Success Bancshares, Inc.

                              1998 Annual Report<PAGE>



                   Success Bancshares, Inc. and Subsidiaries

Success Bancshares, Inc., is the bank holding company for Success National
Bank.  Headquartered in Lincolnshire, Illinois, Success National Bank is a
locally-owned community bank with a strong focus on customer value.

During our First 20 years of business we were known as First National Bank of
Lincolnshire.  The Bank's name was changed in 1992 - at the time we opened our
first branch office - in recognition of our growth and broader market area.

Today, Success National Bank is a full-service community bank with eleven
locations offering a broad range of financial services to consumers and
businesses in the Northern Chicagoland area.

(Insert Map)                  Retail Banking Offices

                              Arlington Heights 
                              360 Northwest Highway.Arlington Heights, IL 60005
                              Phone:  (847) 279-9000 . Fax:  (847) 279-9246

                              Chicago Downtown 
                              230 W. Monroe . Chicago, IL 60606 
                              Phone:  (847) 279-9000 . Fax:  (312) 279-9929

                              Deerfield Downtown 
                              630 Waukegan Road . Deerfield, IL 60015-4345 
                              Phone:  (847) 279-9000 . Fax:  (847) 279-9225

                              Deerfield/Riverwoods 
                              1020 Milwaukee Avenue . Deerfield, IL 60015-3548
                              Phone:  (847) 279-9000 . Fax:  (847) 279-0580

                              International Office* 
                              3333 West Touhy Avenue.Lincolnwood, IL 60645-2721
                              Phone:  (847) 279-9000 . Fax:  (847) 279-9842

                              Libertyville 
                              (Includes Accounting, Bookkeeping and Merchant
                              Processing Departments) 
                              1123 S. Milwaukee Ave.Libertyville, IL 60048-3270
                              Phone:  (847) 279-9000 . Fax:  (847) 279-9161

                              Lincoln Park 
                              2424 North Clark Street . Chicago, IL 60614-2718
                              Phone:  (847) 279-9000 . Fax:  (847) 279-9906

                              Lincolnwood 
                              3443 Wet Touhy Avenue .Lincolnwood, IL 60069-3703
                              Phone:  (847) 279-9000 . Fax:  (847) 279-9847

                              Lincolnshire 
                              (Includes Executive Offices) 
                              One Marriott Drive . Lincolnshire, IL 60069-3703
                              Phone:  (847) 279-9000 . Fax:  (847) 279-9050
                              Northbrook 
                              1368 Shermer Road . Northbrook, IL 60062-4599
                              Phone:  (847) 279-9000 . Fax:  (847) 279-9276<PAGE>




                              Skokie 
                              4028 Oakton Street . Skokie, IL 60076 
                              Phone:  (847) 279-9000 . Fax:  (847) 279-9869

*  Located inside the Lincolnwood Town Center Mall, the International Office
caters to the extensive pan-Asian community in the North Chicagoland area.  The
staff in this office can provide service in the Chinese, Thai and Malaysian
languages as well as in English.<PAGE>



                  Success Bancshares, Inc. and Subsidiaries 
                               Table of Contents<PAGE>



                   Success Bancshares, Inc. and Subsidiaries 
                               Mission Statement<PAGE>



                  Success Bancshares, Inc. and Subsidiaries 
                              President's Message<PAGE>



                   Success Bancshares, Inc. and Subsidiaries 
                         Selected Financial Highlights

                                          Year Ended December 31,              
                              1998      1997      1996     1995       1994
                                 (Dollars in thousands, except share data)     

Statement of Income Data:
Interest income             $32,459   $24,912   $19,850  $18,675   $14,619
Interest expense             17,184    12,861    10,020    9,886     7,221
                            -------   -------   -------  -------   -------
   Net interest income       15,275    12,051     9,830    8,789     7,398
Provision for loan losses     1,943       766       310      207       250
Other income                  3,275     2,650     2,136    2,125     1,251
Other expenses               15,690    12,349    10,640    9,510     8,318
                            -------   -------   -------  -------   -------
Net income before taxes         917     1,586     1,016    1,197       81 
Income tax expense (benefit)  (287)       499       233      260     (182)
                            -------   -------   -------  -------   -------
Net income                   $1,204    $1,087      $783     $937      $263
                             ======    ======    ======   ======    ======

Common Share Data:
Earnings per common share:
   Basic                      $0.41     $0.68     $0.66    $0.93     $0.27
   Diluted                    $0.40     $0.65     $0.63    $0.86     $0.26
Book value per common share  $10.95    $10.30     $8.99    $7.48     $5.83
Weighted average common 
 shares outstanding           2,938     1,531     1,061    1,011       990

Balance Sheet Data:
Cash and cash equivalents   $38,824   $23,901   $13,833  $20,559   $18,909
Securities                   41,037    53,754    47,707   55,614    55,393
Loans, net                  371,263   287,025   203,299  171,135   139,491
Total assets                470,478   378,719   276,349  251,338   222,809

Deposits                    398,735   329,424   245,105  227,308   204,171
Borrowings, including 
 repurchase agreements       21,513    16,163    18,975   14,395    11,174
Company obligated mandatory 
 redeemable preferred
 securities of subsidiary 
 trust holding solely junior
 subordinated debentures     15,000         -         -        -         -
Shareholders' equity        $32,324   $30,070   $10,100   $8,085    $5,973

Performance Data:
Net interest margin          3.95%     4.17%     4.25%    4.14%     4.38% 
Return on average assets     0.28%     0.34%     0.31%    0.40%     0.13% 
Return on average equity     3.80%     7.76%     8.33%   14.48%     4.29% 
Loans to deposits           93.11%    87.13%    82.94%   75.29%     68.32%

Asset Quality Ratios:
Nonperforming loans to 
 total loans (1)             0.09%     0.63%     0.06%    0.37%     0.27% 
Nonperforming assets to 
 total assets                0.17%     0.56%     0.04%    0.25%     0.17% <PAGE>



Allowance for loan losses 
 to total loans              1.02%     0.72%     0.70%    0.70%     0.71% 
Nonperforming loans to 
 allowance for loan losses   9.13%    87.54%     8.28%   53.74%    38.10% 
Net loan charge-offs to 
 average loans               0.06%     0.05%     0.04%    0.01%      0.08%

Capital Ratios:
Risk-based capital          15.23%    12.37%     8.00%    7.53%     7.83% 
Leverage capital (2)         9.96%     9.69%     4.37%    3.70%      3.52%

Other:
Branch offices
 (including headquarters)        11         9         7        7         5
Full-time equivalent employees  196       162       144      150       120
 ___________

(1)  Nonperforming loans consist of non-accrual loans and loans contractually
past due 90 days or more. 

(2)  The leverage ratio is defined as the ratio of Tier 1 risk-based capital to
adjusted total assets.

 <PAGE>



                  Success Bancshares, Inc. and Subsidiaries 
                   Management's Discussion and Analysis of  
                 Financial Condition and Results of Operations



General

The following discussion is intended to assist in understanding the financial
condition and results of operation of the Company.  The information contained
in this section should be read in conjunction with the Financial Statements and
the accompanying Notes to Financial Statements and the other sections contained
in this annual report.

The Company's principal business is conducted by its wholly-owned subsidiary,
Success National Bank (the "Bank"), and consists of full service community
banking.  The Company's results of operations depend primarily on its net
interest income, which is the difference between the income the Company
receives on its loan and investment portfolios and the Company's cost of funds
or interest paid on deposits and borrowings.  The Company's results of
operations also are affected by the provision for loan losses, the level of its
noninterest income and expenses, and income tax expense.

Net interest income is dependent on the amounts and yields of interest earning
assets as compared to the amounts of and rates on interest bearing liabilities.
Net interest income is sensitive to changes in market rates of interest and the
Company's asset/liability management procedures in coping with such changes.
The provision for loan losses is dependent on increases in the loan portfolio,
management's assessment of the collectibility of the loan portfolio, as well as
economic and market factors.  Noninterest expenses are heavily influenced by
the growth of the Company, with additional employees necessary to staff and
open new branch facilities and marketing expenses necessary to promote them.
Growth in the number of account relationships directly affects expenses such as
data processing costs, supplies, postage and other miscellaneous expenses.<PAGE>



Interest Earning Assets and Interest Bearing Liabilities

The following table sets forth the average daily balances, net interest income 
and expense and average yields and rates for the Company's interest earning 
assets and interest bearing liabilities for the indicated years on a tax-
equivalent basis assuming a 34% tax rate.

<TABLE>
<CAPTION>
                                                  Year Ended December 31,

                                   1998            1997           1996
                                Average          Yield/Average         Yield/Average
                                BalanceInterest   Rate BalanceInterest   RateBalance
<S>                                <C>    <C>      <C>   <C>     <C>     <C>   <C>              
Assets

Loans <1> & <2>                $331,878 $28,970   8.73%$239,084$21,755  9.10%$182,45
Taxable investment securities    40,130   2,317    5.77 38,801   2,318   5.97 40,423
Investment securities exempt from
 Federal income taxes <1>        12,798     939    7.34  8,214     613   7.46  8,824
 Interest bearing deposits with
 financial institutions           5,349     283    5.29  4,032     215   5.33  2,189
Other interest earning assets     5,398     301    5.58  3,576     208   5.82  2,500
                                ------- ------- -------------- ---------------------
Total interest earning assets   395,553 $32,810   8.29%293,707 $25,109  8.55%236,389
Non-interest earning assets      31,685                 25,335                19,890

Total assets                   $427,238                $319,042              $256,279

Liabilities & Shareholders' Equity
Deposits:
 NOW & money market accounts   $131,681  $5,976   4.54%$88,652  $3,114  3.51%$76,127
 Savings deposits                21,104     667    3.16 19,946     640   3.21 18,329
 Time deposits                  163,139   8,622    5.29127,236   7,436   5.84 96,308
 Notes payable                        -       -       -  4,249     363   8.54  4,237
 Other borrowings                28,873   1,919    6.65 20,978   1,308   6.24 15,923
Total interest bearing
 liabilities                    344,797  17,184    4.98261,061  12,861   4.93210,924
Demand deposits - 
 non-interest bearing            48,044                 40,868                33,922
Other non-interest bearing
 liabilities                      2,674                  2,560                 1,515<PAGE>



Minority interest in 
 subsidiary bank                      -                    544                   515

Shareholders' equity             31,723                 14,009                 9,403

Total liabilities &
 shareholder's equity          $427,238                $319,042              $256,27

Net interest income             $15,626                $12,248               $10,057

Net interest margin                       3.95%                  4.17%

<FN>
<1>  Tax-exempt income as reflected on a fully tax equivalent basis utilizing a 34% r
presented. 
<2>  Non-accrual loans are included in average loans. The increase in average interes
$101.8 million to $395.6 million for the year ended December 31, 1998, is primarily a
Company's loan growth.  The average balance of loans during 1998 was $331.9 million, 
$239.1 million for 1997, an increase of $92.8 million or 38.8%.

</TABLE>

The increase in the loan portfolio during this period was due to increased loan
demand primarily in one-to-four family residential loans and, to a lesser 
extent, commercial mortgage loans and other commercial loans.  At December 31, 
1998 residential real estate mortgages increased $29.8 million to $72.4 
million, or 69.8%, from December 31, 1997.

