Exhibit 13.1

Eagle BancGroup, Inc.
1998 Annual Report
Eagle BancGroup, Inc. is a Holding Company for First Federal Savings & Loan 
Association Bloomington, Illinois

                               (Front Cover)
<TABLE>
Eagle BancGroup, Inc. and subsidiary
Table of Contents
<CAPTION>
<S>                                           <C>
Financial Highlights                             1
Management's Discussion and Analysis             2
Independent Auditor's Report                    10 
Consolidated Statements of Condition            11
Consolidated Statements of Income               12
Consolidated Statements of 
  Changes in Stockholders' Equity               13
Consolidated Statements of Cash Flows           14
Notes to Consolidated Financial Statements      16
Other Corporate Information                     37
</TABLE>
	 
To Our Stockholders:

We are pleased to present to our stockholders this annual report for 1998. We 
have continued to build on the theme we used in last year's report, 'Opening 
doors to new possibilities and Creating windows of opportunity.'  The 
architectural look this year is reflective of the building process mentality 
we have adopted.  We believe it captures the spirit and philosophy of the 
Company and its employees.  Our goal is to create a healthy banking franchise 
by building strong personal relationships within the communities we serve.  
Some examples of these relationships are featured within this year's report,
and we are pleased to share them with you.

We had an exciting year in 1998 that included the opening of our new branch 
office in Lexington, Illinois, dramatic growth in loan originations and 
continued improvement in our earnings.  These results are further evidence 
that we continue to work to grow and to improve our financial performance, 
while enhancing the long-term investment value for our stockholders.  The 
positive and aggressive approach to our business we have employed, whereby we 
seek out the new possibilities and create the opportunities that will have a 
positive and lasting effect on our employees, our customers, the communities 
we live in and our stockholders, continues to serve us well.
                                  -Page 87-
The continued support we have received from our customers and our stockholders 
is greatly appreciated and we look forward to an exciting and prosperous year 
in 1999.

Sincerely,

/s/ Gerald A. Bradley                  /s/ Donald L. Fernandes
Gerald A. Bradley                      Donald L. Fernandes
Chairman of the Board                  President and Chief Executive Officer

                             (Inside Front Cover)

Eagle BancGroup, Inc. and Subsidiary
<TABLE>
                             FINANCIAL HIGHLIGHTS
<CAPTION>
The following table sets forth, on a historical basis, selected consolidated 
financial data for the Company.  Data prior to 1996 relates to First Federal 
only.
                              As of and For the Year Ended December 31, 
                             1998      1997      1996      1995      1994
                             (Dollars in thousands except per share data)
<S>                      <C>       <C>       <C>       <C>       <C>
Selected Financial Condition Data
Total assets              $180,101  $171,137  $172,666  $150,974  $140,932
Cash and due from banks      1,084     1,628     1,487     1,072     1,092
Federal funds sold and
 overnight deposits          7,653     3,386     5,573     2,828     1,611
Investments                 49,822    38,943    53,883    53,186    42,680
Loans, net                 116,551   122,409   106,641    88,786    83,589
Deposits                   134,091   131,452   133,995   138,396   122,388
FHLB advances and other
 borrowings                 25,000    18,000    15,300        -      7,936
Total equity                19,697    20,305    22,141    11,515     9,501

Selected Operating Data
Interest income            $12,462   $12,326   $11,094   $ 9,933   $ 8,595
Interest expense             8,208     8,121     7,703     7,376     5,396
Net interest income before
 provision for loan losses   4,254     4,205     3,391     2,557     3,199
Provision for loan losses      240       240       183       100       (32)
Net interest income after
 provision for loan losses   4,014     3,965     3,208     2,457     3,231
Non-interest income          1,711       576       418       395       261
Non-interest expense         4,305     3,768     4,373     2,955     2,840
Income (loss) before income
 taxes                       1,420       773      (747)     (103)      652
Income taxes                   514       264      (258)      (30)      222
Net income (loss)              906       509      (489)      (73)      430

Per Share Data
Book value per share        $18.24    $17.24    $17.00       N/A       N/A
Basic earnings (loss)
 per share                    0.85      0.44     (0.38)      N/A       N/A
Diluted earnings (loss)
 per share                    0.83      0.44     (0.38)      N/A       N/A
Cash dividends per share      0.10        -         -        N/A       N/A
                                  -Page 88-

Selected Financial Ratios and Other Data
Performance Ratios (based on balance sheet averages) <F1>
  Return on assets            0.51%     0.30%    -0.31%    -0.05%     0.31%
  Return on equity            4.44%     2.46%    -2.85%    -0.68%     4.15%
  Interest rate spread
   during period <F2>         1.97%     1.99%     1.69%     1.83%     2.54%
  Net interest margin
   during period <F3>         2.47%     2.53%     2.20%     1.85%     2.55%
  Non-interest expense 
   to assets <F4>             2.42%     2.19%     2.74%     1.98%     2.06%
  Non-interest income to
   assets                     0.96%     0.33%     0.26%     0.26%     0.19%
  Interest-earning assets to
   interest-bearing
   liabilities                1.11x     1.11x     1.10x     1.01x     1.00x
Asset Quality Ratios
  Non-performing assets to
   total assets <F5>          0.62%     0.54%     0.79%     0.80%     4.86%
  Allowance for loan losses to
   non-performing loans     255.67%   316.95%   130.92%   176.80%   219.35%
  Net charge-offs to 
   average gross loans        0.13%     0.19%     0.17%     0.08%     0.05%
Regulatory Capital and Capital Ratios <F6>
  Tangible capital ratio      9.59%     9.99%     9.66%     7.73%     8.20%
  Core capital ratio          9.59%     9.99%     9.66%     7.73%     8.20%
  Risk-based capital ratio   16.04%    16.30%    18.29%    15.78%    15.80%
  Average equity to 
   average assets            11.48%    12.04%    10.76%     7.21%     7.55%
  Equity to assets at
   end of period             10.94%    11.86%    12.82%     7.63%     6.74%
<FN>
<F1>
 With the exception of end of period ratios, all ratios are based on 
average month-end balances during the respective periods.
<F2>
 Interest rate spread represents the difference between the weighted 
average yield on interest-earning assets and the weighted average cost of 
interest-bearing liabilities.
<F3>
 Net interest margin represents net interest income as a percentage of 
average interest-earning assets.
<F4>
 The 1996 ratio reflects the effect of the SAIF special assessment.
<F5>
 Non-performing assets consist of non-performing loans and foreclosed real 
estate owned.  The significant decline in this ratio between the 1994 to 
1995 periods occurred as a result of the sale by First Federal of a 
substantial real estate owned property during the fourth quarter of 1995.
<F6>
 Tangible capital, Core capital and Risk-based capital ratios relate to 
First Federal only.
</FN>
</TABLE>
                                 (Page 1)
Eagle BancGroup, Inc. and Subsidiary
MANAGEMENT'S DISCUSSION AND ANALYSIS
Management's discussion and analysis of the results of operations and 
financial condition is intended to assist in understanding the financial 
condition, changes in financial condition and results of operations of Eagle 
BancGroup, Inc.  This discussion should be read in conjunction with the 
consolidated financial statements, accompanying notes to consolidated 
financial statements and other information contained elsewhere in this report.
                                  -Page 89-
Eagle BancGroup, Inc. ('Eagle') is a non-diversified unitary savings and loan 
holding company engaged in the business of managing its investments and 
directing, planning and coordinating the activities of its wholly-owned 
subsidiary, First Federal Savings and Loan ('First Federal'), a federally 
charted savings association, and First Federal's wholly-owned subsidiary, FFS 
Investment Services Inc., a service corporation that sells investment products 
(collectively, 'the Company').

Eagle was formed in January, 1996 and purchased all of the stock of First 
Federal with the proceeds of a subscription stock offering completed in June, 
1996.  Simultaneous to the stock offering, First Federal converted from a 
federally-chartered mutual savings association to a federally-chartered 
capital stock savings association.  Prior to June, 1996, Eagle had no assets 
or liabilities.

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

General.  In 1998, the Company had net income of $906,000, or $.85 per share 
(basic), compared to $509,000, or $.44 per share (basic), in 1997.  The 
increase in 1998 was primarily the result of significantly higher non-interest 
income, primarily gains on sales of residential mortgage loans, partially 
offset by higher non-interest expense.

Net Interest Income.  Net interest income increased slightly to $4,254,000 in 
1998 from $4,205,000 in 1997.  Interest income increased to $12,462,000 in 
1998 from $12,326,000 in 1997 while interest expense increased to $8,208,000 
in 1998 from $8,121,000 in 1997.  The interest rate spread, the difference 
between the yield on average interest earning assets and the cost of average 
interest bearing liabilities, was 1.97% in 1998 and 1.99% in 1997.  The net 
interest margin, net interest income divided by average interest earning 
assets, was 2.47% in 1998 and 2.53% in 1997.  The Company experienced 
pressures on the spread and margin due to declining market interest rates 
throughout 1998.  The declining rate environment resulted in shifts in the 
loan portfolio that decreased the yield on earning assets more quickly than 
the benefits of the decreasing cost of funds.

Average interest earning assets and average interest bearing liabilities both 
increased over $6,000,000 in 1998 from 1997 to result in the increases in 
interest income and expense.  Average commercial loans increased over 
$13,200,000 and average direct consumer loans, primarily home equity loans, 
increased over $3,200,000 as the Company emphasized higher yielding, shorter 
term loans relative to traditional residential mortgage loans.  Average 
residential mortgage loans decreased $11,100,000 in 1998 as the low rate 
environment spurred increased refinancing activity with most new residential 
mortgage loans sold at origination.  Overall, average loans increased over 
$2,200,000 while the rate earned declined slightly to 7.91% in 1998 from 8.02% 
in 1997 as the loan portfolio restructuring reduced the effects of the 
declining rate environment. 

Average investments increased $3,900,000 in 1998 due primarily to temporary 
investment of residential mortgage loan sale proceeds.  The rate earned on 
average investments decreased to 5.68% in 1998 from 5.95% in 1997 due to the 
rate environment and the increased holdings of lower yielding, short-term 
investments.  Overall, the rate earned on average interest earning assets 
decreased to 7.24% in 1998 from 7.43% in 1997.
                                  -Page 90-
The rate paid on average interest bearing liabilities also decreased in 1998 
to 5.27% from 5.44% in 1997.  
                                  (page 2)
The decrease was due to both increases in demand deposit balances and a 
restructuring of the Federal Home Loan Bank ('FHLB') advance portfolio.  
Average deposits increased $1,300,000 as average demand deposits increased 
$4,000,000 while average time deposits decreased $2,400,000 in 1998 compared 
to 1997.  The higher percentage of demand deposits in total deposits resulted 
in a reduction in the cost of average deposits to 5.26% in 1998 from 5.37% in 
1997.

Average borrowed funds, all FHLB advances, increased $4,900,000 in 1998 while 
the cost of the borrowings decreased to 5.37% in 1998 from 5.89% in 1997.  New 
advances taken out in 1998 had an average cost of 4.69% while the advances 
repaid in 1998 had an average cost of 6.11%.  At year-end, 1998, the average 
cost of all advances was 5.05%.

At December 31, 1998, loans totaling $397,000 were contractually past due 90 
days or more and were classified as non-accrual.  No interest income is 
accrued on such loans.  Income is recognized only upon receipt of cash 
payments, which totaled $28,000 in 1998.  Additional income of $12,000 would 
have been accrued had the loans not been past due.  No other loans were 
contractually past 90 days or more at December 31, 1998.

Provision For Loan Losses.  The provision for loan losses was $240,000 in both 
1998 and 1997.  The provision is determined each year through analysis of the 
loan portfolio, the allowance for loan losses, loan charge-offs and recoveries 
and industry practice and experience.  At December 31, 1998, the allowance for 
loan losses was $1,015,000, or .86% of total loans, compared to $935,000, or 
 .76% of total loans, at December 31, 1997.  The increase in 1998 was deemed 
necessary due to changes in the portfolio mix even though total loans at 
December 31, 1998 were less than at December 31, 1997.  From year-end 1997 to 
year-end 1998, residential mortgage loans and loans held for sale declined 
$15,500,000 while commercial and commercial real estate loans increased 
$10,100,000.  Net charge-offs declined to $160,000 in 1998 from $228,000 in 
1997.  In both years, the charge-off and recovery activity related to indirect 
auto loans with the decline in net charge-offs in 1998 corresponding to a 
decline in the indirect loan portfolio.

Non-Interest Income.  Due to a significant increase in gains of sales of 
residential mortgage loans, non-interest income increased to $1,711,000 in 
1998 from $576,000 in 1997.  Proceeds from sales of residential mortgage loans 
were $93,164,000 in 1998 compared to $19,314,000 in 1997.  Gains realized on 
the sales were $1,218,000 in 1998 compared to $178,000 in 1997.  Loan 
servicing income increased $19,000 in 1998 due to the increased amount of 
serviced loans.  The increase in demand deposit accounts led to an increase in 
deposit account service charges of $33,000 in 1998.  Commission income earned 
by the Company's service corporation brokerage subsidiary also increased 
$13,000 in 1998.

As a percentage of average assets, non-interest income increased to .96% in 
1998 from .33% in 1997.  Net of the gains on loan sales, non-interest income 
was .28% of average assets in 1998 compared to .23% in 1997.

