 
Consolidated Balance Sheet. Based on management's impairment analysis                 
as of December 31, 1995, no valuation allowance was deemed necessary.                 
                 
</TABLE>                 
        
<PAGE>        
<TABLE>        
        
NOTE 7. Allowance for Loan Losses        
        
  Following is a summary of the activity in the allowance for loan losses:        
        
(In Thousands)        
Year Ended December 31,        
<CAPTION>        
                                     1995        1994        1993        
<S>                                <C>         <C>         <C>        
--------------------------------------------------------------------        
Balance at January 1               $110,000    $105,000    $101,800        
Provision for loan losses            26,713      24,359      79,509        
--------------------------------------------------------------------        
                                    136,713     129,359     181,309        
Loans charged off                    46,281      34,397      86,728        
Recoveries of loans previously         
  charged off                        19,568      15,038      10,419        
--------------------------------------------------------------------        
  Net charge-offs                    26,713      19,359      76,309        
--------------------------------------------------------------------        
Balance at December 31             $110,000    $110,000    $105,000        
---------------------------------- ========    ========    ========        
--------------------------------------------------------------------        
</TABLE>        
       
        
<PAGE>        
<TABLE>        
        
NOTE 8. Premises and Equipment        
     Premises and equipment included in the Consolidated Balance Sheet are:        
        
(In Thousands)         
December 31,        
<CAPTION>        
                                                        1995      1994        
<S>                                                   <C>       <C>        
-------------------------------------------------------------------------        
Capital leases                                         $11,827   $11,879        
Land                                                    23,938    23,410        
Buildings                                               83,008    77,987        
Furnishings and equipment                              153,269   143,123        
Leasehold improvements                                  32,679    26,902        
Work-in-progress                                         7,492     7,781        
-------------------------------------------------------------------------        
  Total cost                                           312,213   291,082        
Accumulated depreciation and amortization             (159,334) (143,905)        
-------------------------------------------------------------------------        
  Premises and equipment, net                         $152,879  $147,177        
----------------------------------------------------- ========  ========        
-------------------------------------------------------------------------        
        
     The Company has entered into long-term leases for certain premises and equipment used        
by the Company and its subsidiaries. These leases expire at various dates to 2025, and most        
of the leases contain renewal options for periods ranging from 5 to 30 years. In addition,        
certain leases provide that the Company may elect to purchase the leased property at         
the expiration of the initial lease term. Some leases also contain escalation cluases         
whereby the Company's rental payments are adjusted proportionately with increases         
in the consumer price index.        
        
     Premises and equipment include the following amounts for leases that        
capitalized:        
        
(In Thousands)         
December 31,        
<CAPTION>        
                                                        1995      1994        
<S>                                                     <C>       <C>        
-------------------------------------------------------------------------        
Land                                                      $868      $920        
Buildings                                               10,959    10,959        
-------------------------------------------------------------------------        
  Total cost                                            11,827    11,879        
Accumulated amortization                                (5,538)   (5,255)        
-------------------------------------------------------------------------        
  Capitalized leases, net                               $6,289    $6,624        
-----------------------------------------------------   ======    ======        
-------------------------------------------------------------------------        
</TABLE>        
        
<PAGE>        
<TABLE>        
        
     Future minimum lease payments, by year and in the aggregate, for capital and        
noncancellable operating leases with initial or remaining terms of one year or more        
consisted of the following at December 31, 1995:        
        
(In Thousands)        
<CAPTION>        
                                                      Capital  Operating        
<S>                                                     <C>      <C>        
-------------------------------------------------------------------------        
1996                                                    $1,080   $11,456        
1997                                                     1,090    11,075        
1998                                                     1,102    10,693        
1999                                                     1,104     9,575        
2000                                                     1,106     8,113        
Later years                                              9,694    23,270        
-------------------------------------------------------------------------        
  Total minimum lease payments                          15,176   $74,182        
-----------------------------------------------------            =======        
Imputed interest (rates ranging from 8.0% to 14.3%)     (7,430)        
-----------------------------------------------------------------        
  Present value of net minimum lease payments           $7,746        
-----------------------------------------------------  =======        
-------------------------------------------------------------------------        
     Minimum future rentals receivable from subleases under the Company's capital leases        
December 31, 1995 amounted to $608,000. This amount is not included in the preceding table.        
        
     Rental expense for all operating leases (cancellable and noncancellable) consisted of:        
        
(In Thousands)        
Year Ended December 31,        
<CAPTION>        
                                            1995        1994      1993        
<S>                                       <C>        <C>       <C>        
-------------------------------------------------------------------------        
Minimum rentals                             $13,647    $12,664   $12,540        
Sublease rental income                         (250)      (237)     (298)        
-------------------------------------------------------------------------        
  Net rental expense for operating leases   $13,397    $12,427   $12,242        
--------------------------------------------=======    =======   =======        
-------------------------------------------------------------------------        
</TABLE>        
        
                 
                 
<PAGE>                 
<TABLE>                 
                 
NOTE 9. Foreclosed Properties                 
                 
     Following is a summary of the activity in foreclosed properties and the allowance for                 
foreclosed properties:                 
                 
(In Thousands)                 
Year Ended December 31,                 
<CAPTION>                                   1995        1994        1993                 
<S>                                       <C>         <C>         <C>                 
---------------------------------------------------------------------------                 
Foreclosed properties, at January 1        $30,845     $49,552     $34,416                 
  Additions                                  5,659       6,059      40,408                 
  Sales                                    (11,029)    (24,696)    (24,909)                 
  Paydowns                                     (66)        (70)       (363)                 
-----------------------------------------------------------------------------                 
Foreclosed properties, at December 31       25,409      30,845      49,552                 
-----------------------------------------------------------------------------                 
Allowance for foreclosed properties, at                
  January 1                                  8,085      10,806       6,515                 
  Provision                                  2,149      13,687      10,943                 
  Writedowns                                (1,961)    (16,408)     (6,652)                 
-----------------------------------------------------------------------------                 
Allowance for foreclosed properties, at                
  December 31                                8,273       8,085      10,806                 
-----------------------------------------------------------------------------                 
Foreclosed properties, net (included in                
  other assets)                            $17,136     $22,760     $38,746                 
-----------------------------------------  =======     =======     =======                 
---------------------------------------------------------------------------                 
</TABLE>                 
        
        
<PAGE>        
<TABLE>        
        
NOTE 10. Short-Term Borrowings        
     Short-term borrowings are comprised of:        
        
(In Thousands)        
December 31,        
<CAPTION>        
                                                              1995         1994        
<S>                                                        <C>          <C>        
-----------------------------------------------------------------------------------        
Federal funds purchased                                      $408,670     $153,111        
Securities sold under agreements to repurchase                633,281      887,759        
-----------------------------------------------------------------------------------        
  Total federal funds purchased and securities        
    sold under agreements to repurchase                     1,041,951    1,040,870        
-----------------------------------------------------------------------------------        
Commercial paper                                               33,082       25,197        
Other                                                          54,963       36,801        
-----------------------------------------------------------------------------------        
  Total other short-term borrowings                            88,045       61,998        
-----------------------------------------------------------------------------------        
  Total                                                    $1,129,996   $1,102,868        
-----------------------------------------------------------==========   ==========        
        
     The following tabulation is a summary of amounts and weighted average rates applicable     
to the various categories of short-term borrowings:        
        
(In Thousands)        
<CAPTION>        
-----------------------------------------------------------------------------------        
                                      Average    Annual    Daily Average  Maximum        
                                       Rate     Interest     Amount      Month-end        
                                     December     Rate     Outstanding    Balance        
<S>                                      <C>        <C>        <C>          <C>        
-----------------------------------------------------------------------------------        
Federal funds purchased:                      
  1995                                   5.73 %     5.94 %   $249,149     $408,670        
  1994                                   5.56       3.94      227,194      410,848        
  1993                                   3.08       3.12      378,158      622,474        
Securities sold under agreements to repurchase:        
  1995                                   5.40       5.72      750,098    1,000,269        
  1994                                   5.47       4.06      868,338    1,118,881        
  1993                                   2.82       2.88      692,705    1,133,692        
Commercial paper:                             
  1995                                   4.74       4.97       30,542       35,367        
  1994                                   4.80       3.61       19,598       28,418        
  1993                                   2.32       2.36       17,428       19,840        
Other:        
  1995                                   5.77       5.70       32,323       61,639        
  1994                                   5.35       4.13       23,150       50,001        
  1993                                   2.61       2.80        9,012       10,000        
Total:        
  1995                                   5.50 %     5.75 % $1,062,111           --        
  1994                                   5.46       4.03    1,138,280           --        
  1993                                   2.88       2.95    1,097,303           --        
-----------------------------------------------------------------------------------        
        
     Federal funds purchased and securities sold under agreements to repurchase generally        
mature daily or on demand.        
     Commercial paper, in the form of short-term variable rate notes, matures no later         
than six months from date of issuance.        
     Other short-term borrowings consist principally of U.S. Treasury tax and loan deposit         
notes payable on demand, and Federal Home Loan Bank borrowings callable 90 days from date        
of issuance.        
</TABLE>        
                 
        
<PAGE>                 
<TABLE>                 
NOTE 11. MEDIUM-TERM AND LONG-TERM DEBT                 
                 
     Medium-term and long-term debt consist of:                 
                 
(In Thousands)                  
December 31,                 
<CAPTION>                 
                                                                  1995       1994                 
<S>                                                             <C>        <C>                 
------------------------------------------------------------------------------------                 
Medium-term debt:                 
  Subsidiary bank:                 
    Bank notes:                 
      4.70%, due February 15, 1995                                   $--   $200,500                 
      4.53%, due February 26, 1995                                    --      8,750                 
      4.50%, due June 15, 1995                                        --    100,000                 
      4.785%, due February 15, 1996                              150,000    150,000                 
      5.00%, due June 17, 1996                                   102,250    102,250                 
--------------------------------------------------------------  --------------------                 
        Total bank notes                                         252,250    561,500                 
--------------------------------------------------------------  --------------------                 
    Federal Home Loan Bank borrowings:                 
      6.025%, due May 3, 1996                                     47,700     47,700                 
      7.54%, due November 27, 1996                                46,200     46,200                 
      7.686%, due February 3, 1997                                26,800         --                 
      6.51%, due May 12, 1997                                      4,000         --                 
      6.44%, due June 6, 1997                                     18,500     18,500                 
      Floating rate, due June 6, 1997                             25,000     25,000                 
      6.39%, due June 10, 1997                                    25,000     25,000                 
      Floating rate, due June 23, 1997                            25,000     25,000                 
      6.57%, due August 8, 1997                                   46,600     46,600                 
      7.69%, due November 10, 1997                                 2,500      2,500                 
      8.31%, due January 2, 1998                                   1,500         --                 
      8.05%, due January 5, 1998                                   4,800         --                 
      6.63%, due May 12, 1998                                     19,600         --                 
      5.924%, due June 5, 2000                                    50,000         --                 
      5.95%, due December 11, 2003                                 7,500         --                 
--------------------------------------------------------------  --------------------                 
        Total Federal Home Loan Bank borrowings                  350,700    236,500                 
--------------------------------------------------------------  --------------------                 
        Total medium-term debt                                   602,950    798,000                 
--------------------------------------------------------------  --------------------                 
Long-term debt:                 
  Central Fidelity Banks, Inc. (Parent Company):                 
    Subordinated notes due November 15, 2002                     150,000    150,000                 
  Subsidiary bank:                 
    Mortgage notes at various interest rates                         386        440                 
--------------------------------------------------------------  --------------------                 
        Total long-term debt                                     150,386    150,440                 
--------------------------------------------------------------  --------------------                 
        Total                                                   $753,336   $948,440                 
--------------------------------------------------------------  ========   ========                 
------------------------------------------------------------------------------------                 
                      
     The interest payments on medium-term Bank notes are payable semi-annually on     
February 15 and August 15.                 
                 
     The interest payments on fixed rate medium-term Federal Home Loan Bank borrowings     
are payable quarterly. The floating interest rate is determined quarterly, based on     
3-month LIBO minus 12 basis points, and interest payments are due the first of each month.    
                 
     The subordinated notes due November 15, 2002 are subordinated to all existing and     
future senior indebtedness of the Company. The notes bear interest at 8.15% per annum,     
payable semi-annually on May 15 and November 15. The notes are not redeemable prior to     
maturity.                 
                 
     Scheduled principal payments of the medium-term and long-term debt at December 31,     
1995 are:    
                 
(In Thousands)                 
<CAPTION>                 
                 
<S>                                                                        <C>                 
------------------------------------------------------------------------------------                 
1996                                                                       $346,212                 
1997                                                                        173,467                 
1998                                                                         25,974                 
1999                                                                             80                 
2000                                                                         50,081                 
Later years                                                                 157,522                 
-------------------------------------------------------------------------  ---------                 
  Total                                                                    $753,336                 
-------------------------------------------------------------------------  ========                 
------------------------------------------------------------------------------------                 
</TABLE>                 
                 
         
<PAGE>         
<TABLE>         
         
NOTE 12. Income Taxes         
         
     The components of income tax expense (benefit) from operations are:         
         
(In Thousands)          
Year Ended December 31,         
<CAPTION>         
                                                        1995     1994     1993         
<S>                                                   <C>      <C>      <C>         
---------------------------------------------------------------------------------         
Current taxes - federal                                $47,028  $37,784  $49,502         
Deferred taxes - federal                                 2,024    1,272   (5,168)         
---------------------------------------------------------------------------------         
  Income tax expense                                   $49,052  $39,056  $44,334         
------------------------------------------------------ =======  =======  =======         
---------------------------------------------------------------------------------         
         
     The differences between income tax computed by applying the federal statutory         
rate to income before income taxes and the actual tax provision are shown below:         
         
(In Thousands)          
Year Ended December 31,         
<CAPTION>         
                                                        1995     1994     1993         
<C>                                                   <C>      <C>      <C>         
---------------------------------------------------------------------------------         
Income tax at federal statutory rate                      35.0%    35.0%    35.0%         
Increase (decrease) in taxes resulting from:         
    Tax-exempt interest                                   (2.6)    (3.7)    (3.8)         
    Other, net                                            (0.6)     0.2     (1.1)         
---------------------------------------------------------------------------------         
      Net decrease in taxes                               (3.2)    (3.5)    (4.9)         
---------------------------------------------------------------------------------         
      Income tax expense                                  31.8%    31.5%    30.1%         
------------------------------------------------------  ======   ======   ======         
---------------------------------------------------------------------------------         
         
     The tax effects of temporary differences that give rise to significant portions         
of the deferred tax assets and deferred tax liabilities at December 31, 1995 and 1994         
are presented below:         
         
(In Thousands)          
December 31,         
<CAPTION>         
                                                                 1995     1994         
<S>                                                            <C>      <C>         
---------------------------------------------------------------------------------         
Deferred tax assets:         
  Allowance for loan and other real estate losses               $36,831  $36,766         
  Employee benefit liabilities                                    8,822    6,020         
  Unrealized losses on securities available for sale                 --   55,045         
  Other                                                           3,127    5,175         
---------------------------------------------------------------------------------         
    Total deferred tax assets                                    48,780  103,006         
---------------------------------------------------------------------------------         
Deferred tax liabilities:         
 Securities transactions                                          6,485    1,159         
  Premises and equipment                                          1,106    1,344         
  Leases                                                            641      477         
  Prepaid expenses                                                1,284    4,046         
  Unrealized gains on securities available for sale              12,850       --         
  Other                                                             612      259         
---------------------------------------------------------------------------------         
    Total deferred tax liabilities                               22,978    7,285         
---------------------------------------------------------------------------------         
    Net deferred tax asset (included in other assets)           $25,802  $95,721         
--------------------------------------------------------------- =======  =======         
---------------------------------------------------------------------------------         
     Management has determined, based on the Company's history of earnings, its        
expectation of earnings in future years, its taxable income in the available         
carryback period and future reversing taxable temporary differences, that it is         
more likely than not that all be realized. Accordingly, no valuation allowance has         
been established.         
         
</TABLE>        
         
<PAGE>         
NOTE 13. PREFERRED AND COMMON STOCK  
         
     The Company is authorized to issue two classes of preferred stock:  
200,000 shares of preferred stock, par value $100 per share; and 4,000,000  
shares of 1983 preferred stock, par value $25 per share. Both classes are  
issuable in series, and have such rights, including voting and conversion  
rights, preferences and terms as determined by the Board of Directors at  
the time of issuance.  As of December 31, 1995, no shares of either class  
were outstanding.  
         
     The Company is authorized to issue 100,000,000 shares of common  
stock, par value $5 per share, of which 40,192,879 shares were outstanding  
as of December 31, 1995. Each share of common stock also represents one  
preferred share purchase right ("Right") under the terms of the Company's  
Rights Agreement dated May 3, 1989, as amended and restated in its  
entirety on November 9, 1994 (the "Rights Agreement"). Each Right entitles  
its registered holder to purchase from the Company, after the Distribution  
Date (as defined in the Rights Agreement), one one-hundredth of a share of  
Series A Junior Participating Preferred Stock, par value $25 per share,  
for $110 (the "Purchase Price"). The Purchase Price and the number of  
Rights outstanding, or in certain circumstances the securities purchasable  
upon exercise of the Rights, are subject to adjustment from time to time  
to prevent dilution in the event of a common stock dividend on or a  
subdivision or a combination into a smaller number of shares of common  
stock, or the issuance or distribution of any securities or assets in  
respect of, in lieu of or in exchange for common stock.  
        
                 
        
                 
<PAGE>                 
<TABLE>                 
                 
NOTE 14. Employee Benefit Plans                 
                 
     Central Fidelity has a noncontributory defined benefit pension plan covering                 
substantially all full-time employees. The plan provides pension benefits that                  
are based on the employee's compensation during the five years before retirement.                 
The Company's funding policy is to contribute annually the maximum amount that                  
can be deducted for federal income tax purposes.                 
                 
     The following table sets forth the plan's funded status and amounts recognized                 
in the Company's Consolidated Balance Sheet:                 
                 
(In Thousands)                  
December 31,                 
<CAPTION>                 
                                                    1995       1994                 
<S>                                               <C>        <C>                 
-----------------------------------------------------------------------                 
Accumulated and vested benefit obligation          ($45,968)  ($31,769)                 
-------------------------------------------------   =======    =======                 
Projected benefit obligation                       ($63,820)  ($47,447)                 
Plan assets at fair value                            59,829     44,470                 
----------------------------------------------------------- ----------                 
Plan assets under projected benefit obligation       (3,991)    (2,977)                 
Unrecognized net loss from past experience           12,059      7,129                 
Prior service cost not yet recognized                  (497)      (582)                 
Unrecognized net asset being recognized                 
  over 15 years                                      (1,014)    (1,217)                 
----------------------------------------------------------- ----------                 
    Prepaid  pension cost                            $6,557     $2,353                 
-------------------------------------------------    ======     ======                 
-----------------------------------------------------------------------                 
                 
     Net pension cost included the following components:                 
                 
(In Thousands)                  
Year Ended December 31,                 
<C>                 
        
                                          1995      1994       1993                 
<S>                                      <C>       <C>        <C>                 
-----------------------------------------------------------------------                 
Service cost                              $2,582     $2,679     $2,198                 
Interest cost                              4,189      3,525      3,114                 
Actual (return) loss  on plan assets     (10,044)       705     (2,561)                 
Net amortization and deferral              6,045     (4,635)      (869)                 
----------------------------------------------------------- ----------                 
    Total pension expense                 $2,772     $2,274     $1,882                 
---------------------------------------   ======     ======     ======                 
-----------------------------------------------------------------------                 
                 
     In determining the actuarial present value of the projected benefit obligation,                 
the weighted-average discount rate used was 7.75% for 1995 and 9.00% for 1994,                  
and rate of increase in future compensation levels used was 5.50% for 1995                 
and 4.75% for 1994. The expected long-term rate of return on assets was 9.00% for                 
1995 and 1994.                 
                 
     The plan assets at December 31, 1995 included 207,013 shares of the common                  
stock of the Company having a market value of approximately $6,624,000 or 10.90%                 
of the total market value of the plan assets at that date. The plan received $240,000                 
in dividends on these shares during 1995.                 
                 
     The Company's pension plan provides that the benefits payable to retirees are based                 
on years of service and levels of compensation. The Internal Revenue Code contains                 
limits on the annual benefits that a retiree may receive from a qualified defined                 
benefit plan. For 1996 the maximum amount that a qualified plan may pay out to a                 
retiree is $120,000.                 
                 