The Company's loan growth was funded primarily with interest bearing deposits 
and borrowings.  Interest bearing deposits at December 31, 1998 increased $69.3 
million to $345.2 million, or 21.0%, from December 31, 1997.  Borrowings at 
December 31, 1998, including a $15.0 million trust preferred securities 
issuance in May 1998, increased $20.4 million to $36.5 million, or 125.9%, 
over December 31, 1997.<PAGE>



Rate/Volume Analysis

The following table sets forth the affects of changing rates and volumes on net
interest income of the Company.  Information is provided with respect to (i)
effects on interest income attributable to changes in volume (changes in volume
multiplied by prior rate) and (ii) effects on interest income attributable to
changes in rate (changes in rate multiplied by prior volume).  Changes in
rate/volume (change in rate multiplied by change in volume) have been allocated
to the rate and volume categories in proportion to the relationship of the
absolute dollar amounts of the change in each.

                                             Year Ended December 31,
                                     1998 over 1997    1997 over 1996
                               Change due to      Total Change due to     Total
                               Volume    Rate    Change Volume   Rate    Change
                                             (dollars in thousands) 
Interest earning assets:
Net loans (1)                  $8,133  $(918)    $7,215 $5,155 $(164)    $4,991
Taxable investment securities      78    (79)       (1)   (97)     18      (79)
Investment securities exempt
 from Federal income taxes (1)    337    (11)       326   (46)   (12)      (58)
Interest bearing deposits
 with financial institutions       70     (2)        68     99    (9)       90 
Other interest earning assets     102     (9)        93     59     29       88 
Total increase (decrease)
 in interest income             8,720 (1,019)     7,701  5,170  (138)     5,032

Interest bearing liabilities:
NOW & money market accounts    $1,787  $1,075    $2,862   $435   $122      $557
Savings deposits                   37    (10)        27     52   (18)        34
Time deposits                   1,948   (762)     1,186  1,804    163     1,967
Notes payable                   (181)   (182)     (363)      1      7         8
Other borrowings                  520      91       611    317   (42)       275
Total increase (decrease)
 in interest expense            4,111     212     4,323  2,609    232     2,841
Increase (decrease) in net
 interest income               $4,609$(1,231)    $3,378 $2,561 $(370)    $2,191

(1)  Tax-exempt income is reflected on a fully tax equivalent basis utilizing a
34% rate for all periods presented.

Consolidated Results of Operations

Comparison of Results of Operations for the Years Ended December 31, 1998 and
December 31, 1997

General

The Company reported net income of $1.2 million for the year ended December 31,
1998 compared to net income of $1.1 million for the year ended December 31,
1997, an increase of $117 thousand or 10.8%.  For the year, the loan loss
provision increased by $1.2 million and total other operating expenses
increased by $3.3 million.  These increases were offset by an increase in net
interest income of $3.2 million, an increase in other operating income of $625
thousand and a decrease in the provision for income taxes of $786 thousand.
These and other significant fluctuations in the Company's results of operation
are discussed below.<PAGE>




Net interest income

Net interest income increased to $15.3 million for the year ended December 31,
1998 from $12.1 million for 1997.  This increase in net interest income of $3.2
million, or 26.8%, was attributable to a $7.5 million increase in interest
income resulting from the 34.7% increase in average interest earning assets in
the year ended December 31, 1998 compared to the year ended December 31, 1997.
Partially offsetting this increase in interest income was a $4.3 million
increase in interest expense for the year ended December 31, 1998, a 33.6%
increase from 1997.  The Company's net interest margin decreased to 3.95% for
1998 compared to 4.17% in 1997 as a result of the impact of promotional home
equity loan growth and market competition for high quality loan customers.

Provision for loan losses

The provision for loan losses increased to $1.9 million in 1998, from $766
thousand in the prior year, necessitated by the growth in the loan portfolio.
At December 31, 1998, the allowance for loan losses represented 1.02% of loans
outstanding which management believed was adequate to cover potential losses in
the portfolio.  There can be no assurance that future losses will not exceed
the amounts provided for, thereby affecting future results of operations.  The
amount of future additions to the allowance for loan losses will be dependent
upon the economy, changes in real estate values, interest rates, the view of
regulatory agencies toward adequate reserve levels, and past due and
non-performing loan levels.

Other operating income

Total other operating income increased approximately $625 thousand, or 23.6%,
to $3.3 million for 1998, compared to $2.7 million in 1997.  Service charges on
deposit accounts increased by 8.2% to $2.0 million for the year ended December
31, 1998, from $1.9 million in 1997.  The increase is primarily attributable to
a 22.2% increase in the average balance of deposit accounts subject to such
service charges.  The majority of service charges on deposit accounts consisted
of fees charged for overdrafts and failure to maintain required balances.  Net
credit card processing income decreased to $71 thousand from $446 thousand for
the years ended December 31, 1998 and 1997, respectively, primarily as a result
of competitive pressures to reduce transaction charges for volume customers.
In 1998, a loss of $200 thousand on the sale of the Company's $3.0 million
structured note portfolio was partially offset by gains from the sale of loans
in the secondary market in the amount of $159 thousand.  In 1998, the Company
included in other noninterest income $1.0 million of life insurance proceeds
related to the death of Company President and CEO, Saul D. Binder.

Other operating expenses

Total other operating expenses increased $3.3 million, or 27.1%, to $15.7
million for 1998, as compared to $12.3 million in 1997.  This increase reflects
the higher level of expenditures required to support the Company's growth.
Salaries and employee benefits increased to $8.2 million for the year ended
December 31, 1998, as compared to $6.2 million for the prior year.  The
increase of $2.0 million reflects increased staffing to support new locations
and thegrowth in deposit and loan accounts at existing banking locations which
are required to maintain high levels of customer service.  Also contributing to
the increase in salaries were normal salary increases and the contractual
compensation expenses of approximately $350 thousand incurred in connection<PAGE>



with the unexpected death of Mr. Binder.  Occupancy and equipment expenses
increased to $2.7 million for 1998, from $2.0 million for 1997, primarily due
to improvements in the Company's computer systems and the costs associated with
the May, 1998, opening of the downtown Chicago branch location and August, 1998
opening of the Skokie/Oakton Street branch location.  Data processing expense
decreased to $739 thousand for the year ended December 31, 1998, compared to
$889 thousand for 1997, primarily due to the inclusion in 1997 of the costs
associated with the conversion of the Company's data processing provider.
Other noninterest expenses increased by $852 thousand, or 26.3%, to $4.1
million for the year ended December 31, 1998, from $3.2 million for 1997,
primarily due to a $246 thousand increase of costs related to the carry and
revaluation of other real estate owned, a $119 thousand increase in legal fees
and an increase of $119 thousand in consulting fees attributable to branch
architectural services. 

Income taxes

The Company recorded income tax benefit of $287 thousand for 1998, compared to
an income tax expense of approximately $499 thousand in 1997.  The decrease is
attributable to both a decrease in net income before tax and to an increase in
income not subject to federal tax.  In 1998, the Company received $1.0 million
of life insurance proceeds related to the death of Company President and CEO,
Saul D. Binder, which are exempt from tax.

Comparison of Results of Operations for the Years Ended December 31, 1997 and
December 31, 1996

General

The Company's net income for the year ended December 31, 1997 was $1.1 million
compared to net income of $783 thousand for the year ended December 31, 1996.
The $304 thousand increase in net income was primarily attributable to an
increase in net interest income and other operating income, partially offset by
increased net operating expenses.

Net interest income

Net interest income increased to $12.1 million for the year ended December 31,
1997 from $9.8 million for 1996.  This increase in net interest income of $2.2
million, or 22.6% was attributable to a $5.1 million increase in interest
income resulting from the 24.2% increase in average interest earning assets in
the year ended December 31, 1997 compared to the year ended December 31, 1996.
Partially offsetting this increase in interest income was a $2.8 million
increase in interest expense for the year ended December 31, 1997, a 28.4%
increase from 1996.  The Company's net interest margin decreased to 4.17% for
1997 compared to 4.25% in 1996 as a result of the impact of promotional home
equity loan growth and market competition for high quality loan customers.

Provision for loan losses

The provision for loan losses increased to $766 thousand in 1997, from $310
thousand in the prior year, primarily due to the growth in the loan portfolio.
At December 31, 1997, the allowance for loan losses represented 0.72% of loans
outstanding which management believed was adequate to cover potential losses in
the portfolio.  There can be no assurance that future losses will not exceed
the amounts provided for, thereby affecting future results of operations.  The
amount of future additions to the allowance for loan losses will be dependent<PAGE>



upon the economy, changes in real estate values, interest rates, the view of
regulatory agencies toward adequate reserve levels, and past due and
non-performing loan levels.

Other operating income

Total other operating income increased approximately $514 thousand, or 24.1%,
to $2.7 million for 1997, compared to $2.1 million in 1996.  Service charges on
deposit accounts increased by 34.0% to $1.9 million for the year ended December
31, 1997, from $1.4 million in 1996.  The increase is primarily attributable to
a 15.0% increase in the average balance of deposit accounts subject to such
service charges and a 102.5% increase in average overdrafts outstanding.  The
majority of service charges on deposit accounts consisted of fees charged for
overdrafts and failure to maintain required balances.  Net credit card
processing income increased to $446 thousand from $321 thousand for the years
ended December 31, 1997 and 1996, respectively, due primarily to a 10.3%
increase in the amount of credit card sales processed and an increase in rates
charged merchants.  Total processing volume increased to $290.3 million for the
year ended December 31, 1997, from $263.2 million in 1996.

Other operating expenses

Total other operating expenses increased $1.8 million, or 16.1%, to $12.3
million for 1997, as compared to $10.6 million in 1996.  This increase reflects
the higher level of expenditures required to support the Company's growth.
Salaries and employee benefits increased to $6.2 million for the year ended
December 31, 1997, as compared to $5.5 million for the prior year.  The
increase of $664 thousand reflects increased staffing to support new locations
and the growth in deposit and loan accounts at existing banking locations which
are required to maintain high levels of customer service.  Also contributing to
the increase in salaries were normal salary increases.  Occupancy and equipment
expenses increased to $2.0 million for 1997, from $1.7 million for 1996,
primarily due to improvements in the Company's computer systems and the costs
associated with the April, 1997, opening of the Deerfield/Downtown branch
location and September, 1997 opening of the Arlington Heights branch location.
Data processing expense increased to $889 thousand, (40.4%), for the year ended
December 31, 1997, compared to $633 thousand for 1996, primarily due to
substantially higher volume levels and the costs associated with the conversion
of the Company's data processing provider in March, 1997.  Other non-interest
expenses increased by $460 thousand, or 16.6%, to $3.2 million for the year
ended December 31, 1997, from $2.8 million for 1996, primarily due to a $321
thousand increase in legal fees attributable to increased collection costs and
other matters.

Income taxes

The Company recorded income tax expense of $499 thousand for 1997, compared to
an income tax expense of approximately $233 thousand in 1996, which increase is
attributable to the increase in net income before tax.

Quantitative and Qualitative Disclosures About Market Rates

See Note 18 - Fair Values of Financial Instruments to the Company's
Consolidated Financial Statements for a description of the Company's market
risk.