Non-Interest Expense.  Non-interest expense increased to $4,305,000 in 1998 
                                  -Page 91-
from $3,768,000 in 1997 due primarily to an increase in salaries and employee 
benefits.  Most of the $380,000 increase in salaries and employee benefits in 
1998 was due to incentive payments related to the volume of residential 
mortgage loans originated and sold.  The remainder of the salary and employee 
benefit increase was due to staff additions for the Company's new branch that 
opened in December, 1998 in Lexington, Illinois.  Advertising expense 
increased $60,000 in 1998 due to promotional expenses related to the branch 
opening and increased radio and television advertising.  Equipment expense 
increased $64,000 in 1998 related to hardware and software upgrades and the 
new branch.  Other non-interest expense increased $90,000 due to higher 
supplies, phone, postage and other miscellaneous costs related to both the 
volume of mortgage loans processed and the new branch opening.

As a percentage of average assets, non-interest expense was 2.42% in 1998 
compared to 2.19% in 1997.  When the loan origination incentive payments are 
removed, non-interest expense was 2.23% of average assets in 1998.

Income Tax Expense.  Income tax expense increased to $514,000 in 1998 from 
$264,000 in 1997 due to the increase in income before tax.  The effective tax 
rate was 36% in 1998 and 34% in 1997. 

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

General.  In 1997, the Company earned net income of $509,000, or $.44 per 
share, compared to a net loss of $489,000, or $(.38) per share, in 1996.  The 
1996 results include the SAIF recapitalization special assessment
                                  (page 3)
which reduced earnings $600,000, net of tax.  Excluding the net effect of the 
special assessment, 1996 net income was $111,000.

Net Interest Income.  Net interest income increased to $4,205,000 in 1997 from 
$3,391,000 in 1996.  The 24% increase in net interest income was due to 
improvement in the interest rate spread, which increased to 1.99% in 1997 from 
1.69% in 1996.  The interest rate spread is the difference between the yield 
on average interest earning assets and the cost of average interest bearing 
liabilities.  The net interest margin, net interest income divided by average 
interest earning assets, also improved to 2.53% in 1997 from 2.20% in 1996.  
Interest income increased to $12,326,000 in 1997 from $11,094,000 in 1996 and 
interest expense increased to $8,121,000 in 1997 from $7,703,000 in 1996.

In 1997, the Company benefited from a full year's effect of investment of the 
$11,186,000 net proceeds received from the initial stock offering completed in 
June, 1996.  In addition, strong loan demand and efforts to restructure the 
loan and investment portfolios in 1997 resulted in a $20,700,000 increase in 
average loans outstanding, primarily related to residential mortgage loans.  
During the second half of 1997, the Company began emphasizing originations of 
commercial real estate and commercial loans.  Total average interest earning 
assets were $165,975,000 in 1997 and $154,244,000 in 1996.  The increased 
emphasis on loan originations resulted in higher yielding loans comprising a 
greater share of earning assets in 1997 than 1996.  As a percentage of average 
interest earning assets, average loans outstanding was 71% in 1997 compared to 
63% in 1996.  The yield earned on average interest earning assets increased to 
7.43% in 1997 from 7.19% in 1996.  The yield on average loans outstanding was 
8.02% in 1997 compared to 7.89% in 1996.  The yield on other interest earning 
assets was 5.95% in 1997 and 6.00% in 1996 and the average balance of these 
assets decreased $8,900,000 in 1997.
                                  -Page 92-
Average interest bearing liabilities increased to $149,417,000 in 1997 
form$140,009,000 in 1996 while the rate paid on average interest bearing 
liabilities decreased to 5.44% in 1997 from 5.50% in 1996.  Average borrowed 
funds, all FHLB advances, increased $13,500,000 while average deposits 
decreased $4,100,000 in 1997 compared to 1996.  The increase in loans 
outstanding in 1997 was funded in part with FHLB advances.  The rate paid on 
average borrowed funds decreased to 5.89% in 1997 from 6.20% in 1996 and the 
rate paid on average deposits decreased to 5.37% in 1997 from 5.48% in 1996.

At December 31, 1997, loans totaling $295,000 were contractually past due 90 
days or more and were classified as non-accrual.  Interest income is 
recognized on such loans only upon cash receipt and no interest income is 
accrued.  In 1997, cash interest payments of $16,000 were included in interest 
income on the non-accrual loans.  Additional interest income of $9,000 would 
have been recorded on the loans on an accrual basis.  No other loans were 
contractually past due 90 days or more at December 31, 1997.

Provision For Loan Loss.  The provision for loan losses increased to $240,000 
in 1997 from $183,000 in 1996 due mainly to the increased lending activity.  
The amount of the provision is determined through analysis of the loan 
portfolio and the allowance for loan losses, including a review of charge-offs 
and delinquencies, as well as industry practice and experience.  At December 
31, 1997, the allowance for loan losses was $935,000, or .76% of total loans, 
compared to $923,000, or .86% of total loans, at December 31, 1996.  The 
growth in the loan portfolio in 1997 related primarily to residential mortgage 
loans, which historically have low loss rates that did not justify a more 
significant increase in the allowance for loan losses.  Net charge-offs were 
$228,000 in 1997, up from $167,000 in 1996.  The net charge-offs in 1997 
related entirely to consumer loans.  The total balance of consumer loans 
decreased approximately $3,000,000 in 1997, due largely to the Company placing 
less emphasis on the origination of indirect auto loans in 1997.

Non-Interest Income.  Non-interest income increased to $576,000 in 1997 from 
$418,000 in 1996 due primarily to gains on loans sold, which increased to 
$178,000 in 1997 from $68,000 in 1996.  Loans sold increased to $19,314,000 in 
1997 from $10,844,000 in 1996.  Net gains on securities sold increased to 
$46,000 in 1997 from $15,000 in 1996.   Proceeds from the sales of securities 
of $25,000,000 in 1997 were used primarily to originate loans.  Service 
charges on deposit accounts increased to $80,000 in 1997 from $51,000 in 1996 
due to an increased number of accounts and a revised account and fee schedule.  
Non-interest income was .33% of average assets in 1997 compared to .26% in 
1996.

Non-Interest Expense.  Non-interest expense increased to $3,768,000 in 1997 
compared to $3,498,000 in 1996, net of the SAIF special assessment.  Total 
non-interest expense in 1996 was $4,373,000
                                  (page 4)
including the $875,000 SAIF recapitalization special assessment.  Salaries and 
employee benefits increased by $414,000 in 1997 due primarily to staff 
additions and normal increases in employee costs as well as to expenses 
related to benefit plans implemented following the stock conversion.  Data 
processing expense increased $73,000 in 1997 due to one-time expenses related 
to converting to a new data provider and deconverting from the previous 
provider.  Audit and legal fees increased $120,000 in 1996 due primarily to 
increased corporate meeting and reporting requirements following formation of 
the holding company.  The expense increases were partially offset by a 
                                  -Page 93-
decrease in regular FDIC premium expense of $289,000 in 1997 due to the 
premium rate reduction following the payment of the recapitalization special 
assessment in 1996.

As a percentage of average assets, non-interest expense was 2.19% in both 1997 
and 1996, net of the recapitalization special assessment.

Income Tax Expense.  Due to the increase in income before income tax, income 
tax expense was $264,000 in 1997 compared to a benefit for income tax of 
$258,000 in 1996.  The effective tax rate was 34% in 1997 compared to an 
effective benefit rate of 35% in 1996.

Financial Condition

Total assets increased 5% to $180,101,000 at December 31, 1998 from 
$171,137,000 at December 31, 1997.  Increases in deposits and FHLB advances 
were initially used to fund commercial and consumer loan originations.  
Refinancing activity throughout the last half of 1998 resulted in increased 
loan repayments and the Company invested the funds in mortgage-backed and 
other securities.

The decline in mortgage loan rates in 1998 caused an increase in refinancing 
activity that resulted in a decrease in residential mortgage loans of 
$15,500,000.  The reduction was due to the fact that most new residential loan 
originations were sold in the secondary market.  In 1998, residential loan 
originations totaled $105,700,000 while proceeds of residential mortgage loan 
sales were $93,164,000.  Commercial and commercial real estate loans increased 
$10,100,000 to result in a net decrease of $5,900,000 in total loans during 
1998.  Consumer loans decreased $400,000 as a decrease in indirect automobile 
loans of $2,800,000 was partially offset by increases in home equity loans and 
lines of credit. 

Total investments increased $10,900,000 in 1998 due to investment of loan sale 
proceeds and funds received from new deposits and FHLB advances.  Mortgage-
backed securities increased $12,600,000 and investment securities decreased 
$1,700,000.  Cash and cash equivalents increased $3,700,000 in 1998 due to 
temporary investment of loan sale proceeds and in preparation for the first 
quarter of 1999 when a larger than usual amount of certificates of deposit are 
scheduled to mature.

Total deposits increased $2,600,000 in 1998 due to a $4,300,000 increase in 
demand deposits and a $600,000 increase in savings deposits offset by a 
$2,300,000 decrease in time deposits.  The increase in demand deposits 
reflects the Company's efforts to reduce the cost of funds and improve the 
interest rate sensitivity of the deposit portfolio.

(MARKETING INSERT)
'THEIR COMMITMENT TO ME IS MORE THAN WINDOW DRESSING' - Jeff 'Mac' McElravy, 
owner of Cornerstone Construction in Bloomington.

Every bank will call you 'friend,' but the key to a good financial 
relationship is trust and commitment.  To earn customer confidence, First 
Federal Savings gets to know them first and then grows the relationship over 
time.

'At First Federal Savings, I feel the respect that comes when people 
                                  -Page 94-
understand that I know my business,' says Mac McElravy, commercial customer.  
'When I proposed a new business venture, they listened and gave the advice I 
needed.  Now I feel comfortable just stopping by anytime and kicking around a 
few ideas.  I know they won't go running when I mention something cutting-
edge.'

'When Mac comes in with a new business proposal, we do more than examine the 
plan,' says Dave Wampler, First Federal Savings President.  'We look at the 
person's philosophy and dedication.  That's how we build trust and long-term 
relationships with our customers.'

When First Federal talks about good working relationships, it's not just a 
sales pitch... it's the way they do business.  Every customer relationship is 
built with trust and commitment... and that makes all the difference.
                                  (page 5)
'WITH SOME BANKS, OPPORTUNITY KNOCKS ONCE.  BUT FIRST FEDERAL SAVINGS LEANS ON 
MY DOORBELL.'  - Ron Brucker, owner of Brucker Farms Inc.

You don't deposit a check and then close the account.  And you don't make an 
investment without thinking of how it will affect your future.  So why should 
you choose a bank that does?  First Federal Savings knows that financial 
success means being available for customers every step of the way.

'Farming has its ups and downs, but I've found success by consistently giving 
it my all.  I need a bank that does the same.  That's why I chose First 
Federal,' says Ron Brucker, agri-business customer.  'They not only know me 
and my business, but they are also in it for the long haul.'

'Ron is not just an application to us and I like to think we're more than 
application takers to him,' says Randy Jacobs, First Federal Savings account 
representative.  'We work hard to anticipate his financial needs and want to 
be there whenever he needs us.  It's long-term relationships like these that 
lead to trust and a higher level of comfort.'

The old adage says, 'Success is not a goal, it's a journey.'  The same holds 
true for financial achievements and security.  That's why First Federal 
Savings is committed to building a lasting relationship with its customers.
(END MARKETING INSERT)

The borrowed funds portfolio, all FHLB advances, was restructured in 1998 to 
reduce the average cost of borrowed funds.  The Company repaid $7,000,000 in 
advances that matured in 1998 with new advances that cost, on average, over 
140 basis points less.  The average cost of the advance portfolio decreased 
from 5.74% at December 31, 1997 to 5.05% at December 31, 1998.  In total, 
borrowed funds increased $7,000,000 in 1998.

Stockholders' equity decreased to $19,697,000, or 10.9% of total assets, at 
December 31, 1998 from $20,305,000, or 11.9% of total assets, at December 31, 
1997.  The decrease in equity in 1998 was due to the repurchase of additional 
shares for the treasury at a cost of $1,762,000 offset by 1998 net income.  
Book value per share increased to $18.24 per share at December 31, 1998 from 
$17.24 per share at December 31, 1997.  

Savings institutions are required to maintain minimum capital levels measured 
by three ratios: Risk-based capital to risk weighted assets of 8%; core 
capital to adjusted tangible assets of 4% and tangible core capital to 
                                  -Page 95-
tangible assets of 1.5%.  At December 31, 1998, the Company's savings 
institution subsidiary had ratios of 16.04%, 9.59% and 9.59%, respectively, 
compared to ratios of 16.30%, 9.99% and 9.99%, respectively, at December 31, 
1997.

Interest Rate Risk

Interest rate risk arises from the impact of changes in interest rates on the 
Company's assets and liabilities.  Successful management of interest rate risk 
reduces the impact of such changes on the Company's operations.  Interest rate 
risk is managed through evaluation of the interest rate risk inherent in 
certain assets and liabilities and determination of the appropriate risk level 
given the Company's business plan, operating environment and capital and 
liquidity requirements.  Interest rate risk management guidelines are reviewed 
and approved annually by the Board of Directors.

