INDEPENDENT AUDITOR'S REPORT
                                
  
  To the Board of Directors
  Orange National Bancorp
  Orange, California
  
  
  We have audited the accompanying consolidated balance sheets of Orange
  National Bancorp and subsidiary as of December 31, 1996 and 1995, and the
  related consolidated statements of income, stockholders' equity and cash
  flows for each of the three years in the period ended December 31, 1996. 
  These financial statements are the responsibility of the Company's
  management.  Our responsibility is to express an opinion on these
  financial statements based on our audits.
  
  
  We conducted our audits in accordance with generally accepted auditing
  standards.  Those standards require that we plan and perform the audit to
  obtain reasonable assurance about whether the financial statements are
  free of material misstatement.  An audit includes examining, on a test
  basis, evidence supporting the amounts and disclosures in the financial
  statements.  An audit also includes assessing the accounting principles
  used and significant estimates made by management, as well as evaluating
  the overall financial statement presentation.  We believe that our audits
  provide a reasonable basis for our opinion.
  
  
  In our opinion, the consolidated financial statements referred to above
  present fairly, in all material respects, the financial position of Orange
  National Bancorp and subsidiary as of December 31, 1996 and 1995, and the
  results of their operations and their cash flows for each of the three
  years in the period ended December 31, 1996, in conformity with generally
  accepted accounting principles.
  
  
  
  
  
  
  
  
  
  Anaheim, California
    January 17, 1997<PAGE>
    ORANGE NATIONAL BANCORP CONSOLIDATED BALANCE SHEETS
                  December 31, 1996 and 1995
<TABLE>
<CAPTION>
<S>                                                      <C>          <C>                               
                                      ASSETS                                          1996      1995
Cash and due from banks (Note 2)                 $19,635,829    $22,929,660
Securities (Note 3):
     Held-to-maturity securities (fair value 1996 $11,018,288; 1995 $12,595,011)
                                                  11,111,231     12,652,817
     Available-for-sale securities                28,899,373     26,908,298
Federal funds sold                                26,800,000     18,500,000
Loans, net of allowance for credit losses 1996 $1,369,288; 1995 $1,512,544 
     (Notes 4, 5 and 12)                         118,991,170    112,724,034
Bank premises and equipment, net (Note 6)          5,212,594      5,526,577
Other real estate owned, net (Note 5)              2,445,955      3,784,482
Accrued interest receivable                        1,352,331      1,167,707
Cash value of life insurance                       3,717,225      3,514,896
Other assets (Note 8)                                               679,661   219,553
                                                 218,845,369    207,928,024

LIABILITIES AND STOCKHOLDERS' EQUITY

Liabilities
     Deposits (Note 7):
          Noninterest bearing demand             $77,828,911    $70,237,126
          Interest bearing:
               Demand                             92,176,073     91,698,505
               Savings                            10,935,397     12,456,884
               Time certificates of deposits of $100,000 or more
                                                   8,808,554      6,632,038
               Other time                          8,614,818      7,966,817

                    Total deposits               198,363,753    188,991,370

Accrued interest payable and other liabilities     1,525,629      1,674,757

                    Total liabilities            199,889,382    190,666,127

Commitments and Contingencies (Notes 9 and 11)

Stockholders' Equity (Notes 10 and 13)
     Common stock, no par value or stated value; 20,000,000 shares authorized; 
          1996 1,952,671; 1995 1,933,571 issued and outstanding
                                                   7,675,505      7,509,888
     Retained earnings                            11,403,180      9,920,549
     Unrealized (loss) on available-for-sale securities, net (Note 3)
                                                   (122,698)      (168,540)

          Total stockholders' equity              18,955,987     17,261,897
                                                 218,845,369    207,928,024
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
ORANGE NATIONAL BANCORPCONSOLIDATED STATEMENTS OF INCOME
Years Ended December 31, 1996, 1995 and 1994
                                         1996           1995           1994
<TABLE>
<CAPTION>
<S>                                       <C>            <C>            <C>
Interest Income
     Loans                        $11,712,351    $12,953,799    $11,479,904
     Securities                     2,627,308      2,470,549      1,605,738
     Federal funds sold             1,554,410      1,146,474        821,864

          Total interest income    15,894,069     16,570,822     13,907,506

Interest Expense, deposits          3,519,428      3,140,658      2,507,412

          Net interest income      12,374,641     13,430,164     11,400,094
Provision for Credit Losses (Note 5)  205,000        320,000        297,907

Net interest income after provision for credit losses
                                   12,169,641     13,110,164     11,102,187
Other Income
     Service charges on deposit accounts
                                    1,169,304      1,112,918      1,173,022
     Fees for other customer services 616,357        666,802        718,236
     Gain on sale of loans            560,372        754,766        651,620
     Increase in cash value of life insurance
                                      183,113              -              -
     Other                                           184,240        246,290    68,916
                                    2,713,386      2,780,776      2,611,794
Other Expenses
     Salaries, wages and employee benefits
                                    6,097,983      6,251,351      6,148,077
     Occupancy expense (Note 9)     1,153,417      1,104,460      1,106,871
     Data processing expense (Note 9) 927,501      1,069,909      1,154,260
     Furniture and equipment expense  633,424        706,584        572,628
     Promotion expense                429,421        467,519        366,318
     Legal and professional services  626,664        507,354        603,782
     Insurance                        181,759        427,928        592,694
     Stationery and supplies          248,923        278,925        252,576
     Telephone and postage            382,624        373,674        344,234
     Other real estate owned (Note 5) 217,147        424,907        160,675
     Other                                           648,063        574,839   659,748
                                   11,546,926     12,187,450     11,961,863
          Income from continuing operations before income taxes
                                    3,336,101      3,703,490      1,752,118

Income tax expense (Note 8)         1,135,052      1,179,000        692,200

          Income from continuing operations
                                    2,201,049      2,524,490      1,059,918
Loss from discontinued operations (Note 17)
                                            -              -        224,432
          Net income (Note 10)     $2,201,049     $2,524,490       $835,486
Earnings per share from continuing operations
                                        $1.13          $1.30          $0.55
Earnings per share                      $1.13          $1.30          $0.43
Weighted average number of shares
                                    1,951,276      1,941,286      1,931,072
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
 ORANGE NATIONAL BANCORP CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY
               Years Ended December 31, 1996, 1995 and 1994
<TABLE>
<CAPTION>                                                                      Unrealized
                                                                   Gain(Loss) on
                                                                      Available-
                                             Common Stock   Retained    For-Sale
                                  Shares    Amount  Earnings          Securities     Total