Forward Looking Statements<PAGE>




Statements made about the Company's future economic performance, strategic
plans or objectives, revenues or earnings projections, or other financial items
and similar statements are not guarantees of future performance, but are
forward looking statements.  By their nature, these statements are subject to
numerous uncertainties that could cause actual results to differ materially
from those in the statements.  Important factors that might cause the Company's
actual results to differ materially include, but are not limited to, the
following: 

 .    Federal and state legislative and regulatory developments; 
 .    The impact of continued loan and deposit promotions on the Company's net
interest margin; 
 .    The impact of opening, staffing and operating new branch facilities; 
 .    Changes in management's estimate of the adequacy of the allowance for loan
losses; 
 .    Changes in the level and direction of loan delinquencies and write-offs; 
 .    Interest rate movements and their impact on customer behavior and the
Company's net interest margin; 
 .    The impact of repricing and competitors' pricing initiatives on loan and
deposit products; 
 .    The Company's ability to adapt successfully to technological changes to
meet customers' needs and developments in the marketplace; 
 .    The Company's ability to access cost effective funding;  
 .    Changes in financial markets and general economic conditions; and 
 .    The Company's ability to achieve year 2000 compliance without incurring
material, unplanned expenditures.<PAGE>






                        Report of Independent Auditors


Board of Directors and Shareholders 
Success Bancshares, Inc. 
Lincolnshire, Illinois 


We have audited the accompanying consolidated balance sheets of Success
Bancshares, Inc. and Subsidiaries as of December 31, 1998 and 1997, and the
related consolidated statements of income, shareholders' equity, and cash flows
for each of the three years in the period ended December 31, 1998.  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 audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements.  An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation.  We believe that our audits provide a reasonable basis
for our opinion.

In our opinion, the consolidated financial statements referred to above present
fairly, in all material respects, the financial position of Success Bancshares,
Inc. and Subsidiaries as of December 31, 1998 and 1997, and the results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998.

                                   /s/ McGladrey & Pullen, LLP

Schaumburg, Illinois 
February 12, 1999<PAGE>



                  Success Bancshares, Inc. and Subsidiaries 
                         Consolidated Balance Sheets 
                          December 31, 1998 and 1997


                                                           1998         1997   
                                              (In thousands, except share data)
ASSETS
Cash and cash equivalents                                  $ 38,824     $23,901
Securities available-for-sale                                41,037      22,090
Securities held-to-maturity (fair value $32,439 in 1997)          -      31,664
Real estate loans held-for-sale                               1,006          65
Loans, less allowances for loan losses of $3,824
 at 1998 and $2,079 in 1997.                                371,263     287,025
Premises and equipment, net                                  11,362       8,786
Interest receivable                                           2,699       2,507
Other real estate owned                                         435         290
Other assets                                                  3,852       2,391
                                                            -------     -------
Total assets                                               $470,478     $78,719
                                                            =======     =======

LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities
 Deposits
 Non-interest bearing deposits                              $53,557     $45,225
 Interest bearing deposits                                  345,178     284,199
                                                            -------     -------
Total deposits                                              398,735     329,424
Federal Home Loan Bank advances                              15,491      10,720
Securities sold under repurchase agreements                   5,136       3,814
Demand notes payable to U.S. Government                         886       1,429
Convertible subordinated debentures                               -         200
Interest payable and other liabilities                        2,906       2,482
                                                            -------     -------
Total liabilities                                           423,154     348,069
Minority interest in subsidiary bank                              -         580

Company obligated mandatory redeemable preferred
 securities of subsidiary trust holding solely junior
 subordinated debentures                                     15,000           -

Shareholders' equity
 Preferred stock, $0.001 par value,
  1,000,000 shares authorized, none issued                        -           -
 Common stock, $0.001 par value 7,500,000
  shares authorized, 2,959,236 and 2,918,324
  shares issued and outstanding, at 1998 and
  1997, respectively                                              3           3
 Additional paid-in capital                                  24,528      24,151
 Retained earnings                                            7,556       6,352
 Unearned compensation                                         (92)           -
 Loan to Employee Stock Ownership Plan                        (113)       (158)
 Accumulated other comprehensive income                         442       (278)
                                                            -------     -------
Total shareholders' equity                                   32,324      30,070
                                                            -------     -------<PAGE>



Total liabilities and shareholders' equity                 $470,478    $378,719
                                                            =======     =======
See accompanying notes to Consolidated Financial Statements<PAGE>



                  Success Bancshares, Inc. and Subsidiaries 
                      Consolidated Statements of Income 
                 Years Ended December 31, 1997, 1996 and 1995

                                                  1998      1997         1996  
                                          (In thousands, except per share data)
Interest income
 Loans (including fee income)                     $28,938   $21,746    $16,757 
 Investment securities
  Taxable                                           2,317     2,318      2,397 
  Exempt from federal income tax                      620       425        451 
 Other interest income                                584       423        245 
                                                  -------   -------    ------- 
Total interest income                              32,459    24,912     19,850 

Interest expense
 Deposits                                          15,265    11,190      8,632 
 Note payable                                           -       363        355 
 Convertible subordinated debentures                    8       303        339 
 Other borrowings                                   1,911     1,005        694 
                                                  -------   -------    ------- 
Total interest expense                             17,184    12,861     10,020 

Net interest income                                15,275    12,051      9,830 
Provision for loan losses                           1,943       766        310 
                                                  -------   -------    ------- 
Net interest income after provision for loan losses13,332    11,285      9,520 

Other operating income
 Service charges on deposit accounts                2,033     1,879      1,402 
 Gains on sales of loans                              159        61        109 
 Loss on sale of securities, net                    (200)         -         -  
 Net credit card processing income                     71       446        321 
 Life insurance proceeds                            1,000         -         -  
 Other noninterest income                             212       264        304 
                                                  -------   -------     -------
Total other operating income                        3,275     2,650      2,136 

Other operating expenses
 Salaries and employee benefits                     8,172     6,177      5,513 
 Occupancy and equipment expenses                   2,688     2,044      1,715 
 Data processing                                      739       889        633 
 Other noninterest expenses                         4,091     3,239      2,779 
                                                  -------   -------    ------- 
Total other operating expenses                     15,690    12,349     10,640 
                                                  -------   -------    ------- 
Income before income taxes                            917     1,586      1,016 

Income tax expense (credit)                         (287)       499        233 
                                                  -------   -------    ------- 
Net income                                          1,204     1,087        783 
Preferred stock dividends                               -        40         81 
                                                  -------   -------    ------- 
Net income applicable to common stock               1,204     1,047        702 
                                                  =======   =======    ======= 
Basic earnings per share                            $0.41     $0.68      $0.66 
Diluted earnings per share                          $0.40     $0.65      $0.63 <PAGE>




See accompanying notes to Consolidated Financial Statements<PAGE>



                               Success Bancshares, Inc. and Subsidiaries 
                            Consolidated Statements Of Shareholders' Equity 
                                    December 31, 1998, 1997 and 1996
<TABLE>
<CAPTION>
                                                                     Accumulated
                              Series B          Class AAdditional       OtherUnearne
                             Preferred   Common  CommonPaid-inRetainedComprehensive
                                Stock     StockStock CapitalEarnings   IncomeCompens
  <S>                           <C>        <C>   <C>   <C>     <C>       <C>   <C>              
 Unearned Compensation
 ESOP Loan
Total Shareholders' Equity
(In thousands) 
Balance at January 1, 1996           $0  $1,041     $40 $3,293 $4,603  $(709)

Comprehensive Income:
 Net income                           -       -       -      -    783       -
 Other comprehensive income,
  net of tax:
  Unrealized gains on securities 
   available for sale arising 
   during the period, net of taxes
   of $82
                                  -----  ------  ------ ------ ------  ------  -----
Total comprehensive Income
Issuance of 5,658 shares of
 common stock                         -       6       -     39      -       -
Issuance of 75,500 shares of
 Class A common                       -       -      76  1,016      -       -
Conversion of common stock to
 Series B preferred                  94    (94)       -      -      -       -
Series B preferred stock dividends    -       -       -      -   (81)       -
Repayment of ESOP loan                -       -       -      -      -       -
                                  -----  ------  ------ ------ ------  ------  -----
Balance at December 31, 1996         94     953     116  4,348  5,305   (579)

Comprehensive Income:
 Net income                           -       -       -      -  1,087       -
 Other comprehensive income,
  net of tax:
  Unrealized gains on securities
   available for sale arising
   during the period, net of taxes<PAGE>



   of $190
                                  -----  ------  ------ ------ ------  ------  -----
Total comprehensive Income
Issuance of 16,461 shares of
 common stock, through option
 exercise                             -      16       -    140      -       -
Change in par value per
 common share from $1.00 to $0.001    - (1,061)          1,061      -       -
Series B preferred stock dividends                               (40)
Conversion of Class A common
 stock into common stock                          (116)    116
Conversion of Series B preferred
 stock into common stock           (94)      94
Issuance of 1,380,000 shares
 through initial public offering,
 net of expenses                              1         15,539              -
Conversion of subordinated
 debentures into common stock         -       -       -  2,917              -
Loan to ESOP                          -       -       -      -      -       -
ESOP shares released                                        30
                                  -----  ------  ------ ------ ------  ------  -----
Balance at December 31, 1997          0       3       0 24,151  6,352   (278)

Net income                            -       -       -      -  1,204       -
Other comprehensive income,
 net of tax:
  Unrealized gains on securities
   available for sale arising during
   the period, net of taxes of $533
   Reclassification adjustment,
   net of tax benefit of $78
                                  -----  ------  ------ ------ ------  ------  -----
Other comprehensive income,
 net of tax                                                               720
Total comprehensive Income
Issuance of 21,250 shares of
 common stock, through option
 exercise                             -       -       -    131      -       -
Issuance of restricted
 common stock                                               92                   (92
Conversion of subordinated
 debentures into common stock         -       -       -    100      -       -<PAGE>



ESOP shares released                  -       -       -     54              -
                                  -----  ------  ------ ------ ------  ------  -----
Balance at December 31, 1998     $    -   $   3   $   -$24,528 $7,556    $442   $(92
                                  =====  ======  ====== ====== ======  ======  =====

</TABLE>
See accompanying notes to Consolidated Financial Statements<PAGE>



                  Success Bancshares, Inc. and Subsidiaries 
                    Consolidated Statements of Cash Flows 
                 Years Ended December 31, 1997, 1996 and 1995

                                                 1998       1997        1996   
                                                         (In thousands) 
Cash flows from operating activities
Net income                                         $1,204    $1,087    $  783  
Adjustments to reconcile net income to net cash
 provided by operating activities
 Premium amortization on securities,
  net of discount accretion                           122      (43)        (49)
 Provision for loan losses                          1,943       766        310 
 Depreciation and amortization                      1,191       878        623 
 Provision for deferred taxes                       (737)     (279)       (88) 
 Net losses on sales of securities                    200         -         -  
 Loans originated for sale                       (10,569)   (3,373)     (5,453)
 Proceeds from sales of loans                       9,787     3,486      3,326 
 Net gains on sales of loans                        (159)      (61)       (109)
 Net losses on sale of other real estate owned         76         -         -  
 Accretion of loan discount                         (110)      (65)        (87)
 Deferred loan fees                                 (322)      (74)         38 
 Change in interest receivables and other assets  (1,419)     (374)       (518)
 Change in interest payable and other liabilities      14       837        605 
 Other                                                151       146        353 
                                                  -------   -------    ------- 
Net cash provided by (used) in operating
 activities                                         1,372     2,931       (266)

