BANC CORP, S-4, 1999-04-30

BANC CORP
S-4, 1999-04-30
STATE COMMERCIAL BANKS

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<PAGE> 1

AS FILED WITH THE SECURITIES AND EXCHANGE COMMISSION ON APRIL 30, 1999

REGISTRATION NO. 333-
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
---------------------

FORM S-4
REGISTRATION STATEMENT
UNDER
THE SECURITIES ACT OF 1933
---------------------

THE BANC CORPORATION
(Exact Name of Registrant as Specified in its Charter)
---------------------

<TABLE>
<S> <C> <C>
DELAWARE 6711 63-1201350
(State or Other Jurisdiction of (Primary Standard Industrial (I.R.S. Employer
Incorporation or Organization) Classification Code Number) Identification Number)
</TABLE>

---------------------
17 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
(205) 326-2265
(Address, including Zip Code, and Telephone Number, including Area Code, of
Registrant's Principal Executive Offices)

JAMES A. TAYLOR, JR.
EXECUTIVE VICE PRESIDENT, GENERAL COUNSEL AND SECRETARY
THE BANC CORPORATION, 17 NORTH 20TH STREET
BIRMINGHAM, ALABAMA 35203
(205) 326-2265
(Name, Address, including Zip Code, and Telephone Number, including Area Code,
of Agent for Service)
---------------------
COPIES TO:

<TABLE>
<S> <C>
ROBERT E. LEE GARNER PETER G. WEINSTOCK
F. HAMPTON MCFADDEN, JR. PAM GATES O'QUINN
HASKELL SLAUGHTER & YOUNG, L.L.C. JENKENS & GILCHRIST, P.C.
1200 AMSOUTH/HARBERT PLAZA SUITE 3200
1901 SIXTH AVENUE NORTH 1445 ROSS AVENUE
BIRMINGHAM, ALABAMA 35203 DALLAS, TEXAS 75202-2799
(205) 251-1000 (214) 855-4500
</TABLE>

---------------------

APPROXIMATE DATE OF COMMENCEMENT OF PROPOSED SALE TO THE PUBLIC: As soon
as practicable after the effective date of this Registration Statement.

If the securities being registered on this Form are to be offered in
connection with the formation of a holding company and there is compliance with
General Instruction G, check the following box. [ ]

CALCULATION OF REGISTRATION FEE

<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
TITLE OF EACH CLASS OF PROPOSED MAXIMUM PROPOSED MAXIMUM
SECURITIES TO BE AMOUNT TO BE OFFERING PRICE AGGREGATE OFFERING AMOUNT OF
REGISTERED REGISTERED(1) PER UNIT PRICE(2) REGISTRATION FEE
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Common Stock, par value $.001 per
share............................. 2,164,921 N/A $8,850,000 $2,460.30
- --------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) Represents the maximum amount of common stock, par value $.001 per share
("Corporation common stock"), of The Banc Corporation (the "Corporation")
issuable upon the consummation of the mergers, assuming (a) the conversion
of each outstanding share of common stock, par value $10.00 per share ("C&L
common stock"), of C&L Banking Corporation ("C&L") into 1,286,686 shares of
Corporation common stock; (b) the conversion of each outstanding share of
common stock, not owned by C&L Banking Corporation, par value $10.00 per
share ("Bank of Bristol common stock") of C&L Bank of Bristol ("Bank of
Bristol") into 24,921 shares of Corporation common stock; and (c) the
conversion of each outstanding share of common stock, par value $12.00 per
share ("Bank of Blountstown common stock"), of C&L Bank of Blountstown
("Bank of Blountstown") into 853,314 shares of Corporation common stock.
(2) Computed in accordance with Rule 457(f)(2), solely for the purpose of
calculating the registration fee, based upon the book value of C&L common
stock of $4,885,000 at December 31, 1998, the book value of Bank of Bristol
common stock of $94,000 at December 31, 1998, and the book value of Bank of
Blountstown common stock of $3,871,000 at December 31, 1998.
---------------------