<S>                               <C>         <C>               <C>       <C>          <C>
Balance, December 31, 1993    $1,839,116   $6,848,120     $7,770,163  $(75,089)$14,543,194

Net income                                       -         - 835,486           -   835,486

Cash dividend paid($.05 per share)               -         -(91,956)           -  (91,956)

Net change in unrealized (loss) on available-for- sale securities (Note 3)
                                             -         -         -     (504,522) (504,522)


Balance, December 31, 1994     1,839,116    6,848,120      8,513,693   (579,611)14,782,202

                                     -         -           2,524,490         -   2,524,490

Cash dividend paid($.25 per share)   -         -           (473,943)         -    (473,943)

Stock dividend paid(5% per share) 91,955      643,691      (643,691)       -           -

Exercise of stock options          2,500       18,077         -               -     18,077

Net change in unrealized(loss) on available- for-sale securities (Note 3)
                                       -         -         -            411,071    411,071


Balance, December 31, 1995     1,933,571    7,509,888     9,920,549    (168,540)17,261,897

Net income                            -         -         2,201,049         -    2,201,049

Cash dividend paid ($.37 per share)   -         -          (718,418)         -   (718,418)

Exercise of stock options         19,100   165,617         -       -     165,617

Net change in unrealized (loss) on available- for-sale securities (Note 3)
                                      -         -         -               45,842   45,842


Balance, December 31, 1996    $1,952,671 $7,675,505       $11,403,180$(122,698)$18,955,987

</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
      ORANGE NATIONAL BANCORP CONSOLIDATED STATEMENTS OF CASH FLOWS
              Years Ended December 31, 1996, 1995 and 1994
                                              1996          1995            1994
<TABLE>
<CAPTION>
<S>                                           <C>            <C>            <C>
Cash Flows from Operating Activities
     Net income                         $2,201,049     $2,524,490       $835,486
     Adjustments to reconcile net income to net cash 
     provided by operating activities:
          Depreciation and amortization                   537,133        535,474   448,448
          Provision for credit losses                     205,000        320,000   297,907
          Deferred income taxes (benefits)(78,000)      (309,000)        338,000
          (Gain) on sale of loans        (560,372)      (754,766)      (759,837)
          Provision for other real estate owned
                                           160,217        303,561         31,612
          Proceeds from loan sales                      5,984,015      5,428,82219,073,450
          Originations of loans held for sale
                                                      (5,423,643)    (4,674,056)   (18,313,613)
          (Increase) decrease in other assets
                                         (797,795)        263,699      1,627,086
          Increase in other liabilities                   434,870        398,577   137,036
          Net cash provided by operating activities     2,662,474      4,036,801 3,715,575
Cash Flows from Investing Activities
     Net (increase) decrease in interest bearing deposits
     in other financial institutions                            -              -   198,000
     Purchase of securities to be held-to-maturity
                                                 -              -   (11,090,000)
     Proceeds from maturities of securities held-to-maturity
                                         1,541,586      4,400,000      5,090,000
     Purchase of available-for-sale securities
                                                     (38,481,479)   (16,883,874)    (7,829,879)
     Proceeds from sales of available-for-sale securities
                                        36,564,980     14,748,366              -
     Change in loans made to customers, net
                                                      (7,273,917)    (3,261,938)    (1,301,330)
     Net (increase) decrease in federal funds sold
                                                      (8,300,000)      9,715,000   800,000
     Purchase of life insurance                  -    (3,514,896)              -
     Proceeds from sale of other real estate owned
                                         1,396,093        841,043              -
     Purchases of bank premises and equipment                    
                                         (223,150)      (675,372)      (315,431)
          Net cash provided by (used in)investing activities
                                                     (14,775,887)      5,368,329   (14,448,640)
Cash Flows from Financing Activities
     Net increase (decrease) in deposits                9,372,383    (1,414,483)12,834,554
     Proceeds from exercise of stock options
                                          165,617         18,077         -
     Cash dividends paid                 (718,418)      (473,943)       (91,956)
          Net cash provided by (used in)financing activities
                                         8,819,582    (1,870,349)     12,742,598
          Increase (decrease) in cash and due from banks
                                        (3,293,831)    7,534,781       2,009,533
Cash and Due from Banks
     Beginning                          22,929,660     15,394,879     13,385,346

     Ending                            $19,635,829    $22,929,660    $15,394,879
</TABLE>
See Notes to Consolidated Financial Statements.
<PAGE>
               NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
  
  Note 1. Nature of Banking Activities and Summary of Significant
  Accounting Policies
  
  Nature of operations:  Orange National Bancorp is a bank holding company
  which provides a full range of banking services to its commercial and
  consumer customers through six branches located in Orange County,
  California.
  
  The Company grants commercial, residential and consumer loans to
  customers, substantially all of whom are middle-market businesses or
  residents.  The Company's business is concentrated primarily in Orange
  County, California, and the loan portfolio includes a significant credit
  exposure to the real estate industry and local economy of this area.  As
  of December 31, 1996, real estate related loans accounted for
  approximately 55% of total loans.  Substantially all of these loans are
  secured by first liens with an initial loan to value ratio of generally
  not more than 75%.
  
  The loans are expected to be repaid from cash flows or proceeds from the
  sale of selected assets of the borrowers.  The Company's policy requires
  that collateral be obtained on substantially all loans.  Such collateral
  is primarily first trust deeds on property.
  
  Use of estimates in the preparation of financial statements:  The
  preparation of financial statements in conformity with generally accepted
  accounting principles requires management to make estimates and
  assumptions that affect the reported amounts of assets and liabilities and
  disclosures of contingent assets and liabilities at the date of the
  financial statements and the reported amounts of revenues and expenses
  during the reporting period.  Actual results could differ from those
  estimates.
  
  Principles of consolidation:  The consolidated financial statements
  include the accounts of Orange National Bancorp and its wholly-owned
  subsidiary Orange National Bank (Bank).  These entities are collectively
  referred to herein as the Company.  All significant intercompany balances
  and transactions have been eliminated in consolidation.
  
  Cash and due from banks and federal funds sold:  For purposes of reporting
  cash flows, cash and due from banks includes cash on hand and amounts due
  from banks.  Cash flows from loans originated by the Company, deposits and
  federal funds sold are reported net.
  
  The Company maintains amounts due from banks which exceed federally
  insured limits.  In addition, federal funds sold were placed with two
  financial institutions.  The Company has not experienced any losses in
  such accounts.
  