Specific strategies used to reduce interest rate risk include (i) diversifying 
the loan portfolio by emphasizing origination of short-term direct consumer 
loans, commercial and commercial real estate loans; (ii) selling at 
origination all long-term, fixed rate and most adjustable rate residential 
mortgage loans; (iii) classifying all investments as available for sale; (iv) 
maintaining an investment portfolio of primarily adjustable rate and short-
term, fixed rate securities; (v)  utilizing medium-term, fixed rate FHLB 
advances as a funding source; and (vi) emphasizing deposit products that 
reduce interest sensitivity (demand and savings deposits and long-term, fixed 
rate certificates).   

The effects of these strategies are evident in the Company's 1998 operations.  
Commercial and commercial real estate loan originations in 1998, totaling 
$20,700,000, primarily mature in five years or less.  Proceeds of residential 
real estate loan sales exceeded $93,000,000 and the amount of residential 
mortgage loans in the portfolio declined $15,500,000.  All investments remain 
classified as available for sale.  Of the over $48,000,000 in new investments 
purchased in 1998, $13,400,000 were adjustable rate and $25,300,000 matured or 
were subject to call within 5 years.  The FHLB advance portfolio consists of 
all medium-term, fixed rate advances that carry an average cost at year-end, 
1998 that is 69 basis                                   
                                   (page 6)
points less than the average cost at year-end, 1997.  Demand and savings 
deposits grew $4,900,000 in 1998.

Interest rate sensitivity is measured quarterly by use of the Office of Thrift 
Supervision ('OTS') net portfolio value ('NPV') model.  Data provided by the 
Company's thrift subsidiary in various regulatory reports is the primary basis 
for the model, which generates estimates of the amount of and change in NPV 
over a range of interest rate change scenarios.  NPV is defined as the 
difference between incoming and outgoing cash flows from assets, liabilities 
and certain off-balance sheet contracts.  The NPV ratio of each scenario is 
the NPV in that scenario divided by the present value of assets in the same 
scenario. 
      
The benchmark measurements are the decline in NPV and the change in NPV ratio 
given a 200 basis point shock (increase) in interest rates.  The figures 
below, provided by the OTS, show the changes under this scenario.  The Board 
of Directors has determined that the maximum allowable decline in NPV given a 
                                  -Page 96-
200 basis point shock is 45%.  The OTS figures show a decline in NPV of 10%, 
which is well within the board of directors guidelines.
<TABLE>
<S>                                       <C>
RISK MEASURES: 200 BP Rate Shock
Pre-shock NPV ratio                         10.14%
Exposure measure: Post-shock NPV Ratio       9.47%
Sensitivity measure: Change in NPV Ratio    68 basis points
</TABLE>
<TABLE>
                                                  NPV as Percent of Present 
                       Net Portfolio Value             Value of Assets
 Change         Dollar      Dollar      Percent         NPV         
in Rate         Amount      Change       Change        Ratio     Change
<S>           <C>         <C>           <C>          <C>        <C>
+400 bp        $13,482     $-4,872        -27%         8.02%     -212 bp
+300 bp         15,108      -3,246        -18%         8.81%     -134 bp
+200 bp         16,651      -1,793        -10%         9.47%     - 68 bp
+100 bp         17,706      -  648        - 4%         9.94%     - 20 bp
   0            18,354         -           -          10.14%        -
-100 bp         18,703         349          2%        10.18%        4 bp
-200 bp         18,849         495          3%        10.11%     -  3 bp
-300 bp         19,253         898          5%        10.16%        2 bp
-400 bp         19,223         869          5%        10.00%     - 15 bp
</TABLE>
All changes in NPV ratios at December 31, 1998 were within the limits approved 
by the Board of Directors.

The OTS measurement of interest rate risk has inherent shortcomings due to the 
assumptions utilized in the model.  Actual changes in market interest rates 
may result in different yield and cost changes than assumed in the model.  The 
model also assumes that holdings of interest sensitive assets and liabilities 
would remain constant under each interest rate change scenario, which may be 
different than actual circumstances.  As such, the NPV measurements in the 
table provide an indication of interest rate risk exposure at December 31, 
1998 only and are not intended to and should not be used to forecast the 
effect of changes in interest rates on the Company's net interest income.

Market Risk

Market risk arises primarily from interest rate risk inherent in the Company's 
lending, investing, deposit taking and borrowing activities.  The varying 
levels of sensitivity to changes in market interest rates of the Company's 
interest-earning assets, primarily loans and investments, and interest-bearing 
liabilities, primarily deposits and borrowed funds, create market risk.  
Evaluation of market risk is an integral component of interest rate risk 
management.

The Company's exposure to market risk is lessened by not holding or using any 
derivative instruments to manage interest rate risk.  In addition, the Company 
does not maintain a portfolio of trading account investments.  At December 31, 
1998, the Company did hold $3,701,000 as loans held for sale, the entire 
amount of which was residential mortgage loans originated in December, 1998 
that had been sold to various secondary market investors.  The loans remained 
on the Company's books at year-end due to the usual delay between a loan 
closing and the funding by the investor.  As such, the market risk exposure on 
these loans was not significant.
                                  -Page 97-
Liquidity
Primary sources of funds are deposits, FHLB advances and principal and 
interest payments on loans and 
                                  (page 7)
mortgage-backed and investment securities.  Scheduled maturities of loans and 
mortgage-backed and investment securities are predictable sources of funds 
while deposit inflows and loan and mortgage-backed securities prepayments are 
greatly influenced by general interest rates, economic conditions and 
competition.

Funds are invested in loans, primarily residential mortgage, commercial, 
commercial real estate and direct consumer loans, and mortgage-backed and 
investment securities.  Loan originations totaled $162,709,000, $72,203,000 
and $63,005,000 in 1998, 1997 and 1996, respectively.  Purchases of mortgage-
backed and investment securities were $48,142,000, $13,218,000 and $26,686,000 
in 1998, 1997 and 1996, respectively.  Net cash provided by financing 
activities in 1998 was $7,765,000 while $1,498,000 net cash was used by 
operating activities and $2,544,000 net cash was used by investing activities.

Adequate liquidity must be maintained to ensure that sufficient funds are 
available to support loan originations, deposit withdrawal demands, satisfy 
other financial commitments and take advantage of investment opportunities.  
Approved loan commitments totaled $479,000 and unused lines of credit equaled 
$8,826,000 at December 31, 1998.  Scheduled maturities of certificates of 
deposit in 1999 total $64,793,000.  Scheduled loan maturities and principal 
payments in 1999 total $30,049,000 and scheduled maturities of investment 
securities in 1999 total $4,630,000.  In addition, an unknown amount of 
principal payments will be received on mortgage-backed securities in 1999.  In 
1998, principal payments totaling $9,944,000 were received on mortgage-backed 
securities.

The OTS requires thrifts to maintain a 4% liquidity ratio measured as the 
ratio of cash, cash equivalents, short-term investments and certain long-term 
investments to deposits and certain borrowed funds.  The Company's savings 
institution subsidiary had liquidity ratios of 14.11% and 12.07% at December 
31, 1998 and 1997, respectively.

Inflation
The Consolidated Financial Statements and notes thereto included in this 
report have been prepared in accordance with generally accepted accounting 
principles and reflect the results of operations and financial position 
measured in historical dollars without regard for the changes in the relative 
purchasing power of money over time due to inflation.  Inflation impacts the 
Company in the increased cost of operations and as an inherent factor in the 
general level of interest rates.  Changes in interest rates have a greater 
impact on the Company's financial performance than the general level of 
inflation due to the monetary nature of most of the Company's assets and 
liabilities.  Effective interest rate management can minimize the effects of 
inflation on the Company's monetary assets and liabilities.  Inflation has not 
had a significant impact on the costs of operation or the non-monetary assets 
of the Company.

Year 2000
The Year 2000 ('Y2K') computer problem has received considerable publicity as 
January 1, 2000 nears.  The ability of computers and computer systems to 
successfully function on and after January 1, 2000 has been the subject of 
                                  -Page 98-
much concern and speculation.  All companies face many challenges in their 
efforts to be Y2K compliant.     

As a financial institution, the Company relies heavily on both in house and 
third party data processing systems to maintain accurate loan, deposit and 
other financial and corporate information and records.  The Company also 
relies on public and private utilities for phone and data lines, electricity, 
water and other such services over which it has little, if any, control.  In 
the event of a Y2K failure in house or by any other service provider, the 
Company must be prepared to operate as normally as possible or risk a decline 
in its financial performance.

The Company formulated its initial Y2K compliance plan in September, 1997.  
This plan has been expanded, revised and updated continually since then.  The 
OTS has and continues to monitor the compliance effort including an on-site 
inspection in early 1998 and by reviewing compliance plan updates.  To date 
the Company's compliance plan and efforts have been approved by the OTS.  A 
second on-site inspection and review is scheduled for February, 1999.

In the fourth quarter, the Company took the following actions related to its 
Y2K compliance effort: Started the initial round of software compliance 
testing on the Company's primary third party data provider (following the 
provider's pre-determined testing schedule for all users); continued follow-up 
contacts to monitor compliance status of third party software vendors; set up 
testing procedures with third party software vendors as applicable; followed 
up initial contact with significant loan and deposit
                                  (page 8)
customers regarding their Y2K status; and began developing a comprehensive 
contingency plan.

The initial round of software compliance testing on the primary third party 
data provider is scheduled for completion in January, 1999.  A second round of 
testing is scheduled to begin in February, 1999 after review and analysis of 
the initial testing by the provider and all users.  The comprehensive 
contingency plan will expand upon the plan briefly detailed in previous 
versions of the Y2K compliance plan.  Development of the contingency plan was 
delayed pending completion and review of the initial round of testing. 

Direct costs related to the Y2K compliance effort incurred by the Company in 
1998 include $25,000 paid to the primary data provider related to the software 
compliance testing and $5,000 paid to the Company's third party network 
consultant for testing and certifying that in house hardware was Y2K 
compliant.  In 1999, additional costs related to the Y2K compliance effort 
will be incurred.  The third party network consultant may provide additional 
services at a cost not expected to exceed $25,000.  Compliance testing on 
other software providers will be conducted at a cost not expected to exceed 
$10,000.  An informational mailing to all customers will be sent that is not 
expected to cost more than $5,000.

The Company also incurred indirect costs related to the Y2K compliance effort 
in 1998, primarily salaries and benefits for the employees involved with the 
testing.  In 1998, the Company estimates that approximately $40,000 of salary 
and benefit expense could be allocated to the Y2K compliance effort.  This 
amount does not represent additional expense, rather a reallocation of expense 
that would have been incurred even without the Y2K testing.  In 1999, more 
salary and benefit expense could be allocated to the Y2K compliance effort but 
                                  -Page 99-
total salary and benefit expense is not expected to increase due to the Y2K 
compliance effort.

In addition to the direct and indirect costs noted, the Company has also spent 
over $200,000 upgrading hardware since the third quarter of 1997 related to 
conversion to the current data provider, which occurred in August, 1997.  In 
late 1998, the Company, as planned at the time of the conversion, migrated to 
updated hardware to support teller operations and also converted to new teller 
and platform software.  These events have assisted in the Company's Y2K 
compliance effort but since the data provider conversion was necessary without 
regard to Y2K compliance, the costs associated with the conversion are not 
considered directly related to Y2K compliance.

The Y2K problem is extremely complex and potentially impacts any computer 
process.  The Company believes its Y2K compliance effort will be effective.  
However, since the Company relies on so many third parties for various 
services, over which the Company has little or no control, no reasonable 
assurance can be given that the Company will not suffer a Y2K related service 
interruption or incur potentially significant unanticipated expenditures that 
could impact the financial performance of the Company.  
 
(MARKETING INSERT)
'FIRST FEDERAL SAVINGS IS PROUD TO SPONSOR THE OPPORTUNITY TO OPEN MANY 
WINDOWS THROUGH SOARING EAGLES, A SPECIAL CLUB FOR CUSTOMERS AND FRIENDS 50 
AND OVER.'  - Roberta Leake, Coordinator (Lexington)

In April, First Federal Savings will launch Soaring Eagles, their new travel 
club for customers and friends 50 and over.  The group, which is coordinated 
by Roberta Leake, offers a wide variety of trips, seminars and social events.  
The Soaring Eagles will visit such places as Amish Acres (Nappanee, IN); the 
Long Grove Village Strawberry Festival; Drury Lane Theatre (Oakbrook, IL); the 
New England Countryside; and the Branson Christmas Extravaganza.

According to Roberta, 'Soaring Eagles offers worry-free travel because all the 
arrangements are made for those who attend - from tipping to luggage and meals 
to hotels - we take care of everything!'  Roberta is assisted by Judy 
Schlosser of the LeRoy branch and Mary Kay Kates, Bloomington.

This club is just another way First Federal consistently adds value to 
customer relationships.
(END MARKETING INSERT)
                                  (page 9)

Independent Auditor's Report

To the Stockholders and Board of Directors
Eagle BancGroup, Inc.
Bloomington, Illinois

We have audited the accompanying consolidated statements of
condition of Eagle BancGroup, Inc. and subsidiary as of December
31, 1998 and 1997, and the related consolidated statements of income,
statements of changes in stockholders' equity, and cash flows
for the years then ended.  These financial statements are the
responsibility of the Company's management.  Our responsibility
is to express an opinion on these financial statements based on
                                  -Page 100-
our audits.  The consolidated statements of income, stockholders'
equity and cash flows of Eagle BancGroup, Inc. and subsidiary, 
for the year ended December 31, 1996, were audited by other auditors 
whose report dated January 17, 1997, expressed an unqualified 
opinion on those statements.