THE REGISTRANT HEREBY AMENDS THIS REGISTRATION STATEMENT ON SUCH DATE OR
DATES AS MAY BE NECESSARY TO DELAY ITS EFFECTIVE DATE UNTIL THE REGISTRANT SHALL
FILE A FURTHER AMENDMENT WHICH SPECIFICALLY STATES THAT THIS REGISTRATION
STATEMENT SHALL THEREAFTER BECOME EFFECTIVE IN ACCORDANCE WITH SECTION 8(A) OF
THE SECURITIES ACT OF 1933 OR UNTIL THE REGISTRATION STATEMENT SHALL BECOME
EFFECTIVE ON SUCH DATE AS THE SEC, ACTING PURSUANT TO SAID SECTION 8(A), MAY
DETERMINE.
- --------------------------------------------------------------------------------
- --------------------------------------------------------------------------------
<PAGE> 2

C&L BANKING CORPORATION

To Our Stockholders:

I am pleased to invite you to attend the special meeting of stockholders of
C&L Banking Corporation. The date, time and place of the special meeting are as
follows:

, 1999
a.m. local time
C&L Bank of Bristol
Highway 20 and Baker Street
Bristol, Florida 32321

At this meeting, you will be asked to consider and vote upon a merger
between C&L and The Banc Corporation. If the merger is completed, C&L will merge
into the Corporation, and the banking operations of C&L will continue to be
conducted through C&L Bank of Bristol, a Florida bank, which will become a
subsidiary of the Corporation.

Additionally, if the merger is completed, you will receive the number of
shares of Corporation common stock calculated as discussed in the attached
Prospectus-Joint Proxy Statement for each share of C&L stock that you own,
unless you exercise dissenters' rights of appraisal. The C&L merger is subject
to certain conditions, including the approval of the C&L merger by holders of a
majority of the outstanding shares of C&L common stock. The exchange of your
shares of C&L common stock for Corporation common stock in the C&L merger is
intended to be a tax-free reorganization for federal income tax purposes. The
C&L merger is described in greater detail in the accompanying Prospectus-Joint
Proxy Statement.

YOUR VOTE, IN PERSON OR BY PROXY, IS VERY IMPORTANT. Whether or not you
plan to attend the special meeting, please complete, date, sign and promptly
return the enclosed proxy in the enclosed envelope to ensure your shares are
represented. If you return your proxy without indicating how you want to vote,
your proxy will be voted in favor of the merger. If you do not return your card,
the effect will be a vote against the proposed merger. If you have any
questions, please contact me at (850) 643-2221.

THE BOARD OF DIRECTORS OF C&L UNANIMOUSLY RECOMMENDS THAT YOU VOTE "FOR"
APPROVAL OF THE C&L MERGER, WHICH APPROVAL AND ADOPTION WILL CONSTITUTE APPROVAL
OF THE TRANSACTIONS CONTEMPLATED THEREBY. WE URGE YOU TO CONSIDER CAREFULLY
THESE IMPORTANT MATTERS, WHICH ARE DESCRIBED IN THE ACCOMPANYING PROSPECTUS-
JOINT PROXY STATEMENT.

Sincerely,

/s/ JED M. HIERS

--------------------------------------
Jed M. Hiers
President and Chief Executive Officer
<PAGE> 3

C&L BANKING CORPORATION

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD , 1999
A.M.
C&L BANK OF BRISTOL
HIGHWAY 20 AND BAKER STREET
BRISTOL, FLORIDA 32321

C&L Banking Corporation will hold a special meeting of stockholders to vote
on the following:

To consider and vote upon a proposal to approve a Plan and Agreement of
Merger, dated as of February 25, 1999, by and between The Banc Corporation, a
Delaware corporation headquartered in Birmingham, Alabama, and C&L, and the
transactions contemplated thereby. The C&L Plan of Merger, which describes the
merger in more detail, is included in the accompanying Prospectus-Joint Proxy
Statement as Annex A.