Cash flows from investing activities
 Proceeds from sales of available-for-sale
  securities                                        $  35   $    -     $     - 
 Proceeds from sales of held-to-maturity
  securities                                        2,835         -          - 
 Proceeds from maturities of available-for-sale
  securities                                       14,571     8,856      3,828 
 Purchases of available-for-sale securities      (11,902)  (15,651)     (3,906)
 Proceeds from maturities of held-to-maturity
  securities                                       11,333     1,381      3,171 
 Purchases of held-to-maturity securities         (3,000)     (374)         -  
 Changes in interest-bearing balances with
  financial institutions                                -        99        100 
 Loans made to customers, net                    (86,178)  (84,643)    (30,218)
 Purchase of other real estate owned              (1,430)         -         -  
 Proceeds from sales of other real estate           1,638         -         -  
 Premises and equipment expenditures              (3,762)   (2,615)     (2,889)
 Purchase of subsidiary bank common stock           (580)       (5)        (25)
                                                  -------   -------    ------- 
Net cash used in investing activities            (76,440)  (92,952)    (29,939)

Cash flows from financing activities
 Increase in non-interest bearing deposits         $8,332   $ 2,629    $ 7,428 
 Increase in interest bearing deposits             60,979    81,690     10,369 
 Increase (decrease) in demand notes payable
  to US Government                                  (543)     (157)      1,251 
 Increase (decrease) in securities sold
  under agreements to repurchase                    1,322     (441)      2,387 <PAGE>



 Repayments of notes payable                            -   (7,815)     (2,015)
 Proceeds from notes payable                            -     3,000      3,000 
 Proceeds from Federal Home Loan Bank advances      9,000    11,750      4,000 
 Repayment of Federal Home Loan Bank advances     (4,229)   (6,182)     (4,798)
 Issuance of convertible subordinated debentures        -         -        755 
 Repayment of convertible subordinated debentures   (100)         -         -  
 Issuance of Trust Preferred securities            15,000         -         -  
 Issuance of common stock                             185    15,676      1,137 
 ESOP loan for common shares purchased by ESOP          -      (50)         -  
 Principal payment on ESOP loan                        45        29         46 
 Dividends paid                                         -      (40)        (81)
                                                  -------   -------    ------- 
Net cash provided by financing activities          89,991   100,089     23,479 
                                                  -------   -------    ------- 
Increase (decrease) in cash and cash equivalents   14,923    10,068     (6,726)

Cash and cash equivalents at beginning of year     23,901    13,833     20,559 
                                                  -------   -------    ------- 
Cash and cash equivalents at end of year          $38,824   $23,901    $13,833 
                                                  =======   =======    ======= 

Supplemental disclosures of cash flow information
 Cash paid during the year for: 
  Interest on deposits                            $15,208   $11,002     $8,647 
  Interest on borrowings                            1,877     1,708      1,373 
  Income taxes                                        627       570        352 

Selected noncash investing activities
 Other real estate acquired in settlement of loans $   671  $   290     $   -  


See accompanying notes to Consolidated Financial Statements<PAGE>



                  Success Bancshares, Inc. and Subsidiaries 
                  Notes to Consolidated Financial Statements

NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Success Bancshares, Inc. (the Company), through its subsidiary, Success
National Bank (the Bank), provides a full range of financial services to
customers through locations in the Chicago metropolitan area.

(a) Basis of Presentation:  The consolidated financial statements of Success
Bancshares, Inc. include the accounts of the Company and its wholly-owned
subsidiaries:  Success National Bank, Success Realty Ventures, Inc.
("Success"), and Success Capital Trust I ("Trust").  Significant intercompany
accounts and transactions have been eliminated in consolidation.

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Significant estimates which are particularly susceptible to change in a short
period of time include the determination of the allowance for possible loan
losses.  Actual results could differ from those estimates.

In June 1997, the FASB issued SFAS No. 130, "Reporting Comprehensive Income."
The Statement establishes standards for the reporting and display of
comprehensive income and its components in a full set of general purpose
financial statements.  The Statement does not address when transactions are
recorded, how they are measured in the financial statements, or whether they
should be included in net income or other comprehensive income.  SFAS No. 130
requires unrealized gains and losses on the Company's available for sale
portfolio, which prior to adoption were reported separately in stockholders'
equity, to be included in Comprehensive income.  Prior year financial
statements have been reclassified to conform to the requirements of SFAS No.
130.

Also in June 1997, the FASB issued SFAS No. 131, "Disclosures about Segments of
an Enterprise and Related Information".  The Statement established standards
for the way that public companies report information about operating segments
in annual financial statements and requires that those enterprises report
selected financial information about operating segments in interim financial
reports issued to shareholders.  It also established standards for related
disclosures about products and services, geographic areas, and major customers.
Statement No. 131 is effective for financial statements for fiscal years
beginning after December 15, 1997.  Based upon the Company's approach to
decision making, management has concluded that its business is comprised of a
single segment and that SFAS No. 131 therefore, has no impact on its
consolidated financial statements.

(b) Cash and Cash Equivalents:  Cash and cash equivalents include cash on hand,
noninterest-bearing amounts due from banks, interest-bearing demand balances
with banks, and federal funds sold.  Generally, federal funds are sold or
purchased for one-day periods.  Cash flows from loans originated by the Bank,
deposits, securities sold under agreements to repurchase and demand notes
payable to U.S. Government are reported net.<PAGE>



(c)  Securities:  Securities classified as held-to-maturity are those debt
securities the Company has both the positive intent and ability to hold to
maturity regardless of changes in market conditions, liquidity needs or changes
in general economic conditions.  These securities are carried at cost adjusted
for amortization of premium and accretion of discount which are recognized in
interest income using the interest method over the period to maturity.
Transfer of debt securities into the held-to-maturity classification from the
available-for-sale classification are made at fair value on the date of
transfer.  The unrealized gain or loss on the date of transfer is retained as a
separate component of stockholders' equity and in the carrying value of the
held-to-maturity securities.  Such amounts are amortized over the remaining
contractual lives of the securities by the interest method.
Securities classified as available-for-sale are those debt securities that the
Company intends to hold for an indefinite period of time, but not necessarily
to maturity.  Any decision to sell a security classified as available for sale
would be based on various factors, including significant movements in interest
rates, changes in the maturity mix of the Company's assets and liabilities,
liquidity needs, regulatory capital considerations and other similar factors.
Securities available for sale are carried at fair value.  The difference
between fair value and amortized cost results in an unrealized gain or loss.
Unrealized gains or losses are reported as increases or decreases in
stockholders' equity, net of the related deferred tax effect.  Realized gains
or losses, determined on the basis of the cost of specific securities sold, are
included in earnings.  Premiums and discounts are recognized in interest income
using the interest method over their contractual lives.

(d)  Real Estate Loans Held-for-Sale:  Real estate loans held-for-sale are
carried at the lower of cost, net of loan fees collected, or fair value in the
aggregate.  Loans are sold without recourse with servicing retained.  Gains and
losses from the sale of loans are determined based upon the net proceeds and
the carrying value of the loans sold after allocating cost to servicing rights
retained.  Net unrealized losses are recognized in a valuation allowance by
charges to income.

Transfer of loans held for sale to portfolio are accounted for at the lower of
cost or fair value at the date of transfer.  The excess of the carrying value
over the fair value as of the transfer date is accreted into interest income
over the remaining estimated lives of the transferred loans.  Cost approximated
fair value for loans held for sale as of December 31, 1998 and 1997.

(e) Loans:  Loans that management has the intent and ability to hold for the
foreseeable future or until maturity or payoff ("portfolio" loans) are stated
net of unearned income, deferred loan fees, unaccreted discounts and the
allowance for loan losses.  Interest on loans is accrued over the term of the
loan based on the amount of principal outstanding.  For impaired loans, accrual
of interest is discontinued on a loan when management believes, after
considering collection efforts and other factors, that the borrower's financial
condition is such that collection of interest is doubtful.  Additionally,
interest income is reduced for any amounts previously accrued.  Interest income
is subsequently recognized only to the extent cash payments are received and
the principal is considered fully collectible.  Discounts are accreted into
income over the estimated lives of the loans on a method that approximates the
interest method.  Loan origination fees are being deferred in accordance with
SFAS No. 91 "Accounting for Nonrefundable Fees and Costs Associated with
Originating or Acquiring Loans and Initial Direct Costs of Leases."  This
statement requires that loan origination fees and direct loan origination costs<PAGE>



for a completed loan be netted and then deferred and amortized into interest
income as an adjustment of yield over the contractual life of the loan.

The Company has adopted the provisions of SFAS No. 114 "Accounting by Creditors
for Impairment of a Loan" and SFAS No. 118 "Accounting by Creditors for
Impairment of a Loan - Income Recognition and Disclosures." These statements
apply to all loans that are identified for evaluation except for large groups
of smaller-balance homogeneous loans that are collectively evaluated for
impairment.  Commercial loans less than $100,000, residential real estate
mortgages, home equity loans, and installment loans are considered small
balance homogenous loan pools and are not evaluated for purposes of impairment.
All other loans are specifically evaluated for impairment.  Loans are
considered impaired when, based on current information and events, it is
probable that the Company will not be able to collect all amounts due according
to the contractual terms of the loan agreement.  The impairment is measured
based on the present value of expected future cash flows, or alternatively, the
observable market price of the loans or the fair value of the collateral.
However, for those loans that are collateral-dependent and for which management
has determined foreclosure is probable, the measure of impairment of those
loans is to be based on the fair value of the collateral.  The amount of
impairment, if any, and any subsequent changes are included in the allowance
for loan losses.

Because some loans may not be paid in full, an allowance for loan losses is
recorded.  Increases to the allowance are recorded by a provision for loan
losses charged to expense.  Estimating the risk of loss and the amount of loss
on any loan is necessarily subjective.  Accordingly, the allowance is
maintained at a level considered adequate to cover possible losses that are
currently anticipated based on past loss experience, general economic
conditions, information about specific borrower situations including their
financial position and collateral values, and other factors and estimates which
are subject to change over time.  A loan is charged-off by management as a loss
when deemed uncollectible, although collection efforts continue and future
recoveries may occur. 

(f) Premises and Equipment:  Buildings, leasehold improvements, furniture, and
equipment are stated at cost less accumulated depreciation and amortization.
Depreciation and amortization are provided on the straight-line method over
estimated useful lives of the related assets.  Maintenance and repairs are
expensed as incurred, while major improvements are capitalized.

(g) Other Real Estate Owned:  Other real estate owned (OREO) represents
properties acquired through foreclosure or other proceedings and is initially
recorded at fair value at the date of foreclosure, which establishes a new
cost.  After foreclosure, OREO is held for sale and is carried at the lower of
cost or fair value less estimated costs of disposal.  Any write-down to fair
value at the time of transfer to OREO is charged to the allowance for loan
losses.  Property is evaluated regularly to ensure the recorded amount is
supported by its current fair value and valuation allowances to reduce the
carrying amount to fair value less estimated costs to dispose are recorded as
necessary.  Revenue and expense from the operations of OREO and changes in the
valuation allowance are included in the results of operations.