We conducted our audit 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 audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred
to above present fairly, in all material respects, the
consolidated financial position of Eagle BancGroup, Inc. and
subsidiary as of December 31, 1998 and 1997, and the results of their
operations and their cash flows for the years then ended, in
conformity with generally accepted accounting principles.

/S/ McGladrey & Pullen, LLP
Peoria, Illinois
January 29, 1999
                                (Page 10)
                                                                    
Eagle BancGroup, Inc. and Subsidiary   
<TABLE>
<CAPTION>
                 Consolidated Statements of Condition 
                      December 31, 1998 and 1997  				
  	
                                                    1998          1997
                                                  (Dollars in thousands)
<S>                                            <C>           <C>
Assets                                  
		
Cash and due from banks                          $  1,084      $  1,628 
Federal funds sold and overnight deposits           7,653         3,386 
Investment securities - available for sale         11,328        13,037
Mortgage-backed securities - available for sale    37,244        24,596 	
Federal Home Loan Bank ("FHLB") stock               1,250         1,310
Loans, net of allowance for loan losses:
     $1,015 in 1998, $935 in 1997                 112,850       121,652
Loans held for sale                                 3,701           757
Premises and equipment                              2,819         2,834
Other assets                                        2,172         1,937
  Total assets                                   $180,101      $171,137 
	 	
Liabilities 	 	 		

Deposits                                         $134,091      $131,452 
Federal Home Loan Bank advances                    25,000        18,000
Other liabilities                                   1,313         1,380 
  Total liabilities                               160,404       150,832
                                  -Page 101-  

Stockholders' Equity  	 	 		

Preferred stock, par value $.01 per share, 
  100,000 shares authorized, no shares issued           -             -
Common stock, par value $.01 per share, 
  5,000,000 shares authorized; 
  1,302,705 shares issued                              13            13
Paid-in capital                                    12,456        12,323
Retained earnings - substantially restricted       12,495        11,697
Unrealized loss on investment securities 
  available for sale, net                            (144)         (110) 
  Total stockholders' equity before treasury stock,  				
    unearned ESOP shares and Management  				
    Development and Recognition Plan               24,820        23,923

Treasury stock, at cost, 125,000 shares in 1997    (3,817)       (2,055)
Unearned Employee Stock Ownership Plan 
  ("ESOP") shares                                    (730)         (834)
Management Development and Recognition 
  Plan ("MDRP")                                      (576)         (729)
  Total stockholders' equity                       19,697         20,305 

  Total liabilities and stockholders' equity     $180,101       $171,137 
</TABLE>
See Notes to Consolidated Financial Statements.
                                (Page 11)

Eagle BancGroup, Inc. and Subsidiary
<TABLE>
<CAPTION>
                       Consolidated Statements of Income 
                 Years Ended December 31, 1998, 1997 and 1996  	 	 	  

                                            1998        1997        1996	
                               (Dollars in thousands except per share data)
<S>                                     <C>         <C>         <C>
Interest income: 	 	 	 	 	 	 
  Loans and fees on loans                 $ 9,517     $ 9,472     $ 7,681 
  Investment securities and 
    other interest earning assets           1,150       1,044       1,024 
  Mortgage-backed securities                1,583       1,738       2,358 
  Federal funds sold                          212          72          31 
    Total interest income                  12,462      12,326      11,094 

Interest expense: 	 	 	 	 	 	 
  Deposits: 	 	 	 	 	 	 
    Passbook                                  549         579         577 
    MMDA and NOW                              330         202         181 
    Certificates of deposit                 6,103       6,285       6,673 
                                            6,982       7,066       7,431       
  Borrowings                                1,226       1,055         272 
    Total interest expense                  8,208       8,121       7,703

    Net interest income before 
      provision for loan losses             4,254       4,205       3,391 
Provision for loan losses                     240         240         183

    Net interest income after 
      provision for loan losses             4,014       3,965       3,208 
                                  -Page 102-
Non-interest income: 	 	 	 	 	 	 
  Loan servicing                              157         138         146 
  Gains on loans sold, net                  1,218         178          68 
  Gains on securities sold, net                49          46          15
  Other                                       287         214         189 
    Total non-interest income               1,711         576         418 

Noninterest expense: 	 	 	 	 	 	 
  Salaries and employee benefits            2,530       2,150       1,736 
  Net occupancy                               590         537         544
  Federal deposit insurance premium            80          67       1,231 
  Data processing                             305         322         249 
  Other                                       800         692         613 
    Total noninterest expense               4,305       3,768       4,373 

  Income (loss) before income tax 
    expense (benefit)                       1,420         773        (747) 
Income tax expense (benefit)                  514         264        (258) 
  Net income (loss)                       $   906     $   509    $   (489) 

Basic earnings (loss) per share           $  0.85     $  0.44    $  (0.38) 
Diluted earnings (loss) per share         $  0.83     $  0.44       (0.38) 
</TABLE>
See Notes to Consolidated Financial Statements.
                                (page 12) 

Eagle BancGroup, Inc. and Subsidiary   
<TABLE>
<CAPTION>
            Consolidated Statements of Changes in Stockholders' Equity 
                   Years ended December 31, 1998, 1997 and 1996  	 	 	 
	 	 	                                                              
                                                             Accumulated
                              Common     Paid-In   Retained  Comprehensive
                               Stock     Capital   Earnings     Income
                                          (Dollars in thousands)
<S>                         <C>        <C>        <C>         <C>
Balance, December 31, 1995   $     -    $     -    $11,677     $  (162)
Comprehensive income:
  Net loss                         -          -       (489)          -
  Unrealized loss on securities
    available for sale arising
    during the period, net taxes
    of $85                         -          -          -        (165)
  Less: Reclassification
    adjustment, net of tax
    of $5                          -          -          -         (10)
Comprehensive income(loss)
  Sale of capital stock           13     12,215          -           -
  Common stock acquired
    by ESOP                        -          -          -           -
  Release of ESOP shares           -          -          -           - 
Balance, December 31, 1996        13     12,215     11,188        (337)     
Comprehensive income:
  Net income                       -          -        509           -
  Unrealized loss on securities
    available for sale arising
    during the period, net taxes
    of $133                        -          -          -         257
                                  -Page 103-
  Less: Reclassification
    adjustment, net of tax
    of $16                         -          -          -         (30)
Comprehensive income
  Purchase of 125,000 shares
    for the treasury 
  Release of ESOP shares           -         96          -           -
  Purchase of 52,106 shares
    for MDRP                       -          -          -           -
  Allocation of MDRP shares        -         12          -           -
Balance, December 31, 1997        13     12,323     11,697        (110)
Comprehensive income:
  Net income                       -          -        906           -
  Unrealized loss on securities
    available for sale arising
    during the period, net taxes
    of $1                          -          -          -          (2)
  Less: Reclassification
    adjustment, net of tax
    of $17                         -          -          -         (32)
Comprehensive income
  Purchase of 97,597 shares
    for the treasury               -          -          -           -
  Release of ESOP shares           -         94          -           - 
  Allocation of MDRP shares        -         39          -           -
  Cash dividend paid               -          -       (108)          -
Balance, December 31, 1998   $    13    $12,456    $12,495     $  (144)
</TABLE>
<TABLE>
<CAPTION>
                                                   Management
                                                   Development
                                        Unearned     and
                             Treasury    ESOP      Recognition
                              Stock     Shares       Plan      Total
                                       (Dollars in thousands)
<S>                         <C>        <C>        <C>         <C>
Balance, December 31, 1995   $     -    $     -    $     -     $11,515  
Comprehensive income:
  Net loss                         -          -          -        (489)
  Unrealized loss on securities 
    available for sale arising
    during the period, net taxes
    of $85                         -          -          -        (165)
  Less: Reclassification
    adjustment, net of tax
    of $5                          -          -          -         (10)
Comprehensive income(loss)                                        (664)
  Sale of capital stock            -          -          -      12,228
  Common stock acquired
    by ESOP                        -     (1,042)         -      (1,042)
  Release of ESOP shares           -        104          -         104 
Balance, December 31, 1996         -       (938)         -      22,141

Comprehensive income:
  Net income                       -          -          -         509
  Unrealized loss on securities
    available for sale arising
    during the period, net taxes
    of $133                        -          -          -         257
                                  -Page 104-
  Less: Reclassification
    adjustment, net of tax
    of $16                         -          -          -         (30)
Comprehensive income                                               736
  Purchase of 125,000 shares
    for the treasury          (2,055)         -          -      (2,055)
  Release of ESOP shares           -        104          -         200
  Purchase of 52,106 shares
    for MDRP                       -          -       (840)       (840)
  Allocation of MDRP shares        -          -        111         123
Balance, December 31, 1997    (2,055)      (834)      (729)     20,305

Comprehensive income:
  Net income                       -          -          -         906
  Unrealized loss on securities
    available for sale arising
    during the period, net taxes
    of $1                          -          -          -          (2)
  Less: Reclassification
    adjustment, net of tax
    of $17                         -          -          -         (32)
Comprehensive income                                               872
  Purchase of 97,597 shares
    for the treasury          (1,762)         -          -      (1,762)
  Release of ESOP shares           -        104          -         198
  Allocation of MDRP shares        -          -        153         192
  Cash dividend paid               -          -          -        (108)
Balance, December 31, 1998   $(3,817)    $ (730)    $ (576)    $19,697
</TABLE>
See Notes to Consolidated Financial Statements.
                                (Page 13)

Eagle BancGroup, Inc. and Subsidiary
<TABLE>
<CAPTION>
                     Consolidated Statements of Cash Flows 
                   Years Ended December 31, 1998, 1997 and 1996 
						
                                                 1998      1997     1996
                                                  (Dollars in thousands)
<S>                                           <C>       <C>     <C>
Cash Flows from Operating Activities 						
Net income (loss)                              $   906   $   509 $  (489) 
Adjustments to reconcile net income (loss) to 	 	 				
  net cash provided by operating activities: 
    Provision for loan losses                      240       240      183 
    Provision for depreciation                     315       284      288 
    Provision for deferred income taxes            (36)     (114)      (4) 
    Amortization of premiums and accretion of 
      discounts on investment securities          (106)      (11)      74 
    Gains on securities sold, net                  (49)      (46)     (15)
    Gains on loans sold, net                    (1,218)     (178)     (68) 
    Compensation expense related to ESOP shares    198       200      104
    Compensation expense related to MDRP shares    192       123        -
    Proceeds from sale of loans 
      originated for sale                       93,164    19,314   10,844 
    Loans originated for sale                  (94,890)  (19,009)  (9,209)
                                  -Page 105-
     Decrease (increase) in accrued 
      interest receivable                          (47)       43     (130) 
    (Decrease) increase in accrued 
      interest payable                              24        (5)      94
    Decrease (increase) in other assets           (140)      232      (65)
    (Decrease) increase in other liabilities       (51)      150       44 
    Net cash provided by (used in)
      operating activities                      (1,498)    1,732    1,651 

Cash Flows from Investing Activities 	 	 				
Investment securities 
    Purchases                                  (23,274)   (5,610) (15,109) 
    Proceeds from sales                         25,149     8,173   10,602 
Mortgage-backed securities 						
    Purchases                                  (24,868)   (7,608) (11,667) 
    Proceeds from sales                          2,268    16,790    9,749
    Principal collected                          9,944     3,799    5,625 
Sale (purchase) of FHLB stock                       60      (355)    (261) 
Principal collected on loans                    76,374    37,167   34,270 
Loans originated, net                          (67,819)  (53,194) (53,796) 
Purchases of premises and equipment               (353)     (229)     (65) 
Net sales (purchases) of other real estate         (25)       20       (8) 
Net cash used in investing activities           (2,544)   (1,047) (20,570) 
</TABLE>
                           (Continued on page 15)
                                 (Page 14)

Eagle BancGroup, Inc. and Subsidiary
<TABLE>
<CAPTION>
           Consolidated Statements of Cash Flows - Continued
              Years Ended December 31, 1998, 1997 and 1996  			
			
                                                 1998      1997     1996
                                                  (Dollars in thousands)
<S>                                           <C>       <C>      <C>
Cash Flows from Financing Activities 	 	 		 		 
 Increase in savings accounts, demand 
  deposits and NOW accounts, net               $ 4,923   $ 1,801  $ 1,520 
Increase (decrease) in certificate 
  accounts, net                                 (2,288)   (4,337)  (5,927) 
Proceeds from FHLB advances                     14,000    29,750   36,311 
Principal payments on FHLB advances             (7,000)  (27,050) (21,011)
Purchase of MDRP shares                              -      (840)       -
Purchase of treasury stock                      (1,762)   (2,055)       -
Dividends paid                                    (108)        -        -
Proceeds from the sale of capital stock              -         -   11,186 
Net cash (used in) provided by  						
  financing activities                           7,765    (2,731)  22,079 

(Decrease) increase in cash and 	 	 				
   cash equivalents                              3,723    (2,046)   3,160 

Cash and cash equivalents: 	 	 				
Beginning of year                                5,014     7,060    3,900 
End of year                                    $ 8,737   $ 5,014  $ 7,060 
                                  -Page 106-

Supplemental Disclosures of Cash Flow Information
 	 	 		
Cash paid during the year for: 	 	 				
  Interest on deposits                         $ 6,978   $ 7,074  $ 7,425 
  Interest on borrowed funds                     1,206     1,053      184 
  Income taxes                                     714       210        - 
</TABLE>
See Notes to Consolidated Financial Statements.
                                (Page 15)

Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements

Note 1. Significant Accounting Policies

Organization
Eagle BancGroup, Inc. ("Eagle") was formed in January, 1996 and purchased 
all of the stock of First Federal Savings and Loan Association 
("First Federal") with the proceeds of a subscription stock offering 
completed in June, 1996.  Simultaneous to the stock offering, First
Federal converted from a federally-chartered mutual savings association 
to a federally-chartered capital stock savings association.  Prior to
June, 1996, Eagle had no assets or liabilities.  