     The Company maintains an unfunded nonqualified plan that enables retirees to receive                 
pension benefits in accordance with the computational terms of the plan when those                 
terms provide benefits in excess of the amounts payable under the IRS qualified                 
rules. In addition, there is an unfunded Executive Supplemental Retirement Plan                 
which provides a benefit equal to 25% of the participating executive's salary.                 
Benefits are payable for 20 years to the executive or to his estate upon his death.                 
The table below sets forth these plans' funded status and amounts recognized                  
in the Company's Consolidated Balance Sheet.                 
                 
(In Thousands)                  
December 31,                 
<CAPTION>                 
                                                    1995       1994                 
<S>                                               <C>        <C>                 
-----------------------------------------------------------------------                 
Accumulated and vested benefit obligation          ($11,755)   ($8,479)                 
-------------------------------------------------   =======    =======                 
Projected benefit obligation                       ($14,241)  ($11,422)                 
Plan assets at fair value                                --         --                 
-----------------------------------------------------------------------                 
Plan assets under projected benefit obligation      (14,241)   (11,422)                 
Unrecognized net loss from past experience             (264)    (2,442)                 
Prior service cost not yet recognized                 1,299      1,491                 
Unrecognized net asset being recognized                 
  over 15 years                                       5,219      5,668                 
-----------------------------------------------------------------------                 
    Accrued pension cost                            ($7,987)   ($6,705)                 
-------------------------------------------------    ======     ======                 
-----------------------------------------------------------------------                 
                 
     Net pension cost for this supplemental plan included the following components:                 
                 
(In Thousands)                  
Year Ended December 31,                 
<CAPTION>                 
                                                    1995       1994                 
<S>                                                <C>        <C>                 
-----------------------------------------------------------------------                 
Service cost                                           $353       $282                 
Interest cost                                         1,000        957                 
Net amortization and deferral                           488        659                 
-----------------------------------------------------------------------                 
    Total pension expense                            $1,841     $1,898                 
-------------------------------------------------    ======     ======                 
-----------------------------------------------------------------------                 
                 
     In determining the actuarial present value of the projected benefit obligation, the                 
weighted-average discount rate used was 7.75% for 1995 and 9.00% for 1994, and the                 
rate of increase in future compensation levels used was 5.50% for 1995 and 4.75% for                 
1994.                 
                 
     Under the provisions of its Stock and Thrift Plan, the Company matches at least                 
50% of employee contributions to the plan. Additional matching contributions are                 
made by the Company based upon attainment of defined earnings levels. There were                 
no additional matching contributions made in 1995, 1994 or 1993. The Company                 
contributed $2,581,000, $2,429,000 and $2,148,000 in 1995, 1994 and 1993,                 
respectively, as its matching share.                 
                 
     In 1992, the Company adopted a Stock Incentive Plan under which employees were                 
awarded shares of the Company's common stock upon the attainment of growth in                  
earnings per share objectives. Payouts occur only in stock upon termination of                 
employment, retirement, long-term disability, or death. The plan was terminated in                 
early 1994. The cost to the Company was $3,101,000 in 1993.                 
                 
     During the first quarter of 1993, the Company adopted Statement of Financial                 
Accounting Standards No. 106, "Employers' Accounting for Postretirement Benefits                 
Other Than Pensions" (SFAS 106), for the Medicare carve-out health insurance                 
coverage provided to its qualifying retirees (the "Plan"). Participants in this                 
Plan are retired employees and active employees who are age 45 and have completed                 
10 full years of service.                  
                 
     The following table sets forth the Plan's funded status and amounts recognized                 
in the Company's Consolidated Balance Sheet:                 
                 
(In Thousands)                 
December 31,                  
<CAPTION>                 
                                                    1995       1994                 
<S>                                               <C>        <C>                 
-----------------------------------------------------------------------                 
Accumulated postretirement benefit obligation:                 
  Retirees and spouses                             ($12,670)  ($12,656)                 
  Eligible active participants                       (2,741)    (2,547)                 
  Other active participants                          (3,349)    (2,990)                 
------------------------------------------------------------------------                 
    Total accumulated postretirement benefit                
       obligation                                   (18,760)   (18,193)                 
Plan assets at fair value                                --         --                 
Total unrecognized loss                              (1,905)    (1,096)                 
Unrecognized transition obligation                   14,070     14,898                 
------------------------------------------------------------------------                 
    Net postretirement benefit liability            ($6,595)   ($4,391)                 
-------------------------------------------------   =======    =======                 
-----------------------------------------------------------------------                 
                 
     The net postretirement benefit cost included the following components:                 
                 
(In Thousands)                 
Year Ended December 31,                  
<CAPTION>                 
                                          1995      1994       1993                 
<S>                                       <C>       <C>        <C>                 
-----------------------------------------------------------------------                 
Service cost                                $667     $1,031       $753                 
Interest cost                              1,649      1,434      1,471                 
Amortization of transition obligation                
  over 20 years                              828        828        828                 
-----------------------------------------------------------------------                 
    Total postretirement benefit expens   $3,144     $3,293     $3,052                 
---------------------------------------   ======     ======     ======                 
-----------------------------------------------------------------------                 
     The assumed health care cost trend used to measure the expected cost of benefits                 
under the Plan for 1995 and 1996 is 8.60%. This rate gradually declines to 6.50% for the                 
year 2004 and remains at that level thereafter. The discount rate used in determining the                 
accumulated postretirement benefit obligation was 7.75% in 1995 and 9.00% in 1994. The                 
Plan is not compensation based, accordingly, changes in participants' compensation                 
have no effect upon the Plan. Should the health care cost trend increase by 1%, the                 
service and interest cost and the accumulated benefit obligation would increase by                 
$151,000 and $2,279,000, respectively.                 
                 
</TABLE>                 
                  
                  
                 
<PAGE>                 
<TABLE>                 
                 
NOTE 15. Stock Option and Stock Incentive Plans                 
                 
     The Company has four stock option plans which provide for the granting of options to                 
key executives and employees of the Company and its subsidiaries to purchase                 
shares of the Company's common stock at the fair value at date of grant. The 1986                  
Incentive Stock Option Plan ("1986 Plan"), 1988 Incentive Stock Option Plan  ("1988                 
Plan"), 1991 Incentive Stock Option Plan ("1991 Plan") and the 1993 Incentive Stock                 
Option Plan ("1993 Plan") provide for the granting of stock options for 675,000 shares                 
each for the 1986 Plan, 1988 Plan and 1991 Plan, and 750,000 shares  for the 1993                 
Plan, of the Company's common stock.                 
                 
     Each option granted is exercisable within ten years from date of grant. The 1986 Plan,                 
1988 Plan, 1991 Plan and 1993 Plan will terminate February 4, 1996, February 2,  1998,                 
March 12, 2001 and March 12, 2003, respectively.                 
                 
     A summary of activity in the stock option plans follows:                 
<CAPTION>                 
                              Options                 
                             Available    Options     Option Price                  
                             for Grant   Outstanding    per Share                 
<S>                              <C>        <C>        <C>                 
-------------------------------------------------------------------                 
Balance, December 31, 1992     77,806    1,992,895     $8.52 - $28.00                 
                 
  Adoption of 1993 Plan       750,000           --                 
  Granted                    (331,900)     331,900     23.92 -  29.50                 
  Exercised                        --     (192,951)   8.52 -  28.00                 
  Cancelled                     7,100       (7,100)   23.92 -  29.50                 
--------------------------------------------------------                 
Balance, December 31, 1993    503,006    2,124,744     $8.52 - $29.50                 
                 
  Granted                    (470,700)     470,700     24.50 -  28.00                 
  Exercised                        --     (291,284)   8.52 -  29.50                 
  Cancelled                     9,350       (9,350)   21.17 -  29.50                 
--------------------------------------------------------                 
Balance, December 31, 1994     41,656    2,294,810     $8.52 - $29.50                 
                 
  Granted                     (40,250)      40,250    21.17 - 31.88                 
  Exercised                        --     (374,564)   8.52 -  28.00                 
  Cancelled                    18,050      (18,050)   23.92 -  29.50                 
--------------------------------------------------------                 
Balance, December 31, 1995     19,456    1,942,446     $10.50 - $31.88                 
----------------------------- =======    =========                 
-------------------------------------------------------------------                 
                 
     The 1995 Stock Incentive Plan (the "1995 Plan") was approved by the Board on                 
January 11, 1995 and by the shareholders at the May 10, 1995 Annual Meeting of                 
Shareholders. Under the terms of the 1995 Plan, all present and future employees are                 
eligible to receive awards under the 1995 Plan in the form of incentive stock options,                 
nonqualified stock options, stock appreciation rights, restricted stock, performance                 
awards and other stock unit awards. A maximum of 1,750,000 shares of common stock                 
is authorized for issuance pursuant to awards made under the 1995 Plan, subject to                 
adjustments in the event of a stock split, stock dividend, or other changes in the common                 
stock as set forth in the 1995 Plan. At year-end 1995, no awards have been made under                  
the 1995 Plan.                 
</TABLE>                
                 
                 
<PAGE>                 
<TABLE>                 
                 
NOTE 16. Other Information                 
                 
  The principal components of "Interest on deposits," "Other income" and "Other expense"                 
 in the Statement of Consolidated Income are:                 
                 
(In Thousands)                  
Year Ended December 31,                 
<CAPTION>                 
                                          1995        1994        1993                 
<S>                                     <C>         <C>         <C>                 
-------------------------------------------------------------------------                 
Interest on deposits:                 
  Interest checking                      $15,163     $15,802     $15,666                 
  Regular savings                         20,666      23,723      25,028                 
  Consumer certificates                  225,832     156,610     143,565                 
  Money market accounts                   43,300      33,133      32,832                 
  Certificates of deposit $100,000 and                
    over                                  14,764      14,364      22,087                 
-------------------------------------   ---------   ---------   ---------                 
    Total                               $319,725    $243,632    $239,178                 
-------------------------------------   =========   =========   =========                 
Other income:                 
  Gain on sale of out-of-state bank card     $--     $11,400         $--                 
  Other (includes no items in excess of 1%                 
    of total revenue)                     25,424      24,460      23,909                 
-------------------------------------   ---------   ---------   ---------                 
    Total                                $25,424     $35,860     $23,909                 
-------------------------------------   =========   =========   =========                 
Other expense:                 
  Telecommunications and postage expense  $9,623      $8,708      $8,402                 
  Other (includes no items in excess of 1%                 
    of total revenue)                     39,877      40,483      30,507                 
-------------------------------------   ---------   ---------   ---------                 
    Total                                $49,500     $49,191     $38,909                 
-------------------------------------   =========   =========   =========                 
-------------------------------------------------------------------------                 
</TABLE>                 
         
         
<PAGE>         
             
NOTE 17. Off-Balance-Sheet Items, Commitments and Contingent  
Liabilities  
             
  In the normal course of business, there are outstanding various  
financial instruments which involve elements of credit and interest rate  
risk, to varying degrees, that are not recognized in the Consolidated  
Balance Sheet. These financial instruments include commitments to extend  
credit, standby letters of credit, interest rate swaps, options, and  
forward and exchange rate contracts.  
             
  At December 31, 1995 and 1994, the Company had outstanding loan  
commitments of $1,271,035,000 and $1,214,470,000, and standby letters of  
credit approximating $218,208,000 and $214,178,000, respectively. To meet  
the financing needs of its customers, the Company controls and monitors  
the credit risk of these financial instruments through credit approvals,  
limits, and the same credit policy procedures as it does for on-balance-  
sheet instruments.  No material losses are anticipated as a result of  
these transactions. The Company's loan portfolio is comprised of credit  
extensions principally to customers in the Commonwealth of Virginia.  
             
  The notional value of total interest rate swaps at December 31, 1995 and  
1994 approximated $554,800,000 and $994,500,000, respectively. To hedge  
against interest rate risk, the Company's swap portfolio consists of  
$450,000,000 of receive fixed-pay variable swaps which were used primarily  
to convert fixed rate borrowings to a variable rate and variable rate  
commercial loans to fixed rate, and $96,800,000 of pay fixed-receive  
variable swaps used to lock in certain fixed rate funding costs and  
convert certain fixed rate commercial loans to variable rate. In addition,  
the Company has also entered into interest rate swap agreements to  
accommodate the needs of commercial customers. In order to offset  
the interest rate risk of customer swaps, the Company has executed  
offsetting transactions with third parties. The notional amount of  
customer-related swap transactions was $8,000,000 and $18,000,000 at  
December 31, 1995 and 1994, respectively. The fair value of total interest  
rate swaps was an unrealized gain of $6,600,000 and an unrealized loss of  
$29,500,000 at December 31, 1995 and 1994, respectively.  
             
  Financial derivatives may expose the Company to credit risk to the  
extent of the fair value gain of an instrument, should the counterparty  
default on its obligation to perform. The Company seeks to reduce credit  
risk by dealing only with highly rated counterparties and by setting  
exposure limits based on independent industry ratings from the major  
rating agencies and other relevant criteria. Furthermore, the Company uses  
bilateral netting agreements and collateral arrangements to reduce credit  
risk. Collateral is delivered by either party when the fair value of the  
transaction exceeds established thresholds of credit risk. At year-end  
1995, the Company had net credit risk of $11.0 million to one  
counterparty. This exposure was below the threshold for receiving  
collateral. Of the transactions that had negative fair values at year-end  
1995, none were above threshold levels requiring the Company to deliver  
collateral.  
             
  The Company also periodically enters into options, forwards and exchange  
rate contracts. Such amounts were not material in 1995 or 1994.  
         
  There are also legal proceedings pending against the Company and its  
subsidiaries arising during the normal course of business. In the opinion  
of management, after consultation with legal counsel, liabilities arising  
from these proceedings, if any, would not have a material adverse effect  
on the consolidated financial position or results of operations.  
                 
        
                
<PAGE>                
<TABLE>                
                
NOTE 18. Disclosures About Fair Value of Financial Instruments                
                
  The following methods and assumptions were used to estimate the fair value of                
each class of financial instruments for which it is practicable to estimate that                
value:                
                
Cash and due from banks and temporary investments                
  The carrying amount of cash and due from bank balances and temporary                
investments is a reasonable estimate of fair value.                
                
Securities available for sale and trading account securities                
  Fair values of securities are based on quoted market prices or dealer quotes. If                
a quoted market price is not available, fair value is estimated using quoted                
market prices for similar securities.                
                
Loans                
  The fair value of loans is estimated by discounting the future cash flows using                
the current rates at which similar loans would be made to borrowers with similar                
credit ratings and for the same remaining maturities, taking into consideration the                
credit risk in various loan categories.                
                
Deposits                
  The fair value of demand, interest checking, regular savings 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 using the rates                
currently offered for deposits of similar remaining maturities.                
                
Short-term borrowings                
  The carrying values of federal funds purchased and securities sold under                
agreements to repurchase and other short-term borrowings are reasonable                
estimates of fair value.                 
                
Medium-term notes, FHLB borrowings, long-term debt  and capitalized                
lease obligations                
  The fair values for these borrowings are determined based on interest rates                
currently available for debt with similar terms and remaining maturities.                
                
Off-Balance-Sheet Items                
  The fair value of interest rate swaps is the estimated amount that the Company                
would receive or pay to terminate the swap agreements at the reporting date,                
taking into account current interest rates and the current creditworthiness of the                
swap counterparties.                
                
  The fair value of commitments to extend credit 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                
counterparties. For fixed rate loan commitments, fair value also considers the                
difference between current levels of interest rates and the committed rates.                
                
  The fair value of standby letters of credit is based on fees currently charged for                
similar agreements or on the estimated cost to terminate them or otherwise                
settle the obligations with the counterparties at the reporting date.                
                
  The carrying amount and fair value of commitments and standby letters of                
credit were not material at December 31, 1995 and December 31, 1994.                
                
  The carrying amount and fair value of financial instruments as of December 31,                
1995 and December 31, 1994 are as follows:                
                
(In Thousands)                           Carrying       Fair                
<CAPTION>                                 Amount       Value                
<S>                                     <C>          <C>                
---------------------------------------------------------------                
December 31, 1995:                
Financial assets:                
  Cash and due from banks                $338,580     $338,580                
  Temporary investments                   208,156      208,156                
  Securities available for sale         3,654,887    3,654,887                
  Loans, net                            6,206,813    6,198,405                
                
Financial liabilities:                
  Deposits                              7,985,898    8,044,645                
  Short-term borrowings                 1,129,996    1,129,996                
  Medium-term notes and FHLB borrowings   602,950      610,356                
  Long-term debt and capitalized lease                
    obligations                           158,132      172,216                
                
Interest rate swaps                            --        6,564                
                
December 31, 1994:                
Financial assets:                
  Cash and due from banks                $274,813     $274,813                
  Temporary investments                   198,276      198,276                
  Securities available for sale         3,486,381    3,486,381                
  Loans, net                            5,662,093    5,428,578                
                
Financial liabilities:                
  Deposits                              7,227,244    7,178,417                
  Short-term borrowings                 1,102,868    1,102,868                
  Medium-term notes and FHLB borrowings   798,000      793,677                
  Long-term debt and capitalized lease                
    obligations                           158,607      167,864                
                
Interest rate swaps                            --      (29,465)                
---------------------------------------------------------------                
</TABLE>                
        
        
        
<PAGE>        
        
INDEPENDENT AUDITORS' REPORT        
        
KPMG Peat Marwick LLP        
Certified Public Accountants        
        
Suite 1900        
1021 East Cary Street        
Richmond, Virginia 23219-4023        
        
        
The Board of Directors and Shareholders        
Central Fidelity Banks, Inc.:        
        
  We have audited the accompanying consolidated balance sheet of Central  
Fidelity Banks, Inc. and subsidiaries as of December 31, 1995 and 1994,  
and the related statements of consolidated income, consolidated cash flows  
and changes in consolidated shareholders' equity for each of the years in  
the three-year period ended December 31, 1995, and the combined balance  
sheet of the subsidiary banks of Central Fidelity Banks, Inc. as of  
December 31, 1995 and 1994. These financial statements are the  
responsibility of the Company'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 audits to  
obtain reasonable assurance about whether the financial statements are  
free of material misstatement. An audit includes examining, on a test  
basis, evidence supporting the amounts and disclosures in the financial  
statements. An audit also includes assessing the accounting principles  
used and significant estimates made by management, as well as evaluating  
the overall financial statement presentation. We believe that our audits  
provide a reasonable basis for our opinion.  
        
  In our opinion, the consolidated financial statements referred to above  
present fairly, in all material respects, the financial position of  
Central Fidelity Banks, Inc. and subsidiaries at December 31, 1995 and  
1994, the results of their operations and their cash flows for each of  
the years in the three-year period ended December 31, 1995, and the  
combined balance sheet referred to above presents fairly, in all material  
respects, the financial position of the subsidiary banks of Central  
Fidelity Banks, Inc. at December 31, 1995 and 1994, all in conformity with  
generally accepted accounting principles.  
        
  As discussed in note 1 to the consolidated financial statements,  
Central Fidelity Banks, Inc. and subsidiaries adopted the provisions of  
Financial Accounting Standards Board's Statement of Financial Accounting  
Standards No. 115, "Accounting for Certain Investments in Debt and Equity  
Securities" in 1993.  
        