  Held-to-maturity securities:  Securities classified as held-to-maturity
  are those debt securities the Company has both the intent and ability to
  hold to maturity regardless of changes in market conditions, liquidity
  needs or changes in general economic conditions.  These securities are
  carried at cost adjusted for amortization of premiums and accretion of
  discounts, computed by the interest method over their contractual lives. 
  The sale of a security within three months of its maturity date or after
  at least 85% of the principal outstanding has been collected is considered
  a maturity for purposes of classification and disclosure.
<PAGE>
Note 1. Nature of Banking Activities and Summary of Significant Accounting
  Policies             (Continued)
  
  Available-for-sale securities:  Securities classified as
  available-for-sale are those debt securities that the Company intends to
  hold for an indefinite period of time, but not necessarily to maturity. 
  Any decision to sell a security classified as available-for-sale would be
  based on various factors, including significant movements in interest
  rates, changes in the maturity mix of the Company's assets and
  liabilities, liquidity needs, regulatory capital considerations, and other
  similar factors.  Securities available-for-sale are carried at fair value. 
  Unrealized gains or losses, net of the related deferred tax effect, are
  reported as increases or decreases in stockholders' equity.  Realized
  gains or losses, determined on the basis of the cost of specific
  securities sold, are included in earnings.
  
  Transfers:  Transfers of debt securities into the held-to-maturity
  classification from the available-for-sale classification are made at fair
  value on the date of transfer.  The unrealized holding gains or losses on
  the date of transfer are retained as a separate component of stockholders'
  equity and in the carrying value of the held-to-maturity securities.  Such
  amounts are amortized over the remaining contractual lives of the
  securities by the interest method.
  
  Loans:  Loans are stated at the amount of unpaid principal, reduced by
  unearned fees and allowance for credit losses.
  
  The allowance for credit losses is established through a provision for
  credit losses charged to expense.  Loans are charged against the allowance
  for credit losses when management believes that collectibility of the
  principal is unlikely.  The allowance is an amount that management
  believes will be adequate to absorb estimated losses on existing loans
  that may become uncollectible, based on evaluation of the collectibility
  of loans and prior loan loss experience.  This evaluation also takes into
  consideration such factors as changes in the nature and volume of the loan
  portfolio, overall portfolio quality, review of specific problem loans,
  and current economic conditions that may affect the borrower's ability to
  pay.  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 or other conditions.  In addition, the
  Office of the Comptroller of the Currency, as an integral part of their
  examination process, periodically reviews the Company's allowance for
  credit losses, and may require the Company to make additions to the
  allowance based on their judgment about information available to them at
  the time of their examinations.
  
  A loan is impaired when it is probable the creditor will be unable to
  collect all contractual principal and interest payments due in accordance
  with the terms of the loan agreement.  Impaired loans are measured based
  on the present value of expected future cash flows discounted at the
  loan's effective interest rate or, as a practical expedient, at the loan's
  observable market price or the fair value of the collateral if the loan is
  collateral dependent.  The amount of impairment, if any, and any
  subsequent changes are included in the allowance for credit losses.
<PAGE>
Note 1. Nature of Banking Activities and Summary of Significant
  Accounting Policies            (Continued)
  
  Interest and fees on loans:   Interest on loans is recognized over the
  terms of the loans and is calculated using the simple-interest method on
  principal amounts outstanding.  The accrual of interest on loans is
  discontinued when, in management's opinion, the borrower may be unable to
  meet payments as they become due.  When interest accrual is discontinued,
  all unpaid accrued interest is reversed.  Generally, interest income is
  not subsequently recognized until all principal amounts are received.
  
  Loan origination and commitment fees and certain direct loan origination
  costs are deferred and the net amount amortized as an adjustment of the
  related loan's yield.  The Company is generally amortizing these amounts
  over the contractual life.
  
  Sale of loans:  The Company sells the guaranteed portion of small business
  administration loans in the secondary market to provide funds for
  additional lending and to generate servicing income.  Under such
  agreements, the Company continues to service that loans and the buyer
  receives the principal collected together with interest.  Loans held for
  sale are valued at the lower of cost or market value.
  
  Gains and losses on sales of loans are calculated on a predetermined
  formula in compliance with Emerging Issues Task Force Issue No. 88-11
  based on the difference between the selling price and the book value of
  the loans sold.  Any inherent risk of loss on loans is transferred to the
  buyer at the date of sale on the portion of the loan sold.  However, the
  Company maintains the risk on the portion retained.
  
  The Company has issued various representations and warranties associated
  with the sale of loans.  These representations and warranties may require
  the Company to repurchase loans for a period of 90 days after the date of
  sale as defined per the applicable sales agreement.  The Company
  experienced no losses during the years ended December 31, 1996 and 1995
  regarding these representations and warranties.
  
  Premises and equipment:  Premises and equipment are stated at cost less
  accumulated depreciation and amortization.  Depreciation is computed
  principally by the straight-line method over the following estimated
  useful lives:  Buildings and leasehold improvements -- 4 to 28 years;
  equipment and furnishings -- 5 to 10 years.
  
  Improvements to leased property are amortized over the lesser of the term
  of the lease or life of the improvements.
  
  Other real estate owned:  Other real estate owned (OREO) represents
  properties acquired through foreclosure or other proceedings.  OREO is
  held for sale and is recorded at the lower of the carrying amounts of the
  related loans or the estimated fair value of the properties less estimated
  costs of disposal. Any write-down to estimated fair value less cost to
  sell at the time of transfer to OREO is charged to the allowance for
  credit losses.  Property is evaluated regularly by management and
  reductions of the carrying amount to estimated fair value less estimated
  costs to dispose are recorded as necessary.  Depreciation is recorded
  based on the recorded amount of depreciable assets after they have been
  owned for one year.  Depreciation and additions to or reductions from
    valuation allowances are recorded in income.
<PAGE>
Note 1. Nature of Banking Activities and Summary of Significant
  Accounting Policies            (Continued)
  
  Income taxes:  Deferred taxes are provided on an asset and liability
  method whereby deferred tax assets are recognized for deductible temporary
  differences and operating loss and tax credit carryforwards and deferred
  tax liabilities are recognized for taxable temporary differences. 
  Temporary differences are the differences between the reported amounts of
  assets and liabilities and their tax bases.  Deferred tax assets are
  reduced by a valuation allowance when management determines that it is
  more likely than not that some portion or all of the deferred tax assets
  will not be realized.  Deferred tax assets and liabilities are adjusted
  for the effects of changes in tax laws and rates on the date of enactment. 
  