Eagle issued 1,302,705 shares of common stock following the subscription 
stock offering.  Net proceeds to Eagle were $11,186,000 of which $6,200,000
was paid to First Federal in exchange for all of the common stock of First 
Federal.  Expenses related to the offering totaled $799,000 and $1,042,000 
was loaned to First Federal to create an Employee Stock Ownership Plan.  

The significant accounting and reporting policies for Eagle
BancGroup, Inc. and its subsidiary follow:

Principles of Presentation
The consolidated financial statements include the accounts of Eagle, its 
wholly-owned subsidiary, First Federal and First Federal's wholly-owned 
subsidiary, FFS Investment Services, Inc. (collectively "the Company").  
Eagle is a unitary savings and loan holding company engaged in the business
of managing its investments and directing, planning and coordinating the
business activities of First Federal.  First Federal operates as a 
traditional thrift institution in McLean and surrounding counties of 
Central Illinois.  FFS Investment Services, Inc. sells investment products,
including annuities.  All material intercompany accounts and transactions have 
been eliminated in consolidation.

The consolidated financial statements of the Company have been prepared in
conformity with generally accepted accounting principles and conform to 
predominant practice within the banking industry.

Effective January 1, 1998, the Company adopted Statement of Financial 
Accounting Standards No. 130 (SFAS 130), which was issued in June 1997.  SFAS 
130 establishes new rules for the reporting and display of comprehensive 
income and its components, but has no effect on the Company's net income or 
total stockholders' equity.  SFAS 130 requires unrealized gains and losses on 
the Company's available-for-sale securities, which prior to adoption were 
                                  -Page 107-
reported separately in stockholder's equity, to be included in comprehensive 
income.  Prior year financial statements have been reclassified to conform to 
the requirements of SFAS 130.

Effective January 1, 1998, the Company adopted Statement of Financial 
Accounting Standards 131, 'Disclosures about Segments of an Enterprise and 
Related Information,' (SFAS 131).  SFAS 131 requires a publicly held entity to 
disclose financial and other descriptive information about all of its 
reportable segments.  The Statement requires disclosure of net income or loss, 
certain specific revenue and expense items, and assets for each segment 
presented and disclosure of a reconciliation of this information with the 
corresponding amounts recognized in the financial statements of the entity.  
This statement also requires disclosure of other pertinent segment 
information, including the products and services provided by its operating 
segments and the method by which the operating segments were determined.

Based on the Company's approach to decision making, it has decided that its 
business is comprised of a single segment and that SFAS 131 therefore has no 
impact on it consolidated financial statements.
                                (Page 16)

Eagle BancGroup, Inc. and Subsidiary
                       Notes to Consolidated Financial Statements
Use of Estimates
In preparing the consolidated financial statements, the Company's management
is required to make estimates and assumptions which significantly affect the
amounts reported in the consolidated financial statements and accompanying 
notes.  Significant estimates which are particularly susceptible to change 
in a short period of time include the determination of the allowance for 
loan losses and valuation of real estate and other properties acquired in
connection with foreclosures or in satisfaction of amounts due from 
borrowers on loans and fair value of investments and mortgage-backed 
securities.  Actual results could differ significantly from those 
estimates.

Cash Equivalents
Cash equivalents include federal funds sold and overnight deposits.  
Generally, federal funds are sold for one-day periods.
                                 
Investment Securities
Securities classified as available-for-sale are those securities that the
Company intends to hold for an indefinite period of time, but not necessarily
to maturity, and marketable equity securities.  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.  Accrued interest receivable on the related 
securities is included in the amortized cost balance to agree with amounts
reported to the Company's regulatory authority.  The difference between fair
value and cost, adjusted for amortization of premium and accretion of 
discounts, results in an unrealized gain or loss.  Unrealized gains or losses 
are reported as accumulated comprehensive income net of the related deferred 
tax effect in the statement of stockholders' equity.  Gains or losses on the 
                                  -Page 108-
sale of securities are determined on the basis of the specific security sold 
and are included in earnings.  Premiums and discounts are recognized in 
interest income using the interest method over their contractual lives.

Federal Home Loan Bank Stock
Federal Home Loan Bank stock is carried at cost and the amount of stock 
First Federal is required to own is determined by regulation.

Loans
First Federal has a mortgage lien on all property on which mortgage, 
participation or purchased loans are made.  Loans secured by deposits are 
secured by equal or greater deposit account balances.  In general, First 
Federal originates residential mortgage loans for sale in the secondary 
market.  Other loans are held for long-term investment unless designated
as held for sale at the time of origination.  Loans designated as held for 
sale are carried at the lower of cost or market value with changes in the 
valuation allowance reflected in income.  All loans are sold without recourse.

Interest income on loans is computed monthly based upon the principal amount 
of the loans outstanding.  A valuation allowance is established for 
uncollected interest on loans on which any payments are more than ninety days 
past due.

Loan origination and commitment fees and certain direct loan origination 
costs are deferred and the net amount is amortized as an adjustment to yield 
over the contractual life of the related loans.

First Federal originates qualifying mortgage loans for sale in the secondary 
market.  The majority of these loans are sold with servicing released.
                                 (Page 17)

Eagle BancGroup, Inc.
                       Notes to Consolidated Financial  Statements
Allowance for Loan Losses
The allowance for loan losses is established through provisions for loan 
losses charged against income.  Loans deemed to be uncollectible are charged
against the allowance for loan losses, and subsequent recoveries, if any, are 
credited to the allowance.  The allowance for loan losses related to troubled
loans identified for evaluation in accordance with Statement of Financial 
Accounting Standards No. 114 (SFAS 114) is based on estimated discounted cash 
flows using the loan's initial effective interest rate or the fair value of 
the collateral for certain collateral dependent loans.  Consumer loans and
one-to-four family residential loans are collectively evaluated for impairment 
as homogeneous loan groups which are outside the scope of SFAS 114.  Under 
SFAS 118, no interest income on loans determined to be impaired is accrued.  
Interest income on such loans is recognized only upon cash receipt.  SFAS 114 
and SFAS 118 have not had a significant impact on results of operations
in 1998, 1997 or 1996.

The allowance for loan losses is maintained at a level management believes to 
be adequate to absorb estimated future losses inherent in the loan portfolio.  
Management's determination of the adequacy of the allowance is based on an
evaluation of the portfolio including consideration of past loan experience, 
current economic conditions, volume, growth and composition of the loan 
                                  -Page 109-
portfolio, and other relevant factors.  This evaluation is inherently 
subjective as it requires material estimates including the amounts and timing
of future cash flows expected to be received on impaired loans that may be
susceptible to significant change.  While management uses the best information 
available to make its evaluation, future adjustments to the allowance may be 
necessary if there are significant changes in economic conditions.  In 
addition, various regulatory agencies periodically review the allowance for
loan losses.  These agencies may require First Federal to make additions to 
the allowance for loan losses based on their judgments of collectibility based 
on information available to them at the time of their examination.

Premises and Equipment
Premises and equipment is stated at cost less accumulated depreciation.  
Provisions for depreciation of premises and equipment are computed using 
straight-line and accelerated methods over the estimated useful lives of the 
related assets.

Deferred Income Taxes
Deferred income tax assets and liabilities are computed annually for 
differences between the financial statement and tax bases of assets and 
liabilities that will result in taxable or deductible amounts in the future 
based on enacted tax laws and rates applicable to the periods in which the 
differences are expected to affect taxable income.  Deferred tax assets are 
also recognized for operating loss and tax credit carryforwards.  Valuation 
allowances are established when necessary to reduce deferred tax assets to an 
amount expected to be realized.  Income tax expense is the tax payable or 
refundable for the period plus or minus the change during the period in 
deferred tax assets and liabilities.

Earnings Per Share
Basic earnings per share is computed by dividing net income for the year by 
the weighted average number of shares outstanding of 1,066,003, 1,146,538 and 
1,302,705 for 1998, 1997 and 1996, respectively.  

Diluted earnings per share is determined by dividing net income for the year 
by the weighted average number of shares of common stock and dilutive 
potential common shares outstanding.  Dilutive potential common shares assume 
exercise of stock instruments and use of proceeds to purchase treasury stock 
at the average market price for the period.  The weighted average shares of 
common stock and dilutive potential common shares 1,088,654, 1,152,169 and 
1,302,705 for 1998, 1997 and 1996, respectively.
                                 (Page 18)

Eagle BancGroup, Inc and Subsidiary
                        Notes to Consolidated Financial Statements
Recent Accounting Pronouncements
Accounting for Derivative Instruments and Hedging Activities
In June 1998, the Financial Accounting Standards Board issued Statement No. 
133, "Accounting for Derivative Instruments and Hedging Activities" which is 
required to be adopted for all fiscal quarters of fiscal years beginning after 
June 15, 1999.  The Statement permits early adoption as of the beginning of 
any fiscal quarter after its issuance.  The Statement will require the bank to 
recognize all derivatives on the balance sheet at fair value.  Derivatives 
that are not hedges must be adjusted to fair value through income.
                                  -Page 110-
Management does not anticipate that the adoption of the new Statement will 
have a significant effect on the Bank's financial statement.

Note 2. Investments
<TABLE>
Investment securities and mortgage-backed securities available
for sale are summarized below:
<CAPTION>
                                             Gross       Gross
                               Amortized  Unrealized  Unrealized    Fair	
                                 Cost        Gains      Losses      Value
                                           (Dollars in thousands)
<S>                            <C>        <C>          <C>       <C> 
December 31, 1998
Investment securities: 								
  U.S. Treasury and agencies    $ 8,141    $   18       $    6    $ 8,153 
  Other securities                3,222         2           49      3,175 
   Total investment securities   11,363        20           55     11,328 

Mortgage-backed securities: 								
  Collateralized mortgage 
   obligations                    7,563         1           32      7,532 
  Other mortgage-backed 
   securities                    29,864        11          163     29,712 
   Total mortgage-backed 
     Securities                  37,427        12          195     37,244 

Total                           $48,790    $   32       $  250    $48,572  	

December 31, 1997
Investment securities: 								
  U.S. Treasury and agencies    $12,642    $   13       $   20    $12,635 
  Other securities                  395         7            -        402 
   Total investment securities   13,037        20           20     13,037 

Mortgage-backed securities: 								
  Collateralized mortgage 
   obligations                   12,467         -          152     12,315 
  Other mortgage-backed 
   securities                    12,296        32           47     12,281 
   Total mortgage-backed 
     Securities                  24,763        32          199     24,596 

Total                           $37,800    $   52       $  219    $37,633 
</TABLE>
                                 (Page 19)
Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements
<TABLE>
The amortized cost and fair value of investment and mortgage-backed 
securities at December 31, 1998, by contractual maturity, are shown below.  
Expected maturities may differ from contractual maturities because mortgage-
backed securities may be called or prepaid without penalty and therefore they 
are not included in the maturity categories in the following summary.  Equity 
securities are not included in the maturity categories in the following 
maturity summary, since they do not have maturity dates.
                                  -Page 111-
<CAPTION>
                                                  Available for Sale 		
                                                 Amortized        Fair 	
                                                    Cost          Value 	
                                                 (Dollars in thousands) 	
<S>                                              <C>           <C>		
Due within one year                               $ 4,626       $ 4,630 
Due after one year through five years                  -            - 
Due after five through ten years                    6,498         6,506 
Due after ten years                                    -            -
Mortgage-backed securities                         37,427        37,244
Equity securities                                     239           192 

Total                                             $48,790       $48,572 
</TABLE>
<TABLE>
Realized gains and losses related to sales of investments were
as follows:
<CAPTION>
                                                Year Ended December 31,     
                                               1998      1997      1996
                                                (Dollars in thousands)
<S>                                           <C>       <C>       <C>
Realized gains                                 $ 61      $102      $ 49 	 
Realized losses                                 (12)      (56)      (34)	 
Net gain                                       $ 49      $ 46      $ 15	 
</TABLE>
Investments with a carrying value of approximately $5,049,000 and $6,450,000 
as of December 31, 1998 and 1997, respectively, were pledged to secure public 
deposits and for other purposes as required or permitted by law. 
                                (Page 20)

Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements

Note 3. Loans
<TABLE>
Loans consist of the following :
<CAPTION>
                                                           December 31, 
                                                        1998        1997  	
                                                     (Dollars in thousands) 	
<S>                                                 <C>         <C>		
Residential mortgage loans                           $ 66,922    $ 85,326 
Commercial real estate loans                           10,729       6,791 
Consumer loans                                         28,824      29,236 
Commercial installment loans                            7,792       1,588 
Accrued interest receivable                               638         631 
     Gross loans                                      114,905     123,572 
Less: 				
  Deferred loan fees                                      109         114 
  Allowance for loan losses                             1,015         935 
  Undisbursed portion of loan proceeds                    931         871 
        Loans, net                                   $112,850    $121,652 
</TABLE>
Advances from the Federal Home Loan Bank of Chicago are secured by a floating 
lien on First Federal's one-to-four family residential mortgage loans.
                                  -Page 112-
The Company's opinion as to the ultimate collectibility of these loans is 
subject to estimates regarding the future cash flows from operations and the 
value of the property, real and personal, pledged as collateral.  These 
estimates are affected by changing economic conditions and the economic 
prospects of the borrowers.