        
January 12, 1996       
                
        
    
<PAGE>                
<TABLE>                
                
1995 GRAPH MATERIAL                
CENTRAL FIDELITY BANKS, INC.                
                
<CAPTION>                
                
                                                 1991        1992        1993        1994        1995                
<S>                                               <C>         <C>         <C>         <C>         <C>                
                                              ----------  ----------  ----------  ----------  ----------                
                
Average Earning Assets (In Millions of Dollars)                
    Average Securities and Other Earning Asset    2,058       3,206       4,139       3,699       3,715                
    Average Loans                                 3,607       3,731       4,250       5,322       5,999                
                
    Total Average Earning Assets                  5,665       6,937       8,389       9,021       9,714                
                
                
Net Interest Margin                
    Yield on Earning Assets                       10.12%       8.52%       7.43%       7.47%       8.04%                
    Rate on Interest-bearing Liabilities                 
      (Relative to Earning Assets)                 5.64%       4.12%       3.45%       3.67%       4.45%                
                
    Net Interest Margin                            4.48%       4.40%       3.98%       3.80%       3.59%                
                
                
Average Loans (In Millions of Dollars)            3,607       3,731       4,250       5,322       5,999                
                
                
Loan Yields                                       11.00%       9.55%       8.56%       8.37%       8.87%                
                
                
Loan Loss Coverage (In Millions of Dollars)                
    Provision for Loan Losses                      49.8        99.8        79.5        24.4        26.7                
                
    Net Loan Charge-offs                           49.6        59.0        76.3        19.4        26.7                
                
                
Allowance for Loan Losses (In Millions of Dollars) 61.0       101.8       105.0       110.0       110.0                
                
                
Allowance for Loan Losses as a Percentage                
  of Net Loans                                     1.69%       2.58%       2.18%       1.91%       1.74%                
                
                
Year-End Securities Mix                
    U.S. Treasury and Agency Securities              --          --          --        14.0%       11.0%                
    Mortgage-Backed Securities                       --          --          --        40.0%       36.0%                
    CMOs                                             --          --          --        27.0%       27.0%                
    Asset-Backed Securities                          --          --          --        13.0%       21.0%                
    Other Securities                                 --          --          --         6.0%        5.0%                
                
                
Year-End Funding Mix                
    Deposits                                         --          --          --        78.0%       81.0%                
    Short-term Borrowings                            --          --          --        12.0%       11.0%                
    Medium-term Borrowings                           --          --          --         9.0%        6.0%                
    Long-term Debt                                   --          --          --         1.0%        2.0%                
                
                
Interest-Bearing Deposit Rates                     6.44%       4.87%       4.09%       4.11%       4.81%                
                
                
Average Deposits (In Millions of Dollars)                
    Interest-bearing Deposits                     4,279       5,181       5,846       5,921       6,644                
    Noninterest-bearing Deposits                    592         734         840         903         929                
                
    Total                                         4,871       5,915       6,686       6,824       7,573                
                
                
Net Income (In Millions of Dollars)                60.4        78.5       102.9        84.9       105.4                
                 
                
Earnings and Dividends Per Share                
    Earnings Per Share                            $1.87       $2.25       $2.66       $2.17       $2.65                
                
    Dividends Per Share                           $0.74       $0.82       $1.00       $1.12       $1.18                
                
                
Book Value Per Share                              13.07       15.66       18.61       15.84       20.56                
                
                
Average Shareholders' Equity (In Millions of                 
     Dollars)                                     404.8       503.3       646.8       667.2       753.4                
                
</TABLE>                
    
<PAGE>    
    
Summary    
    
     Net income for 1995 was $105.4 million, an increase of 24.2% from the     
$84.9 million reported for 1994. On a per share basis, net income     
increased 22.1% to $2.65 from $2.17 for 1994, on 1.6% higher average     
number of shares outstanding.    
    
     Net interest income, on a tax-equivalent basis, was $348.4 million,     
an increase of 1.6% from $343.0 million in 1994. Noninterest income was     
$78.8 million compared to $58.4 million in 1994, an increase of 35.0%.     
Included in 1994 noninterest income was a $28.7 million loss which     
resulted from the sale of approximately $470 million of fixed rate     
securities as the Company restructured its balance sheet to lessen its     
exposure to rapidly changing interest rates, and an $11.4 million profit     
on the sale of a segment of the bank card portfolio. Excluding the effects     
of securities transactions for both 1995 and 1994 as well as the profit on     
the bank card sale in 1994, noninterest income for 1995 increased 3.5%.     
Noninterest expense declined 2.8% to $238.3 million compared to $245.2     
million in 1994. The primary reasons for this decline resulted from lower     
FDIC insurance premiums and other real estate expense. The provision for     
loan losses was $26.7 million, an increase of 9.7% from $24.4 million in     
1994, reflecting higher consumer charge-offs during 1995.    
    
     Earning assets averaged $9.7 billion, compared to $9.0 billion in     
1994, an increase of 7.7%. Total loans, up $677.5 million or 12.7% from     
1994, averaged $6.0 billion for 1995. Residential real estate and all     
categories of consumer loans accounted for the majority of the growth.     
Securities available for sale grew 1.7% to an average of $3.6 billion in     
1995, following a decline of 9.6%, on average, in 1994. Trading account     
securities averaged $1.1 million, reflecting an increase of 37.5%, which     
was offset by a 37.2% decline in money market investments.    
    
     Interest-bearing liabilities averaged $8.5 billion, up 8.1% from    
$7.9 billion in 1994. Interest-bearing deposits increased 12.2% to an    
average of $6.6 billion. Consumer certificates of deposit accounted for     
virtually all the growth. An increase in Federal Home Loan Bank and other     
short-term borrowings also contributed to the growth in funding sources,     
up 190.3% and 47.3%, to $311.2 million and $62.9 million, on average,     
respectively.    
    
     Average shareholders' equity grew 12.9% to $753.4 million from    
$667.2 million in 1994. The return on average shareholders' equity of    
13.99% increased from 12.72% in 1994. The book value of common stock per    
share was $20.56 at December 31, 1995, compared to $15.84 at year-end    
1994, representing an increase of 29.8%. The closing price of the    
Company's common stock as of December 31, 1995 was $32.00, which    
represents a market to book value ratio of 156%.    
    
    
                 
         
<PAGE>         
<TABLE>         
         
----------------------------------------------------------------------------------         
TABLE 1  Changes in Earnings Per Share         
<CAPTION>         
                                                  1995/1994    1994/199   1993/199         
<S>                                                    <C>        <C>        <C>         
----------------------------------------------------------------------------------         
Net income for 1994, 1993 and 1992, respectively      $2.17      $2.66      $2.25         
         
Increase (decrease) attributable to:         
  Net interest income                                  0.14       0.28       0.77         
  Provision for loan losses                           (0.06)      1.41       0.52         
  Noninterest income                                   0.51      (1.72)      0.27         
  Noninterest expense                                  0.17      (0.56)     (0.58)         
  Income taxes                                        (0.25)      0.13      (0.35)         
  Average shares outstanding                          (0.03)     (0.03)     (0.22)         
----------------------------------------------------------------------------------         
    Net increase (decrease)                            0.48      (0.49)      0.41         
----------------------------------------------------------------------------------         
         
Net income for 1995, 1994 and 1993, respectively      $2.65      $2.17      $2.66         
-------------------------------------------------   =======    =======    =======         
----------------------------------------------------------------------------------         
</TABLE>         
                         
                 
<PAGE>                 
<TABLE>                 
                 
-------------------------------------------------------------------------                 
TABLE 2  Selected Ratios                 
                 
Year Ended December 31,                 
<CAPTION>                 
                                          1995       1994       1993                 
<S>                                       <C>        <C>        <C>                 
-------------------------------------------------------------------------                 
Percentage of net income to:                 
  Average shareholders' equity             13.99 %    12.72 %    15.91 %                 
  Average total assets                      1.03       0.89       1.16                 
Percentage of dividends per share                  
  to net income per share                  44.53      51.61      37.59                 
Percentage of average total shareholders' equity                 
  to average total assets                   7.36       7.01       7.27                 
-------------------------------------------------------------------------                 
</TABLE>                 
                 
                
                
<PAGE>                
<TABLE>                
                
-----------------------------------------------------------------------------------------------------------------                
TABLE 3  Selected Financial Data                
                
(In Thousands, except share and per share data)                                                  Percent                
                                                                                                  Change                
<CAPTION>                                                                                  --------------------                
                                  1995        1994        1993        1992        1991     1995/1994  1994/1993                
<S>                           <C>          <C>         <C>         <C>         <C>         <C>        <C>                
-----------------------------------------------------------------------------------------------------------------                
Results of Operations (Taxable                                                                  
  Equivalent Basis)                
  Interest income                $780,695    $673,731    $623,645    $591,076    $573,187      15.9 %      8.0 %                
  Interest expense                432,295     330,691     289,731     285,697     319,365      30.7       14.1                
------------------------------------------------------------------ ----------- ------------                            
    Net interest margin           348,400     343,040     333,914     305,379     253,822       1.6        2.7                
  Provision for loan losses        26,713      24,359      79,509      99,757      49,810       9.7      (69.4)                
------------------------------------------------------------------ ----------- ------------                            
    Net income from earning assets321,687     318,681     254,405     205,622     204,012       0.9       25.3                
  Noninterest income               78,770      58,359     125,803     115,422      78,942      35.0      (53.6)                
  Noninterest expense             238,329     245,223     223,298     200,833     190,406      (2.8)       9.8                
------------------------------------------------------------------ ----------- ----------------                
    Income before income taxes    162,128     131,817     156,910     120,211      92,548      23.0      (16.0)                
  Income tax expense               56,758      46,953      53,993      41,695      32,113      20.9      (13.0)                
------------------------------------------------------------------ ----------- ----------------                
    Net income                   $105,370     $84,864    $102,917     $78,516     $60,435      24.2      (17.5)                
------------------------------  =========   =========   =========   =========   =========                
                
Per Share                
  Net income                        $2.65       $2.17       $2.66       $2.25       $1.87      22.1 %    (18.4)%                
  Cash dividends declared           $1.18       $1.12       $1.00       $0.82       $0.74       5.4       12.0                
  Average common shares               
      outstanding               39,784,750  39,163,599  38,737,447  34,962,561  32,396,301       1.6        1.1                
Daily Averages for the Year                
  Total assets                $10,230,710  $9,512,447  $8,900,247  $7,416,919  $6,083,792       7.6 %      6.9 %                
  Loans                         5,999,371   5,321,848   4,250,089   3,730,625   3,606,906      12.7       25.2                
  Earning assets                9,713,659   9,021,290   8,389,175   6,937,150   5,665,342       7.7        7.5                
  Deposits                      7,572,851   6,823,793   6,685,916   5,914,733   4,871,463      11.0        2.1                
  Shareholders' equity            753,411     667,150     646,826     503,313     404,817      12.9        3.1                
-----------------------------------------------------------------------------------------------------------------                
</TABLE>               
                
                
<PAGE>               
<TABLE>               
               
----------------------------------------------------------------------------------------------               
TABLE 4  Analysis of Changes in the Components of Net Interest Earnings (Taxable Equivalent Basis)               
               
  Interest income and expense are affected by fluctuations in interest rates, by changes in     
the volumes of earning assets and interest-bearing liabilities, by the interaction of rate     
and volume factors, and  by the mix of the categories of earning assets and interest-bearing     
liabilities. The following analysis shows the direct causes of the year-to-year changes in     
the components of net interest earnings on a taxable equivalent basis. The rate and volume     
variances are calculated by a formula prescribed by the Securities and Exchange Commission.     
Rate/volume variances, a third element in the calculation, are not shown separately, but are     
allocated to the rate and volume variances according to their relative size. The details of     
rate and volume variances do not sum to the rate and volume variances on total interest    
earnings or total interest expense because of changes in the mix of interest-earning assets    
and interest-bearing liabilities from year to year.               
               
               
               
(In Thousands)                         1995 Compared to 1994         1994 Compared to 1993               
<CAPTION>                            Increase (Decrease) due to    Increase (Decrease) due to               
                                      Volume    Rate     Total      Volume    Rate     Total               
<S>                                   <C>     <C>      <C>          <C>     <C>      <C>               
----------------------------------------------------------------------------------------------               
Interest-earning assets:               
  Loans:               
    Commercial and commercial real               
      estate                           $5,778  $12,874  $18,652     $19,601   $4,706  $24,307               
    Construction                        1,152    4,904    6,056      (2,769)   3,364      595               
    Residential real estate            14,462      356   14,818      40,415   (4,084)  36,331               
    Consumer second mortgage            6,653    2,436    9,089       7,037     (824)   6,213               
    Installment                        16,879    5,533   22,412      11,547   (6,050)   5,497               
    Bank card                          15,483      (10)  15,473      11,685   (2,750)   8,935               
------------------------------------                   -------------                 -----------               
        Total loans                    59,120   27,380   86,500      90,555   (8,677)  81,878               
  Assets available for sale:               
    Securities:               
      U.S. Government and agencies     (7,273)  12,887    5,614      63,629  (50,704)  12,925               
      States and political subdivisions(2,233)     830   (1,403)      3,469   (5,636)  (2,167)               
      Other                            13,835    3,198   17,033      (6,409) (35,575) (41,984)               
------------------------------------                   -------------                 -----------               
                                        3,868   17,376   21,244      61,207  (92,433) (31,226)               
    Loans                                 (81)      52      (29)       (456)     198     (258)               
------------------------------------                   -------------                 -----------               
        Total assets available for sale 3,799   17,416   21,215      60,772  (92,256) (31,484)               
  Money market investments             (2,394)   1,613     (781)     (2,149)   1,830     (319)               
  Trading account securities               27        3       30          (2)      13       11               
------------------------------------                   -------------                 -----------               
        Total interest-earning assets  53,684   53,280  106,964      47,195    2,891   50,086               
------------------------------------                   -------------                 -----------               
Interest-bearing liabilities:                                                                        
  Interest checking                       (79)    (560)    (639)        750     (614)     136               
  Regular savings                      (2,823)    (234)  (3,057)        810   (2,115)  (1,305)               
  Consumer certificates                47,314   21,907   69,221      15,618   (2,573)  13,045               
  Money market accounts                   947    9,220   10,167      (2,629)   2,930      301               
  Certificates of deposit $100,000               
    and over                           (2,929)   3,329      400      (9,261)   1,538   (7,723)               
  Federal funds purchased and repos    (4,166)  17,673   13,507         747   11,672   12,419               
  Other short-term borrowings             946      751    1,697         526      474    1,000               
  Medium-term notes                   (11,720)   5,628   (6,092)     10,551    4,903   15,454               
  Federal Home Loan Bank borrowings    13,400      734   14,134       6,343       63    6,406               
  Long-term debt                          (34)   2,331    2,297        (192)   1,468    1,276               
  Capitalized lease obligations           (33)       2      (31)        (50)       1      (49)               
------------------------------------                   -------------                 -----------               
        Total interest-bearing               
          liabilities                  28,289   73,315  101,604      18,761   22,199   40,960               
------------------------------------                   -------------                 -----------               
Net interest earnings                 $25,469 ($20,109)  $5,360     $28,434 ($19,308)  $9,126               
------------------------------------                    =======                        ======               
----------------------------------------------------------------------------------------------               
</TABLE>              
               
    
    
    
    
    
    
<PAGE>    
<TABLE>    
    
------------------------------------------------------------------------------------------------    
TABLE 5  Average Balances and Interest Rates (Taxable Equivalent Basis)    
    
  The following table shows the average balance sheets for each of the years ended December 31,    
1995, 1994 and 1993. In addition,  the amounts of interest earned on earning assets, with    
related yields, and the interest paid on interest-bearing liabilities,  together with the rates,    
are shown. Loans placed on a nonaccrual status are included in the balances and were included in    
the computation of yields, upon which they had an immaterial effect. Interest on earning assets    
is on a taxable equivalent basis,  which was computed using the federal corporate income tax rate    
of 35% for all three years.    
    
(In Millions)    
<CAPTION>    
                                            1995                   1994                    1993    
<S>                              <C>         <C>  <C>    <C>        <C>  <C>     <C>        <C>  <C>    
---------------------------------------------------------------------------------------------------------    
                                  Average         Yield/  Average        Yield/   Average        Yield/    
                                  Balance  Interes Rate   Balance Interes Rate    Balance Interes Rate    
---------------------------------------------------------------------------------------------------------    
Assets    
---------------------------------------------------------------------------------------------------------    
Interest-earning assets:    
  Loans:    
    Commercial and commercial     
      real estate                 $1,903.8 $164.6  8.65 %$1,833.1 $146.0  7.96 % $1,585.1 $121.7  7.67 %    
    Construction                     308.2   30.3  9.84     294.7   24.3  8.24      331.2   23.7  7.15    
    Residential real estate        1,584.1  114.5  7.23   1,383.9   99.6  7.20      825.9   63.3  7.67    
    Consumer second mortgage         578.3   56.4  9.75     509.2   47.3  9.28      433.5   41.1  9.47    
    Installment                      971.9   80.8  8.32     764.8   58.4  7.64      619.2   52.9  8.55    
    Bank card                        647.9   85.0 13.12     529.9   69.5 13.12      441.6   60.5 13.72    
-----------------------------------------------------    -------------------     -------------------    
                                   5,994.2  531.6  8.87   5,315.6  445.1  8.37    4,236.5  363.2  8.57    
  Assets available for sale:    
    Securities:    
      U.S. Government and agencies 2,529.2  166.4  6.58   2,645.6  160.8  6.08      747.4   45.9  6.14    
      States and political     
        subdivisions                 133.2   11.1  8.35     160.4   12.5  7.80       43.4    3.5  8.03    
      Other                          972.1   66.4  6.83     767.3   49.4  6.43      230.4   12.0  5.22    
-----------------------------------------------------    -------------------     -------------------    
                                   3,634.5  243.9  6.71   3,573.3  222.7  6.23    1,021.2   61.4  6.01    
    Loans                              5.1    0.4  7.87       6.2    0.4  6.95       13.6    0.7  5.08    
-----------------------------------------------------    -------------------     -------------------    
                                   3,639.6  244.3  6.71   3,579.5  223.1  6.23    1,034.8   62.1  6.00    
  Investment securities:    
    U.S. Government and agencies        --     --    --        --     --    --    1,516.7  102.0  6.73    
    States and political subdivisions   --     --    --        --     --    --      137.4   11.2  8.15    
    Other                               --     --    --        --     --    --    1,279.0   79.3  6.20    
-----------------------------------------------------    -------------------     -------------------    
                                        --     --    --        --     --    --    2,933.1  192.5  6.56    
  Money market investments            78.8    4.7  5.91     125.4    5.4  4.33      184.0    5.8  3.13    
  Trading account securities           1.1    0.1  8.37       0.8    0.1  7.98        0.8     --  6.18    
-----------------------------------------------------    -------------------     -------------------    
      Total interest-earning assets9,713.7 $780.7  8.04 % 9,021.3 $673.7  7.47 %  8,389.2 $623.6  7.43 %    
-------------------------------------------======        ---------======         ---------======    
Noninterest-earning assets:                                                           
  Cash and due from banks            278.4                  270.7                   248.3    
  Premises and equipment, net        149.0                  145.7                   145.6    
  Other assets                       199.6                  184.7                   222.1    
  Allowance for loan losses         (110.0)                (110.0)                 (105.0)    
-------------------------------------------              ---------               ---------     
      Total assets               $10,230.7               $9,512.4                $8,900.2      
---------------------------------=========                =======                 =======      
</TABLE>    
    
    
<PAGE>    
<TABLE>    
    
Liabilities and Shareholders' Equity    
<CAPTION>    
    
<S>                              <C>         <C>  <C>    <C>        <C>  <C>     <C>        <C>  <C>    
---------------------------------------------------------------------------------------------------------    
Interest-bearing liabilities:    
  Interest checking                 $660.1  $15.2  2.30 %  $663.4  $15.8  2.38 %   $632.4  $15.7  2.48 %    
  Regular savings                    742.5   20.7  2.78     843.9   23.7  2.81      816.8   25.0  3.06    
  Consumer certificates            3,946.4  225.8  5.72   3,088.7  156.6  5.07    2,781.4  143.6  5.16    
  Money market accounts            1,035.9   43.3  4.18   1,007.8   33.1  3.29    1,091.8   32.8  3.01    
  Certificates of deposit     
    $100,000 and over                258.5   14.8  5.71     316.9   14.4  4.53      523.5   22.1  4.22    
  Federal funds purchased and repos  999.3   57.7  5.77   1,095.5   44.2  4.03    1,070.9   31.7  2.97    
  Other short-term borrowings         62.9    3.3  5.34      42.7    1.7  3.89       26.4    0.7  2.51    
  Medium-term notes                  323.5   19.3  5.97     537.7   25.4  4.72      292.4    9.9  3.40    
  Federal Home Loan Bank borrowings  311.2   20.5  6.60     107.2    6.4  5.98         --     --    --    
  Long-term debt                     150.4   11.0  7.30     151.0    8.7  5.75      154.9    7.4  4.78    
  Capitalized lease obligations        8.0    0.7  8.85       8.3    0.7  8.82        8.9    0.8  8.81    
-----------------------------------------------------    -------------------     -------------------    
      Total interest-bearing     
        liabilities                8,498.7 $432.3  5.09 % 7,863.1 $330.7  4.21 %  7,399.4 $289.7  3.92 %    
-------------------------------------------======        ---------======         ---------======    
Noninterest-bearing liabilities:    
  Demand deposits                    929.4                  903.2                   840.1    
  Other                               49.2                   78.9                    13.9    
------------------------------------------------         -------------           -------------    
                                     978.6                  982.1                   854.0    
Shareholders' equity                 753.4                  667.2                   646.8    
------------------------------------------------         -------------           -------------    
      Total liabilities and     
        shareholders' equity     $10,230.7               $9,512.4                $8,900.2    
---------------------------------=========                =======                 =======      
Net interest earnings                      $348.4                 $343.0                  $333.9    
---------------------------------          ======                 ======                  ======    
Net interest spread                                2.95 %                 3.26 %                  3.51 %    
---------------------------------                  ====                   ====                    ====    
Net interest margin                                3.59 %                 3.80 %                  3.98 %    
---------------------------------                  ====                   ====                    ====    
Fees included in loan income                $11.5                  $14.1                    $8.4    
---------------------------------          ======                 ======                  ======    
Taxable equivalent adjustment                $7.7                   $7.9                    $9.7    
---------------------------------          ======                 ======                  ======    
---------------------------------------------------------------------------------------------------------    
</TABLE>    
    
    
    
<PAGE>    
          
Net Interest Income    
          
     Net interest income, the primary source of the Company's earnings,    
is the amount by which interest and fee income earned on earning assets    
exceeds interest paid on interest-bearing liabilities.  Earning assets    
are comprised of loans, securities available for sale, money market    
investments and trading account securities. Interest-bearing liabilities    
consist of deposits and borrowings. Net interest income is impacted by the    
volume, mix, and the general level of interest rates among earning assets    
and interest-bearing liabilities.    
    