  
  Off-balance sheet instruments:  In the ordinary course of business, the
  Company has entered into off-balance sheet financial instruments
  consisting of commitments to extend credit, commercial letters of credit
  and standby letters of credit.  Such financial instruments are recorded in
  the financial statements when they are funded.
  
  Fair value of financial instruments:  Management uses its best judgment in
  estimating the fair value of the Company's financial instruments; however,
  there are inherent weaknesses in any estimation technique.  Therefore, for
  substantially all financial instruments, the fair value estimates
  presented herein are not necessarily indicative of the amounts the Company
  could have realized in a sales transaction at either December 31, 1996 or
  1995.  The estimated fair value amounts for 1996 and 1995 have been
  measured as of their respective year ends, and have not been reevaluated
  or updated for purposes of these consolidated financial statements
  subsequent to those respective dates.  As such, the estimated fair values
  of these financial instruments subsequent to the respective reporting
  dates may be different than the amounts reported at each year-end.
  
  The information in Note 15 should not be interpreted as an estimate of the
  fair value of the entire Company since a fair value calculation is only
  required for a limited portion of the Company's assets.  This disclosure
  of fair value amounts does not include the fair values of any intangibles,
  including core deposit intangibles or mortgage servicing rights.  Due to
  the wide range of valuation techniques and the degree of subjectivity used
  in making the estimate, comparisons between the Company's disclosures and
  those of other banks may not be meaningful.
  
  The following methods and assumptions were used by the Company in
  estimating the fair value of its financial instruments:
  
   Cash and short-term instruments:  The carrying amounts reported in
     the consolidated balance sheets for cash and due from banks,
     interest bearing deposits and federal funds sold approximate their
     fair values.
  
   Securities:  Fair values for securities are based on quoted market
     prices when available.  For certain mortgage backed securities, the
     Company utilizes a broker to determine fair value.  This broker
     obtains estimates of fair value from up to three pricing services
     which estimate fair value through a mapping process to other
     mortgage pools adjusted for interest rate, maturity, etc.  There is
     no guarantee that the prices obtained for these methods can be
          realized upon ultimate sale of the security.
<PAGE>
Note 1. Nature of Banking Activities and Summary of Significant
     Accounting Policies              (Continued)
  
   Loans:  For variable-rate loans that reprice frequently and that
     have experienced no significant change in credit risk, fair values
     are based on carrying values.  At December 31, 1996 and 1995,
     variable rate loans comprised approximately 80% and 85%,
     respectively, of the loan portfolio.  Fair values for all other
     loans are estimated based on discounted cash flows, using interest
     rates currently being offered for loans with similar terms to
     borrowers with similar credit quality.  Prepayments prior to the
     repricing date are not expected to be significant.  Loans are
     expected to be held-to-maturity and any unrealized gains or losses
     are not expected to be realized.
  
   Off-balance sheet instruments:  Fair values for off-balance sheet
     instruments (guarantees, letters of credit and lending commitments)
     are based on quoted fees currently charged to enter into similar
     agreements, taking into account the remaining terms of the
     agreements and the counterparties' credit standing.
  
   Deposit liabilities:  Fair values disclosed for savings and demand
     deposits equal their carrying amounts, which approximate the amount
     payable on demand.  The carrying amounts for variable-rate money
     market accounts and certificates of deposit approximate their fair
     values at the reporting date.  Fair values for fixed-rate
     certificates of deposit are estimated using a discounted cash flow
     calculation that applies interest rates currently being offered on
     certificates to a schedule of aggregate expected monthly maturities
     on time deposits.  Early withdrawals of fixed-rate certificates of
     deposit are not expected to be significant.
  
   Accrued interest receivable and payable:  The fair values of both
     accrued interest receivable and payable approximate their carrying
     amounts.
  
  Earnings per share:  Earnings per share of common stock are based on the
  weighted average number of common shares and common equivalent shares
  outstanding. 
  
  Financial instruments:  The Company has purchased collateralized mortgage
  obligations (CMO's) which are derivative financial instruments.  These
  financial instruments are held for purposes other than trading.
  
  Current accounting development:  The Financial Accounting Standards Board
  (FASB) has issued Statement No. 125, Accounting for Transfers and
  Servicing of Financial Assets and Extinguishment of Liabilities, which
  becomes effective for transactions occurring after December 31, 1996.  The
  Statement does not permit earlier or retroactive application.  The
  Statement distinguishes transfers of financial assets that are sales from
  transfers that are secured borrowings.  A transferred assets of financial
  assets in which the transferor surrenders control over those assets is
  accounted for as a sale to the extent that consideration other than
  beneficial interests in the transferred assets is received in exchange. 
  The Statement also establishes standards on the initial recognition and
  measurement of servicing assets and other retained interests and servicing
    liabilities, and their subsequent measurement.
<PAGE>
Note 1.      Nature of Banking Activities and Summary of Significant
  Accounting Policies                 (Continued)
  
  Current accounting development (continued):  The Statement requires that
  debtors reclassify financial assets pledged as collateral and that secured
  parties recognize those assets and their obligation to return them in
  certain circumstances in which the secured party has taken control of
  those assets.  In addition, the Statement requires that a liability be
  derecognized only if the debtor is relieved of its obligation through
  payment to the creditor or by being legally released from being the
  primary obligor under the liability either judicially or by the creditor.
  
  In December 1996, FASB issued Statement No. 127 which amended statement
  No. 125 by delaying the effective date of Statement No. 125 for one year
  for certain transactions.
  
  Management does not believe the application of these Statements to
  transactions of the Bank that have been typical in the past will
  materially affect the Bank's financial position and results of operations.
  
  Note 2.         Restrictions on Cash and Due from Banks
  
  The Company is required to maintain reserve balances in cash or on deposit
  with Federal Reserve Banks.  The total of those reserve balances was
  approximately $4,035,000 as of December 31, 1996.
  