(h) Income Taxes:  The Company files a consolidated income tax return with its
subsidiaries.  The Company's share of the consolidated income tax provision is
computed on a separate return basis.  Deferred taxes are provided using the
liability method to recognize deferred tax assets for deductible temporary<PAGE>



differences and operating loss and tax credit carryforwards and deferred tax
liabilities are recognized for taxable temporary differences.  Temporary
differences are the differences between the reported amounts of assets and
liabilities and their tax bases.  Deferred tax assets are reduced by a
valuation allowance when, in the opinion of management, it is more likely than
not that some portion or all of the deferred tax assets will not be realized.
Deferred tax assets and liabilities are adjusted for the effects of changes in
tax laws and rates on the date of enactment.

(i) Earnings Per Share:  The Company computes its earnings per share (EPS) in
accordance with SFAS No. 128, "Earnings per Share."  This statement simplifies
the standards for computing EPS preisouly found in Accounting Principles Board
Opinion No. 5, "Earnings per Share" and makes them comparable to international
EPS standards.  It replaces the presentation of primary EPS with a presentation
of basic EPS and fully diluted EPS with diluted EPS.

Basic EPS, unlike primary EPS, excludes dilution and is computed by dividing
income available to common stockholders by the weighted-average number of
common shares outstanding for the period.  Diluted EPS reflects the potential
dilution that could occur if securities or other contracts to issue common
stock were exercised or converted into common stock or resulted in the issuance
of common stock that then shared in the earnings of the entity.

(j)  Recent Accounting Developments:  During 1998, the FASB issued SFAS No.
133, "Accounting for Derivative Instruments and for Hedging Activities" which
establishes new standards for reporting information about derivatives and
hedging.  It is effective for periods beginning after June 15, 1999 and will be
adopted by the Company as of January 1, 2000.  The Company has not yet
quantified the impact of adopting Statement No. 133 on its financial statements
and has not determined the timing or method of its adoption of Statement No.
133, if any. 

In October 1998, the FASB issued SFAS No. 134, "Accounting for Mortgage-Backed
Securities Retained after the Securitization of Mortgage Loans Held for Sale by
a Mortgage Banking Enterprise" which is effective for the first fiscal quarter
after December 15, 1998.  This statement amends SFAS No. 65 "Accounting for
Certain Mortgage Banking Activities."  This statement revises the accounting
for retained securities and beneficial interests.  Management does not believe
that adoption of SFAS No. 134 will have a material impact on the Company's
consolidated financial condition or results of operations.

(k) Prior Year Reclassifications:  Certain reclassifications were made to make
the 1997 and 1996 financial statements comparable with the 1998 presentation.

Cash and cash equivalents are comprised of the following at December 31:
                                                         1998      1997   
                                                          (In thousands)       
Cash and due from banks                                 $ 24,905  $ 16,337
Interest-bearing demand balances with banks                7,019       564
Federal funds sold                                         6,900     7,000
                                                         -------   -------
                                                        $ 38,824  $ 23,901
                                                         =======   =======
At December 31, 1998 and 1997, reserves of $9.9 million and $7.2 million,
respectively, were required to be held as cash or on deposit with the Federal
Reserve Bank of Chicago.  These reserves do not earn interest.<PAGE>



NOTE 3 - SECURITIES

The amortized cost, gross unrealized gains and losses, and fair values of
securities at December 31, 1998 are as follows:


                                               Gross     Gross  
                                  Amortized Unrealized Unrealized    Fair 
                                     Cost       Gains    Losses      Value
                                                (In thousands)
Securities available-for-sale
 U.S. Treasury                        $5,201     $   19  $   (5)    $5,215
 U.S. Government sponsored entities    4,251         30      (5)     4,276
 States and political subdivisions 
  Taxable                              1,732        149       -      1,881
  Exempt from Federal income taxes    12,995        233     (37)    13,191
 Mortgage-backed securities           10,691         97       -     10,788
 SBA guaranteed loan participation
  certificates                         2,304          1     (15)     2,290
 Other securities                      3,141        267     (12)     3,396
                                     -------    -------  -------   -------
                                     $40,315     $  796 $   (74)   $41,037
                                     =======    =======  =======   =======
The amortized cost and fair value of securities at December 31, 1998, by
contractual maturity, are shown below.  Expected maturities of mortgage-backed
securities and SBA guaranteed loan participation certificates will differ from
contractual maturities because borrowers may have the right to call or prepay
obligations with or without call or prepayment penalties.  Therefore, these
securities are not included in the maturity categories in the following
maturity summary.

                                                        Available-for-sale     
                                                      Amortized      Fair 
                                                        Cost         Value
                                                           (In thousands)      
Due in one year or less                                   $7,727    $7,765
Due after one year through five years                      8,341     8,463
Due after five years through ten years                     5,049     5,149
Due after ten years                                        3,676     3,811
Mortgage-backed securities and SBA guaranteed
 loan participation certificates                          15,522    15,849
                                                         -------   -------
                                                         $40,315   $41,037
                                                         =======   =======

NOTE 3 - SECURITIES (continued)

The amortized cost, gross unrealized gains and losses, and fair values of
securities at December 31, 1997 are as follows:

Amortized Cost Gross Unrealized Gains Gross Unrealized Losses
Fair Value
 (In thousands)
Securities available-for-sale


U.S. Treasury                            $3,775   $    17    $   -       $3,792<PAGE>



U.S. Government sponsored entities        3,346         1      (46)       3,301
States and political subdivisions
 exempt from Federal income taxes         4,437         5        -        4,442
Mortgage-backed securities                7,019        35        -        7,054
SBA guaranteed loan participation
 certificates                             3,221        28      (11)       3,238
Other securities                            182        84       (3)         263
                                        -------   -------   -------     -------
                                        $21,980   $   170  $   (60)     $22,090
                                        =======   =======   =======     =======
Securities held-to-maturity
 U.S. Treasury                           $  246    $    2  $    -       $    48
 U.S. Government sponsored entities      14,754       362     (154)      14,962
 States and political subdivisions
  Taxable                                 1,791       108        -        1,899
  Exempt from Federal income taxes        6,506       196        -        6,702
 Mortgage-backed securities               5,148       261        -        5,409
Other securities                          3,219        -         -        3,219
                                        -------   -------   -------     -------
                                        $31,664    $  929  $  (154)     $32,439
                                        =======   =======   =======     =======
Proceeds from sales of securities available-for-sale and realized gross gains
and losses in 1998, 1997 and 1996 are as follows:

                                                  1998      1997      1996
                                                        (In thousands)         
Securities available-for-sale
 Proceeds from sales                             $2,835   $    -   $     -
 Gross gains                                         20        -         -
 Gross losses                                     (220)        -         -

Securities with a carrying value of approximately $27.2 and $32.2 million at
December 31, 1998 and 1997, respectively, were pledged to secure public
deposits and for other purposes as required or permitted by law.

In 1998 the Company sold held-to-maturity securities with an amortized cost of
$3.0 million and realized a net loss of $200 thousand.  Additionally, the
Company transferred its remaining held-to-maturity securities portfolio with an
amortized cost of $26.5 million to available-for-sale and recorded as a
component of equity, an unrealized gain of $525 thousand, net of $332 thousand
deferred taxes.  In accordance with SFAS No. 115 "Accounting for Certain
Investments in Debt and Equity Securities," these securities are accounted for
at fair value, and any unrealized gain or loss net of deferred tax effect is
reflected in accumulated other comprehensive income.

NOTE 4 - LOANS

Loans at December 31, 1998 and 1997 consisted of the following:

                                                           1998        1997
                                                           (In thousands)      
Commercial                                             $102,592     $87,506
Residential real estate-mortgage                          72,420     42,651
Commercial real estate-mortgage                           96,413     63,469
Real estate - construction                                15,517     13,409
Home equity                                               78,384     72,944
Installment                                                9,889      9,685<PAGE>



                                                        --------   --------
Total gross loans                                       $375,215   $289,664
                                                        --------   --------
Net deferred loan fees                                       135      (187)
Unaccreted discount resulting from loss on
 transfer of loans from held for sale to portfolio         (263)      (373)
Allowance for loan losses                                (3,824)    (2,079)
                                                        --------   --------
Net loans                                               $371,263   $287,025
                                                        ========   ========
Activity in the allowance for loan losses is summarized below:

                                               1998      1997       1996  
                                                     (In thousands)            
Balance at beginning of year                    $2,079    $1,425    $1,189
Provision for loan losses                        1,943       766       310
Recoveries on loans previously charged-off           9        37         4
Loans charged-off                                (207)     (149)      (78)
                                               -------   -------   -------
Balance at end of year                         $3,824    $2,079     $1,425
                                               =======   =======   =======
Impaired loan information as of and for the years ended December 31, 1998 and
1997 is as follows:

                                                           1998       1997
                                                            (In thousands)     
Impaired loans for which no allowance has been provided  $   268    $1,479
Impaired loans for which an allowance has been provided                  -
                                                         -------   -------
Total loans determined to be impaired                    $   268    $1,479
                                                         =======   =======
Allowance provided for impaired loans, 
 included in the allowance for loan losses              $     -    $     -
                                                         =======   =======
Average recorded investment in impaired loans            $  324     $1,869
Interest income recognized from impaired loans           $    5     $  231
Cash basis interest income recognized from 
 impaired loans                                           $    -    $   79

Mortgage loans serviced for the Federal Home Loan Mortgage Corporation by the
Company are not included in the accompanying consolidated balance sheets.  The
unpaid principal balances of these loans were approximately $45.7 and $50.1
million at December 31, 1998 and 1997, respectively.

NOTE 5 - PREMISES AND EQUIPMENT

Premises and equipment consisted of the following at December 31, 1998 and
1997:

                                                          1998      1997  
                                                           (In thousands)      
Land                                                      $2,904    $2,904
Building and leasehold improvements                        7,571     5,444
Furniture and equipment                                    5,859     4,232
                                                         -------   -------
Total cost                                                16,334    12,580
Less accumulated depreciation and amortization             4,972     3,794<PAGE>



                                                         -------   -------
Net book value                                           $11,362    $8,786
                                                         =======   =======
NOTE 6 - DEPOSITS

Deposits at December 31, 1998 and 1997 are summarized as follows:

                                                          1998      1997  
                                                          (In thousands)       
Demand deposits:
 Non-interest-bearing                                    $53,557   $45,225
 Interest-bearing                                        129,730    76,058
                                                         -------   -------
Total demand deposit                                     183,287   121,283
Savings                                                   22,686    19,389
Money market                                              36,691    32,940
Other deposits                                            17,239    17,015
Time:
 Due within one year                                     118,321    91,444
 Due within one to two years                              14,994    40,262
 Due within two to three years                             2,844     3,020
 Due within three to four years                            1,756     2,417
 Due thereafter                                              917     1,654
                                                         -------   -------
Total time deposits                                      138,832   138,797
                                                         -------   -------
Total deposits                                          $398,735  $329,424
                                                         =======   =======

NOTE 6 - DEPOSITS (continued)

Time deposits in amounts of $100,000 or more were approximately $58.2 million
and $48.0 million at December 31, 1998 and 1997, respectively.