     On a tax-equivalent basis, net interest income for 1995 was $348.4    
million, an increase of 1.6% from 1994. This moderate growth resulted         
primarily from higher levels of average earning assets. Higher funding    
costs during 1995 resulted in the Company's net interest margin declining    
21 basis points from 3.80% to 3.59%. Average earning assets for 1995 grew    
$692.4 million, or 7.7%. This growth produced $107.0 million additional    
income, an increase of 15.9% from 1994. Average interest-bearing    
liabilities increased $635.6 million, or 8.1% from 1994, and interest    
expense increased $101.6 million or 30.7% over 1994. The yield on average    
earning assets increased 57 basis points during 1995 but was offset by an    
increase of 88 basis points on the cost of interest-bearing liabilities.    
    
     During 1995, the Company's interest rate swap activities resulted in    
a decline in interest income of $2.2 million and an increase in interest    
expense of $1.7 million compared to a $1.6 million increase in interest    
income and a decrease of $3.5 million in interest expense for 1994. The    
Company's interest rate swap activities resulted in a reduction of net    
interest income of $3.9 million during 1995 and an increase of net    
interest income of $5.1 million for 1994.    
    
     In 1995, total loans grew $677.5 million, or 12.7% to an average of    
$6.0 billion. Residential real estate and all categories of consumer loans    
accounted for the majority of the increase. Residential real estate loans    
rose 14.3% to an average of $1.6 billion, following a 65.6% growth in    
1994. Consumer second mortgage loans increased 13.6%, averaging $578.3    
million. Installment loans averaged $971.9 million, reflecting growth of    
27.1% compared to 1994. Bank card loans rose $118.0 million, an increase    
of 22.3% and averaged $647.9 million. When compared with the 1994 levels,    
commercial and commercial real estate and construction loans registered    
increases of 3.9% and 4.6%, respectively. Securities available for sale    
averaged $3.6 billion, reflecting an increase of 1.7%. This follows a    
decline of 9.6% in 1994 due to the sale of fixed rate securities in an    
effort by the Company to reduce its exposure to changes in interest rates.    
Money market investments, consisting primarily of federal funds sold and    
securities purchased under agreements to resell, declined 37.2% to an    
average of $78.8 million. In 1995, the yield on average earning assets    
gained 57 basis points to 8.04%, due primarily to higher yields on most    
categories of earning assets.    
    
     In 1995, core deposits increased $807.3 million to an average of $7.3    
billion, an increase of 12.4%, following a 5.6% increase in 1994. Deposit    
growth was impacted by the acquisition, on June 9, 1995, of fourteen    
branches and approximately $453 million of core deposits from Household    
Bank, f.s.b. Other deposit categories contributing to 1995  growth were    
consumer certificates, which increased $857.7 million to $3.9 billion, or    
27.8% from 1994, and money market accounts which grew 2.8% to an average    
of $1.0 billion. Regular savings and interest checking showed declines of    
12.0% and .5%, averaging $742.5 million and $660.1 million, respectively.    
Certificates of deposit $100,000 and over declined 18.4%, on average,    
compared to 1994. Federal Home Loan Bank borrowings and other short-term    
borrowings increased 190.3% and 47.3% to averages of $311.2 million and    
$62.9 million, respectively. The decline in medium-term notes of 39.8%,    
averaging $323.5 million, resulted from notes maturing during 1995 and the    
use of other lower cost funding sources. Federal funds purchased and repos    
showed an 8.8% decline over 1994. Long-term debt and capitalized lease    
obligations declined slightly to an average of $158.4 million. In 1995,    
the cost of interest-bearing liabilities increased 88 basis points to    
5.09%, due primarily to the higher interest rate environment.    
    
     Table 5 presents the components of net interest income on a taxable    
equivalent basis. Interest earned on certain tax-exempt loans and    
investment securities has been increased by an amount equivalent to the    
taxes that would have been paid on taxable assets at the federal    
statutory rate.    
    
    
    
<PAGE>          
          
Loans    
     
     Loans represent the highest yielding and largest component of    
earning assets. In 1995, total loans grew 12.7% to an average of $6.0    
billion compared to $5.3 billion from the prior year. This growth    
reflected an increased demand in consumer lending activities. The    
average yield on the loan portfolio increased 50 basis points to 8.87%    
from 8.37% in 1994. The average prime rate was 8.69% in 1995    
compared to 7.08% in 1994.    
    
     Commercial and commercial real estate loans averaged $1.9 billion, a    
3.9% increase from $1.8 billion in 1994. The average yield was up 69 basis    
points to 8.65% compared to 1994, reflective of the higher average prime    
rate during 1995. Construction loans grew 4.6%, or $13.5 million to an    
average of $308.2 million, following an 11.0% decline in 1994. The average    
yield of 9.84%, was up 160 basis points over 1994.    
    
     Residential first mortgage loans averaged $1.6 billion, an increase    
of 14.3% compared to 1994, following an increase of 65.6% in 1994. During    
1995, higher mortgage interest rates negatively impacted new first    
mortgage loan originations as well as refinancing activity. The average    
yield on the residential first mortgage loan portfolio increased slightly    
to 7.23% from 7.20% in 1994.    
    
     Consumer second mortgage loans, which consist of second mortgage    
loans and home equity lines of credit, averaged $578.3 million, a 13.6%    
increase over 1994. The average yield was up 47 basis points to 9.75%.    
Installment loans averaged $971.9 million, representing growth of 27.1%.    
The average yield on installment loans was 8.32%, up 68 basis points from    
7.64% in 1994. Bank card loans grew 22.3% to an average of $647.9 million.    
The average yield remained flat at 13.12%, and is indicative of the    
competitiveness in the bank card industry.    
    
     There are no foreign loans within the portfolio or credits to    
finance leveraged buyouts or other highly leveraged transactions.    
    
    
    
    
    
              
<PAGE>              
<TABLE>              
              
---------------------------------------------------------------------------------------------------------              
TABLE 6  Average Loans              
              
(In Thousands) Year Ended December 31,              
<CAPTION>                                                                                      Percent              
                                                                                               Change              
                                  1995         1994         1993         1992         1991    1995/1994              
<S>                             <C>          <C>          <C>          <C>          <C>           <C>              
---------------------------------------------------------------------------------------------------------              
Commercial and commercial              
  real estate                  $1,903,759   $1,833,077   $1,585,135   $1,542,712   $1,560,323      3.9 %              
Construction                      308,239      294,753      331,162      422,029      518,131      4.6              
Residential real estate         1,589,223    1,390,149      839,496      397,512      216,117     14.3              
Consumer second mortgage          578,316      509,173      433,552      394,024      346,074     13.6              
Installment                       971,878      764,778      619,172      559,588      551,820     27.1              
Bank card                         647,956      529,918      441,572      414,760      414,441     22.3              
--------------------------------------------------------------------  -----------  ------------------              
  Total loans                  $5,999,371   $5,321,848   $4,250,089   $3,730,625   $3,606,906     12.7 %              
-------------------------------==========   ==========   ==========   ==========   ==========              
---------------------------------------------------------------------------------------------------------              
</TABLE>              
              
              
<PAGE>              
<TABLE>              
              
--------------------------------------------------------------------              
TABLE 7  Sensitivity of Loan Portfolio to Changes in Interes Rates              
              
  At December 31, 1995, the total commercial and construction loans due after one year are              
categorized according to interest rate sensitivity as follows:              
              
(In Thousands)              
<CAPTION>              
              
<S>                                                        <C>              
--------------------------------------------------------------------              
Loans having floating or adjustable interest rates              $--              
Loans with fixed or predetermined interest rates            932,890              
--------------------------------------------------------------------              
  Total                                                    $932,890              
---------------------------------------------------------  ========              
--------------------------------------------------------------------              
</TABLE>             
              
              
<PAGE>              
<TABLE>              
              
----------------------------------------------------------------------------------------              
TABLE 8  Loan Maturities              
              
  Scheduled principal repayments of loans outstanding for commercial and construction loans at     
December 31, 1995 are as follows:              
(In Thousands)              
<CAPTION>              
              
<S>                                     <C>           <C>         <C>        <C>              
----------------------------------------------------------------------------------------              
                                                        One              
                                         One Year     Through    Over Five              
                                          or Less    Five Years    Years        Total              
----------------------------------------------------------------------------------------              
Commercial and commercial real estate   $1,082,976    $497,296    $404,121   $1,984,393              
Construction                               258,711       6,894      24,579      290,184              
-----------------------------------------------------------------------------------------------              
  Total                                 $1,341,687    $504,190    $428,700   $2,274,577              
----------------------------------------==========   ==========  ==========  ==========              
----------------------------------------------------------------------------------------              
  As is common in the banking industry, the timing of actual principal repayments is expected     
to vary significantly from the scheduled repayments due to renewal of certain loans at their     
maturities.              
</TABLE>              
          
<PAGE>    
    
Allowance/Provision for Loan Losses    
    
     The allowance for loan losses represents management's estimate of    
an amount adequate to absorb potential future losses inherent in the    
loan portfolio. In assessing the adequacy of the allowance, management    
relies predominately on its ongoing review of the lending process and    
the risk characteristics of the portfolio in the aggregate. Among other    
factors, management considers the Company's loan loss experience, the    
amount of past-due and nonperforming loans, current and anticipated    
economic conditions, and the estimated current values of collateral    
securing loans in assessing the level of the allowance for loan losses.    
    
     While it is the Company's policy to charge off in the current    
period loans for which a loss is considered probable, there are    
additional risks of future losses which cannot be quantified precisely    
or attributed to particular loans or classes of loans. Because these    
risks include the state of the economy as well as conditions affecting    
individual borrowers, management's judgment of the allowance is    
necessarily approximate and imprecise. It is also subject to regulatory    
examinations and determinations as to its adequacy.    
    
     The allowance for loan losses at December 31, 1995 was $110.0    
million, the same as year-end 1994. At December 31, 1995, the    
allowance for loan losses was 1.74% of loans, compared to 1.91% at    
December 31, 1994. The provision for loan losses totalled $26.7 million    
for 1995, an increase of $2.3 million compared to $24.4 million in 1994.    
The increase in the provision is consistent with comparable increases in    
charge-offs from year to year. Net charge-offs amounted to $26.7    
million for 1995, compared with $19.4 million for 1994. The ratio of    
provision for loan losses declined slightly from .46% to .45% for 1995,    
and the ratio of net charge-offs to average loans increased from .36% to    
 .45%. Table 9 provides an analysis of the allowance for loan losses for    
the years 1991 through 1995, including gross charge-offs and recoveries    
for the five year period.    
    
     Nonperforming assets as of December 31, 1995 were $65.9 million or    
 .61% of total assets compared to $90.3 million or .90% of total assets a    
year ago. At December 31, 1995, nonperforming assets were 1.04% of loans    
and foreclosed properties, compared to 1.56% at December 31, 1994. The    
lower level of nonperforming assets was the result of improved real estate    
markets across the Commonwealth of Virginia and continued success in    
problem loan resolution. At December 31, 1995, the allowance for loan    
losses to nonperforming assets was 166.9% compared to 121.8% at December    
31, 1994. Asset quality continued to improve in the commercial,    
commercial real estate and construction loan portfolios during 1995.    
Higher consumer loan delinquencies, however, resulted in increased charge-    
offs, a trend expected to continue into 1996. This is, in part, a    
reflection of conditions in consumer banking throughout our industry, as    
well as increased volume. In response, our underwriting criteria have been    
strengthened and collection efforts enhanced. Table 13 shows the    
distribution of nonperforming assets by geographic region and loan    
category.    
     
<PAGE>             
<TABLE>             
             
---------------------------------------------------------------------------------------------------------             
TABLE 9  Selected Loan Loss Data             
             
(In Thousands) Year Ended December 31,             
<CAPTION>             
                                             1995         1994         1993         1992         1991             
<S>                                        <C>          <C>          <C>          <C>          <C>             
---------------------------------------------------------------------------------------------------------             
Balance at beginning of year                $110,000     $105,000     $101,800      $61,000      $60,806             
Provision charged to expense                  26,713       24,359       79,509       99,757       49,810             
-----------------------------------------------------------------------------------------------------------             
                                             136,713      129,359      181,309      160,757      110,616             
Loans charged off:             
  Commercial and commercial real estate        5,101        8,288       27,995       17,091       20,092             
  Construction                                   735        4,744       39,031       27,793       14,393             
  Residential real estate                        344          173           64            4           32             
  Installment                                 14,983        5,989        5,841        6,273        5,949             
  Bank card                                   25,118       15,203       13,797       16,408       15,587             
-----------------------------------------------------------------------------------------------------------             
    Total charge-offs                         46,281       34,397       86,728       67,569       56,053             
-----------------------------------------------------------------------------------------------------------             
Recoveries of loans previously charged off:             
  Commercial and commercial real estate        8,962        4,281        3,162        1,967        2,083             
  Construction                                 3,171        4,425          392        1,557           69             
  Residential real estate                         18           20           23            3            2             
  Installment                                  4,429        3,456        3,508        2,656        2,099             
  Bank card                                    2,988        2,856        3,334        2,429        2,184             
-----------------------------------------------------------------------------------------------------------             
    Total recoveries                          19,568       15,038       10,419        8,612        6,437             
-----------------------------------------------------------------------------------------------------------             
    Net charge-offs                           26,713       19,359       76,309       58,957       49,616             
-----------------------------------------------------------------------------------------------------------             
Balance at end of year                      $110,000     $110,000     $105,000     $101,800      $61,000             
------------------------------------------  ========      =======      =======      =======      =======             
Average loans                             $5,999,371   $5,321,848   $4,250,089   $3,730,625   $3,606,906             
Loans at year-end                         $6,316,813   $5,772,093   $4,812,509   $3,953,354   $3,619,218             
Ratio of provision for loan losses to             
  average loans                                 0.45%        0.46%        1.87%        2.67%        1.38%             
Ratio of net charge-offs to average loans       0.45%        0.36%        1.80%        1.58%        1.38%             
Ratio of allowance for loan losses to             
  loans at year-end                             1.74%        1.91%        2.18%        2.58%        1.69%             
---------------------------------------------------------------------------------------------------------             
</TABLE>             
         
<PAGE>         
<TABLE>         
         
------------------------------------------------------------------------------------------------------------------------         
TABLE 10  Allocated Allowance for Loan Losses         
         
  The allowance for loan losses is a general allowance applicable to all loan categories; however, management has         
allocated the allowance to provide an indication of the relative risk characteristics of the loan portfolio. The         
allocation is based on the same judgmental criteria discussed earlier in determining the level of the allowance         
and should not be interpreted as an indication that charge-offs in 1996 will occur in these amounts or         
proportions, or that the allocation indicates future trends. The allocation of the allowance at December 31 for         
the years indicated and the ratio of the related outstanding loan balances to total loans are as follows:         
         
(In Thousands)         
December 31,         
<CAPTION>         
         
<S>            <C>           <C>     <C>           <C>    <C>           <C>    <C>           <C>     <C>          <C>         
------------------------------------------------------------------------------------------------------------------------         
                        Ratio of              Ratio of             Ratio of             Ratio of             Ratio of         
                        Loans to              Loans to             Loans to             Loans to             Loans to         
                       Total Loans           Total Loans          Total Loans          Total Loans          Total Loans         
              AllowanceOutstanding  AllowanceOutstanding AllowanceOutstanding AllowanceOutstanding AllowanceOutstanding         
------------------------------------------------------------------------------------------------------------------------         
Commercial and          
  commercial          
  real estate  $47,194       31.4 %  $62,724      32.5 %  $61,956      35.5 %  $40,166      39.9 %  $24,377      42.5 %         
Construction    11,896        4.6     17,835       5.3     18,803       6.0     36,184       8.8     21,351      13.3         
Residential          
  real estate    2,733       25.7      1,789      27.0      1,318      24.4      1,018      14.9        300       7.1         
Installment     14,917       22.3      5,917      20.6      5,497      19.0      6,108      20.3      3,672      20.3         
Bank card       33,260       16.0     21,735      14.6     17,426      15.1     18,324      16.1     11,300      16.8         
------------------------------------------------------------------------------------------------------------------------         
  Total       $110,000      100.0 % $110,000     100.0 % $105,000     100.0 % $101,800     100.0 %  $61,000     100.0 %         
--------------========   ========   ========  ========   ========  ========   ========  ========   ========  ========         
------------------------------------------------------------------------------------------------------------------------         
</TABLE>        
             
             
             
<PAGE>             
<TABLE>             
             
--------------------------------------------------------------------------             
TABLE 11  Nonaccrual, Past-Due and Restructured Loans             
             
  The following table presents information concerning: loans in a nonaccrual status; other loans             
which are contractually past due as to interest or principal payments; and loans whose terms             
have been renegotiated to provide a reduction or deferral of interest or a deferral of             
principal because of a deterioration in the financial position of the borrower.  Past-due loans             
are those loans contractually past due for 90 days or more.             
             
--------------------------------------------------------------------------             
(In Thousands) December 31,             
<CAPTION>             
                               1995     1994     1993     1992     1991             
<S>                           <C>      <C>      <C>      <C>      <C>             
--------------------------------------------------------------------------             
Nonaccrual loans              $48,763  $67,534  $93,349  $84,401  $35,853             
Past-due loans (not including             
  nonaccrual loans):             
  Commercial and construction   1,159    1,195    1,887    9,369    8,542             
  Residential real estate       7,941    2,255      670      134      306             
  Installment                   4,028    2,028      681    2,271    3,300             
  Bank card                     7,855    5,562    3,104    3,413    4,363             
-----------------------------------------------------------------------------             
                               20,983   11,040    6,342   15,187   16,511             
Restructured loans (in             
  accrual status)                  --       --      606      260    1,635             
-----------------------------------------------------------------------------             
    Total                     $69,746  $78,574 $100,297  $99,848  $53,999             
----------------------------- =======  ======= ========  =======  =======             
--------------------------------------------------------------------------             
</TABLE>            
            
            
<PAGE>            
<TABLE>            
            
----------------------------------------------------------------------------------------------------            
TABLE 12  Loan Distribution            
             
(In Thousands) December 31,            
<CAPTION>                                                                                Percent            
                                                                                          Change            
                                    1995       1994       1993       1992       1991    1995/1994            
<S>                              <C>         <C>        <C>        <C>        <C>             <C>            
----------------------------------------------------------------------------------------------------            
Commercial and commercial real             
  estate                         $1,984,393 $1,879,499 $1,711,092 $1,576,744 $1,537,611       5.6 %            
Construction                        290,184    305,457    289,199    347,685    483,026      (5.0)            
Residential real estate           1,625,651  1,558,429  1,174,051    589,133    256,863       4.3            
Consumer second mortgage            613,097    552,301    458,294    411,708    377,009      11.0            
Installment                       1,046,536    871,115    670,487    593,065    537,258      20.1            
Bank card                           756,952    605,292    509,386    435,019    427,451      25.1            
---------------------------------------------------------------------------------------------            
  Total loans                    $6,316,813 $5,772,093 $4,812,509 $3,953,354 $3,619,218       9.4 %            
-------------------------------- ==========  =========  =========  =========  =========            
----------------------------------------------------------------------------------------------------            
</TABLE>            
            
            
<PAGE>            
<TABLE>            
            
-------------------------------------------------------------------------------------------------            
TABLE 13  Distribution of Loan Portfolio and Nonperforming Assets by Region            
            
            
(In Thousands) December 31, 1995            
<CAPTION>                        Capital    Eastern   Northern    Western  Southwestern            
                                 Region     Region     Region     Region     Region   Consolidated            
<S>                            <C>        <C>        <C>        <C>        <C>        <C>            
-------------------------------------------------------------------------------------------------            
Commercial and commercial real            
  estate                         $333,512   $748,297   $321,729   $332,033   $248,822 $1,984,393            
Construction                       68,492     70,402     89,153     36,559     25,578    290,184            
Residential real estate           365,341    295,567    296,650    494,975    173,118  1,625,651            
Consumer second mortgage          111,292    118,421     69,397    242,064     71,923    613,097            
Installment                       329,133    136,535     78,888    358,353    143,627  1,046,536            
Bank card                         241,049    149,245    209,813    119,507     37,338    756,952            
------------------------------------------------------------------------------------------------------            
  Loans*                       $1,448,819 $1,518,467 $1,065,630 $1,583,491   $700,406 $6,316,813            
------------------------------- =========  =========  =========  =========  =========  =========            
            
Nonaccrual loans                   $3,139    $10,530    $25,349     $5,065     $4,680    $48,763            
Foreclosed properties                 991      4,718      8,956        305      2,166     17,136            
------------------------------------------------------------------------------------------------------            
  Nonperforming assets             $4,130    $15,248    $34,305     $5,370     $6,846    $65,899            
------------------------------- =========  =========  =========  =========  =========  =========            
Ratio of nonperforming assets to             
  loans and foreclosed properties    0.28%      1.00%      3.19%      0.34%      0.97%      1.04%            
-------------------------------------------------------------------------------------------------            
*  Includes nonaccrual loans.            
</TABLE>            
            
          
<PAGE>    
    
Securities Available for Sale    
    
     The Company classifies substantially all of its securities as    
available for sale and reports them at fair value.  Unrealized gains or    
losses are reported on the balance sheet as a separate component of    
shareholders' equity, net of any deferred tax provision.    
    