The amount of loans serviced by the Company for the benefit of others is not 
included in the accompanying consolidated financial statements. Loans serviced 
at December 31, 1998 and 1997 totaled approximately $41,979,000 and 
$38,370,000, respectively.  
<TABLE>
Changes in the allowance for loan losses were as follows:
<CAPTION>
                                                 Year Ended December 31, 
                                                 1998      1997     1996  	
                                                  (Dollars in thousands) 	
<S>                                           <C>         <C>     <C>				
Balance at beginning of year                   $  935      $ 923   $ 907 
Provision for losses                              240        240     183 
Charge-offs                                      (170)      (239)   (178) 
Recoveries                                         10         11      11 
Balance, December 31                           $1,015      $ 935   $ 923 
</TABLE>
                                (Page 21)

Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements

In the normal course of business, loans are made to directors, executive 
officers and principal stockholders of the Company and of parties which the 
Company or its directors, executive officers, and stockholders have the 
ability to significantly influence its management or operating policies 
(related parties).  The terms of these loans, including interest rates and 
collateral, are similar to those prevailing comparable transactions with other 
customers and do not involve more than a normal risk of collectibilty.  
<TABLE>
Activity associated with loans (in thousands) made to related parties during 
1998 was as follows:
<S>                                                        <C>
Balance, January 1                                          $1,004
  New loans                                                    712
  Repayments                                                  (862)
    Balance, December 31                                    $  854
</TABLE>
Note 4. Premises and Equipment
<TABLE>
Premises and equipment are summarized as follows:
<CAPTION>
                                                      December 31, 	
                                                    1998        1997 	
                                                 (Dollars in thousands) 	
<S>                                               <C>         <C>		
Land                                               $  721      $  775 
Buildings                                           3,048       2,935 
Furniture and equipment                             2,558       2,326 
                                                    6,327       6,036 
Less allowance for depreciation                     3,508       3,202 
                                                   $2,819      $2,834 
</TABLE>
                                  -Page 113-

Note 5. Deposits
<TABLE>
Deposits are summarized as follows:
<CAPTION>
                                                      December 31, 	
                                                    1998        1997 	
                                                 (Dollars in thousands) 	
<S>                                             <C>         <C>		
Passbook accounts                                $ 15,756    $ 15,130 
NOW accounts                                       15,866      11,569
Certificate accounts                               90,193      96,614
Time deposits over $100,000                        12,254       8,121 
                                                  134,069     131,434 
Accrued interest payable                               22          18 
                                                 $134,091    $131,452 
</TABLE>
<TABLE>
As of December 31, 1997, certificates of deposit have scheduled maturity 
dates as follows (in thousands):
<CAPTION>
Year of Maturity                                        Amount 	
<S>                                                   <C>
    1999                                               $ 64,793 
    2000                                                 24,660
    2001                                                  6,188 
    2002                                                  4,204 
    2003 and thereafter                                   2,602 
                                                       $102,447 
</TABLE>
                                (Page 22)

Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements

Note 6. Federal Home Loan Bank Borrowings

Federal Home Loan Bank of Chicago (FHLB) provides advances with various terms 
and conditions.  Open line, variable rate advances are generally held for 
short terms.  Fixed amount advances can have fixed or variable rates with 
short- or long-term maturities and allow prepayments under certain conditions.
At December 31, 1998, all FHLB advances were fixed amounts.  
<TABLE>
Future payments at December 31, 1998 for all FHLB advances were as follows 
(in thousands):
<CAPTION>
Year of Maturity                                      Amount
<S>                                                 <C>
     1999                                            $     -
     2000                                                  -
     2001                                                  -
     2002                                             11,000
     2003                                                  -
     Thereafter                                       14,000
                                                     $25,000
</TABLE>
                                  -Page 114-
<TABLE>
A summary of FHLB advances follows:
<CAPTION>
                                                 Year Ended December 31, 
                                                    1998         1997  	
                                                  (Dollars in thousands) 
<S>                                              <C>          <C>
Balance on December 31                            $25,000      $18,000 
Highest month-end balance                          27,000       21,050 
Average balance during the year                    22,917       17,905 
Average rate during the year                         5.37%        5.89% 
Average rate at year-end                             5.05%        5.74% 
</TABLE>
Note 7. Income Taxes

Under provisions of the Internal Revenue Code and similar sections of the 
Illinois income tax law for years beginning before January 1, 1996, 
qualifying thrifts could claim bad debt deductions based on the greater of 
(1) a specified percentage of taxable income, as defined, or (2) actual loss 
experience. 

The Small Business Job Protection Act became law on August 20, 1996.  One of 
the provisions in this law repealed the reserve method of accounting for bad 
debts for thrift institutions so that the bad debt deduction described in the 
preceding paragraph will no longer be effective for tax years beginning after
December 31, 1995.  The change in the law requires that the tax bad debt 
reserves accumulated after September 30, 1988 be recaptured into taxable 
income over a six-year period.  The Company has no deferred tax liability 
related to this change.

                                (Page 23)

Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements

The Company qualified under provisions for the Internal Revenue Code which 
permitted it to deduct from taxable income a provision for bad debts which 
differs from the provision for such losses charged to income.  Accordingly, 
retained earnings at December 31, 1998 includes approximately $3,565,000 for 
which no provision for federal income taxes has been made.  If, in the future, 
this portion of retained earnings is used for any purpose other than to absorb 
loan losses, federal income taxes may be imposed at the then applicable rates.
<TABLE>
The federal income tax expense (benefit) consists of the following:
<CAPTION>
                                            Year Ended December 31, 
                                          1998       1997       1996  	
                                            (Dollars in thousands) 	
<S>                                     <C>        <C>       <C>
Current                                  $ 550      $ 378     $(254) 
Deferred                                   (36)      (114)       (4) 
                                         $ 514      $ 264     $(258) 
</TABLE>
<TABLE>
A reconciliation of the statutory federal income tax rate to the
effective income tax rate follows:
<CAPTION>
                                            Year Ended December 31, 		
                                          1998       1997       1996  
<S>                                      <C>        <C>        <C>
Statutory rates                            35%        35%         35% 
Other                                       1         (1)          - 
                                           36%        34%         35% 
</TABLE>
                                  -Page 115-
<TABLE>
The components of the deferred tax asset (liability) are as follows:
<CAPTION>
                                                            December 31, 	
                                                          1998       1997  	
                                                     (Dollars in thousands) 
<S>                                                     <C>        <C>
Deferred tax assets: 				
  Allowance for loan and real estate losses              $ 345      $ 318
  State net operating loss carryforwards                   290        345
  Unrealized loss on securities available for sale          75         57
  Deferred compensation                                    110        114
  MDRP accrual                                              42         50 
  Other                                                     35         54 
    Total deferred tax assets                              897        938
  Valuation allowance for deferred tax assets              154        225
    Total deferred tax assets, net of valuation allowance  743        713 
Deferred tax liabilities: 				
  Premises and equipment                                  (228)      (250) 
Other                                                      (90)       (75) 
  Total deferred tax liabilities                          (318)      (325) 

  Net deferred tax assets                                $ 425      $ 388 
</TABLE>
                                (Page 24)

Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements

Note 8. Stockholders' Equity

Eagle has authorized the issuance of 100,000 shares of preferred stock with a 
par value of $.01 per share.  Preferred stock may be issued by the Board of 
Directors from time to time on terms set by the Board without further 
authorization from the stockholders.

First Federal is 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 First Federal's financial statements.  Under capital
adequacy guidelines and the regulatory framework for prompt corrective action, 
First Federal must meet specific capital guidelines that involve quantitative 
measures of assets, liabilities, and certain off-balance-sheet items as 
calculated under regulatory accounting practices.  First Federal's capital
amounts and classifications are also subject to qualitative judgments by the 
regulators about components, risk weightings, and other factors.

Quantitative measures established by regulation to ensure capital adequacy 
require First Federal to maintain minimum amounts and ratios (set forth in the 
table below) of Tangible and Core Capital (as defined by the regulations) to 
Tangible Assets (as defined) and Total and Tier I capital (as defined) to
Risk-Weighted Assets (as defined).  Management believes, as of December 31, 
1998, that First Federal meets all capital adequacy requirements to which it 
is subject.

As of December 31, 1998, the most recent notification from the Office of 
Thrift Supervision categorized First Federal as well capitalized under the 
                                  -Page 116-
regulatory framework for prompt corrective action under FDICIA.  To be 
categorized as well capitalized, First Federal must maintain minimum total 
risk-based, Tier I risk-based, and Tier I leverage ratios as set forth in the 
following table.  There are no conditions or events since that notification 
that management believes would change First Federal's category.
<TABLE>
<CAPTION>
                                                              To Be Well
                                                          Capitalized Under
                                         For Capital      Prompt Corrective
                             Actual    Adequacy Purposes  Action Provisions
                         Amount  Ratio    Amount   Ratio    Amount   Ratio 
                                       (Dollars in thousands)
<S>                   <C>       <C>     <C>       <C>     <C>      <C>      
As of December 31, 1998: 	 	 	 	 	 	 	 	 	 
Tangible Capital to 
  Tangible Assets       $17,135  9.59%   $ 2,681   1.50%     N/A     N/A 
Core Capital to 
  Tangible Assets       $17,135  9.59%   $ 7,150   4.00%   $ 8,938   5.00% 
Tier I Capital to 
  Risk Weighted Assets  $17,135 15.15%      N/A     N/A    $ 6,787   6.00% 
Total Capital to 
  Risk Weighted Assets  $18,150 16.04%   $ 9,050   8.00%   $11,312  10.00%

As of December 31, 1997: 	 	 	 	 	 	 	 	 	 
Tangible Capital to 
  Tangible Assets       $16,845   9.99%  $ 2,530   1.50%      N/A     N/A 
Core Capital to 
  Tangible Assets       $16,845   9.99%  $ 6,747   4.00%   $ 8,434   5.00% 
Tier I Capital to 
  Risk Weighted Assets  $16,845  15.44%    N/A     N/A     $ 6,545   6.00% 
Total Capital to 
  Risk Weighted Assets  $17,780  16.30%  $ 8,726   8.00%   $10,908  10.00% 
</TABLE>
                                (Page 25)

Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements

First Federal established a liquidation account at the time of conversion from
a mutual savings association to a capital stock savings association.  The 
account balance was equal to the amount of First Federal's net worth on June 
29, 1996.  The account will be maintained for the benefit of eligible deposit
account holders who continue to maintain deposit accounts following the 
conversion.  In the unlikely event of a complete liquidation, each eligible 
deposit account holder will be entitled to receive a liquidation distribution
of any assets remaining after payment of all valid creditor's claims,
including the claims of all depositors to the withdrawal values of their 
deposit accounts, but before any liquidation distribution may be made with 
respect to Eagle's common stock.  Eligible deposit account holders have a 
subaccount in the liquidation account for each deposit account as of March 31,
1996.  The liquidation account balance will gradually decrease as eligible 
deposit account holders subaccount balances are reduced or cease to exist.  
Dividends cannot be paid from the liquidation account

The Board of Directors may declare dividends to be paid on Eagle's common 
stock.  Such payments may depend on dividends paid by First Federal to Eagle.  
The amount First Federal can pay in dividends is limited by Office of Thrift 
                                  -Page 117-
Supervision rules that generally allow for capital distributions in any
calendar year equal to the higher of net income for the calendar year to date 
plus an amount that would reduce by one-half the surplus capital ratio at the 
beginning of the calendar year or 75% of the net income over the previous four 
quarters.  As of January 1, 1999, First Federal's allowable capital 
distribution amount was approximately $5,900,000.

Note 9. Employee and Director Benefit Plans

Pension Plan - First Federal has a defined benefit pension plan that was 
frozen on March 31, 1996 as a result of the creation of the Employee Stock 
Ownership Plan.  Benefits, which were based on years of service and 
compensation, ceased to accrue January 1, 1996.  Annual contributions are made 
to the plan as required by actuarial calculation and as allowed as a deduction 
for federal income tax purposes.  Contributions are intended to provide for 
benefits attributed to service through December 31, 1995.  Management 
terminated the plan as of March 31, 1998.  Subject to the IRS and Department 
of Labor approvals, final distribution to plan participants will be made in 
1999.  