Interest expense on deposits for the years ending December 31 is summarized as
follows:

                                                 1998       1997      1996
                                                        (In thousands)         
Interest-bearing demand                       $  3,211   $  1,658 $  1,200
Savings                                            667        640      606
Money market                                     1,934      1,456    1,357
Other deposits                                     831        973    1,224
Time                                             8,622      6,463    4,245
                                               -------    -------  -------
                                              $ 15,265   $ 11,190 $  8,632
                                               =======    =======  =======
NOTE 7 - BORROWING ARRANGEMENTS

The Bank is permitted to borrow from the Federal Reserve Bank ("FRB") up to 75%
of loans pledged to the FRB.  As of December 31, 1998 and 1997, there were no
loans pledged to the FRB and there were no borrowings outstanding at either
date.

NOTE 8 - FEDERAL HOME LOAN BANK ADVANCES<PAGE>



At December 31, 1998 and 1997, advances from the Federal Home Loan Bank of
Chicago ("FHLB") were as follows:

 Maturity                      Interest  Frequency of       Advance Amount 
   Date                            Rate Rate Adjustment       1998    1997
                                               (In thousands)                  
August, 1998                      5.98%          Fixed     $     -  $4,000
July, 1999                        6.30%          Fixed       2,000   2,000
October, 2001                     4.75%          Fixed       5,000       -
May, 2002 (1)                     6.83%          Fixed       1,643   1,782
February, 2003 (1)                5.65%          Fixed       1,159   1,223
July, 2004 (1)                    6.38%          Fixed       1,689   1,715
April, 2008 (2)                   4.80%          Fixed       4,000       -
                                                           ------- -------
                                                           $15,491 $10,720

(1) 15 year amortizing advance with a seven year balloon. 
(2) Callable at end of one year

The Bank maintains a collateral pledge agreement with the FHLB covering secured
advances.  Under this agreement, first mortgages on improved residential
property not more than 90 days delinquent are pledged as collateral.  Total
loans pledged to secure advances at December 31, 1998 and 1997 were
approximately $28.2 million and $39.5 million, respectively.

NOTE 9 - SECURITIES SOLD UNDER AGREEMENTS TO REPURCHASE

Securities sold under agreements to repurchase are overnight repurchase
agreements with customers of the Bank and consist of primarily U.S. government
sponsored entity obligations.

The securities underlying the agreements are book-entry securities.  During the
period, the securities were delivered by appropriate entry into a third-party
custodian's account designated by the Bank under a written custodial agreement
that explicitly recognizes the customer's interest in the securities.  At
December 31, 1998, no material amount of agreements to repurchase securities
sold were outstanding with any individual customer.  Securities sold
underagreements to repurchase averaged $5.4 million and $5.8 million during
1998 and 1997, respectively, and the maximum amounts outstanding at any
month-end during 1998 and 1997 were $6.4 million and $12.0 million,
respectively.  The weighted average rate paid during 1998 and 1997 was 4.15%
and 4.20%, respectively, and the weighted average rate at the end of 1998 and
1997 was 3.92% and 4.54%.

NOTE 10 - CONVERTIBLE SUBORDINATED DEBENTURES

In 1992, the Company issued $2.2 million of ten year 9% convertible
subordinated debentures (the debentures).  The debentures pay interest
semi-annually.  The debentures are convertible at any time prior to maturity
into common stock at $8.57 per share.  The Company can redeem the debentures
(a) without paying a premium if the book value per share of the Company's
common stock equals or exceeds the conversion price; or (b) with a premium of
between 10% and 2% depending on the redemption date.  All but $200,000 of these
debentures were converted to common stock in October 1997.  In June 1998 $100
thousand of the remaining debentures were converted to Common Stock and $100
thousand were redeemed.<PAGE>



NOTE 11 - SHAREHOLDERS' EQUITY AND CAPITAL STANDARDS

The Company and the Bank are subject to various regulatory capital requirements
administered by the federal banking agencies.  Failure to meet minimum capital
requirements can initiate certain mandatory, and possibly additional
discretionary, actions by regulators that, if undertaken, could have a direct
material effect on the Company's financial statements.  The regulations require
the Company and the Bank to meet specific capital adequacy guidelines that
involve quantitative measures of assets, liabilities, and certain
off-balance-sheet items as calculated under regulatory accounting principles.
The Company's and the Bank's capital amounts and classifications are also
subject to qualitative judgments by the regulators about risk weightings and
other factors.

Quantitative measures established by regulation to ensure capital adequacy
require the Company and the Bank to maintain minimum ratios (set forth in the
table below) of Tier I capital (as defined in the regulations) to total average
assets (as defined) ("leverage ratio") and minimum ratios of Tier I and total
capital (as defined) to risk-weighted assets (as defined).  Management believes
that as of December 31, 1998 the Company and the Bank met all capital adequacy
requirements to which they were subject.  As of December 31, 1998, the most
recent notification from the corresponding regulatory agency categorized the
Bank as well capitalized under the regulatory framework for prompt corrective
action.  To be considered well capitalized, under this framework, the Bank must
maintain minimum leverage, Tier I and Total Capital ratios as set forth in the
following table.  There are no conditions or events since the notification that
management believes has changed the Bank's category.

The required ratios and the Company's actual ratios at December 31, 1998 and
1997, are presented below:

                                                        To Be Well Capitalized
                                          For Capital   Under Prompt Corrective
                             Actual       Adequacy Purposes  Action Provisions
                      Amount      Ratio    Amount  Ratio    Amount        Ratio
                                           (Dollars in thousands)              

As of December 31, 1998
Total Capital (to Risk Weighted Assets):
 Consolidated        $50,706      15.23%   $26,628   8.0%  Not Applicable
 Bank                  36,379     10.99%    26,486   8.0%   $33,108      10.0% 
Tier 1 Capital (to Risk Weighted Assets):
 Consolidated          42,509     12.77%    13,314   4.0%  Not Applicable
 Bank                  32,555      9.83%    13,243   4.0%    19,865        6.0%
Tier 1 Capital (to Average Assets):
 Consolidated          42,509      9.96%    17,073   4.0%Not Applicable
 Bank                  32,555      7.66%    17,004   4.0%    21,255        5.0%


As of December 31, 1997
Total Capital (to Risk Weighted Assets):
 Consolidated         $33,124     12.37%   $21,425   8.0%Not Applicable
 Bank                  30,425     11.38%    21,388   8.0%   $26,734      10.0% 
Tier 1 Capital (to Risk Weighted Assets):
 Consolidated          30,928     11.55%    10,713   4.0%Not Applicable
 Bank                  28,346     10.60%    10,694   4.0%    16,041       6.0% 
Tier 1 Capital (to Average Assets):<PAGE>



 Consolidated          30,928      9.69%    12,762   4.0%Not Applicable
 Bank                  28,346      8.90%    12,739   4.0%    15,924        5.0%

The Bank may not declare or pay cash dividends on any of its shares of common
stock if the effect thereof would cause stockholders' equity to be reduced
below applicable regulatory capital maintenance requirements or if such
declaration and payment would otherwise violate regulatory requirements.
Unlike the Bank, the Company is not subject to these regulatory restrictions on
the payment of dividends to its stockholders.  However, the Company's source of
funds for future dividends may depend upon dividends received by the Company
from the Bank.

NOTE 12 - EMPLOYEE BENEFIT PLANS

The Company maintains an Employee Stock Ownership Plan ("ESOP"), which also has
a 401(k) feature.  The ESOP, which is internally leveraged, covers
substantially all employees of the Bank.  Loans from the Company to the ESOP to
acquire Company stock are recorded as a reduction of shareholders' equity.  At
December 31, 1998 and 1997, the fair value of unearned ("suspense") ESOP shares
was approximately $175,000 and $255,000, respectively.  Suspense shares are
released and allocated to participants as the ESOP's debt to the Company is
repaid.  Employer contributions, including any matching contribution for the
401(k) provision, are made at the discretion of the Bank's Board of Directors.
Contributions to the ESOP, which are not materially different from the fair
value of shares allocated to participants, were partially funded with $40,000
of dividends on the Series B preferred stock during 1997.  For the year ended
December 31, 1998, the Company recorded $55,000 of 401(k) expense and $99,000
of ESOP expense.  During 1997 the Company recorded $45,000 of 401(k) expense
and $59,000 of ESOP expense.

Shares of the Company's stock held by the ESOP as of December 31, 1998 and
1997, are shown in the following table.  The allocated and unallocated common
shares as of December 31, 1998 are approximations, as the 1998 participant
allocation has not yet been completed.

                                                           1998        1997
Shares allocated to participants                         72,953      72,527
Suspense (unallocated) shares                            15,211      18,577
                                                        -------     -------
Total ESOP Shares                                        88,164      91,104
                                                        =======     =======
NOTE 13 - STOCK OPTIONS AND RESTRICTED STOCK AWARD

Prior to adopting the 1995 Incentive Stock Plan, the Company's Board of
Directors has granted nonqualified options to various members of senior
management.  The outstanding stock options may be exercised at any time by the
respective officers through a period ending three years after termination of
employment with the Bank or the Company.

The Company implemented SFAS No. 123 "Accounting for Stock-Based Compensation"
during the year ended December 31, 1997.  The Company will retain its current
accounting method for its stock-based compensation plans.  This statement will
only result in additional disclosures for the Company, and as such, its
adoption did not, nor is it expected to have, a material impact on the
Company's financial condition or its results of operation.<PAGE>



In 1995, the Company adopted a qualified incentive stock option plan for senior
officers and directors of the Company with options to be granted at the fair
value of the stock at the date of grant.  Under this plan, 170,000 shares of
authorized but unissued common stock are reserved for the granting of options.
Vesting of the options is determined by the Board of Directors and typically is
over a period not exceeding four years.  Options must be exercised within ten
years after the date of grant.  The following table summarizes data concerning
stock options:

                                   Common                      Weighted   
                                Shares Under  Option Price      Average   
                                    Option      Per Share   Exercise Price
Outstanding at December 31, 1995     156,740 $1.82 - $ 6.18        $  5.04
Cancelled                             (3,400)         $6.09          $6.09
                                    ---------------------------------------    
Outstanding at December 31, 1996
 and 1997                            153,340  $1.82 - $6.18          $5.02
Exercised                            (21,250)$6.18 - $10.50          $7.04
Cancelled                            (17,000)         $6.18          $6.18
Issued                               116,500 $11.50 - $14.50        $13.91
                                    ---------------------------------------    
Outstanding at December 31, 1998     231,590 $1.82 - $14.50          $9.22
                                    =======================================    
At December 31, 1998, there are options exercisable for 115,090 shares at a
weighted average price of $4.63.