     At December 31, 1995, the Company had $3.7 billion in securities    
available for sale, compared with $3.5 billion at year-end 1994.    
    
     The fair value of securities available for sale, at year-end 1995,    
exceeded amortized cost by $36.7 million, resulting in a $23.9 million    
after-tax addition to shareholders' equity.  This represents a significant    
reversal from year-end 1994, when the portfolio had an unrealized loss of    
$157.3 million, resulting in a $102.2 million after-tax reduction of    
shareholders' equity.    
    
     The change in the composition of the portfolio in 1995 reflects the    
emphasis on asset-backed securities, which grew to 21% of the portfolio,    
compared to 13% at the end of 1994.  Mortgage-backed securities decreased    
slightly to 36% of the portfolio following the sale of certain adjustable    
rate securities during the fourth quarter.  Collateralized mortgage    
obligations remained at 27% of securities.    
    
     The average yield on securities available for sale in 1995 was 6.71%,    
compared with 6.23% in 1994.  The expected weighted average life of the    
portfolio shortened to 3.7 years, compared with 4.4 years at year-end    
1994. This shortening is attributed to the aging of the securities held in    
the portfolio as well as faster prepayment assumptions.    
    
     Going forward, the Company expects that maturities and cash flows    
from the investment portfolio will be used primarily to fund loan growth.    
    
          
<PAGE>            
<TABLE>            
            
---------------------------------------------------------------------------------------            
TABLE 14  Securities Available for Sale            
            
  The carrying value of securities available for sale at the dates indicated was:            
            
(In Thousands) December 31,            
<CAPTION>            
                                                       1995        1994        1993            
<S>                                                 <C>         <C>         <C>            
---------------------------------------------------------------------------------------            
U.S. Government and agencies                        $2,342,541  $2,516,781  $3,193,391            
States and political subdivisions                      124,380     142,530     170,981            
Other                                                1,187,966     827,070     735,734            
-------------------------------------------------------------------------------------------            
  Total securities available for sale               $3,654,887  $3,486,381  $4,100,106            
---------------------------------------------------  =========   =========   =========            
---------------------------------------------------------------------------------------            
</TABLE>            
     
     
<PAGE>     
<TABLE>     
     
--------------------------------------------------------------------------------------------------------     
TABLE 15  Securities Maturities, Expected Principal Repayments, and Expected Yields     
     
  The table below shows the weighted average expected yields, maturities and expected principal     
repayment at carrying value, of securities available for sale at December 31, 1995:     
     
(In Thousands)     
<CAPTION>     
                                             Maturity or Expected Principal Repayment     
<S>              <C>        <C>   <C>        <C>     <C>       <C>    <C>        <C>  <C>        <C>     
--------------------------------------------------------------------------------------------------------     
                                         After One Bu     After Five But     
                   Within One Year   Within Five Year  Within Ten Year After Ten Years             Total     
                  Amount  Yield     Amount   Yield     Amount  Yield   Amount  Yield    Amount   Yield     
--------------------------------------------------------------------------------------------------------     
U.S. Government and      
  agencies:     
    U.S. Treasury     $--    -- %   $275,605  6.18 %       $--   -- %      $--   -- %   $275,605 6.18 %     
    Federal agenc      --    --      107,606  4.96          --   --         --   --      107,606 4.96     
    Mortgage-backed     
      obligations 182,899  6.63    1,067,472  6.69     708,959 6.72         --   --    1,959,330 6.70     
                 ---------------- ----------------   ---------------- ----------------------------------     
                  182,899  6.63    1,450,683  6.47     708,959 6.72         --   --    2,342,541 6.56     
                 ---------------- ----------------   ---------------- ----------------------------------     
States and political     
  subdivisions     23,961  8.08       30,958  8.47      49,411 7.82     20,050 9.46      124,380 8.29     
                 ---------------- ----------------   ---------------- ----------------------------------     
Other:     
  Whole loan     
    mortgage-back  12,501  7.15      346,030  6.85          --   --         --   --      358,531 6.86     
  Asset-backed    152,579  7.38      603,208  6.62          --   --         --   --      755,787 6.77     
  Other            25,251  6.42       48,397  6.99          --   --         --   --       73,648 6.79     
                 ---------------- ----------------   ---------------- ----------------------------------     
                  190,331  7.24      997,635  6.72          --   --         --   --    1,187,966 6.80     
--------------------------------- ----------------   ---------------- ----------------------------------     
  Total          $397,191  7.01 % $2,479,276  6.59 %  $758,370 6.79 %  $20,050 9.46 % $3,654,887 6.69 %     
-----------------=========         =========         =========        =========       ==========     
--------------------------------------------------------------------------------------------------------     
</TABLE>    
            
<PAGE>    
      
Asset/Liability Management    
    
     The purpose of the Asset/Liability process is the effective    
management of interest rate risk (IRR) through the proper supervision of    
lending, investment, funding, and off-balance-sheet activities.  The    
Asset/Liability Committee meets regularly to review the following topics:    
current and predicted economic conditions, interest rate trends, loan    
strategies, investment strategies, funding strategies, interest rate risk,    
liquidity, off-balance-sheet positions and earnings forecasts.    
    
     The primary tool for IRR measurement is an earnings simulation    
model which has been used and refined over many years.  The model projects    
changes to the balance sheet and earnings over two twelve-month periods    
using four standard interest rate scenarios:  1) a base case scenario    
which is management's expected path of interest rates, 2) an up rate    
scenario that measures the Company's exposure to increasing rates up to    
200 basis points in increments of 50 basis points occurring over the first    
three months of the forecast period, 3) a down rate scenario of 200 basis    
points as described in 2 above, and 4) no change in rates.  Policy of the    
Company requires that projected earnings not vary more than 10% from the    
flat rate scenario over the first twelve-month horizon.  At year-end 1995,    
the Company's exposure to either up or down rates was well within the    
Company's prescribed policy guidelines.    
          
     In addition to earnings simulation, the Company also uses a static    
gap report to measure it's general exposure to repricing risk at a point    
in time.  As a result of  the Company's acquisition of the Virginia    
deposits of Household Bank, f.s.b. and other steps to reduce its exposure    
to rising rates, the one year cumulative gap was reduced from a negative    
11.96% of earning assets at year-end 1994 to negative 2.00% at year-end    
1995 as shown in Table 20 on page 47.  The Company anticipates maintaining    
a neutral exposure to interest rate changes.    
          
<PAGE>          
          
Off-Balance-Sheet Derivatives    
    
     In the context of its asset/liability management, the Company is a    
limited end-user of off-balance-sheet financial derivatives as a cost-    
efficient vehicle for managing interest rate sensitivity.  Interest rate    
swaps have been the main derivative instrument used to modify the    
repricing characteristics of various balance sheet assets and liabilities.    
The interest rate swaps entered into by the Company are essentially    
commitments to participate in cash settlements with a counterparty at    
various future dates as agreed to in the swap contract.   These cash    
settlements result from movements in interest rates and are based on    
differences in specific rate indexes as applied to the notional principal    
amount of the contract.    
    
     The notional amount of the Company's off-balance-sheet swap    
portfolio, at December 31, 1995, was $546.8 million, down from $976.5    
million at year-end 1994. The related fair value, or unrecognized gains    
(losses), of these derivative financial instruments was $6.6 million and    
($29.5) million at December 31, 1995 and 1994, respectively. As shown on    
Table 17, the swap portfolio consists principally of contracts wherein the    
Company receives a fixed rate of interest and pays a variable rate,    
typically three-month LIBOR.    
    
     During 1992 and 1993, the Company utilized financial derivatives in    
its strategy of increasing liability sensitivity, which produced earnings    
in an environment of declining interest rates.   The Company entered into    
interest rate swaps to receive a fixed rate of interest and pay a variable    
rate.  In the implementation of this strategy, the use of off-balance-    
sheet derivatives was limited compared to the size of various on-balance-    
sheet instruments, namely fixed rate securities and short-term borrowings,    
which were the predominant vehicles for pursuing liability sensitivity.    
Conversely, when interest rates began rising in 1994, the Company sought    
to reduce its liability sensitivity and entered into interest rate swaps    
to pay a fixed rate and receive a variable rate.    
    
     Market values of derivatives transactions fluctuate based upon    
movements in the underlying financial indices such as interest rates.    
Market values are monitored on a monthly basis through external pricing    
mechanisms and then tested by using internal calculations.  The Company's    
objective measurement system together with risk limits and timely    
reporting to senior management help to mitigate the possibility of any    
gain or loss recognition on the Company's interest rate swaps.    
In the event that a derivative product were terminated prior to its    
contractual maturity, it is the Company's policy to recognize the    
resulting gain or loss over the remaining life of the underlying hedged    
asset or liability.  In 1995 and 1994, the Company did not terminate any    
derivatives transactions prior to contractual maturity. Unrecognized gains    
and losses as of December 31, 1995 are noted in Table 17.    
    
     Financial derivatives may expose the Company to credit risk to the    
extent of the fair value gain of an instrument, should the counterparty    
default on its obligation to perform.  The Company seeks to reduce credit    
risk by dealing only with highly rated counterparties and by setting    
exposure limits based on independent industry ratings from the major    
rating agencies and other relevant criteria.  Furthermore, the Company    
uses bilateral netting agreements and collateral arrangements to reduce    
credit risk.  Collateral is delivered by either party when the fair value    
of the transaction exceeds established thresholds of credit risk.  At    
year-end 1995, the Company had net credit risk of $11.0 million to one    
counterparty.  This exposure was below the threshold for receiving    
collateral. Of the transactions that had negative fair values at year-end    
1995, none were above threshold levels requiring the Company to deliver    
collateral.    
           
     The Company has also entered into a limited number of interest rate    
swap agreements to accommodate the needs of commercial customers.  In    
order to offset the interest rate risk of customer swaps, the Company has    
executed offsetting transactions with third parties.  The notional amount    
of customer-related swap transactions was $8.0 million and $18.0 million    
at December 31, 1995 and 1994, respectively. In 1995, at the request of    
the customer, the Company terminated a $5.0 million notional swap. As a    
result, the offsetting swap with a third party was also terminated for a    
total notional amount terminated during the year of $10.0 million. No    
customer swaps were terminated in 1994.    
           
     The Company intends to continue using off-balance-sheet financial    
derivatives as a limited end-user in the prudent management of interest    
rate sensitivity.    
           
            
<PAGE>            
<TABLE>            
            
-----------------------------------------------------------------------------------------------------            
TABLE 16 Expected Maturities of Interest Rate Swaps            
            
<CAPTION>            
                                     Due   After OneAfter Two After ThreAfter Four            
                                   Within   Through  Through   Through   Through    After            
(In Thousands) December 31, 1995  One Year Two YearsThree YearFour YearsFive YearsFive Years  Total            
<S>                               <C>      <C>      <C>       <C>       <C>       <C>       <C>            
-----------------------------------------------------------------------------------------------------            
Company Hedging Swaps            
-----------------------------------------------------------------------------------------------------            
Pay fixed/receive variable:            
  Notional amount                   $9,192  $62,347    $6,603   $17,344    $1,328        --  $96,814            
  Weighted average pay rate           8.18%    6.72%     8.69%     7.26%     7.03%       --     7.10%            
  Weighted average receive rate:             
    Contractual rate*                 6.20%    5.82%     6.29%     6.00%     5.88%       --     5.92%            
    Forward yield curve**             5.20%    5.18%     5.31%     5.46%     5.62%       --     5.25%            
            
Receive fixed/pay variable:            
  Notional amount                 $200,000 $100,000        --        --        --  $150,000 $450,000            
  Weighted average pay rate:             
    Contractual rate*                 5.88%    5.63%       --        --        --      5.88%    5.82%            
    Forward yield curve**             5.43%    5.18%       --        --        --      5.84%    5.51%            
            
  Weighted average receive rate       5.14%    4.77%       --        --        --      7.10%    5.71%            
-----------------------------------------------------------------------------------------------------            
Customer Hedging Swaps            
-----------------------------------------------------------------------------------------------------            
Pay fixed/receive variable:            
  Notional amount                       --       --    $4,000        --        --        --   $4,000            
  Weighted average pay rate             --       --      9.57%       --        --        --     9.57%            
  Weighted average receive rate:             
    Contractual rate*                   --       --      5.85%       --        --        --     5.85%            
    Forward yield curve**               --       --      5.62%       --        --        --     5.62%            
            
Receive fixed/pay variable:            
  Notional amount                       --       --    $4,000        --        --        --   $4,000            
  Weighted average pay rate:            
    Contractual rate*                   --       --      5.85%       --        --        --     5.85%            
    Forward yield curve**               --       --      5.62%       --        --        --     5.62%            
            
  Weighted average receive rate         --       --      9.62%       --        --        --     9.62%            
-----------------------------------------------------------------------------------------------------            
*  The weighted average variable rates are based upon the contractual rates in effect at     
       December 31, 1995.            
** The weighted average variable rates are projected based upon the implied forward yield     
       curve from date of analysis through maturity.            
</TABLE>            
            
            
<PAGE>            
<TABLE>            
            
--------------------------------------------------------------------------------------------------------            
TABLE 17 Summary of Interest Rate Swaps            
            
  The weighted average variable rates are based upon the contractual rates in effect at December 31,     
1995:            
            
(In Thousands) December 31, 1995            
<CAPTION>            
            
            
                                  Notional    Weighted Average Rate   Matur    Interest    Unrecognized            
                                   Amount     Receive         Pay     In YeIncome/(Expense)Gains (Losses)            
<S>                                   <C>       <C>       <C>                       <C>            <C>            
--------------------------------------------------------------------------------------------------------            
Company Hedging Swaps            
--------------------------------------------------------------------------------------------------------            
Pay fixed/receive variable:            
  Variable rate medium-term             
    borrowings                     $50,000    5.75 % (1)  6.42 %      1.46           ($148)       ($794)            
  Variable rate deposits                --      --          --          --             232           --            
  Securities available for sale     21,228    6.35   (2)  9.00        3.74            (170)      (1,099)            
  Fixed rate commercial loans       25,586    5.91   (1)  6.83        3.68            (211)        (944)            
------------------------------------------------                            -------------- --------------            
    Total pay fixed/receive variable96,814    5.92        7.10        2.54            (297)      (2,837)            
------------------------------------------------                            -------------- --------------            
Receive fixed/pay variable:            
  Fixed rate subordinated debt     150,000    7.10        5.88   (1)  6.88           1,391       11,155            
  Fixed rate medium-term borrowings200,000    5.14        5.88   (1)   1.3          (3,204)      (1,079)            
  Variable rate commercial loans   100,000    4.77        5.63   (1)  1.06          (1,804)        (679)            
------------------------------------------------                            -------------- --------------            
    Total receive fixed/pay             
      variable                     450,000    5.71        5.82        3.11          (3,617)       9,397            
------------------------------------------------                            -------------- --------------            
    Total company hedging swaps   $546,814    5.75 %      6.05 %      3.01         ($3,914)      $6,560            
----------------------------------========                                        ========     ========            
--------------------------------------------------------------------------------------------------------            
Customer Hedging Swaps            
--------------------------------------------------------------------------------------------------------            
Pay fixed/receive variable          $4,000    5.85 % (1)  9.57 %      2.34            $916        ($384)            
Receive fixed/pay variable           4,000    9.62        5.85   (1)  2.34            (910)         388            
------------------------------------------------                            -------------- --------------            
    Total customer hedging swaps    $8,000    7.74 %      7.71 %      2.34              $6           $4            
----------------------------------========                                        ========     ========            
            
  The weighted average variable rates are based upon the contractual rates in effect at December 31,     
1994:    
            
(In Thousands) December 31, 1994            
--------------------------------------------------------------------------------------------------------            
Company Hedging Swaps            
--------------------------------------------------------------------------------------------------------            
Pay fixed/receive variable:            
  Variable rate medium-term             
    borrowings                     $50,000    6.34 % (1)  6.42 %      2.46           ($453)      $1,894            
  Variable rate deposits            50,000    5.72   (3)  4.98        0.53          (1,037)         416            
  Fixed rate commercial loans       26,548    5.71   (1)  6.83        4.67            (185)         884            
------------------------------------------------                            -------------- --------------            
    Total pay fixed/receive             
      variable                     126,548    5.97        5.94        2.16          (1,675)       3,194            
------------------------------------------------                            -------------- --------------            
Receive fixed/pay variable:            
  Fixed rate subordinated debt     150,000    7.10        5.81   (1)  7.88           3,760       (9,170)            
  Fixed rate medium-term borrowings400,000    4.87        5.81   (1)  1.67           1,264      (16,013)            
  Variable rate commercial loans   300,000    5.18        6.42   (1)  0.83           1,772       (7,509)            
------------------------------------------------                            -------------- --------------            
    Total receive fixed/pay             
      variable                     850,000    5.37        6.03        2.47           6,796      (32,692)            
------------------------------------------------                            -------------- --------------            
    Total company hedging swaps   $976,548    5.45 %      6.01 %      2.43          $5,121     ($29,498)            
----------------------------------========                                        ========     ========            
--------------------------------------------------------------------------------------------------------            
Customer Hedging Swaps            
--------------------------------------------------------------------------------------------------------            
Pay fixed/receive variable          $9,000    5.47 % (1)  6.87 %      2.27          $1,114           $6            
Receive fixed/pay variable           9,000    6.92        5.47   (1)  2.27          (1,110)          27            
------------------------------------------------                            -------------- --------------            
    Total customer hedging swaps   $18,000    6.20 %      6.17 %      2.27              $4          $33            
----------------------------------========                                        ========     ========            
--------------------------------------------------------------------------------------------------------            
(1) Variable rate is tied to London Inter-Bank Offered Rate (LIBOR) with designated 3-month maturity.            
(2) Variable rate is tied to London Inter-Bank Offered Rate (LIBOR) with designated 1-month maturity     
        plus 60 basis points.            
(3) Variable rate is tied to U.S. Treasury bill rate.            
</TABLE>            
            
           
<PAGE>           
           
Deposits    
           
     Total deposits increased 11.0%, averaging $7.6 billion in 1995, as    
compared to $6.8 billion in 1994. Total core deposits of approximately    
$453 million and a total of fourteen branch offices in Northern Virginia    
were acquired on June 9, 1995 from Household Bank, f.s.b., a Virginia    
subsidiary of Household International, Inc., a Chicago, Illinois based    
financial services company. The offices are located in the city of    
Alexandria, and counties of Arlington and Fairfax.    
           
     In 1995, consumer certificates accounted for the largest increase    
in core deposits, averaging $3.9 billion compared to $3.1 billion in    
1994, representing a 27.8%, or $857.7 million increase. Money market    
accounts averaged $1.0 billion, showing a 2.8% increase from the prior    
year. Regular savings and interest checking declined 12.0% and .5% in    
1995, averaging $742.5 million and $660.1 million, respectively. Table    
18 shows the components of total average deposits for the past five    
years.    
           
     The Company's asset funding strategy focuses primarily on core    
deposit growth. Central Fidelity's share of total core deposits in the    
Commonwealth of Virginia was 12.56% as of September 30, 1995, ranking it    
third in market share. During 1995, certificates of deposit $100,000 and    
over decreased 18.4% to an average of $258.5 million. Table 19 shows a    
maturity schedule for certificates of deposit $100,000 and over at year-    
end 1995.    
            