  Note 3.         Securities
  
  Carrying amounts and fair values of securities being held-to-maturity as
  of December 31, 1996 and 1995 are summarized as follows:
<TABLE>
<CAPTION>  
                               Amortized          Unrealized     Unrealized           Fair
                                    Cost          Gains              Losses           Values
                                                              1996
<S>                                 <C>              <C>                  <C>            <C>  
Mortgage-backed securities        $10,937,560         -              $(92,943)    $10,844,617
Other                                 173,671         -                        -      173,671

                                  $11,111,231        $-              $(92,943)    $11,018,288

                                                               1995
Mortgage-backed securities        $12,479,146         $5,416         $(63,222)    $12,421,340
Other                                 173,671         -                        -      173,671

                                  $12,652,817         $5,416         $(63,222)    $12,595,011
</TABLE>
  
  Securities being held-to-maturity with a carrying amount of $4,004,227 and
  $4,006,440 at December 31, 1996 and 1995, respectively, were pledged as
  collateral on public deposits and for other purposes as required or
    permitted by law.
<PAGE>
Note 3.   Securities (Continued)
  
  Carrying amounts and fair values of available-for-sale securities as of
  December 31, 1996 and 1995 are summarized as follows:

<TABLE>
<CAPTION>
                               Amortized         Unrealized   Unrealized      Fair
                                    Cost              Gains       Losses    Values


                                  1996
<S>                                 <C>                 <C>          <C>           <C>
U.S. Treasury securities and obligations of other 
U.S. Government corporations and agencies
                             $28,991,728            $44,785   $(137,140)    $28,899,373

                                  1995

U.S. Treasury securities and obligations of other 
U.S. Government corporations and agencies
                             $24,984,083            $72,382   $(142,243)    $24,914,222
Mortgage-backed securities     2,018,380                  -     (24,304)      1,994,076

                             $27,002,463            $72,382   $(166,547)    $26,908,298
</TABLE>
  
  Available-for-sale securities with a carrying amount of $4,001,643 and
  $3,991,010 at December 31, 1996 and 1995, respectively, were pledged as
  collateral on public deposits and for other purposes as required or
  permitted by law.
  
  The amortized cost and fair value of investment securities as of December
  31, 1996 by contractual maturities are shown below.  Maturities may differ
  from contractual maturities in mortgage-backed securities because the
  mortgages underlying the securities may be called or prepaid without any
  penalties.  Therefore, these securities are not included in the maturity
  categories in the following maturity summary:
<TABLE>
<CAPTION>
                                        Held-to-Maturity                Available-for-Sale   
                               Amortized                       Fair    Amortized   Fair
                                    Cost                      Value         Cost   Value
<S>                                             <C>                   <C>           <C>           <C>
Due in one year or less                           $-          $-  $3,998,702 $4,005,120
Due after one year through five years              -           -  16,997,87616,961,740
Due in six years through ten years                 -           -   7,995,150 7,932,513
Mortgage-backed securities                10,937,56   10,844,617         -         -
Other                                        173,671     173,671         -         -

                                         $11,111,231 $11,018,288  $28,991,728    $28,899,373
</TABLE>
  
  Gross realized (losses) from the sale of $20,998,675 and $14,846,582
  available-for-sale securities for the years ended December 31, 1996 and
    1995 was $(23,578) and $(20,075), respectively.
<PAGE>
Note 3.   Securities (Continued)
  
  On March 31, 1994, the Company transferred certain securities from
  available-for-sale to held-to-maturity.  The amortized cost and fair value
  of the securities at the date of the transfer were $5,971,740 and
  $5,701,014 respectively.  Amortized cost of held-to-maturity securities is
  presented net of approximately $111,000 of unrealized loss on the
  securities transferred from available-for-sale.
  
  On December 29, 1995, the Company reassessed the appropriateness of the
  classification of all securities in accordance with the issuance of
  Financial Accounting Standards Board Guide to Implementation of Statement
  No. 115 on Accounting for Certain Investments in Debt and Equity
  Securities.  As a result, the Company transferred debt securities at their
  fair value of $4,995,483 on December 29, 1995 previously classified as
  held-to-maturity into available-for-sale securities and recorded an
  unrealized holding loss of $3,827.
  
  Note 4. Loans
  
  The composition of the Company's loan portfolio is as follows:
  
<TABLE>
<CAPTION>

                                                               1996         1995
<S>                                                            <C>           <C>
Real Estate Loans
     Construction                                        $1,412,112     $243,402
     Commercial                                          64,611,382   61,563,940

                                                         66,023,494   61,807,342
Commercial and industrial loans                          44,765,651   41,686,636
Loans to individuals                                     10,255,452   10,343,229
Other                                                       152,421    1,206,759

                                                        121,197,018  115,043,966
Deduct
Unearned net loan fees and premiums                        (836,560) (807,388)
Allowance for credit losses                                ,369,288)( 1,512,544)

                                                       $118,991,170 $112,724,034<PAGE>
  Note 4. Loans (Continued)
</TABLE>
  <PAGE>

  Impaired loans:
  
  Information about impaired loans as of and for the years ended December
  31, is as follows:
<TABLE>
<CAPTION>

  
                                                               1996         1995

<S>                                                               <C>                 <C>
Loans receivable for which there is a related allowance 
for credit losses                                               $904,337  $1,642,374

Loans receivable for which there is no related allowance 
for credit losses                                                180,181     217,260

     Total impaired loans                                     $1,084,518  $1,859,634

Related allowance for credit losses                             $267,695    $390,031

Average balance (based on month-end balances)                 $1,472,076  $2,634,317

Interest income recognized                                      $140,000    $284,000
</TABLE>
  
  The Company is not committed to lend additional funds to debtors whose
  loans have been modified due to impairment.
  
  As of December 31, 1996 and 1995, the Company had loans totaling
  approximately $2,464,000 and $3,055,000, respectively, on which income was
  not currently being accrued due to their delinquent status.  Interest
  income which would have been earned on such nonaccrual loans was
  approximately $492,000, $205,000 and $169,000 (earnings per share effect
  of $.15, $.06 and $.05) for the years ended December 31, 1996, 1995 and
  1994, respectively.  The Company's policy for requiring collateral is to
  obtain collateral whenever it is available or desirable, depending upon
  the degree of risk the Company is willing to undertake.  Management
  estimates that certain nonaccrual loans, which are not classified as
  impaired, will ultimately be collected in full in accordance with the
  original terms.
  
  Loans serviced:   The Company services approximately $53,374,000 and
  $56,530,000 of loans for others as of December 31, 1996 and 1995,
  respectively, which are not included in the accompanying balance sheets.
  