During the year ended December 31, 1998, the Company adopted Statement of 
Financial Accounting Standards No. 132, 'Employer's Disclosures about 
Pensions and Other Postretirement Benefits - an amendment of SFAS 87, 88 and 
106' (SFAS 132).  SFAS 132 revises employer's disclosures about pension and 
other postretirement benefit plans.  It does not change the measurement or 
recognition of those plans.  It standardizes the disclosure requirements for 
pensions and other postretirement benefits to the extent practicable, requires 
additional information on changes in the benefit obligations and fair values 
of plan assets that will facilitate financial analysis and eliminates certain 
disclosures.  Prior period disclosures have been restated.

                                (Page 26)
Eagle BancGroup Inc.
                        Notes to Consolidated Financial Statements
<TABLE>
Change in Benefit Obligation:
<CAPTION>
                                                  Year Ended December 31, 	
                                                      1998        1997  	
                                                   (Dollars in thousands) 
<S>                                                <C>          <C> 
Assumptions at beginning of year: 				
  Discount rate                                       7.50%       7.50% 
  Average rate of compensation increase                  -           -

Assumptions at end of year:
  Discount rate                                       6.75%       7.50%
  Average rate of compensation increase                  -           -

Benefit obligation at beginning of year:
  Service cost                                       $ 631       $ 562
  Interest cost                                          -          19
  Actuarial (gain)/loss including effect of
    change in assumptions                               23          32 
  Benefits paid                                         (4)        (25) 
Benefit obligation at end of year                      693         631
</TABLE>
                                  -Page 118-
<TABLE>
Change in Plan Assets:
<CAPTION>
                                                  Year Ended December 31, 	
                                                      1998        1997  	
                                                   (Dollars in thousands)
<S>                                                 <C>         <C>
Fair value of plan assets at beginning of year       $ 543       $ 473
Actual return on plan assets (net of expenses)          41          43
Employer contributions                                 125          52
Benefits paid                                           (4)        (25)
Fair value of plan assets at end of year             $ 705       $ 543
</TABLE>
<TABLE>
Information on Funded Status and Amounts Recognized
<CAPTION>
                                                  Year Ended December 31, 	
                                                      1998        1997  	
                                                   (Dollars in thousands)
<S>                                                 <C>         <C>
Discount rate                                         6.75%       7.50%
Average rate of compensation increases                   -           -

Accumulated benefit obligation                       $ 693       $ 613 
Projected benefit obligation                           693         631
Fair value of assets                                   705         543
Funded status                                           12         (87)
  Unrecognized net actuarial (gain)/loss               116          86
  Unrecognized prior service cost                        2           3
  Unrecognized transition (asset)/obligation           (17)        (18)
Net amount recognized                                $ 113       $ (16) 
</TABLE>
                                 (page 27)

Eagle BancGroup, Inc. and Subsidiary
              Note to Consolidated Financial Statements
<TABLE>
Components of Net Periodic Benefit Cost:
<CAPTION>
                                                  Year Ended December 31, 
                                                 1998      1997      1996  	
                                                   (Dollars in thousands)
<S>                                            <C>       <C>       <C>
Discount rate                                    7.50%     7.50%     7.50%
Average rate of compensation increases              -         -         -
Expected rate on assets                          7.50%     7.50%     7.50%

 
Service cost                                     $  -      $ 19      $ 19 
Interest cost                                      43        43        42 
Expected return on plan assetrs                   (48)      (37)      (35) 
Net amortization and deferral amounts:
  Unrecognized transition obligation/(asset)       (1)       (1)       (1)
  Prior service cost                                1         1         1
  Amortization of (gains)/losses                    -         4         7 
  Total                                             0         4         7 
Net periodic pension expense                     $ (5)     $ 29      $ 33
</TABLE>
401(k) Plan - First Federal maintains a 401(k) plan that allows eligible 
employees to establish a tax-favored savings plan.  Matching contributions 
were made by First Federal up to a maximum of $1,000 per employee annually 
to all eligible employees on the last day of 1998, 1997 and 1996.  Future
contributions may be made by First Federal at the discretion of the Board of 
                                  -Page 119-
Directors.  Eligible employees fully vest in their share of employer 
contributions after six years of qualified service.  Matching expense for 
1998, 1997 and 1996 totaled $29,000, $26,000 and $22,000, respectively.

Employee Stock Ownership Plan (ESOP) - In conjunction with Eagle's 
subscription stock offering, an ESOP was created and 104,216 shares of Eagle's 
stock were purchased for future allocation to employees.  The purchase was 
funded with a loan from Eagle.  Shares will be allocated to all eligible 
employees annually on the last day of the fiscal year based on a pro rata
share of total compensation for the year.  Benefits vest in full upon 
completion of six years of qualified service.  Compensation expense for the 
ESOP was $198,000, $200,000 and $104,000 for the years ended December 31, 
1998, 1997 and 1996, respectively.
<TABLE>
The following table reflects the shares held by the ESOP:
<CAPTION>
                                                 December 31,
                                               1998        1997
<S>                                      <C>         <C>
Shares allocated to participants              31,266      20,844 
Unallocated shares                            72,950      83,372 
  Total                                      104,216     104,216 

Fair value of unallocated shares          $1,477,238  $1,573,646 
</TABLE>
First Federal will make minimum contributions to the ESOP sufficient to meet 
annual principal and interest obligations on the loan from Eagle. 
Contributions in excess of this amount may be made at First Federal's 
discretion.  Cash dividends received with respect to unallocated shares, if 
any, will be applied to principal and interest due on the loan.
                                (Page 28)

Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements

Management Development and Recognition Plan - The Management Development and 
Recognition Plan (MDRP) was approved with an effective date of February 11, 
1997.  The MDRP purchased, with funds provided by the Company, 52,106 shares 
in the open market during February, 1997.  Directors and officers become 
vested in the shares of common stock awarded to them under the MDRP at a rate 
of 20 percent per year, commencing one year after the grant date, and 20 
percent on each anniversary date thereof for the following four years.  As of 
December 31, 1998, 46,892 shares have been awarded to officers and directors.  
MDRP compensation expense was $192,000 and $123,000 for the years ended 
December 31, 1998 and 1997, respectively.  First Federal accounts for its MDRP 
in accordance with Accounting Principle Board Statement 25 (APB No. 25). 
Compensation expense is recognized over the vesting period for shares awarded 
under the plan.

Stock Option Plans - At a special stockholder's meeting on February 11, 1997, 
the 1996 Stock Option Plan ("SOP") was approved.  The Board has reserved an 
amount of stock equal to 130,270 shares, or 10 percent of the common stock 
sold in the conversion for issuance under the SOP.  The options will be 
granted by a Committee, comprised of directors, to key employees and directors 
based on their services.  The exercise price of options granted must be at 
least equal to the fair market value of the common stock on the date the 
                                  -Page 120-
option is granted.  The options granted under the plan become exercisable at a 
rate of 20 percent per year commencing one year after the grant date and 20 
percent on each anniversary date for the following four years.  As of December 
31, 1998, 117,243 options had been granted.

The SOP promotes stock ownership by directors and selected officers and 
employees of Eagle and First Federal by granting stock options to 
participants.  Options granted will vest and become exercisable over a five 
year period.  Options granted are not expected to result in any compensation 
and employee benefits expense for the Company either at the time of the grant
or at the time of exercise of the option.
<TABLE>
A summary of the status of the Company's stock option plan as of
December 31, 1998 and the changes during the year is as follows:
<CAPTION>
                                          1998                  1997	 
                                            Weighted-             Weighted-
                                             Average               Average
                                             Exercise             Exercise
                                    Shares    Price      Shares     Price 	 
<S>                               <C>       <C>        <C>        <C>
Outstanding at beginning of year   110,729   $15.48           -    $    - 	 
Granted                              6,514    20.88     110,729     15.48 
Exercised                                -        -           -         -
  Outstanding at end of year       117,243   $15.78     110,729    $15.48 

Exercisable at end of year          22,146                    -    		
	
Weighted-average fair value per option 
  of options granted during the year         $ 8.03                $ 4.57 	
</TABLE>
                                (Page 29)

Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements
<TABLE>
The following table presents certain information with respect to stock options 
granted:
<CAPTION>
                                  Options Outstanding and Exercisable
                                               Weighted-
                                                Average     Weighted-
                                               Remaining     Average
                                   Number     Contractual   Exercise
Exercise Prices                 Outstanding      Life         Price
<S>                               <C>            <C>        <C>
$15.125                            84,679         8.12       $15.125
$16.625                            26,050         8.66        16.625
$20.875                             6,514         9.22        20.875
</TABLE>
Grants under the above plan are accounted for following APB No. 25 and related 
Interpretations.  Accordingly, no compensation cost has been recognized for 
grants under this plan.  Had compensation cost for stock-based compensation 
been determined based on the grant date fair values of awards (the method
described in SFAS 123), reported net income and earnings per common share 
would have been reduced to the pro forma amounts shown below.  There is no 
difference for 1997 since no options were vested as of December 31, 1997.
                                  -Page 121-
<TABLE>
<CAPTION>
                                                                1998
<S>                                                           <C>
Net income
  As reported                                                  $ 906
  Pro forma                                                      856
Basic earnings per common share
  As reported                                                  $0.85
  Pro forma                                                     0.80
Diluted earnings per common share
  As reported                                                  $0.83
  Pro forma                                                     0.79
</TABLE>
The Black-Scholes option pricing model was used in estimating the fair value 
of traded options which have no vesting restrictions.  In addition, the model 
requires the use of subjective assumptions, included expected stock price
volatility.  In management's opinion, this valuation model may not necessarily 
provide the best single measure of option value. 
<TABLE>
The fair value of the stock 
options granted has been estimated using the Black-Scholes option pricing 
model with the following weighted average assumptions:
<CAPTION>
                                                        1998         1997  	
<S>                                                  <C>         <C>
Number of options granted                              6,514      110,729 
Risk-free interest rate                                 4.65%        5.69% 
Expected life, in years                                   10           10 
Expected volatility                                     32.6%        16.6% 
Expected dividend yield                                  2.0%         2.0% 
Estimated fair value per option                        $8.03        $4.57 
</TABLE>
                                  (Page 30)
Eagle BancGroup, Inc. and Subsidiary
                   Notes to Consolidated Financial Statements

Note 10. Fair Value of Financial Instruments
Following are disclosures of the estimated fair value of the Company's 
financial instruments.  The estimated fair value amounts have been determined 
using available market information and appropriate valuation methodologies.  
However, considerable judgment is necessarily required to interpret market 
data to develop the estimates of fair value.  Accordingly, the estimates 
presented are not necessarily indicative of the amounts the Company could 
realize in a current market exchange.  The use of different market assumptions 
and/or estimation methodologies may have a material effect on the estimated 
fair value amounts.

The following methods and assumptions were used by the Company in estimating 
its fair value disclosures for financial instruments:

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

  Investment securities, mortgage-backed securities and FHLB stock:  Fair
  values for investment securities and mortgage-backed 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.  Fair value of FHLB stock is estimated to equal
  cost.  The carrying amount of accrued interest receivable
  approximates fair value.
                                   -Page 122-

  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 all other loans are estimated using 
  discounted cash flow analyses, using interest rates currently being 
  offered for loans with similar terms to borrowers of similar credit 
  quality.  The carrying amount of accrued interest receivable 
  approximates its fair value.

  Deposits:  The fair value disclosed for demand deposits, including 
  interest-bearing and noninterest bearing accounts, passbook savings and
  certain types of money market accounts are, by definition, equal to the
  amount payable on demand at the reporting date (i.e. their carrying 
  amounts).  Fair values for fixed-rate certificates of deposit are 
  estimated using a discounted cash flow calculation that applies interest
  rates currently offered on certificates to a schedule of aggregated
  expected monthly maturities on time deposits.  The carrying amount of 
  accrued interest payable approximates fair value.

  FHLB Advances:  The fair value of the Company's borrowed funds are
  estimated using discounted cash flow analysis based on the Company's 
  current incremental borrowing rates for similar types of borrowing   
  arrangements.

  Off-balance-sheet instruments:  Fair values of off-balance-sheet
  instruments (loan commitments) are based on quoted rates and fees 
  currently charged to enter into similar agreements, taking into account
  the counterparties' credit standing.  The terms of loan commitments
  outstanding at December 31, 1998 are comparable to terms available for 
  new commitments at that date.

                                  (Page 31)

Eagle BancGroup, Inc. and Subsidiary
                   Notes to Consolidated Financial Instruments
<TABLE>
The estimated fair values of the Company's financial instruments
are as follows:
<CAPTION>
                                                December 31, 	
                                          1998                 1997  		
                                  Carrying     Fair    Carrying     Fair 	
                                   Amount     Value     Amount     Value 	
                                           (Dollars in thousands) 		
<S>                              <C>       <C>        <C>       <C>
Assets: 								
  Cash on hand and in other 
    institutions                  $  1,084  $  1,084   $  1,628  $  1,628 
  Federal funds sold and 
    overnight deposits               7,653     7,653      3,386     3,386 
  Investment securities, 
    mortgage-backed securities 
    and FHLB stock                  49,822    49,822     38,943    38,943 
  Loans, net                       116,551   117,863    122,409   123,141 

Liabilities: 					
  Deposits                        $134,091  $135,072   $131,452  $131,744 
  Borrowed funds                    25,000    24,938     18,000    17,811 
</TABLE>
                                  -Page 123-

Note 11. SAIF Recapitalization
The Economic Growth and Regulation Paperwork Reduction Act of 1996 (the "Act") 
was signed into law on September 30, 1996.  The Act included a provision to 
bring the Savings Association Insurance Fund ("SAIF") reserve ratio to the 
statutory minimum of 1.25% of insured deposits through a one-time special
assessment on SAIF members.  In November, 1996, savings institutions paid an 
assessment of $0.657 per $100 of deposits as of March 31, 1995.  First 
Federal's special assessment amounted to $875,000.  Net of tax, 1996 earnings 
were reduced $600,000.  In 1997, deposit insurance premium rates were lower
than in previous years as only the amount necessary to maintain the statutory 
minimum SAIF reserve ratio was paid.