<PAGE>            
<TABLE>            
            
--------------------------------------------------------------------------------------------------            
TABLE 18  Average Deposits            
            
(In Thousands) Year Ended December 31,             
<CAPTION>                                                                               Percent            
                                                                                         Change            
                                    1995       1994       1993       1992       1991    1995/1994            
<S>                               <C>        <C>        <C>        <C>        <C>           <C>            
--------------------------------------------------------------------------------------------------            
Noninterest-bearing                $929,378   $903,164   $840,070   $733,716   $591,724     2.9 %            
Interest-bearing:            
  Interest checking                 660,090    663,405    632,429    520,062    392,912    (0.5)            
  Regular savings                   742,518    843,867    816,783    557,220    367,837   (12.0)            
  Consumer certificates           3,946,396  3,088,651  2,781,417  2,603,656  2,274,954    27.8            
  Money market accounts           1,035,942  1,007,847  1,091,764  1,181,713    922,429     2.8            
  Certificates of deposit             
    $100,000 and over               258,527    316,859    523,453    318,366    321,607   (18.4)            
---------------------------------------------------------------------------------------------            
    Total interest-bearing        6,643,473  5,920,629  5,845,846  5,181,017  4,279,739    12.2            
---------------------------------------------------------------------------------------------            
    Total                        $7,572,851 $6,823,793 $6,685,916 $5,914,733 $4,871,463    11.0 %            
---------------------------------==========  =========  =========  =========  =========            
--------------------------------------------------------------------------------------------------            
</TABLE>             
             
             
<PAGE>             
<TABLE>             
             
----------------------------------------------------------------------------             
TABLE 19  Certificates of Deposit $100,000 and Over             
             
(In Thousands) December 31,             
<CAPTION>             
                                                                    1995             
<S>                                                             <C>             
----------------------------------------------------------------------------             
Time remaining to maturity:             
  Less than three months                                           $301,220             
  Three through six months                                           15,214             
  Six through twelve months                                          21,263             
  More than twelve months                                            10,650             
----------------------------------------------------------------------------             
    Total                                                          $348,347             
----------------------------------------------------------------  =========             
----------------------------------------------------------------------------             
</TABLE>             
        
        
<PAGE>        
<TABLE>        
        
------------------------------------------------------------------------------------------------------------        
Table 20  Interest Sensitivity Analysis        
        
     Interest sensitivity management is the process of developing objectives, goals and strategies         
to manage the Company's assets and liabilities. Its purpose is to maintain a managed balance in         
interest sensitive assets and liabilities, those which either mature within a certain time period         
or where the related interest rate can be adjusted or repriced within a specified time period prior        
to maturity. The objective of interest sensitivity management is to provide flexibility in         
controlling the response of both rate sensitive assets and liabilities to wide and frequent         
fluctuations in market rates of interest so that the effect of such swings on net interest        
income is minimized. The most important part of this objective is to maximize earnings while        
keeping risks within defined limits.        
        
     The interest sensitivity position is indicated by the volume of rate sensitive assets, less        
rate sensitive liabilities. This difference is generally referred to as the interest sensitivity         
gap. The nature of the gap indicates how future interest rate changes may affect net interest 
income. Depending on the perception as to whether interest rates will rise or fall, the objective         
is to maintain the gap within a designated range. A negative gap, for example, should generally         
have a favorable impact on net interest income when interest rates are declining, as more         
liabilities than assets would be repriced at lower interest rates.  The table below shows the        
Company's interest sensitivity position at December 31, 1995.        
        
(In Thousands)         
<CAPTION>        
        
                                1-30 Day     1-90 Day     1-180 Day    1-365 Day   Beyond One Year        
                               Sensitivity  Sensitivity  Sensitivity  Sensitivity  Or Insensitiv   Total        
<S>                              <C>        <C>          <C>          <C>              <C>      <C>        
------------------------------------------------------------------------------------------------------------        
Uses of Funds        
------------------------------------------------------------------------------------------------------------        
Earning assets:        
  Securities available for sale and        
    trading account securities   $545,877     $870,758   $1,136,295   $1,634,117   $2,021,192    $3,655,309        
  Federal funds sold, repos and        
    deposits in other banks       207,734      207,734      207,734      207,734           --       207,734        
  Loans and loans available for        
    sale                        1,707,682    1,958,777    2,373,407    3,215,633    3,101,180     6,316,813        
  Interest rate swaps             (65,009)     (55,057)     (57,909)     (63,782)      63,782            --        
------------------------------------------------------------------------------------------------------------        
      Total earning assets      2,396,284    2,982,212    3,659,527    4,993,702    5,186,154    10,179,856        
Nonearning assets                     598        1,183        2,060        3,813      627,305       631,118        
------------------------------------------------------------------------------------------------------------        
      Total uses of funds      $2,396,882   $2,983,395   $3,661,587   $4,997,515   $5,813,459   $10,810,974        
-------------------------------==========   ==========   ==========   ==========   ==========   ===========        
Sources of Funds        
------------------------------------------------------------------------------------------------------------        
Interest-bearing liabilities:        
  Savings and interest-bearing        
    demand accounts                   $--          $--          $--          $--   $1,415,456    $1,415,456        
  Certificates and other time         
    deposits                    1,033,954    1,300,042    1,636,102    2,721,226    2,462,963     5,184,189        
  Certificates of deposit $100,000        
    and over                      224,945      301,220      316,434      337,697       10,650       348,347        
  Federal funds purchased and securities        
    sold under agreements to         
    repurchase                  1,038,900    1,041,880    1,041,880    1,041,880           71     1,041,951        
  Other borrowings                 88,045      288,045      437,995      484,195      206,800       690,995        
  Long-term debt and capitalized        
    lease obligations                  --           --           --           --      158,132       158,132        
  Interest rate swaps                  --      200,000      100,000      100,000     (100,000)           --        
------------------------------------------------------------------------------------------------------------        
      Total interest-bearing         
        liabilities             2,385,844    3,131,187    3,532,411    4,684,998    4,154,072     8,839,070        
Noninterest-bearing sources       132,212      516,300      516,300      516,300    1,455,604     1,971,904        
------------------------------------------------------------------------------------------------------------        
      Total sources of funds    2,518,056    3,647,487    4,048,711    5,201,298    5,609,676    10,810,974        
------------------------------------------------------------------------------------------------------------        
      Interest sensitivity gap  ($121,174)   ($664,092)   ($387,124)   ($203,783)    $203,783           $--        
-------------------------------==========   ==========   ==========   ==========   ==========   ===========        
Interest sensitivity gap as a percentage         
  of earning assets                 (1.19)%      (6.52)%      (3.80)%      (2.00)%       2.00 %        
Uses of funds as a percentage        
  of sources of funds               95.19 %      81.79 %      90.44 %      96.08 %     103.63 %        
------------------------------------------------------------------------------------------------------------        
</TABLE>        
           
<PAGE>    
           
Noninterest Income    
           
     Noninterest income was $78.8 million for 1995, representing an    
increase of $20.4 million, or 35.0% compared to $58.4 million in 1994.    
Trust income grew 7.3% to $14.9 million, while deposit fees and    
charges increased 1.7% over 1994. Profits on securities available for    
sale and trading account securities amounted to $3.3 million in 1995, as    
compared to $26.0 million in securities losses in 1994. These securities    
losses were largely due to a major restructuring of the securities    
portfolio in 1994 to lessen the future exposure to interest rate changes.    
Other income was $25.4 million, a 29.1% decrease when compared to $35.9    
million in 1994. The decline in other income was due primarily to an    
$11.4 million profit recognized from the sale of an affinity bank card    
portfolio in 1994.    
           
     Excluding the effects of securities transactions in 1995 and 1994 and    
the $11.4 million gain on the sale of bank card assets in 1994,    
noninterest income was $75.5 million for 1995, representing an increase of    
$2.6 million, or 3.5% over $72.9 million for 1994.    
           
     Table 21 shows the major categories of noninterest income for the    
past five years.    
            
<PAGE>            
<TABLE>            
            
----------------------------------------------------------------------------------------            
TABLE 21  Noninterest Income            
            
(In Thousands) Year Ended December 31,                                        Percent            
<CAPTION>                                                                     Change            
                                  1995     1994     1993     1992     1991   1995/1994            
<S>                             <C>      <C>      <C>      <C>       <C>        <C>            
----------------------------------------------------------------------------------------            
Trust income                     $14,943  $13,926  $13,621  $12,208  $10,849      7.3 %            
Deposit fees and charges          35,150   34,557   33,898   29,792   27,341      1.7            
Profits (losses) on securities             
  available for sale and             
  trading account securities       3,253  (25,984)   3,695   52,827    6,172       --            
Investment securities gains, net      --       --   50,680       --   17,725       --            
Other income                      25,424   35,860   23,909   20,595   16,855    (29.1)            
---------------------------------------------------------------------------------            
    Total                        $78,770  $58,359 $125,803 $115,422  $78,942     35.0 %            
-------------------------------- =======  =======  =======  =======  =======            
----------------------------------------------------------------------------------------            
</TABLE>            
           
           
<PAGE>           
           
Noninterest Expense    
           
     Noninterest expense totalled $238.3 million for 1995, a decline of    
2.8%, or $6.9 million from $245.2 million in 1994. Lower FDIC deposit    
insurance premiums and other real estate expense were the primary factors    
contributing to this reduction. FDIC insurance expense declined 25.1% to    
$11.2 million for 1995, and other real estate expense was down 87.3% from    
$11.8 million in 1994. This decline in other real estate expense was due    
primarily to charges in 1994 to appropriately reflect appraised current    
values of other real estate owned.    
           
    Personnel expense was up 4.3%, due largely to expenses associated    
with the acquisition of the Household branches and recognition of one time    
charges relating to the announced closing of 10 branches. Occupancy and    
equipment expense for 1995 increased 3.2% to $43.0 million. Other expense    
of $49.5 million in 1995 remained flat compared to 1994. For the year, the    
efficiency ratio was 55.87%, up 125 basis points compared to 54.62% for    
1994.    
           
    Table 22 shows the major categories of noninterest expense for the    
past five years.    
             
<PAGE>             
<TABLE>             
             
----------------------------------------------------------------------------------------             
TABLE 22  Noninterest Expense             
             
(In Thousands) Year Ended December 31,                                        Percent             
<CAPTION>                                                                     Change             
                                  1995     1994     1993     1992     1991   1995/1994             
<S>                             <C>      <C>      <C>      <C>      <C>         <C>             
----------------------------------------------------------------------------------------             
Personnel expense               $133,186 $127,683 $115,917 $104,060  $97,342      4.3 %             
Occupancy and equipment expense   42,979   41,653   38,752   38,313   35,826      3.2             
FDIC insurance expense            11,164   14,910   14,612   11,886    9,244    (25.1)             
Other real estate expense          1,500   11,786   15,108    4,715    8,376    (87.3)             
Other expense                     49,500   49,191   38,909   41,859   39,618      0.6             
----------------------------------------------------------------------------------             
    Total                       $238,329 $245,223 $223,298 $200,833 $190,406     (2.8)%             
--------------------------------================= ======== ======== ========             
----------------------------------------------------------------------------------------             
</TABLE>             
          
<PAGE>          
          
Liquidity          
          
     Central Fidelity's liquidity sources include core deposits, money    
market assets, wholesale funding, and investment securities. Cash flows    
are managed to ensure availability of funds to support loan growth or    
unanticipated declines in deposits or borrowings. Liquidity is measured by    
comparing expected cash flows to available sources under anticipated and    
stress-imposed scenarios to confirm that adequate reserves are available    
to meet unforeseen events.  Concentrations are also monitored for    
significant dependence on single sources of funds.    
          
     The two primary sources of asset liquidity are money market assets    
and expected paydowns and maturities from securities available for sale.    
These portfolios are expected to generate $988 million in cash flows for    
1996. Maturing loans are a secondary founding source to meet the Company's    
liquidity requirements.    
          
     Funds management policy guidelines require a diversified approach    
to the participation in various markets based on relative costs and term    
structures.  Federal funds purchased, repurchase agreements, and large    
denomination certificates of deposit provide the primary sources of short-    
term wholesale funding.  Medium-term funding is provided by the bank note    
program and Federal Home Loan Bank borrowings.  As of December 31, 1995,    
$252.3 million in bank notes and $350.7 million Federal Home Loan Bank    
borrowings were outstanding with over $700 million remaining available    
under these programs.    
          
           
<PAGE>           
           
Capital Resources           
           
     Total shareholders' equity was $826.5 million at December 31, 1995,    
a 32.7% increase compared with $623.1 million for the same period in    
1994. Factors contributing to the equity increase were $58.3 million in    
earnings, after dividends, and the issuance of common stock through    
various Plans totalling $19.0 million, and $23.9 million was attributable    
to unrealized gains on securities available for sale in 1995 compared to    
$102.2 million in unrealized losses on securities available for sale in    
1994 . During 1995, cash dividends declared on common stock at an annual    
rate of $1.18 per share represented a payout ratio of 44.5%.    
           
     At year-end 1992, the Federal Reserve Board adopted final    
risk-based capital guidelines for bank holding companies and banks to    
assist in the assessment of capital adequacy. The risk-based capital    
guidelines significantly revised the definition of capital and    
established minimum capital standards in relation to assets and    
off-balance-sheet exposures, as adjusted for credit risks. The final    
minimum guideline for the ratio of total capital to risk-weighted assets    
is 8%. At least 4% of the total risk-based capital is to be composed of    
common equity net of goodwill and other intangibles ("Tier 1 capital").    
The remainder may consist of subordinated debt, other preferred stock    
and an allowable portion of allowance for loan losses ("Tier 2    
capital"). Table 23 shows the components of risk-based capital at    
December 31, 1995 and 1994.    
           
     In addition, the Federal Reserve established minimum leverage ratio    
guidelines for bank holding companies. These guidelines provided for a    
minimum ratio of Tier 1 capital to total average quarterly assets, less    
goodwill and other intangibles of 3% for bank holding companies that    
meet certain specified criteria, including having the highest regulatory    
rating. All other bank holding companies generally are required to    
maintain a leverage ratio of at least 3% plus an additional cushion of    
100 to 200 basis points.  Furthermore, the Federal Reserve has proposed    
a "tangible Tier 1 leverage ratio" in evaluating proposals for expansion    
or new activities. The tangible Tier 1 leverage ratio is the ratio of    
Tier 1 capital less all intangibles, to total tangible assets.    
           
     At December 31, 1995, Central Fidelity's risk-based capital and    
leverage ratios exceeded the Federal Reserve's minimum guidelines.    
Central Fidelity's Tier 1 and total risk-based capital were $738.8    
million and $982.7 million at December 31, 1995, as compared to $694.3    
million and $928.4 million at year-end 1994. At December 31, 1995, the    
ratios of Tier 1 and total risk-based capital to risk-weighted assets were    
9.87% and 13.12%, compared to 10.36% and 13.85%, at December 31, 1994. The    
leverage ratio was 7.06% at December 31, 1995, compared to 7.04% at    
December 31, 1994.    
           
     Based upon the risk-based capital and leverage requirements,    
Central Fidelity's capital structure places it well above the Federal    
Reserve Board's minimum guidelines and in the well capitalized category    
when measured against FDIC criteria. The Company will continue to review    
and monitor the asset mix and pricing, and other areas determined to be    
most affected by these capital requirements.    
           
     In January 1996, the Company announced authorization by its Board of    
Directors to repurchase up to 2,000,000 shares, approximately 5% of its    
common stock outstanding, over an 18 to 24 month period. Repurchases under    
the program may be discontinued or interrupted at any time.    
          
            
<PAGE>            
<TABLE>            
-------------------------------------------------------------            
TABLE 23  Risk-Based Capital            
            
(In Thousands) December 31,            
<CAPTION>            
                                                 1995       1994            
<S>                                          <C>         <C>            
--------------------------------------------------------------------            
Tier 1 capital:            
  Common shareholders' equity                   $826,547   $623,072            
  Less unrealized (gains)losses on             
    securities available for sale                (23,865)   102,226            
----------------------------------------------------------------------            
                                                 802,682    725,298            
  Less goodwill                                   (9,356)   (10,039)            
  Less deposit intangibles                       (54,480)   (20,995)            
----------------------------------------------------------------------            
      Tier 1 capital                             738,846    694,264            
----------------------------------------------------------------------            
Tier 2 capital:            
  Allowable allowance for loan losses             93,812     84,086            
  Allowable long-term debt                       150,000    150,000            
----------------------------------------------------------------------            
      Tier 2 capital                             243,812    234,086            
----------------------------------------------------------------------            
      Total capital                             $982,658   $928,350            
---------------------------------------------   ========    =======            
            
Risk-weighted assets                          $7,488,748 $6,700,948            
Quarterly average assets                     $10,521,840 $9,886,464            
Risk-based capital ratios:            
  Tier 1 capital                                    9.87%     10.36%            
  Total capital                                    13.12%     13.85%            
Leverage ratio                                      7.06%      7.04%            
--------------------------------------------------------------------            
</TABLE>            
            
          
<PAGE>          
          
Recent Accounting Pronouncement          
          
     The Financial Accounting Standards Board issued Statement of    
Financial Accounting Standards No. 123 (SFAS 123), "Accounting for Stock-    
Based Compensation," in October 1995. SFAS 123 prescribes accounting and    
reporting standards for all stock-based compensation plans. The new    
standard allows companies the option to continue to follow present    
accounting rules, which often result in no compensation expense being    
recorded, or to adopt the SFAS 123 fair-value-based method. The fair-    
value-based method will generally result in higher compensation expense    
based on the estimated fair value of stock-based awards on the grant date.    
Companies electing to continue following present accounting rules will be    
required to provide pro forma disclosures of net income and earnings per    
share, as if the fair-value-based method had been adopted. The Company    
intends to continue following present accounting rules and to implement    
the new disclosures in 1996 as required. The adoption of SFAS 123,    
therefore, will not impact the financial condition or results of    
operations of the Company.    
          
          
<PAGE>    
    
Earnings and Balance Sheet Analysis    
1994 Compared to 1993    
          
Net Interest Income    
          
     On a tax-equivalent basis, net interest income for 1994 was $343.0    
million, a 2.7% increase over 1993. The growth in net interest income    
resulted primarily from higher levels of average earning assets. Average    
earning assets increased $632.1 million, or 7.5% over 1993, totalling $9.0    
billion. The net interest margin for 1994 was 3.80%, reflecting a decline    
of 18 basis points when compared with 3.98% for 1993. The decline in net    
interest margin during 1994 was impacted by the higher than anticipated    
interest rates which lowered interest margins due to higher funding costs.    
        
     Total loans rose 25.2%, or $1.1 billion to an average of $5.3 billion    
over 1993. The growth in loans resulted from gains in all loan categories    
except construction lending. Continued demand for first mortgage    
residential real estate loans as well as increased consumer activities    
were contributing factors to the loan growth. Residential real estate    
loans averaged $1.4 billion, showing an increase of $550.6 million, or    
65.6% compared to $839.5 million in 1993, following a substantial gain of    
111.2% in 1993. Installment loans averaged $764.8 million, representing a    
23.5% increase over the prior year. When compared with the 1993 levels on    
average, bank card, consumer second mortgage, and commercial and    
commercial real estate loans registered increases of 20.0%, 17.5% and    
15.6%, respectively. Construction loans declined 11.0%, averaging $294.7    
million during the year. Securities available for sale averaged $3.6    
billion, reflecting a decline of 9.6% when compared with the total    
securities portfolio for 1993. The decline in the securities portfolio    
resulted from strong loan growth and the sale of fixed rate securities, in    
an effort to reduce the Company's exposure to continued increases in    
interest rates. Money market investments, consisting of federal funds sold    
and securities purchased under agreements to resell, averaged $125.4    
million, a decline of 31.8% compared to 1993. Trading account securities    
were flat compared to 1993's level. The yield on average earning assets    
gained 4 basis points to 7.47%, due to the higher interest rate    
environment for 1994 and a shift to a greater percentage of loans to total    
earning assets.    
          
     In 1994, average interest-bearing liabilities totalled $7.9 billion,    
having grown 6.3% from $7.4 billion in 1993. Core deposits averaged $6.5    
billion, representing a 5.6% increase from the prior year. Consumer    
certificates of deposit rose 11.0% to an average of $3.1 billion. Interest    
checking averaged $663.4 million, registering a 4.9% increase from the    
previous year. Regular savings, averaging $843.9 million, showed an    
increase of 3.3%. Money market accounts declined 7.7%, on average,    
compared to 1993. Certificates of deposit $100,000 and over declined    
39.5%, to an average of $316.9 million. In 1994, Federal Home Loan Bank    
borrowings averaged $107.2 million. Medium-term notes averaged $537.7    
million, an 83.9% increase, or $245.3 million over 1993. Federal funds    
purchased and securities sold under agreements to repurchase averaged $1.1    
billion, a 2.3% increase over 1993. Long-term debt and capitalized lease    
obligations declined to $151.0 million and $8.3 million on average,    
respectively. The decline in long-term debt resulted from a $1.0    
million note maturing in August. In 1994, the cost of interest-bearing    
liabilities increased 29 basis points to 4.21%, following a decline of 72    
basis points to 3.92% in 1993, and was consistent with a rising interest    
rate environment.    
          