  Note 5. Allowance for Credit Losses and Reserve for Other Real Estate
  Owned
  
  Changes in the allowance for credit losses are as follows:
<TABLE>
<CAPTION>
  
                                                1996         1995      1994
<S>                                           <C>            <C>            <C>
Balance, beginning                        $1,512,544        465,000   $1,524,329

Provision charged to expense                 205,000        320,000      297,907
Recoveries of amounts charged off             38,427        115,342      131,251
Amounts charged off                         (386,683)      (387,798)    (488,487)

Balance, ending                          $1,369,288      $1,512,544   $1,465,000
</TABLE>
<PAGE>
Note 5.   Allowance for Credit Losses and Reserve for Other Real Estate
  Owned (Continued)
  
  Changes in the reserve for other real estate owned are as follows:
  
<TABLE>
<CAPTION>
                                                1996          1995      1994
<S>                                             <C>            <C>       <C>
Balance, beginning                          $300,684       $31,612        $-

Provision charged to other real estate owned expense
                                             160,217       303,561    31,612
Disposal of other real estate owned         (209,160)      (34,489)         -

Balance, ending                             $251,741      $300,684   $31,612

</TABLE>
Note 6.   Bank Premises and Equipment

The major classes of bank premises and equipment and the total accumulated 
depreciation and amortization are as follows:
<TABLE>
<CAPTION>
                                                1996           1995
<S>                                             <C>             <C>
Land                                      $1,100,000     $1,100,000
Buildings and leasehold improvements       4,472,086      4,384,645
Equipment and furnishings                  3,241,679      3,132,999

                                           8,813,765      8,617,644
Less accumulated depreciation and amortization
                                           3,601,171      3,091,067

                                          $5,212,594     $5,526,577
</TABLE>
Note 7.   Deposits and Concentrations

At December 31, 1996, substantially all certificates of deposits mature within 
one year.

As of December 31, 1996, the Company has deposit concentrations of approximately
 $29,053,000 from five customers.
<PAGE>
Note 8    Income Taxes

The cumulative tax effects of the primary temporary differences are shown in the
following table:

<TABLE>
<CAPTION>

                                                   1996      1995
<S>                                                  <C>       <C>
Deferred Tax Assets
     Credit loss allowances                     $316,000  $378,000
     Deferred compensation accruals              215,000   165,000
     Interest accruals                            90,000    93,000
     Acquired net operating loss carryforward     85,000    94,000
     Unrealized loss on available-for-sale securities
                                                  88,000   118,000
     Other real estate allowance                 105,000   125,000
     State income taxes                          136,000   133,000

Total deferred tax assets                      1,035,000 1,106,000

Deferred tax liability, premises and equipment   678,000   632,000

Subtotal                                         357,000   474,000

Valuation allowance for deferred tax assets            -   165,000

Net deferred tax assets                         $357,000  $309,000
</TABLE>
The Company recorded valuation allowances on deferred tax assets in excess of 
deferred tax liabilities at December 31, 1995, due to the uncertainty of future
 taxable income and reversal patterns of temporary differences.  Management 
believes that the net deferred tax assets, as of December 31, 1996, are more 
likely than not to be realized.

The provision for income taxes charged to operations consists of the following:
<TABLE>
<CAPTION>
                                                1996                        1995      1994
<S>                                              <C>                       <C>
Current tax expense                       $1,213,052                  $1,488,000  $354,200
Deferred tax expense (benefit)              (78,000)                   (309,000)   338,000

                                          $1,135,052                  $1,179,000  $692,200
</TABLE>
<PAGE>
Note 8.   Income Taxes (Continued)

The income tax provision differs from the amount of income tax determined by 
applying the U.S. federal income tax rate to pretax income as follows:

                                                1996           1995      1994
<TABLE>
<CAPTION>
<S>                                             <C>            <C>           <C>
Computed "expected" tax expense           $1,168,000       $1,296,000  $613,200
Increase (decrease) in income taxes resulting from:
     State income taxes, net of federal tax benefit
                                             249,000          278,000   105,000
     Change in valuation allowance          (165,000)        (483,000)  (10,000)
     Cash value of life insurance            (85,000)               -         -
     Other                                   (31,948)          88,000   (16,000)

                                          $1,135,052       $1,179,000  $692,200
</TABLE>
  
  Note 9. Commitments and Contingencies
  
  Contingencies:    In the normal course of business, the Company is
  involved in various legal proceedings.  In the opinion of management, any
  liability resulting from such proceedings would not have a material
  adverse effect on the consolidated financial statements.
  
  Financial instruments with off-balance sheet risk:     The Company 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 and standby
  letters of credit.  They involve, to varying degrees, elements of credit
  risk in excess of amounts recognized on the consolidated balance sheets.
  
  The Company's exposure to credit loss in the event of nonperformance by
  the other parties to the financial instrument for these commitments is
  represented by the contractual amounts of those instruments.  The Company
  uses the same credit policies in making commitments and conditional
  obligations as it does for on-balance sheet instruments.  
  
  A summary of the contract amount of the Company's exposure to off-balance
  sheet risk as of December 31, 1996 and 1995 is as follows:
  
                                          1996                        1995
<TABLE>
<CAPTION>
<S>                                             <C>               <C>
Commitments to extend credit         $26,451,000                 $23,739,000
Standby letters of credit              1,907,000                   1,533,000

                                     $28,358,000                 $25,272,000
</TABLE>
<PAGE>
Note 9.   Commitments and Contingencies (Continued)
  
  Commitments to extend credit:    Commitments to extend credit are agreements
  to lend to a customer as long as there is no violation of any condition
  established in the contract.  Commitments generally have fixed expiration
  dates or other termination clauses and may require payment of a fee. 
  Since many of the commitments are expected to expire without being drawn
  upon, the total commitment amounts do not necessarily represent future
  cash requirements.  The Company evaluates each customer's creditworthiness
  on a case-by-case basis.  If deemed necessary upon extension of credit,
  the amount of collateral obtained is based on management's credit
  evaluation of the counterparty.  Collateral held varies, but may include
  accounts receivable, inventory, property and equipment, and
  income-producing commercial properties.
  
  Standby letters of credit:  Standby letters of credit are conditional
  commitments issued by the Company to guarantee the performance of a
  customer to a third party.  Those guarantees are primarily issued to
  support public and private borrowing arrangements.  The credit risk
  involved in issuing letters of credit is essentially the same as that
  involved in extending loan facilities to customers.  Collateral held
  varies as specified above and is required in instances which the Company
  deems necessary.  At December 31, 1996, substantially all of the standby
  letters of credit were collateralized.
  
  Lease commitments:  The Company leases certain branch facilities and
  equipment from nonaffiliates under operating leases expiring at various
  dates through September 2004.  The following is a schedule of future
  minimum rental payments under these leases:  1997 $465,000; 1998 $367,000;
  1999 $303,000; 2000 $257,000 2001 $262,000; thereafter $698,000; total
  $2,352,000.  Annual rent expense under these leases and other
  month-to-month leases for the years ended December 31, 1996, 1995 and
  1994, was approximately, $790,000, $ 771,000 and $793,000, respectively.
  