Grants under the plan are accounted for following Accounting Principles Board
Opinion No. 25, "Accounting for Stock Issued to Employees," and related
interpretations.  Accordingly, no compensation cost has been recognized for
incentive stock option grants under the stock option plan.  Had compensation
cost for the stock-based compensation plan been determined based on the grant
date fair values of awards, reported income and earnings per common share would
have been reduced to the pro forma amounts shown below:

                                                  1998     1997       1996
Net income applicable to common stock (in thousands):

 As reported                                    $1,204   $1,047       $702
 Pro forma                                      $1,094   $1,047       $702
Basic earnings per common share:
 As reported                                     $0.41    $0.68      $0.66
 Pro forma                                       $0.37    $0.68      $0.66
Diluted earnings per common share:
 As reported                                     $0.40    $0.65      $0.63
 Pro forma                                       $0.36    $0.65      $0.63

The fair value of each option grant was estimated using the Black-Scholes
option-pricing model with the following weighted average assumptions used for
grants during the year ended December 31, 1998: dividend yield of 0% for the
period; expected volatility of 0% for the period; risk free rate of return of
4.50%; and expected life of 9.5 years. 

In December 1998 the Company granted its President, Wilbur G. Meinen, a total
of 8,000 restricted shares of Company stock.  Under terms of the grant, 2,667
shares of the restricted stock will vest on December 31, 1999, 2,667 will vest
on December 31, 2000 and 2,666 will vest on December 31, 2001.  Unearned<PAGE>



compensation of $92 thousand has been recognized at December 31, 1998 and will
be amortized to compensation expense over the vesting period.

NOTE 14 - INCOME TAXES

The deferred tax assets and liabilities consist of the following components as
of December 31, 1998 and 1997:

                                                           1998        1997
                                                             (In thousands)    
Deferred tax assets:
 Allowance for loan losses                               $1,416        $656
 Securities available for sale                                 -        224
 Deferred loan fees                                            6        113
 Premises and equipment                                      124        121
 Writedown of other real estate owned                         39          -
 Alternative minimum tax credit carry forward                144          -
 Loans                                                       109        145
                                                         -------    -------
                                                           1,838      1,259
Deferred tax liabilities:
 State income taxes                                         $93         $68
 Securities available for sale                               279          -
 Loans - tax mark to market                                    -         24
 Mortgage servicing rights                                    70         38
 Other                                                        63         30
                                                         -------    -------
                                                             505        160
                                                         -------    -------
Net deferred tax assets                                   $1,333     $1,099
                                                         =======    =======
No valuation allowance was considered necessary.

Income tax expense for the years ended December 31, 1998, 1997 and 1996,
consists of the following:

                                                    1998      1997         1996
 (In thousands)
Current                                             $450      $778         $321
Deferred                                            (737)     (279)        (88)
                                                  -------   -------     -------
                                                   $(287)     $499         $233
                                                  =======   =======     =======
Reconciliations of income tax expense computed at the statutory federal income
tax rate to the Company's income tax expense for the years ended December 31,
1998, 1997, and 1996, are as follows:

                                                    1998      1997         1996
                                                          (In thousands)       
Income tax expense at statutory rate                $312      $539         $345
Increase (decrease) in income taxes resulting from:
State income taxes, net of federal tax benefit       (28)        82          21
Nontaxable interest income (net of
  disallowed expenses)                              (195)     (155)       (141)
Officer's life insurance proceeds                   (340)         -           -
Other                                                (36)        33           8
                                                  -------   -------     -------<PAGE>



                                                   $(287)      $499        $233
                                                  =======   =======     =======<PAGE>



NOTE 15 - COMPUTATION OF EARNINGS PER SHARE

The table following summarizes the computation of earnings per share for the 
years indicated:
<TABLE>
<CAPTION>
                                                   For the Year Ended December 31,   
                                           1998           1997           1996
                                Income   Share Per-ShareIncome  SharePer-ShareIncome
                            (Numerator)(Denominator)Amount(Numerator)(Denominator)
Amount(Numerator)(Denominator)Amount
                                                (In thousands, except per share amoun
<S>                                 <C>     <C>     <C>    <C>    <C>     <C>    <C>
Net income                       $1,204                 $1,087                  $783
Less:  Preferred stock dividends                          (40)                  (81)
Basic EPS
Income available to
 common stockholders             $1,204   2,938 $  0.41  1,047  1,531 $  0.68    702

Effect of Dilutive Securities
Options                                      88                    76

Diluted EPS
Income available to common stockholders
 + assumed conversions           $1,204   3,026 $  0.40 $1,047  1,607 $  0.65   $702
</TABLE>
In 1998, 1997 and 1996, the assumed conversion of the convertible subordinated 
debt would have had an antidilutive effect and as such, was not included in 
diluted EPS for those years.  Additionally, the convertible Series B Preferred 
Stock would have had an antidilutive effect in 1997 and 1996, and as such, was 
not included in diluted EPS for these years.<PAGE>



NOTE 16 - COMMITMENTS, CONTINGENCIES AND CREDIT RISK

Credit risk:  The Company makes loans to, and obtains deposits from, customers
primarily in Lake County, Cook County, DuPage County, and McHenry County,
Illinois and surrounding areas.  Most loans are secured by specific items of
collateral, including residential and commercial real estate and other business
and consumer assets.  Collateral held varies but may include deposits held in
financial institutions; U.S. Treasury securities; other marketable securities;
income-producing commercial properties; residential real estate; accounts
receivable; and property, plant and equipment.

Financial instruments with off-balance sheet risk: The Company is a party to
financial instruments with off-balance-sheet risk in the normal course of
business to meet financing needs of its customers.  These financial instruments
include commitments to make loans, standby letters of credit, and unused lines
of credit.  The Company's exposure to credit loss in the event of
nonperformance by the other parties is represented by the contractual amounts
of the instruments.  The Company uses the same credit policy to make such
commitments as it uses for on-balance-sheet items.

At December 31, 1998 and 1997, the contract amount of these financial
instruments is summarized as follows:

                                                            1998      1997
                                                            (In thousands)     
Financial instruments whose contract amount
 represents credit risk
 Unused home equity lines of credit                      $95,112   $75,588
Unused commercial and other consumer lines of credit        8,690   14,676
Standby letters of credit                                  3,214     2,041
Commitments to make loans                                 12,595    20,765

Since many commitments to make loans expire without being used, the amounts
above do not necessarily represent future cash commitments.  Collateral
obtained upon exercise of the commitment is determined using management's
credit evaluation of the borrower, and may include commercial and residential
real estate and other business and consumer assets.

Litigation:  From time to time, the Company and the Bank are involved in
litigation, both as a defendant and as a plaintiff.  Management believes that
the ultimate liability from such actions, if any, will not have a material
effect on the financial condition of the Company or the Bank. 

Lease Commitments:  The Bank leases branch facilities under noncancelable
operating lease agreements.  Rent expense for branch facilities was $434
thousand, $285 thousand, and $322 thousand in 1998, 1997 and 1996,
respectively, excluding taxes, insurance and maintenance.  The branch
facilities are charged for their proportionate share of taxes, insurance and
maintenance costs plus monthly rent.  The minimum rental commitments, not
including taxes, insurance and maintenance, at December 31, 1998 under the
leases are summarized below (in thousands):


               1999                                                    $515
               2000                                                     427
               2001                                                     355
               2002                                                     325<PAGE>



               2003                                                     276
               2004 and thereafter                                    1,111
                                                                    -------
               Total                                                 $3,009
                                                                    =======
NOTE 17 - RELATED PARTY TRANSACTIONS

In the normal course of business, certain executive officers, directors, and
companies with which they are affiliated have borrowed funds from the Bank.  In
the opinion of management, these loans were made on substantially the same
terms, including interest rates and collateral, as those prevailing at the time
for comparable transactions with unrelated parties.  The activities in total
loans during 1998 is as follows (in thousands):

               Balance as of January 1, 1998                        $2,849 
               New loans                                               214 
               Repayments                                           (1,595)
                                                                   ------- 
               Balance as of December 31, 1998                      $1,468 
                                                                   ======= 
NOTE 18 - FAIR VALUES OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Company in estimating
the fair value of its financial instruments. 

Cash and cash equivalents:  The carrying amounts reported in the balance sheet
for cash and these short-term instruments approximate their fair values. 

Securities:  Fair values for investment securities are based on quoted market
prices, where available.  If quoted market prices are not available, fair
values are based on quoted market prices of comparable instruments. 

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

Deposit liabilities:  The fair value of deposits with no stated maturity, such
as noninterest bearing deposits, savings, NOW accounts, and money market
accounts, is equal to the amount payable on demand (i.e. the carrying value.)
Fair values for fixed rate certificates of deposit are estimated using a
discounted cash flow calculation that applies interest rates currently being
offered on certificates to a schedule of aggregated expected monthly maturities
on time deposits. 

Borrowed funds:  The fair value is estimated using a discounted cash flow
calculation using the rate currently available for similar term borrowings.

Accrued interest receivable and payable:  The carrying amounts reported in the
balance sheet approximate their fair values. Off-balance-sheet instruments:
Fair values for the Company's off-balance-sheet instruments are based on fees
currently charged to enter into similar agreements, taking into account the
remaining term of the agreements and the counterparties' credit standing.
There is no material difference between the notional amount and the estimated
fair value of off-balance sheet items which are primarily comprised of<PAGE>



commitments to extend credit which are generally priced at market at the time
of funding.

The carrying amount and estimated fair value of financial instruments at
December 31, 1998 and 1997, are as follows:

                                        1998                1997
                                   Carrying             Carrying
                                    Amount   Fair Value  Amount Fair Value
                                               (In thousands)                  
Financial assets:
 Cash and cash equivalents           $38,824    $38,824  $23,901   $23,901
 Investment securities                41,037     41,037   53,754    54,529
 Loans held-for-sale                   1,006      1,006       65        65
 Loans                               371,263    377,548  287,025   292,219
 Accrued interest receivable           2,699      2,699    2,507     2,507

Financial liabilities:
 Deposits                           $398,735   $399,904 $329,424  $332,121
 Borrowed funds                       21,513     21,332   16,163    16,469
 Accrued interest payable                633        633      510       510

Loan commitments on which the committed interest rate is less than the current
market rate are insignificant at December 31, 1998.

The Company assumes interest rate risk (the risk that general interest rate
levels will change) as a result of its normal operations.  As a result, fair
values of the Company's financial instruments will change when interest rate
levels change and that change may be either favorable or unfavorable to the
Company.  Management attempts to match maturities of assets and liabilities to
the extent believed necessary to minimize interest rate risk.  However,
borrowers with fixed rate obligations are more likely to prepay in a falling
rate environment and less likely to prepay in a rising rate environment.
Conversely, depositors who are receiving fixed rates are more likely to
withdraw funds before maturity in a rising rate environment and less likely to
do so in a falling rate environment.  Management monitors rates and maturities
of assets and liabilities and attempts to minimize interest rate risk by
adjusting terms of new loans and deposits and by investing in securities with
terms that mitigate the Company's overall interest rate risk.

NOTE 19 - 8.95% CUMULATIVE TRUST PREFERRED SECURITIES

On May 19, 1998, the Company issued $15 million of Trust Preferred Securities
("Securities") through Success Capital Trust I ("Trust"), a statutory business
trust and wholly-owned subsidiary of the Company.  The Securities pay
cumulative cash distributions quarterly at an annual rate of 8.95%.  Proceeds
from the sale of the Securities were invested by the Trust in 8.95% Junior
Subordinated Deferrable Interest Debentures issued by the Company which 
represents all of the assets of the Trust.  The Securities are subject to
mandatory redemption, in whole or in part, upon repayment of the Junior
Subordinated Debentures at the stated maturity or their earlier redemption, in
each case at a redemption price equal to the aggregate liquidation preference
of the Securities plus any accumulated and unpaid distributions thereon to the
date of redemption.  Prior redemption is permitted under certain circumstances
such as changes in tax and investment company regulations.  The Company fully
and unconditionally guarantees the Securities through the combined operation of
the debentures and other related documents.  The Company's obligations under<PAGE>



the guarantee are unsecured and subordinate to senior and subordinated
indebtedness of the Bank. 