Loans    
          
     In 1994, total loans grew $1.1 billion, or 25.2% to an average of    
$5.3 billion, with all loan categories except construction lending    
recording strong gains. The loan growth reflected an increased demand in    
lending activities. The average yield on the loan portfolio declined 20    
basis points to 8.37%, compared to 8.57% in 1993. This decline resulted    
from a change in loan mix and heightened price competition. The average    
prime rate was 7.08% in 1994 compared to 5.93% in 1993.    
          
     Commercial and commercial real estate loans averaged $1.8 billion,    
representing a 15.6% or $248.0 million increase over 1993. The average    
yield was up 29 basis points to 7.96% compared to 1993, reflecting a    
higher average prime rate during 1994.  Construction loans averaged $294.7    
million, which represented a decline of 11.0% in volume, after a 21.5%    
decline in 1993.    
          
     Residential first mortgage loans totalled $1.4 billion, on average,    
an increase of 65.6% compared to 1993, following a substantial increase of    
111.2% in 1993. Rising mortgage rates slowed growth in refinancing and new    
first mortgage residential loans culminating in December with the lowest    
home sales in 18 months. The loan growth was primarily in the adjustable    
rate mortgages and shorter term fixed rate products. The average yields on    
the residential first mortgage loan portfolio declined 43 basis points to    
7.19% from 7.62% in 1993.    
          
     Consumer second mortgage loans which consist of second mortgage loans    
and home equity lines of credit, averaged $509.2 million, a 17.5% increase    
over 1993. The average yield was down 19 basis points to 9.28%.    
Installment loans grew $145.6 million to an average of $764.8 million,    
representing a 23.5% increase over 1993. Installment loan yields declined    
91 basis points to 7.64% in 1994. Bank card loans averaged $529.9 million,    
resulting in a 20.0% increase compared to 1993. The average yield on bank    
card loans represented a decline of 60 basis points to 13.12%. The    
declines in yields reflected aggressive promotional rates.    
          
Allowance/Provision for Loan Losses    
          
     At December 31, 1994, the allowance for loan losses was $110.0    
million, or 1.91% of loans, reflecting a 4.8% increase, or $5.0 million,    
compared to $105.0 million or 2.18% of loans at December 31, 1993. The    
level of allowance for loan losses was impacted by the increase in loan    
volume and continued improvement in credit quality. The provision for loan    
losses totalled $24.4 million for 1994, a decline of $55.2 million    
compared to $79.5 million in 1993. The decline in the provision is    
consistent with comparable declines in the charge-offs from year to year.    
Net charge-offs amounted to $19.4 million for 1994, compared with $76.3    
million for 1993. The ratios of provision for loan losses and net charge-    
offs to average loans declined from 1.87% and 1.80% for 1993 to .46% and    
 .36% for 1994, respectively.    
           
     Nonperforming assets as of December 31, 1994 were $90.3 million or    
 .90% of total assets compared to $132.1 million or 1.37% of total assets a    
year ago. At December 31, 1994, nonperforming assets were 1.56% of loans    
and foreclosed properties, compared to 2.72% at December 31, 1993. The    
lower level of nonperforming assets was a result of improved real estate    
markets across the Commonwealth of Virginia and persistent success in    
problem loan resolution. At December 31, 1994, the allowance for loan    
losses to nonperforming assets was 121.8% compared to 79.5% at December    
31, 1993.    
          
Securities Available for Sale    
          
     At December 31, 1994, the Company had $3.5 billion in securities    
available for sale, compared with $4.1 billion at year-end 1993.  The    
decrease was attributable to the Company's decision to allocate a greater    
portion of earning assets to loans as well as the year-long decline in    
bond prices which occurred in 1994.    
          
     With the adoption of SFAS No. 115 as of December 31, 1993, the    
Company has classified substantially all of its securities as available    
for sale and reported them at fair value.  At year-end 1994, the fair    
value of securities available for sale was $157.3 million lower than the    
amortized cost.  This represents a decline from year-end 1993, when the    
fair value of securities available for sale exceeded amortized cost value    
by $70.5 million.    
          
     While the Federal Reserve raised the federal funds rate six times for    
a total of 250 basis points in 1994, the rise in market rates was even    
greater in the short and intermediate part of the yield curve where most    
of the securities available for sale were concentrated.  During the fourth    
quarter, the Company restructured a portion of its securities portfolio in    
order to reduce exposure to further increases in interest rates.  A total    
of approximately $470 million of U.S. Treasury and mortgage-backed    
securities were sold, resulting in pre-tax losses of $28.7 million.  The    
majority of the proceeds were invested in higher yielding adjustable rate    
mortgage securities, and the remainder of the proceeds were used primarily    
to reduce short-term borrowings.  Other portfolio activity in 1994    
contributed $7.4 million in net realized gains in the first quarter and    
$4.4 million in realized losses in the third quarter.    
          
     Holdings in the mortgage sector, including collateralized mortgage    
obligations, increased to 67% of the portfolio at December 31, 1994,    
compared to 50% at December 31, 1993.  Holdings of U.S. Treasury    
securities declined to 12% of the portfolio from 31%.  The biggest change    
within the mortgage sector was the emphasis on adjustable rate mortgage    
securities, which grew from 2.7% of total securities to 22.8%.    
          
     The average yield earned on securities available for sale in 1994 was    
6.23%, compared with 6.42% in 1993.  The expected weighted average life of    
the portfolio at the end of 1994 was 4.4 years, compared to 3.3 years at    
the end of 1993.  This lengthening is largely a result of the shift to    
adjustable rate mortgage securities, which have longer weighted average    
lives than the securities replaced.    
          
Asset/Liability Management    
          
     As 1994 unfolded, the Company recognized that the pace of interest    
rate increases was faster than expected and took steps to reduce its    
exposure to rising rates.  These actions included increasing the volume of    
longer term retail CD's and restructuring the securities portfolio. As a    
result, the one year cumulative gap was reduced from a negative 26.15% of    
earning assets at year-end 1993 to negative 11.96% at year-end 1994.    
         
Off-Balance Sheet Derivatives    
          
     The notional amount of the Company's off-balance-sheet swap portfolio    
was $976.5 million and $975.0 million at December 31, 1994 and 1993,    
respectively. The related fair value or unrecognized gains (losses) of    
these derivative financial instruments was ($29.5) million and $17.6    
million at December 31, 1994 and 1993, respectively.  The swaps portfolio    
consists  principally of contracts wherein the Company receives a fixed    
rate of interest and pays a variable rate, typically three-month LIBOR.    
          
     During 1992 and 1993, the Company employed financial derivatives in    
its strategy of increasing liability sensitivity, which boosted earnings    
in an environment of declining interest rates.  The Company entered into    
interest rate swaps to receive a fixed rate of interest and pay a variable    
rate.  When interest rates began rising in 1994, the Company sought to    
reduce its liability sensitivity and entered into interest rate swaps to    
pay a fixed rate and receive a variable rate.    
          
     In the event that a derivative product were terminated prior to its    
contractual maturity, it is the Company's policy to recognize the    
resulting gain or loss over the remaining life of the underlying hedged    
asset or liability.  In 1994 and 1993, the Company did not terminate any    
derivatives transactions prior to contractual maturity.    
          
     At year-end 1994, the Company had net credit risk of $1.8 million to    
three counterparties.  This exposure was below thresholds for receiving    
collateral. On transactions which had negative fair values, the Company    
delivered $15.2 million of securities to collateralize credit exposure to    
two counterparties in excess of threshold levels.    
          
     The Company has also entered into a limited number of interest rate    
swap agreements to accommodate the needs of commercial customers.  In    
order to offset the interest rate risk of customer swaps, the Company has    
executed offsetting transactions with third parties.  The notional amount    
of customer-related swap transactions was $18.0 million and $23.0 million    
at December 31, 1994 and 1993, respectively.    
          
Deposits    
          
     Total deposits averaged $6.8 billion, representing a 2.1% increase in    
1994. When compared with 1993, core deposits rose $344.5 million, or 5.6%    
to an average of $6.5 billion in 1994 with consumer certificates of    
deposit accounting for virtually all of the growth. The slower growth in    
core deposits was due primarily to lower rates paid on bank deposits in a    
generally lower interest rate environment particularly during the first    
half of 1994.    
          
     In 1994, consumer certificates of deposit represented the largest    
growth in core deposits, increasing $307.3 million, or 11.0%, averaging    
$3.1 billion. The biggest increases in consumer certificates of deposit    
were in maturities ranging from one to two years. Interest checking and    
regular savings averaged $663.4 million and $843.9 million, increasing    
4.9% and 3.3%, respectively. Money market accounts showed a decline of    
7.7%, averaging $1.0 billion.    
          
     Central Fidelity's share of total core deposits in the Commonwealth    
of Virginia was 12.19% as of September 30, 1994, ranking the Company third    
in market share. During 1994, certificates of deposit $100,000 and over    
decreased 39.5% to an average of $316.9 million.    
          
Noninterest Income    
          
     Noninterest income was $58.4 million for 1994, a 53.6% decrease when    
compared with $125.8 million for 1993. The decline in noninterest income    
was due primarily to a major restructuring of the securities portfolio    
that resulted in securities losses of $28.7 million in 1994, as compared    
to $54.4 million profits on securities trading transactions in 1993.  The    
sale of approximately $470 million of fixed rate securities in 1994 was    
designed to lessen the future exposure to rising interest rates. The net    
proceeds were reinvested in higher yielding adjustable rate securities and    
also used to reduce short-term borrowings. A significant item contributing    
to total noninterest income during the first quarter of 1994 was an $11.4    
million gain recognized from the sale of an $80.3 million affinity bank    
card portfolio. Excluding the impact of securities transactions in 1994    
and 1993 and nonrecurring income in 1994, noninterest income grew 2.1% for    
the year.    
          
     Trust income and deposit fees and charges for 1994 grew 2.2% and    
1.9%, respectively.  Other income, excluding the sale of bank card    
receivables, was up 2.3% with a modest increase in commissions on annuity    
and mutual fund products.    
          
Noninterest Expense    
          
     Noninterest expense for 1994 was $245.2 million, a 9.8% increase over    
$223.3 million for 1993. Noninterest expense increased 6.5% after    
eliminating the $7.4 million nonrecurring charges in several categories.    
These charges included $.5 million in employee relocation costs, $3.3    
million in other real estate costs, a $3.1 million adjustment to prior    
years' bank franchise tax assessments, and $.5 million in various other    
expense items.    
          
     Absent the nonrecurring expense items, personnel expense increased    
9.7%, resulting primarily from higher expense relating to personnel and    
employee benefits. Occupancy and equipment expense increased 7.5%. FDIC    
insurance premiums were up modestly, representing a 2.0% increase to $14.9    
million. Other expense increased 17.2%, paced by higher marketing expense,    
bank card promotions and the write-off of certain software systems.    
          
Liquidity    
          
    In 1994, Central Fidelity's bank note program was increased from $600    
million to $1 billion.    
              
     The two primary sources of asset liquidity are money market    
investments and securities available for sale with a maturity or expected    
weighted average life of less than one year.  As of December 31, 1994, the    
fair value of these assets were $198.3 million and $241.3 million,    
respectively, as compared to balances of $194.6 million and $563.0    
million, respectively, at December 31, 1993.    
          
     Federal funds purchased, repurchase agreements, and large    
denomination certificates of deposit provide the primary sources of    
shorter-term wholesale funding.  Medium-term funding is primarily    
generated from the bank note program and Federal Home Loan Bank    
borrowings.  As of December 31, 1994, $561.5 million of the bank note    
program was outstanding and Federal Home Loan Bank borrowings were $236.5    
million. The total amount scheduled to mature in 1995 for both sectors is    
$309.3 million.    
          
Capital Resources    
          
     At December 31, 1994, total shareholders' equity was $725.3 million,    
compared with $680.3 million for the same period in 1993, representing a    
6.6% increase after excluding the unrealized gains or losses on securities    
available for sale subject to SFAS 115. The contributing factors to the    
equity increase were primarily due to the $41.0 million in earnings after    
dividends and also from the issuance of common stock through stock option    
exercises of $4.0 million. During 1994, cash dividends declared on common    
stock at an annual rate of $1.12 per share represented a payout ratio of    
51.6%.    
          
     At December 31, 1994, Central Fidelity's risk-based capital and    
leverage ratios exceeded the Federal Reserve's minimum guidelines. Central    
Fidelity's Tier 1 and total risk-based capital were $694.3 million and    
$928.4 million at December 31, 1994, as compared to $646.9 million and    
$870.4 million at year-end 1993, respectively. At December 31, 1994, the    
ratios of Tier 1 and total risk-based capital to risk-weighted assets were    
10.36% and 13.85%, compared to 11.06% and 14.88%, respectively, at    
December 31, 1993. The leverage ratio was 7.04% at December 31, 1994,    
compared to 7.10% at December 31, 1993.    
          
         
<PAGE>         
<TABLE>         
         
Quarterly Results of Operations         
         
  The following is a tabulation of the quarterly results of operations for         
each of the four quarters in 1995 and 1994:         
(In Thousands, except per share data)         
<CAPTION>         
                             March 31  June 30 Sept. 30  Dec. 31         
<S>                          <C>      <C>      <C>      <C>         
-----------------------------------------------------------------         
1995         
  Total income from earning         
    assets                   $185,462 $191,152 $196,833 $199,542         
  Net interest income          83,122   83,817   85,764   87,991         
  Provision for loan losses     5,304    3,344    8,704    9,361         
  Gains recognized on sales         
      of securities available        
      for sale                    633       --    2,326      863         
  Income before income taxes   37,524   38,015   40,554   38,329         
  Net income                   25,720   26,024   27,552   26,074         
  Net income per share           0.65     0.66     0.69     0.65         
1994         
  Total income from earning         
    assets                   $154,535 $161,346 $171,106 $178,847         
  Net interest income          84,006   83,602   84,578   82,957         
  Provision for loan losses    10,117    2,304    3,900    8,038         
  Gains (losses) recognized on         
      sales of securities         
      available for sale        7,377       --   (4,180) (28,489)         
  Income (loss) before income        
    taxes                      43,521   43,884   40,308   (3,793)         
  Net income (loss)            29,291   29,583   27,399   (1,409)         
  Net income (loss) per share    0.75     0.76     0.70    (0.04)         
-----------------------------------------------------------------         
</TABLE>        
          
            
<PAGE>            
<TABLE>            
            
Common Stock Performance and Dividends            
            
  Central Fidelity Banks, Inc. common stock is traded on the national over-the-counter market            
under NASDAQ symbol CFBS. A comparative summary of the prices for such stock for            
1995 and 1994 is as follows:            
            
<CAPTION>            
            
<S>                   <C>      <C>        <C>       <C>      <C>    <C>            
--------------------------------------------------------------------------            
                             Common Stock Prices             
                    --------------------------------------    Dividends            
                          1995                1994            Per Share            
                    ------------------  ------------------  --------------            
                      High      Low       High      Low      1995   1994            
--------------------------------------------------------------------------            
First Quarter         $27.25   $24.25     $30.25   $27.00    $0.28  $0.28            
Second Quarter         30.50    25.25      34.00    28.25     0.30   0.28            
Third Quarter          33.50    29.25      34.50    30.25     0.30   0.28            
Fourth Quarter         34.25    30.50      31.00    23.75     0.30   0.28            
--------------------------------------------------------------------------            
  Please read "Dividends" in note 1 and "Parent Company Financial Information" in note 2 of            
the notes to financial statements for information on the Company's sources of funds for            
dividends and restrictions on the payment thereof. At December 31, 1995, there wer 14,841            
holders of record of the Company's outstanding common stock.             
</TABLE>            
            
<PAGE>            
<TABLE>            
            
FORM 10-K            
----------------------------------------------------------------------------------------            
Central Fidelity Banks, Inc. and Subsidiaries            
            
Cross Reference Index            
            
  This Annual Report to Shareholders and Form 10-K incorporates into a single document     
the requirements of the Securities and Exchange Commission for both.            
<CAPTION>            
            
<S>                                                                            <C>            
Part One                                                                       Page            
Item 1      Business            
Item 2      Properties            
Item 3      Legal Proceedings            
Item 4      Submission of Matters to a Vote of Security Holders                None            
            
Part Two            
Item 5      Market for the Registrant's Common Stock and Related Shareholder Matters            
Item 6      Selected Financial Data            
Item 7      Management's Discussion and Analysis of Financial Condition and Results of Operations            
Item 8      Financial Statements and Supplementary Data            
Item 9      Changes in and Disagreements with Accountants on Accounting and             
              Financial Disclosure                                             None            
            
Part Three            
Item 10     Directors and Executive Officers of the Registrant*            
Item 11     Executive Compensation*            
Item 12     Security Ownership of Certain Beneficial Owners and Management*            
Item 13     Certain Relationships and Related Transactions*            
            
Part Four            
Item 14     Exhibits, Financial Statement Schedules and Reports on Form 8-K            
            
* Included in this report is a listing of the names of the directors and executive officers     
of the Company. However, the specific information called for by the instructions to Form     
10-K with respect to Items 10 through 13 as listed above is hereby incorporated by reference     
to the Company's definitive Proxy Statement for use at the Annual Meeting of Shareholders     
on May 8, 1996.            
            
</TABLE>            
           
<PAGE>            
            
FORM 10-K    
--------------------------------------------------------------------------    
Central Fidelity Banks, Inc. and Subsidiaries    
            
Business    
            
  Central Fidelity, a Virginia corporation headquartered in Richmond,    
Virginia, is a bank holding company. The Company owns, except for bank    
directors' qualifying shares, all of the stock of its commercial bank. At    
December 31, 1995, Central Fidelity and its subsidiaries had approximately    
3,600 full-time employees.    
            
  The Company is registered with, and supervised by, the Board of    
Governors of the Federal Reserve System under the Bank Holding Company Act    
of 1956. Under this Act, it may only engage in the business of managing or    
controlling banks or furnishing services to its subsidiaries and certain    
other activities which, in the opinion of the Federal Reserve Board, are    
closely related to banking.    
            
  The Company serves the marketplace primarily through its wholly-owned    
banking subsidiary, Central Fidelity National Bank, a national banking    
association (the "Bank"). At December 31, 1993, Central Fidelity National    
Bank, the Company's principal banking subsidiary, converted to a national    
bank and is therefore supervised and examined by the Comptroller of the    
Currency. At year-end 1995, the Bank operated 244 branch offices,    
including 28 full-service supermarket locations and 211 automated teller    
machines throughout the Commonwealth of Virginia. The Company, through the    
Bank and its other subsidiaries, provides a wide variety of financial    
services to a broad customer base of individuals, corporations,    
institutions and governments, primarily located in Virginia.  The Bank is    
an issuer of MasterCard  and VISA  credit cards. Through the use of    
reciprocally shared automated teller machines, the Company can deliver    
services through its membership in the Internet/MOST  regional and PLUS    
national networks of automated teller machines. The Company also engages    
in limited international banking activities, primarily in connection with    
foreign trade financing for Virginia based companies.  In addition to    
commercial activities, through its Financial Services Group, the Company    
generates noninterest income by sales of trust and fiduciary services,    
and other investment services.    
            
  On September 18, 1995, the Company's other national bank subsidiary,    
Central Fidelity Bank, N.A., organized in 1986, was merged with the    
Company's principal banking subsidiary, Central Fidelity National Bank.    
           
  Bank-related subsidiaries, all of which are wholly owned, are engaged in    
insurance and other bank-related services. Such subsidiaries, of which    
there are eleven, have made only a nominal contribution to revenues for    
each of the past five years. The bank-related companies are examined by    
the Federal Reserve.    
            
  Central Fidelity conducts its commercial banking business under a    
variety of federal and state laws and regulations, some of which relate to    
interest rates, required reserves, transactions between the Company and    
its subsidiaries, restrictions on loans to officers, the use of    
correspondent balances, the establishment of branches and the acquisition    
of subsidiaries.  In addition, the Federal Reserve Board has statutory    
authority to issue "cease and desist" orders to bank holding companies and    
their bank-related subsidiaries with respect to actions deemed to    
constitute a serious threat to the safety, soundness or stability of a    
subsidiary bank.  In 1991, Congress enacted the Federal Deposit Insurance    
Corporation Improvement Act ("FDICIA"), which substantially revised the    
bank regulatory and funding provisions of the Federal Deposit Insurance    
Act and made revisions to several other federal banking statutes. FDICIA    
requires that insured depository institutions maintain certain minimum    
capital standards and that federal bank regulatory authorities take prompt    
corrective action against those institutions that fail to meet these    
standards. FDICIA establishes five capital tiers. Central Fidelity's    
banking subsidiaries rank in the highest of those tiers, which is "well    
capitalized." FDICIA also contains a variety of other provisions that    
affect the operations of the Company's banking subsidiaries, including    
reporting requirements and regulatory standards for real estate lending.    
            