  Data processing commitment:  In March 1995, the Company contracted with a
  data processing center to provide computer services.  The contract expires
  in March 2001.  Should the Company terminate the contract prior to the
  expiration date, the Company is subject to a penalty in the amount of 25%
  of the amounts that would have been paid to the center for the remainder
  of the contract term.  The expense under this contract for the year ended
  December 31, 1996 and the nine months ended December 31, 1995 was
  approximately $927,000 and $500,000, respectively.
<PAGE>
Note 10.  Stock Option Plans
  
  The Company maintains a compensatory incentive stock option plan in which
  options to purchase shares of the Company's common stock are granted at
  the Board of Directors' discretion to certain management and other key
  personnel.  The Plan was originally established for a maximum of 193,106
  shares of the Company's common stock.  Purchase prices associated with the
  options range from $5.78 to $9.92 and are based on the fair market value
  of the Company's stock at the time the option is granted.  The options, if
  not exercised, will expire 5 years from the date they were granted.  Other
  pertinent information relating to the Plan follows:
<TABLE>
<CAPTION>
                                                1996         1995      1994
<S>                                              <C>         <C>        <C>
Under option, beginning of year               62,600       47,500    41,000

Granted                                        5,000       21,000     6,500
Canceled                                           -       (5,500)         -
Effect of 5% stock dividend                        -        2,100         -
Exercised                                   (19,100)       (2,500)         -

Under option, end of year                    48,500        62,600    47,500

Options exercisable, end of year             48,500        62,600    47,500
Available to grant, end of year             123,006       128,006   136,411

Weighted average price under option, end of year  
                                              $6.32         $5.89     $6.07
Weighted average price of options granted,
during the year                               $9.92         $6.17     $6.09
Weighted average price of options exercised,
during the year                               $8.67         $7.23        $-
Weighted average price of options canceled,
during the year                                  $-         $6.07        $-
</TABLE>
  
  The Company applies APB Opinion No. 25, Accounting for Stock Issued to
  Employees, and related Interpretations in accounting for its plans. 
  Accordingly, no compensation cost has been recognized.  The Company has
  elected not to adopt FASB Statement No. 123, Accounting for Stock-Based
  Compensation. The Company has not issued any options to nonemployees.  Had
  compensation cost for the Company's stock option plan been determined
  based on the fair value at the grant dates for awards under this plan
  consistent with the method of Statement No. 123, the Company's net income
  and earnings per share would have been reduced to the pro forma amounts
  indicated below:
<TABLE>
<CAPTION>
                                                          1996      1995
<S>                                         <C>          <C>        <C>
Net income                            As reported   $2,201,049  $2,524,490
                                      Pro forma      2,195,029   2,516,337

Earnings per share                    As reported         1.13      1.30
                                        Pro forma         1.12      1.30
</TABLE>
<PAGE>
Note 10.  Stock Option Plans (Continued)
  
  The pro forma compensation cost was recognized for the fair value of the
  stock options granted, which was estimated using the Black-Scholes model
  with the following assumptions:  Expected volatility ranging from 12% to
  20%, dividends as a percentage of stock price is 2.8%, expected average
  life of four years, and risk-free interest rates, ranging from 5.4% to
  7.9%.  The weighted average fair value of these stock options granted in
  1996 and 1995 was $2.13 and $1.51, respectively.
  
  Note 11.     Employee Benefit Plans
  
  Salary deferral 401(k) plan:     The Company has a salary deferral 401(k)
  plan for all employees who have completed one year of service.  The Bank
  contributes matching funds at its option which amounted to $102,000 and
  $97,000 for 1996 and 1995, respectively. 
  
  Contingency contract:  The Company has a contingency contract with the
  Chief Executive Officer and Chief Financial Officer of the Company which
  provides for monthly payments of $13,000 for 179 months in the event that
  the Company experiences a merger, acquisition, or other act wherein they
  are not retained in similar position with the surviving Company. 
  
  Note 12.     Loans and Other Transactions With Related Parties
  
  Stockholders of the Company, and officers and directors, including their
  families and companies of which they are principal owners, are considered
  to be related parties.  These related parties were loan customers of, and
  had other transactions with, the Company in the ordinary course of
  business.  In management's opinion, these loans and transactions were on
  the same terms as those for comparable loans and transactions with
  nonrelated parties.  
  
  Total loans to related parties were $2,906,320 and $2,832,606 at December
  31, 1996 and 1995, respectively.  The activity in such loans is as
  follows:
<TABLE>
<CAPTION>
                                                          1996        1995
<S>                                                      <C>         <C>
Balance, beginning                                  $2,832,606  $2,829,182

New loans                                            2,976,810   4,356,000
Repayments                                          (2,903,096) (4,352,576)

Balance, ending                                     $2,906,320  $2,832,606
</TABLE>
  
  None of these loans are past due, nonaccrual, or restructured to provide
  a reduction or deferral of interest or principal because of deterioration
  in the financial position of the borrower.  There were no loans to a
  related party that were considered classified loans at December 31, 1996
  and 1995.
  <PAGE>
Note 13.  Regulatory Capital Requirements
  
  The subsidiary Bank 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 the Bank's financial statements. 
  Under capital adequacy guidelines and the regulatory framework for prompt
  corrective action, the Bank must meet specific capital guidelines that
  involve qualitative measures of the Bank's assets, liabilities, and
  certain off-balance sheet items as calculated under regulatory accounting
  practices.  The Bank's capital amounts and classification are also subject
  to qualitative judgments by the regulators about components, risk
  weightings, and other factors.
  
  Quantitative measures established by regulation to ensure capital adequacy
  require the bank to maintain minimum amounts and ratios (set forth in the
  table below) of total and Tier I capital (as defined in the regulations)
  to risk-weighted assets (as defined), and of Tier I capital to average
  assets (as defined).  Management believes, as of December 31, 1996, that
  the Bank meets all capital adequacy requirements to which it is subject.
  
  As of June 30, 1996, the most recent notification from the Office of the
  Comptroller of the Currency categorized the Bank as well capitalized under
  the regulatory framework for prompt corrective action.  To be categorized
  as well capitalized the Bank must maintain minimum total risk-based, Tier
  I risk-based, Tier I leverage ratios as set forth in the table.  There are
  no conditions or events since that management believes have changed the
  institution's category.
  