Note 12. Commitments and Contingencies
In the normal course of business, there are outstanding various contingent 
liabilities such as claims and legal actions, which are not reflected in the 
consolidated financial statements.  In the opinion of management, the ultimate 
resolution of these matters is not expected to have a material effect on the
consolidated financial statements.

First Federal is party to financial instruments with off-balance-sheet risk in 
the normal course of business to meet the financing needs of its customers.  
These financial instruments include commitments to extend credit, standby
letters of credit, and financial guarantees.  Those instruments involve, to 
varying degrees, elements of credit and interest rate risk.  The contract or 
notional amounts of those instruments reflect the extent of involvement First 
Federal has in particular classes of financial instruments.  First Federal's
exposure to credit loss, in the event of nonperformance by the other party to 
the financial instruments for commitments to extend credit and standby letters 
of credit, is represented by the contractual notional amount of those 
instruments.  First Federal uses the same credit policies in making 
commitments and conditional obligations as it does for on-balance-sheet
instruments.
                                  (page 32)
First Federal had outstanding commitments to originate new loans totaling 
approximately $479,000 and $567,000 at December 31, 1998 and 1997, 
respectively.  In addition, First Federal committed to approximately 
$8,826,000 and $2,841,000 of lines of credit, which were undrawn at December
31, 1998 and 1997, respectively.  Such commitments are recorded in the 
financial statements when they are funded or related fees are incurred or
received.  These commitments are principally at variable interest rates.

The Company and First Federal do not engage in the use of interest rate 
swaps, futures, forwards, or option contracts.
                                
Note 13. Quarterly Financial Data (Unaudited)
<TABLE>
Summarized quarterly financial data for 1998 and 1997 follows:
<CAPTION>
                                  First      Second     Third      Fourth 	
                                 Quarter    Quarter    Quarter    Quarter 	
                                    (in thousands except per share data)
<S>                            <C>       <C>        <C>        <C>
1998
Operating summary: 								
  Interest income               $  3,093   $  3,104   $  3,067   $  3,198 
  Interest expense                 2,057      2,052      2,045      2,054 
    Net interest income            1,036      1,052      1,022      1,144 
  Provision for loan losses           60         60         60         60 
                                  -Page 124-
    Net interest income after 						
      provision for loan losses      976        992        962      1,084 
  Non-interest income                319        333        396        664 
  Non-interest expense               984      1,000      1,048      1,274 
   (Loss) income before income tax   311        325        310        474 
  Income tax (benefit) expense       110        123        200        171 
    Net (loss) income           $    201   $    202   $    200   $    303 

Per share data: 								
  Basic earnings per share      $   0.18   $   0.19   $   0.19   $   0.29 
  Diluted earnings per share        0.18       0.18       0.19       0.28 
  Dividends paid                    0.00       0.00       0.00       0.10
  Book value                       17.56      17.82      18.17      18.24 

Selected balance sheet averages: 								
  Assets                        $177,718   $177,867   $175,122   $180,591
  Investment securities           49,225     54,180     52,416     51,527 
  Loans                          122,423    118,059    117,380    123,145 
  Interest bearing deposits      131,517    132,028    133,237    134,596 
  Borrowed funds                  23,623     22,967     20,000     24,782
  Stockholders' equity            20,508     20,834     20,387     19,945
</TABLE>
                                  (page 33)

Eagle BancGroup,Inc. and Subsidiary
                   Notes to Consolidated Financial Statements
<TABLE>
                                  First      Second     Third      Fourth 	
                                 Quarter    Quarter    Quarter    Quarter 	
                                    (in thousands except per share data)
<S>                            <C>        <C>        <C>        <C>
1997				
Operating summary: 								
  Interest income               $  2,974   $  3,140   $  3,134   $  3,078 
  Interest expense                 1,963      2,040      2,085      2,033 
    Net interest income            1,011      1,100      1,049      1,045 
  Provision for loan losses           60         60         60         60 
    Net interest income after 						
      provision for loan losses      951      1,040        989        985 
  Non-interest income                 99        161        156        160 
  Non-interest expense               859        944        988        977 
    Income before income tax         191        257        157        168 
  Income tax expense                  65         87         53         59 
    Net income                  $    126   $    170   $    104   $    109 

Per share data: 								
  Basic earnings per share      $   0.10   $   0.15   $   0.09   $   0.10 
  Diluted earnings per share        0.10       0.15       0.09       0.10 
  Book value                       16.28      16.69      17.03      17.24 

Selected balance sheet averages: 								
  Assets                        $170,518   $172,839   $173,427   $172,748 
  Investment securities           54,066     49,938     46,773     42,107 
  Loans                          109,913    117,431    121,948    122,684 
  Interest bearing deposits      132,474    131,221    131,660    130,711 
  Borrowed funds                  13,897     18,406     21,220     18,015 
  Stockholders' equity            21,513     20,584     20,438     20,301 
</TABLE>
                                    (Page 34)
                                  -Page 125-

Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements

Note 14. Parent Company Information
<TABLE>
Consolidated financial information for Eagle BancGroup, Inc.
(parent company only) follows:
<CAPTION>
                                                      December 31, 
                                                    1998        1997
                                                 (Dollars in thousands)
<S>                                             <C>          <C>
Condensed statements of condition
Assets: 				
  Cash on deposit with bank subsidiary           $   607      $    89 
  Investment securities available for sale 
    at fair value, cost, $738 in 1998; 
    $2,630 in 1997                                   690        2,649 
  Investment in subsidiary                        17,024       16,722 
  Loans, net                                       2,214            -     
  First Federal ESOP loan                            730          834
  Real estate owned                                  667            - 
  Other assets                                        72           22
    Total assets                                 $22,004      $20,316 

Liabilities and stockholders' equity: 				
  Liabilities                                    $ 2,307      $    11 
  Stockholders' equity                            19,697       20,305 
    Total liabilities and stockholders' equity   $22,004      $20,316 
</TABLE>
<TABLE>
                                              Year Ended December 31,
                                            1998       1997       1996
                                               (Dollars in thousands)
<S>                                       <C>        <C>        <C>
Condensed statements of income
Interest income on loans                   $  51      $   -      $   -
Interest income on investments               111        204        154
Interest income on ESOP loan                  69         77         43
  Total interest income                      231        281        197
						
Non-interest income                           10          5          9
Non-interest expense                         122        146         15
  Total non-interest expense                (112)      (141)        (6)
    Income before income tax expense         119        140        191
Income tax expense                            41         47         65
  Income before equity in undistributed 						
    net income (loss) of subsidiary           78         93        126
Equity in undistributed net income
  (loss) of subsidiary                       828        416       (615)
  Net income (loss)                        $ 906      $ 509      $(489)
</TABLE>
                                (Page 35)
Eagle BancGroup, Inc. and Subsidiary
              Notes to Consolidated Financial Statements                  
<TABLE>
                                                  Year Ended December 31, 
                                                  1998      1997      1996
                                                  (Dollars in thousands)
<S>                                            <C>       <C>      <C>
Condensed statements of cash flows  
Operating activities: 						
  Net income (loss)                             $  906    $  509    $ (489)
                                  -Page 126-
  Adjustments to reconcile net income 
 (loss) to net cash provided by 
  operating activities: 						
    Amortization of investment premiums 
      and discounts, net                            (1)       (2)        -
    Gains on securities sold, net                  (10)       (5)        -
    Undistributed (earnings) loss of
      Subsidiary                                  (828)     (416)      615	 
    Release of ESOP shares                          94        96         -
    Allocation of MDRP shares                      192       123         -
    Decrease (increase) in interest receivable      15        34      (105) 
   (Decrease) in other assets                      (65)      (33)        -
   (Decrease) increase in other liabilities      2,346        (7)       61
      Net cash provided by operating activities  2,649       299        82	
		
Investing activities: 						
  Purchases of available for sale securities      (638)   (2,133)   (6,030) 
  Proceeds from sale of available for sale 
    securities                                   2,510     3,536     2,036
  Loan originations and purchases               (2,225)        -         -
  Principal collected on loans                      11         -         -
  Loan to ESOP for stock purchase                    -         -    (1,042) 
  Loan repayment                                   104       208         -
  Purchase of real estate held for investment      (25)        -         -
    Net cash provided by (used in) 
      investing activities                        (263)    1,611    (5,036)	
		
Financing activities: 						
  Purchase MDRP stock                                -      (840)        -
  Purchase of treasury stock                    (1,762)   (2,055)        -   
  Proceeds from sale of common stock                 -         -    12,228   
  Purchase of First Federal common stock             -         -    (6,200)
  Dividends paid                                  (108)        -         -
    Net cash (used in) provided by 
      financing activities                      (1,870)   (2,895)    6,028	
		
(Decrease) increase in cash and 
  cash equivalents                                 516      (985)    1,074	
		
Cash and cash equivalents: 						
  Beginning of year                               89      1,074          -	
  End of year                                 $  605     $   89     $1,074
</TABLE>
                                (Page 36)

Eagle BancGroup, Inc. and Subsidiary
                   Other Corporate Information
Directors -               Senior Officers-         Annual Meeting
Eagle BancGroup, Inc.     First Federal Savings    The annual meeting of
Gerald A. Bradley         Donald L. Fernandes      stockholders of Eagle Banc-
Chairman of the Board     Chairman and Chief       Group, Inc. will be held at
Owner, Bloomington Tent   Executive Officer        10:00am (CDT) on Wednesday,
and Awning Company                                 April 21, 1999 at The Best
Bloomington, Illinois     David R. Wampler         Western Eastland Suites
                          President                Conference Center,
                                                   Bloomington, Il.
                                  -Page 127-
Robert P. Dole                                     
Retired President,        Gary Richardson          
National Union            Vice President-Lending   Form 10-K Report
Electric Corporation                               Single copies of Eagle
Normal, Illinois          Larry C. McClellan       BancGroup, Inc.'s 1998 
                          Vice President-          Annual Report on Form 10-K, 
Louis F. Ulbrich          Operations               as filed with the 
Attorney-at-law, Retired                           Securities and Exchange
Bloomington, Illinois     Donald L. Lambert        Commission, are available 
                          Vice President-          at no charge.  Contact
William J. Hanfland       Retail Banking Services  Marilyn Lockwood, Asst. 
Assistant Treasurer,                               Secretary,
Illinois Agricultural     James E. Lyons           Eagle BancGroup, Inc.
Association               Vice President-Finance   301 Fairway Drive  
Bloomington, Illinois                              Bloomington, IL 61701
                          Corporate Headquarters   or phone (309)663-6345. 
Steven J. Wannemacher     Eagle BancGroup, Inc. 
Executive Vice President  301 Fairway Drive        Common Stock -
Heritage Enterprises,Inc. P.O. Box 429             Market Information
Bloomington, Illinois     Bloomington, IL 61701    The Company's common stock
                          Telephone (309)663-6345  trades on The Nasdaq Stock
Donald L. Fernandes       Facsimile (309)663-8763  Market under the symbol
President and                                      EGLB. At December 31, 1998, 
Chief Executive Officer,  Corporate Attorneys      there were 1,080,108 shares
Eagle BancGroup, Inc.     Schiff Hardin & Waite    of the Company's common 
                          7200 Sears Tower         stock issued and outstand- 
David R. Wampler          Chicago, Illinois 60606  ing and there were approxi-
Vice President                                     mately 400 holders of rec-
Eagle BancGroup, Inc.     Independent Auditors     ord and beneficial holders.
Bloomington, Illinois     McGladrey & Pullen, LLP  The high and low sales 
                          401 Main Street          price of the Company's
Officers-                 Peoria, Illinois 61602   common stock for the four
Eagle BancGroup, Inc.                              quarters ended March 31, 
Donald L. Fernandes       Transfer Agent and       June 30, September 30 and 
President and               Registrar              December 31, 1998, as pro-
Chief Executive Officer   Registrar and Transfer   by Masdaq, are as follows:
                            Company                Quarter Ended  High   Low
David R. Wampler          10 Commerce Drive        Mar 31, 1998  21.125 19.250 
Vice President            Cranford, New Jersey     Jun 30, 1998  21.125 19.125
                            07016                  Sep 30, 1998  19.250 14.000
Louis F. Ulbrich          (908)497-2300            Dec 30, 1998  21.000 13.000
Secretary                                          The Company declared its
                                                   First dividend in December
                                                   1998. For information re-
                                                   garding restrictions on di-
                                                   vidend payments, see Note 8
                                                   of the Notes to Consolidat-
                             (page 37)             ed Financial Statements.