  The earnings and business of Central Fidelity are affected by general    
economic conditions, both domestic and foreign, and by the monetary and    
fiscal policies of the United States Government and its various agencies,    
particularly the Federal Reserve Board. Important functions of the Federal    
Reserve Board, in addition to those enumerated above, are to regulate the    
supply of credit and to deal with general economic conditions within the    
United States. The instruments of monetary policy employed by the Federal    
Reserve Board for these purposes influence in various ways the overall    
level of investments, loans, other extensions of credit and deposits and    
the interest rates paid on liabilities and received on earning assets. The    
Company cannot accurately predict the impact of changes in monetary    
policy.    
            
  Based on September 30, 1995 published core deposit market share data,    
the Company ranks as the third largest among all Virginia based commercial    
banking organizations. The Company experiences keen competition in all    
aspects of its business from each of the other major bank holding    
companies in the state. Additionally, the Company encounters    
competition from smaller banks or bank holding companies and other    
financial service organizations. Finance companies and credit unions    
compete with banks in the important area of consumer lending and deposit    
gathering.    
            
  Among commercial banks, the principal method of competition is the    
efficient delivery of quality financial services at competitive prices.    
Central Fidelity believes its delivery of financial services is equivalent    
or superior to that of its competitors and that its loan, deposit and    
service prices are competitive.    
            
  On September 29, 1994, the Riegel-Neal Interstate Banking and Branching    
Efficiency Act of 1994 (the "Interstate Banking Act"), which eliminated    
the federal restrictions on interstate banking, was enacted. This    
legislation generally authorizes interstate acquisitions of banks by bank    
holding companies without geographic limitations commencing September 29,    
1995, and authorizes interstate mergers of banks after May 31, 1997    
subject to the ability of states to opt-out. In addition, the Interstate    
Banking Act recognizes state legislation which accelerates the    
implementation of interstate branching and mergers under certain    
circumstances. During 1995 the Virginia legislature adopted such    
legislation which became effective on July 1, 1995. The elimination of    
interstate banking restrictions will have no immediate effect on the    
Company's long-standing strategy to serve only Virginia markets. It is    
uncertain at this time what effect the elimination of interstate banking    
restrictions will have on the competitive environment in Virginia in the    
future.    
            
  The Company is not dependent upon any single customer, or group of    
customers, nor is the Company significantly affected by seasonal changes.    
            
            
            
            
<PAGE>            
            
FORM 10-K    
--------------------------------------------------------------------------    
Central Fidelity Banks, Inc. and Subsidiaries    
            
Properties    
            
  The executive offices of Central Fidelity are located in the    
headquarters office of Central Fidelity National Bank, 1021 East Cary    
Street, Richmond, Virginia 23219. The Central Fidelity National Bank    
Building is in the James Center complex located in the heart of Richmond's    
business and financial district. The headquarters building consists of a    
22 story office building and garage, approximately half of which are    
leased from a third party with an initial lease term that expires 2002.    
            
  The Company's subsidiaries generally own their offices and facilities.    
However, either because of escalating property costs or statutes limiting    
the amount of a bank's investment in banking premises in relation to its    
capital, the Company has entered into operating leases for certain of its    
locations.    
            
  As of December 31, 1995, the Company and its subsidiaries had    
consolidated net premises and equipment, including land, buildings,    
furnishings and equipment, leasehold improvements and capitalized leases    
of $152.9 million. For additional information, refer to notes 8 and 11 of    
the notes to financial statements.    
            
            
<PAGE>            
            
FORM 10-K    
--------------------------------------------------------------------------    
Central Fidelity Banks, Inc. and Subsidiaries    
            
Legal Proceedings    
            
  There are legal proceedings pending against the Company and its    
subsidiaries arising during the normal course of business. In the opinion    
of management, after consultation with legal counsel, liabilities arising    
from these proceedings, if any, would not have a material adverse effect    
on the consolidated financial position or results of operations.    
           
           
           
<PAGE>           
           
FORM 10-K    
--------------------------------------------------------------------------    
Central Fidelity Banks, Inc. and Subsidiaries    
           
Directors and Executive Officers of the Registrant    
           
  Information with respect to the Directors of the Registrant is hereby    
incorporated by reference to the Registrant's definitive Proxy Statement    
for use at the Annual Meeting of Shareholders on May 8, 1996.    
           
  The names and ages of the executive officers of the Registrant together    
with their areas of responsibility are set forth herein. Except as    
otherwise indicated, each executive officer holds the same office in the    
Company and in the Bank. All of said officers were elected to their    
positions by the Board of Directors and will hold office until their    
successors are elected. All of said officers, except for Ms. Eberhardt,    
Master and Sorah and Messrs. Baird, Foster, Plymale, Pruitt, Mapp and    
Tysinger, have served in executive positions for more than five years with    
the Registrant and or its subsidiaries.  Ms. Sorah and Messrs. Pruitt and    
Tysinger were elected executive officers in 1990, after having served in    
various senior officer positions with the Bank for more than five years.    
Ms. Master joined the Bank in 1988 as Human Resources manager. For several    
years prior thereto she was Human Resources manager for BDM Corporation, a    
Northern Virginia company that provided  professional technical services    
for the defense industry. Ms. Master manages the Human Resources Division    
and was elected executive officer in 1991. Mr. Baird joined the Bank in    
1992 in its mortgage banking division. Just prior to joining the Bank, Mr.    
Baird was President and Chief Executive Officer of C&S/Sovran Mortgage    
Corporation and its predecessors for more than ten years. Mr. Baird was    
elected executive officer in 1992. After having served in various senior    
officer positions with the Bank for more than five years, Messrs.    
Foster and Mapp were elected executive officers in 1993, and Ms. Eberhardt    
and Mr. Plymale were elected in 1994 as executive officers .    
           
  There are no family relationships between any of the officers nor are    
there any arrangements or understandings between them or any other person    
pursuant to which they were elected as an officer.    
           
Lewis N. Miller, Jr., 52, Chairman of    
  the Board of Directors and President    
Jay O. Livingston, 49, Corporate Executive           
  Vice President and Chief Administrative           
  Officer           
Deborah J. Brooks, 44, Corporate Executive           
  Vice President, Retail Banking           
Philip G. Hug, 53, Corporate           
  Executive Vice President, Commercial           
James W. Koeniger, 49, Corporate Executive           
  Vice President, Financial Services           
Maryann Master, 47, Corporate Executive           
  Vice President, Human Resources           
John T. Percy, Jr., 50, Corporate            
  Executive Vice President, Investments           
William H. Pruitt, 48, Corporate Executive           
  Vice President, Loan Administration           
Jane D. Sorah, 48, Corporate Executive           
  Vice President, Retail Lending           
Nancy K. Eberhardt, 42, Corporate           
  Executive Officer and President,           
  Northern Region           
Rodger W. Fauber, 54, Corporate           
  Executive Officer and President,           
  Western Region           
William I. Foster, III, 40, Corporate           
  Executive Officer and President,           
  Eastern Region           
Stephen W. Mapp, 44, Corporate Executive           
  Officer and President, Capital Region           
Monty W. Plymale, 49, Corporate           
  Executive Officer and President,           
  Southwestern Region           
William N. Stoyko, 49, Corporate Executive           
  Officer, Secretary and Senior Corporate            
  Counsel, Legal Administration           
Charles W. Tysinger, 47, Corporate            
  Executive Officer and Treasurer, Finance           
Bryant W. Baird, Jr., 59, President,            
  Central Fidelity Mortgage Division            
  of Central Fidelity National Bank           
James F. Campbell, 57, Senior Vice           
  President and Controller           
John S. Moore, 44, Senior Vice           
  President and Auditor          
           
           
           
<PAGE>    
           
EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND    
REPORTS ON FORM 8-K    
--------------------------------------------------------------------------    
Central Fidelity Banks, Inc. and Subsidiaries           
           
   The following documents are filed as part of this report:           
           
(a)1. Financial Statements:           
      Consolidated Balance Sheet -           
        December 31, 1995 and 1994           
      Statement of Consolidated Income -            
        Years ended December 31, 1995, 1994 and 1993           
      Statement of Consolidated Cash Flows -            
        Years ended December 31, 1995, 1994 and 1993           
      Statement of Changes in Consolidated Shareholders' Equity -    
        Years ended December 31, 1995, 1994 and 1993           
      Notes to Financial Statements           
      Independent Auditors' Report           
           
   2. Schedules:           
      Schedules specified in the applicable regulations of the Securities    
and Exchange Commission pertain to items which do not appear in the    
consolidated financial statements, to items which are insignificant or to    
items as to which the required disclosures have been made elsewhere in the    
consolidated financial statements and notes thereto. These schedules have    
therefore been omitted.           
           
(b) Reports on Form 8-K:     
    There were no reports filed on Form 8-K during the fourth quarter    
ended December 31, 1995.    
           
(c) Exhibits **           
           
    ** A list of Exhibits was filed separately. Copies of any Exhibits not    
contained herein may be obtained by writing to William N. Stoyko,    
Corporate Secretary, Central Fidelity Banks, Inc., Post Office Box 27602,    
Richmond, Virginia 23261-7602.    
           
           
<PAGE>           
           
SIGNATURES           
--------------------------------------------------------------------------    
Central Fidelity Banks, Inc. and Subsidiaries           
           
  Pursuant to the requirements of Section 13 or 15(d) of the Securities    
Exchange Act of 1934, the Registrant has duly caused this report to be    
signed on its behalf by the undersigned, thereunto duly authorized.    
           
Central Fidelity Banks, Inc.           
           
Lewis N. Miller, Jr.           
Chairman of the Board           
and Chief Executive Officer           
(Principal Executive Officer)           
           
Charles W. Tysinger           
Corporate Executive Officer and Treasurer           
(Principal Financial Officer)           
           
James F. Campbell           
Senior Vice President and Controller           
(Principal Accounting Officer)           
           
Date: March 6, 1996           
           
Pursuant to the requirements of the Securities Exchange Act of 1934, this    
report has been signed on March 6, 1996 by a majority of the Registrant's    
Board of Directors as follows:           
Lewis N. Miller, Jr., George R. Lewis, Robert L. Freeman,             
Kenneth S. White, Thomas R. Glass, Phyllis L. Cothran,           
William G. Reynolds, Jr., James F. Betts, Lloyd U. Noland, III,           
Alvin R. Clements, G. Bruce Miller and Jack H. Ferguson.           
          
          
<PAGE>          
<TABLE>          
          
SHAREHOLDER INFORMATION           
-------------------------------------------------------------------------------------          
Central Fidelity Banks, Inc. and Subsidiaries          
          
Affiliate          
Central Fidelity National Bank          
          
Corporate Headquarters          
1021 East Cary Street          
Post Office Box 27602          
Richmond, Virginia 23261-7602          
Telephone: (804) 782-4000          
          
Common Stock          
The common stock of Central Fidelity Banks, Inc. is traded on the national          
over-the-counter (OTC) market and is quoted through the National Market System          
of NASDAQ under the symbol CFBS. The listing found in most newspapers and USA           
Today is "CFIDBK." The listing found in The Wall Street Journal is "CentlFidlBk."          
          
Shareholder Assistance          
Shareholders requiring a change of address, records or information about lost    
certificates, dividend checks or dividend reinvestment should contact:    
          
            Central Fidelity National Bank          
            Transfer and Dividend Disbursing Agent          
            Post Office Box 27602          
            Richmond, Virginia 23261-7602          
            Telephone: (804) 697-6836, or 1-800-293-CFBS, extension 6836    
          
Information          
Analysts, investors, and others interested in obtaining information about    
Central Fidelity Banks, Inc. are asked to contact Charles W. Tysinger, Corporate    
Executive Officer and Treasurer (direct telephone: (804) 697-7038).    
          
News media representatives and others seeking general information should    
contact Susan Lawrence Mistr, Public Relations Manager (direct telephone:    
(804) 697-7261).          
          
  * Requests for printed material, including annual and quarterly reports,    
    proxy statements, 10-K and 10-Q reports should be directed to Susan    
    Lawrence Mistr, Public Relations Manager (direct telephone: (804)    
    697-7261).    
          
Stock Purchase Program          
Central Fidelity's Stock Purchase Program is a convenient and cost effective way    
to acquire Central Fidelity common stock without brokerage fees or commissions.    
          
  * Under this Program, your dividends on shares of Central Fidelity common          
    stock may be automatically reinvested in additional shares of common stock.          
    You may elect to reinvest all, a portion, or none of the cash dividends.          
  * You may also elect to receive direct deposit of cash dividends.          
  * This Program allows you to purchase stock through automatic monthly          
    deductions from a deposit account at Central Fidelity National Bank or           
    any other financial institution, or through cash payments by check or           
    money order. Optional cash purchases may range from a minimum of $25           
    to a maximum of $10,000 per month.          
  * Participation is voluntary, and you may withdraw at any time.          
          
The foregoing  information concerning Central Fidelity's Stock Purchase          
Program is not an  offer to sell or the solicitation of an offer to buy any          
securities. The offering is made only by means of a Prospectus, which will be          
mailed upon request.          
          
Annual Meeting          
The Annual Shareholders' Meeting of Central Fidelity Banks, Inc. will be held          
Wednesday, May 8, 1996, at 4:30 p.m. in the grand banking hall of Central Fidelity          
National Bank, Broad at Third Street, Richmond, Virginia.          
          
<CAPTION>          
Stock Price Information          
<S>          
-------------------------------------------------------------------------------------          
                               1995                 1994     1993     1992     1991          
-------------------------------------------------------------------------------------          
                 4th      3rd      2nd      1st          
               Quarter  Quarter  Quarter  Quarter          
               <C>      <C>      <C>      <C>      <C>      <C>      <C>      <C>          
-------------------------------------------------------------------------------------          
          
High           $34.25   $33.50   $30.50   $27.25   $34.50   $35.25   $28.33   $26.17          
Low             30.50    29.25    25.25    24.25    23.75    25.75    22.33     8.89          
Close           32.00    32.50    30.50    26.13    24.25    27.75    28.00    25.83          
Dividends        0.30     0.30     0.30     0.28     1.12     1.00     0.82     0.74          
-------------------------------------------------------------------------------------          
</TABLE>          
          
          
<PAGE>          
          
                            Exhibit Index          
                         
          
                       
Exhibit No.     Document             
-----------     --------          
          
   3(i)         Articles of Incorporation           
                Restated Articles of Incorporation, adopted and effective    
                March 14, 1990, incorporated by reference to Exhibit 3.1    
                to Form 8, dated May 22, 1992, File No. 0-8829. Articles    
                of Amendment to Restated Articles of Incorporation, dated    
                May 18, 1993, incorporated by reference to Exhibit 4.4 to    
                Form S-3 Registration Statement, dated August 31, 1994,    
                File No. 33-55311.          
          
   3(ii)        By-Laws          
                Restated By-Laws, effective March 14, 1990, as amended    
                September 13, 1995, incorporated by reference to Exhibit    
                3.2 to Form 8-K, dated September 21, 1995, File No.    
                0-8829.          
          
   4            Instruments defining the rights of security holders,    
                including indentures          
                Amended and Restated Rights Agreement, dated as of    
                November 9, 1994, between Central Fidelity Banks, Inc. and    
                Central Fidelity National Bank, as Rights Agent,    
                incorporated by reference to Exhibit 1 to Amendment No. 1    
                to Registration Statement on Form 8-A, dated November 18,    
                1994, File No. 0-8829.    
          
   11           Statement re: computation of per share earnings - filed    
                herewith.          
          
   21           Subsidiaries of the Registrant - filed herewith.    
          
   23           Consent of independent accountants - filed herewith.    
          
          
<PAGE>          
<TABLE>          
                                                                     EXHIBIT 11          
          
                           Exhibit No. 11 to Annual Report on Form 10-K          
                           Central Fidelity Banks, Inc.          
                            Commission File No. 0-8829          
                          Statement Re Computation of Per Share Earnings          
          
(In Thousands, except per share data)          
          
<CAPTION>          
                                                      Year Ended December 31,          
                                                    ---------------------------          
                                                      1995     1994     1993          
<S>                                                 <C>      <C>      <C>          
                                                    ---------------------------          
Net income                                          $105,370  $84,864 $102,917          
                                                    ========= =======  =======          
          
Shares:          
  Weighted average number of common shares          
    outstanding used in computing primary          
    earnings per share                                39,785   39,163   38,738          
  Dilutive stock options - based on          
    treasury stock method                                599      746      854          
                                                    -------------------------------          
  Weighted average number of common shares          
    used in computing fully diluted          
    earnings per share                                40,384   39,909   39,592          
                                                    ========= =======  =======          
          
Earnings per share:          
  Primary earnings per share                           $2.65    $2.17    $2.66          
          
  Fully diluted earnings per share                     $2.61    $2.13    $2.60          
          
</TABLE>          
          
          
<PAGE>          
<TABLE>          
                                                     EXHIBIT 21          
          
                         Exhibit No. 21 to Annual Report on Form 10-K           
                             Central Fidelity Banks, Inc.          
                             Commission File No. 0-8829          
                             Subsidiaries of the Registrant          
          
The list below shows all of the subsidiaries of Central Fidelity Banks, Inc.,          
their relationship by percentage of stock owned and the state of incorporation.          
All are included in the consolidated financial statements at Dececember 31, 1995,          
which are incorporated in this report.          
          
<CAPTION>          
                             Percentage          
                              Owned by              State of          
                             Registrant          Incorporation          
<S>                             <C>             <C>          
            Registrant          
    ---------------------    ----------         ----------------          
Central Fidelity Banks, Inc.    ---                 Virginia          
          
      Subsidiaries          
     --------------          
Central Fidelity National Ban   100             National Banking          
Richmond, Virginia          
          
Central Fidelity Insurance Ag   100                 Virginia          
Richmond, Virginia          
          
Central Fidelity Services, In   100                 Virginia          
Lynchburg, Virginia          
          
Central Fidelity Properties,    100                 Virginia          
Richmond, Virginia          
          
Mulberry Corporation             *                  Virginia          
Richmond, Virginia          
          
S. Brooke Corporation            *                  Virginia          
Richmond, Virginia          
          
S. Hill Corporation              *                  Virginia          
Richmond, Virginia          
          
North Hart Run, Inc.             **                 Virginia          
Richmond, Virginia          
          
North Hart Run Joint Venture    ***                 Virginia          
Richmond, Virginia          
          
Oakton Hills Estates Joint Ve   ***                 Virginia          
Richmond, Virginia          
          
Cedar Run Joint Venture         ***                 Virginia          
Richmond, Virginia          
          
G. C. Leasing, Inc.              **                 Virginia          
Richmond, Virginia          
          
*   100% owned by Central Fidelity National Bank, the Registrant's principal subsidiary          
**  100% owned by Mulberry Corporation, a subsidiary of the Registrant's principal          
     subsidiary, Central Fidelity National Bank.          
*** 100% owned by North Hart Run, Inc., a subsidiary of Mulberry Corporation, a          
     subsidiary of the Registrant's principal subsidiary, Central Fidelity National          
     Bank.          
          
</TABLE>          
<PAGE>          
          
           
<PAGE>            
            
                                                       Exhibit 23            
            
            
CONSENT OF INDEPENDENT AUDITORS            
            
The Board of Directors and Stockholders            
Central Fidelity Banks, Inc.            
            
We consent to incorporation by reference in (1) Registration Statement    
No. 2-77520 on Form S-8, (2) Registration Statement No. 2-75507 on Form    
S-8, (3) Registration Statement No. 2-86240 on Form S-8, (4)    
Registration Statement No. 33-51393 on Form S-8, and (5) Registration    
Statement No. 33-61694 on Form S-3 of Central Fidelity Banks, Inc. of    
our report dated January 12, 1996, relating to the consolidated balance    
sheet of Central Fidelity Banks, Inc. and subsidiaries as of December    
31, 1995 and 1994, and the related statements of consolidated income,    
consolidated cash flows and changes in consolidated shareholders' equity    
for each of the years in the three-year period ended December 31, 1995,    
which report appears on page 31 of this 1995 annual report on Form 10-K    
of Central Fidelity Banks, Inc.  Our report refers to the adoption of the    
Financial Accounting Standards Board's Statement of Financial Accounting    
Standards No. 115, "Accounting for Certain Investments in Debt and    
Equity Securities" in 1993.    
           
            
KPMG  Peat Marwick	            
            
            
Richmond, Virginia            
March 25, 1996