  The Bank's actual capital amounts and ratios are presented in the
  following table (in thousands of dollars):
<TABLE>
<CAPTION>  
                                                                             To Be Well


                                                           For Capital               Prompt Corrective
                                    Actual                     Adequacy Purposes     Action Provisions
                          Amount               Amount                          Amount
                         (000's)     Ratio     (000's)           Ratio        (000's)     Ratio
As of December 31, 1996:
<S>                        <C>          <C>          <C>             <C>          <C>        <C>                     
Total Capital (to Risk
Weighted Assets)         $19,937        13.3%  >  $11,993            8.0%  >  $14,991     10.0%
Tier I Capital (to Risk
Weighted Assets)         $18,568        12.4%  >   $5,996            4.0%  >   $8,995      6.0%
Tier I Capital (to 
Average Assets)          $18,568         8.3%  >   $8,907            4.0%  >  $11,134      5.0%

As of December 31, 1995:

Total Capital (to Risk
Weighted Assets)         $18,388        12.8%  >  $11,491            8.0%  >  $14,364     10.0%
Tier I Capital (to Risk
Weighted Assets)         $16,876        11.7%  >   $5,746            4.0%  >   $8,618      6.0%
Tier I Capital (to 
Average Assets)          $16,876         8.2%  >   $8,277            4.0%  >  $10,346      5.0%
</TABLE>
  
  The Company's capital amounts and ratios are substantially the same as the
    amounts presented above.
<PAGE>
Note 14.     Statement of Cash Flows
<TABLE>
<CAPTION>
                                                    1996      1995      1994


<S>                                                <C>         <C>         <C>
Supplemental Disclosures of Cash Flow Information
      Cash payments (receipts) for:
          Interest                           $3,572,919  $3,035,412   $2,526,592

          Income taxes                       $1,100,000  $2,005,247   $(630,034)

Disposition of Other Real Estate Owned, financed
      by loans from the Company                $100,000    $272,776         $-
</TABLE>
Note 15.  Fair Values of Financial Instruments

The fair values of the Company's financial instruments are as follows:
<TABLE>
<CAPTION
                                          1996                     1995         
                                  Carrying                 Carrying
                                    Amount   Fair Value      Amount   Fair Value
<S>                                   <C>       <C>           <C>        <C>
Financial Assets
  Cash and short-term investments
                               $19,635,829  $19,635,829 $22,929,660  $22,929,660
  Securities                    40,010,604   39,917,661  39,561,115   39,503,309
  Loans, net                   118,991,170  119,051,170 112,724,034  114,468,551
  Accrued interest receivable    1,352,331    1,352,331   1,167,707    1,167,707
  Federal funds sold            26,800,000   26,800,000  18,500,000   18,500,000
</TABLE>
Financial Liabilities, deposits198,363,753  198,381,562 188,991,370  188,999,119
  
  Fair value of commitments:  The estimated fair value of fee income on
  letters of credit at December 31, 1995 and 1994, is insignificant.  
  
  Interest rate risk:
  
  The Company assumes interest rate risk (the risk that general interest
  rate levels will change) as a result of its normal operations.  As a
  result, fair value of the Company's financial instruments will change when
  interest rate levels change and that change may be either favorable or
  unfavorable to the Company.  Management attempts to match maturities of
  assets and liabilities to the extent believed necessary to minimize
  interest rate risk.  However, borrowers with fixed rate obligations are
  less likely to prepay in a rising rate environment and more likely to
  prepay in a falling rate environment.  Conversely, depositors who are
  receiving fixed rates are more likely to withdraw funds before maturity in
  a rising rate environment and less likely to do so in a falling rate
  environment.  Management monitors rates and maturities of assets and
  liabilities and attempts to minimize interest rate risk by adjusting terms
  of new loans and deposits and by investing in securities with terms that
    mitigate the Company's overall interest rate risk.
<PAGE>
Note 16.  Parent Company Only Condensed Statements
  
                        CONDENSED BALANCE SHEETS
                                (in 000's)
                                                               1996         1995
<TABLE>
<CAPTION>

ASSETS
<S>                                                              <C>          <C>
      Cash                                                     $333         $207
      Investment in subsidiary                               18,445       16,877
      Other assets                                              178          178

                                                            $18,956      $17,262

Stockholders' equity                                        $18,956      $17,262
</TABLE>
                     Condensed Statements of Income
<TABLE>
<CAPTION>
                               (in 000's)
                                                   1996        1995         1994
<S>                                                 <C>           <C>        <C>
Operating income, dividends from subsidiary                    $718         $474      $224

Expenses, professional fees                        (40)        (16)            -

      Income before equity in subsidiary 
          undistributed income                      678         458          224

Equity in undistributed income of subsidiary                  1,523        2,066       611

      Net income                                 $2,201      $2,524         $835
</TABLE>
<PAGE>
Note 16.  Parent Company Only Condensed Statements (Continued)

                   CONDENSED STATEMENTS OF CASH FLOWS
                               (in 000's)

<TABLE>
<CAPTION>

                                                   1996        1995         1994
<S>                                                 <C>         <C>         <C>
Cash Flows from Operating Activities
  Net income                                     $2,201      $2,524         $835
      Adjustments to reconcile net income to net cash 
      provided by operating activities:
      Equity in undistributed income of subsidiary
                                                 (1,523)      (2,066)     (611)
      Decrease in other assets                        -           -          149

          Net cash provided by operating activities
                                                    678          458       373

Cash Flows from Investing Activities,
  capital contributed to subsidiary                   -           -        (120)

Cash Flows from Financing Activities
  Exercise of stock options                         166          18            -
  Dividends paid                                   (718)       (474)         (92)

          Net cash (used in) financing activities  (552)        (456)      (92)

          Increase in cash and due from banks       126           2          161

Cash and Due from Banks
                                                    207          205        44

  Ending                                           $333        $207         $205
</TABLE>
Note 17.  Discontinued Operations

The Company and its subsidiary operate primarily in the banking industry.  
Operations in the banking industry involve a variety of banking and financial
 services.  In 1993, the Company began a mortgage banking division which 
consisted of origination of mortgage loans, sale of mortgage loans in the 
secondary market and servicing of mortgage loans.  During 1994, the Company 
ceased its mortgage banking operations.  There was no gain or loss on the 
disposal of the segment.  Segment information for the year ended 
December 31, 1994 is presented on the following table:
<PAGE>
Note 17.  Discontinued Operations (Continued)


                                                     Mortgage
                                           Banking     Banking Consolidated
                                                (Dollar amounts in thousands)
<TABLE>
<CAPTION>
1994:
<S>                                               <C>           <C>        <C>
Unaffiliated revenue                            $16,544        $512      $17,056

Income (loss) before income taxes                $1,752      $(372)       $1,380

Identifiable assets                            $206,510          $-     $206,510
</TABLE>
Income tax (credits) allocated to the loss on discontinued operations was 
$(148,000).