NOTE 20 - PARENT COMPANY FINANCIAL INFORMATION

Presented below are the condensed balance sheets as of December 31, 1998 and
1997 and statements of income and statements of cash flows for the years ended
December 31, 1998, 1997, and 1996 for Success Bancshares, Inc.:

                           CONDENSED BALANCE SHEETS
                                                            1998      1997
                                                            (In thousands)     
ASSETS
Cash on deposit with subsidiary bank                      $13,281     $800
Securities available-for-sale                                 175    2,293
Investment in subsidiaries                                 32,989   27,289
Other assets                                                2,171      425
                                                          -------  -------
                                                          $48,616  $30,807
                                                          =======  =======
LIABILITIES AND SHAREHOLDERS' EQUITY

Note payable - Success Realty Ventures, Inc.                $105      $105
Subordinated convertible debt                                   -      200
Jr. subordinated debentures                                15,464        -
Other liabilities                                             723      432
                                                          -------  -------
Total liabilities                                          16,292      737
Shareholders' equity                                       32,324   30,070
                                                          -------  -------
                                                          $48,616  $30,807
                                                          =======  =======
                        CONDENSED STATEMENTS OF INCOME

                                                1998      1997       1996  
(In thousands) Operating income

Dividends from subsidiary bank                 $1,776    $1,187    $    949
Interest and other income                       1,561        53          32
                                              -------   -------     -------
                                                3,337     1,240         981
Operating expenses
Interest                                          872       686         695
Other expense                                   1,043       340         126
                                               -------   -------    -------
                                                1,915     1,026         821
                                               -------   -------    -------
Income before income taxes and
 equity in undistributed income of subsidiaries 1,422       214         160
Income tax benefit                                536       387         319
                                               -------   -------    -------
Income before equity in undistributed
 income of subsidiaries                         1,958       601         479
Equity in undistributed income of subsidiaries   (754)      486         304
                                               -------   -------    -------
Net income                                     $1,204    $1,087      $  783
                                               =======   =======    =======<PAGE>




                      CONDENSED STATEMENTS OF CASH FLOWS
                                                 1998      1997       1996 
Cash flows from operating activities
 Net income                                    $1,204    $1,087        $783
 Adjustments to reconcile net income to
  net cash from operating activities
  Equity in undistributed income of subsidiaries   754     (486)      (304)
  Change in other assets and liabilities       (1,455)       310        62 
  Other                                            404      (82)        15 
                                               -------   -------    -------
Net cash provided by operating activities          907       829        556

Cash flows from investing activities
 Proceeds from maturities of
  available-for-sale securities                  2,000         -         - 
Purchase of available-for-sale securities            -   (2,212)         - 
Purchase of subsidiary bank stock              (5,557)   (9,005)    (3,025)
                                               -------   -------    -------
Net cash used in investing activities          (3,556)  (11,217)    (3,025)

Cash flows from financing activities
 Net change in:
  Subordinated debt                              (200)         -       755 
  Repayment of note payable                          -   (7,815)    (2,015)
  Proceeds from note payable                         -     3,000     3,000 
  Issuance of Jr. subordinated debentures       15,000         -         - 
  Payment from (loan to) ESOP, net                  45      (21)        46 
 Dividends on Series B preferred stock               -      (40)       (81)
 Issuance of common stock                          285    15,676     1,137 
                                               -------   -------    -------
Net cash provided by financing activities       15,130    10,800     2,842 
                                               -------   -------    -------
 Increase (decrease) in cash                    12,481       412       373 

 Cash at beginning of year                         800       388        15 
                                               -------   -------    -------
 Cash at end of year                           $13,281      $800      $388 
                                               =======   =======    =======<PAGE>



                  Success Bancshares, Inc. and Subsidiaries 
                            Directors and Officers

DIRECTORS OF Success Bancshares, Inc.
Wilbur G. Meinen, Jr., President 
Success Bancshares, Inc. and Success National Bank 
Charles G. Freund, Retired Vice President 
Mid-Con Corp. 
Avrom H. Goldfeder, Senior Vice President 
I.N.O. Securities Futures & Options 
Sherwin Koopmans, Retired Associate Director 
Federal Deposit Insurance Corporation 
George M. Ohlhausen, Chairman of the Board 
Success Bancshares, Inc. 
Norman D. Rich, C.P.A., Partner 
Veatch, Rich & Nadler, Chtd. 
Glen R. Wherfel, C.P.A. 
Wherfel and Associates


DIRECTORS OF Success National Bank

Frank L. Baasch, Past President 
BDL Inc. 
Aben S. Caplan, Retired 
Caplan, Taub, Levin & Pollack 
Norman W. Fishman, Chairman of the Board 
Success National Bank 
President, Nationwide Assessment Advisors, Inc. 
Avrom Goldfeder, Senior Vice President 
I.N.O. Securities Futures & Options 
Ray Hartstein, Founding Chairman 
Oakton Community College 
Milton Levinson, Retired President 
U.S. Machinery Movers, Inc. 
Wilber G. Meinen, Jr., President 
Success Bancshares, Inc. and Success National Bank 
Keevan Morgan, Attorney at Law 
Morgan & Bley 
George M. Ohlhausen 
Investments 
Norman D. Rich, C.P.A., Partner 
Veatch, Rich & Nadler, Chtd. 
Glen R. Wherfel, C.P.A. 
Wherfel and Associates


OFFICERS OF Success Bancshares, Inc.
Wilbur G. Meinen, Jr., President and Chief Executive Officer 
Kurt C. Felde, Senior Vice President and Chief Financial Officer 
Marlene Sachs, Secretary 
Ronald W. Tragasz, Assistant Secretary & Assistant Treasurer

OFFICERS OF Success National Bank

Wilbur G. Meinen, Jr., President and Chief Executive Officer 
Christa N. Calabrese, Executive Vice President and Chief Lending Officer <PAGE>



Kurt C. Felde, Senior Vice President and Chief Financial Officer 
Ronald W. Tragasz, Senior Vice President and Cashier 
Joseph Bauer, First Vice President-Consumer/Mortgage Loans 
Walter Adreani, Vice President Commercial Loans 
Janis A. Anderson, Vice President/Manager Mortgage and Consumer Loans 
Susan J. Cherf, Vice President and Controller 
Kevin M. Cook, Vice President Commercial Loans 
Candy S. LoGiurato, Vice President, Commercial Loans 
Anna Long, Vice President and Manager Credit Card Services 
Barbara M. Mankowski, Vice President and Auditor 
Chiwin Nilapant, Vice President, International 
Mary Purcell, Vice President/CRA and Compliance Officer 
Marlene Sachs, Vice President and Secretary to the Board of Directors 
Tana J. Shea, Vice President, Branch Administration 
Jai Cai, Assistant Vice President, International 
Robert Hamilton, Assistant Vice President, Business Development 
Regina Hirn, Assistant Vice President, Commercial Loans 
William M. Marquardsen, Assistant Vice President, Commercial Loans 
Vicki Peloquin, Assistant Vice President, Electronic Banking Officer 
Ron Williams, Assistant Vice President and Facilities Director 
Larry D. Young, Assistant Vice President, Commercial Loans





                          Equal Opportunity Employer
    It is the policy of Success National Bank to provide equal opportunity
    employment to all employees and applicants without regard to race, age,
     religion, color, sex, national origin, sexual orientation or physical
disability, judging each individual solely on functional qualifications for the
     position or task to be assigned.  This policy includes all facets of
    employment, work relationships, and work conditions including, but not
   restricted to hiring, recruitment, placement, compensation, promotion and
                              employee benefits.


Member FDIC                                            Equal Housing Lender<PAGE>



                  Success Bancshares, Inc. and Subsidiaries 
                            Shareholder Information

CORPORATE OFFICE 
One Marriott Drive 
Lincolnshire, IL 60069-3703 
(847) 279-9000 . FAX (847) 279-9050

ANNUAL REPORT ON FORM 10-K 

A copy of Success Bancshares, Inc.'s Annual Report on Form 10-K as filed with
the Securities and Exchange Commission may be obtained without charge upon
written request to Kurt C. Felde, Senior Vice President and Chief Financial
Officer, Success Bancshares, Inc., 1123 S. Milwaukee Avenue, Libertyville, IL
60048-3270, or by calling (847) 549-5900 ext. 1410.

REGISTRAR/TRANSFER AGENT Communications regarding change of address, transfer
of stock and lost certificates should be sent to: 

Harris Trust & Savings Bank 
311 West Monroe Street, Floor 14 
Chicago, IL 60606 
(312) 461-5245

CORPORATE COUNSEL 
Much Shelist Freed Denenberg Ament Bell & Rubenstein 
200 N. LaSalle Street 
#2100 
Chicago, IL 60603


ACCOUNTANTS 
McGladrey & Pullen, LLP 
1699 East Woodfield Road 
#300 
Schaumburg, IL 60173

DIVIDENDS The Company has not paid, and does not intend to pay in the
foreseeable future,  any dividends on common stock.  The Board of Directors
will consider the payment of future cash dividends, dependent on the results of
operations and financial condition of the Company, tax considerations, industry
standards, economic conditions, regulatory restrictions, general business
practices and other factors.  The Company's ability to pay dividends may be
dependent on the dividend payments it receives from its subsidiary, Success
National Bank, which are subject to regulations and the Bank's continued
compliance with all regulatory capital requirements.  See Note 11 of the Notes
to the Consolidated Financial Statements for information regarding limitations
of the ability of Success National Bank to pay dividends to the Company.
 
STOCK LISTING Success Bancshares, Inc.'s common stock is traded over the
counter and is listed on the Nasdaq National Market System under the symbol
"SXNB."  At March 10, 1999, there were 2,959,236 shares of Success Bancshares,
Inc. common stock issued and outstanding and there were approximately 529
holders of record.  The table below shows the high and low bid price on the
common stock for each quarter since the common stock began trading on October
21, 1997.  These prices do not represent actual transactions and do not include
retail markups, mark-downs or commissions.<PAGE>




                                                                Bid            
Quarter Ended                                              High       Low 
December 31, 1997                                         $15.13   $13.50 
March 31, 1998                                            $14.00   $13.00 
June 30, 1998                                             $14.88   $13.38 
September 30, 1998                                        $16.38   $12.75 
December 31, 1998                                         $13.13   $10.50 

The stock price information set forth in the table above was provided by the
National Association of Securities Dealers, Inc.  High, low and closing prices
and daily trading volume are reported in most major newspapers.

MARKET MAKERS 
EVEREN Securities, Inc. 
Herzog, Heine, Geduld, Inc. 
Tucker Anthony, Inc. 
Friedman Billings Ramsey & Co. <PAGE>



(Back Cover)<PAGE>