If the proposed merger is completed, C&L will merge into the Corporation,
with the Corporation as the surviving corporation. C&L stockholders will receive
the number of shares of Corporation common stock calculated as discussed in the
attached Prospectus-Joint Proxy Statement for each share of C&L common stock
they own. C&L will cease to exist as a separate corporate entity. Consummation
of the C&L merger is subject to certain conditions, including the approval and
adoption of the C&L Plan of Merger by holders of at least a majority of the C&L
common stock entitled to vote at the meeting.

Stockholders of C&L have a right to dissent from the proposed C&L merger
and obtain payment in cash of the appraised or fair value of their shares of C&L
common stock by complying with the applicable provisions of Florida law. The
full text of Sections 607.1301 through 607.1320 of the Florida Business
Corporation Act, which describes the procedures to be followed by stockholders
who choose to dissent under applicable law, are included as Annex D to the
Prospectus-Joint Proxy Statement and should be read carefully.

Only stockholders of record at the close of business on , 1999,
will be entitled to notice of and to vote at the C&L special meeting or any
adjournments or postponements thereof.

The Board of Directors of C&L unanimously recommends that holders of C&L
common stock vote "FOR" the proposals listed above.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE C&L SPECIAL MEETING
REGARDLESS OF THE NUMBER OF SHARES YOU OWN. EVEN IF YOU PLAN TO ATTEND THE C&L
SPECIAL MEETING, WE URGE YOU TO COMPLETE, SIGN AND DATE THE ENCLOSED PROXY CARD
AND RETURN IT IN THE ENVELOPE PROVIDED AS PROMPTLY AS POSSIBLE. IF YOU ATTEND
THE C&L SPECIAL MEETING, YOU MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY
GIVEN MAY BE REVOKED BY YOU AT ANY TIME PRIOR TO ITS EXERCISE IN THE MANNER
DESCRIBED IN THE PROSPECTUS-JOINT PROXY STATEMENT.

BY ORDER OF THE BOARD OF DIRECTORS

Sincerely,

/s/ JED M. HIERS
--------------------------------------
Jed M. Hiers
President and Chief Executive Officer

, 1999
<PAGE> 4

C&L BANK OF BRISTOL

To Our Stockholders:

I would like to invite you to attend the special meeting of stockholders of
C&L Bank of Bristol. The date, time and place of the special meeting are as
follows:

, 1999
a.m. local time
C&L Bank of Bristol
Highway 20 and Baker Street
Bristol, Florida 32321

At this meeting, you will be asked to consider and vote upon a share
exchange between the Bank of Bristol and a subsidiary of The Banc Corporation.
If the share exchange is completed, Bank of Bristol stockholders, except for C&L
Banking Corporation, will receive shares of Corporation common stock from the
subsidiary of the Corporation.

Additionally, if the share exchange is completed, each share of Bank of
Bristol common stock not owned by C&L Banking Corporation will be converted into
the number of shares of Corporation common stock calculated as discussed in the
attached Prospectus-Joint Proxy Statement for each share of Bank of Bristol
common stock you own, unless you exercise dissenters' rights of appraisal. After
the share exchange, Bank of Bristol will be a wholly-owned subsidiary of the
Corporation. The share exchange is subject to certain conditions, including the
approval of the share exchange by holders of a majority of the outstanding
shares of Bank of Bristol common stock. The exchange of your shares of Bank of
Bristol common stock for Corporation common stock in the share exchange is
intended to be a tax-free reorganization for federal income tax purposes. The
share exchange is described in greater detail in the accompanying
Prospectus-Joint Proxy Statement.

YOUR VOTE, IN PERSON OR BY PROXY, IS VERY IMPORTANT. Whether or not you
plan to attend the special meeting, please complete, date, sign and promptly
return the enclosed proxy in the enclosed envelope to ensure your shares are
represented. If you return your proxy without indicating how you want to vote,
your proxy will be voted in favor of the share exchange. If you do not return
your card, the effect will be a vote against the proposed share exchange. If you
have any questions, please contact me at (850) 643-2221.

THE BOARD OF DIRECTORS OF BANK OF BRISTOL UNANIMOUSLY RECOMMENDS THAT YOU
VOTE "FOR" APPROVAL OF THE SHARE EXCHANGE, WHICH APPROVAL WILL CONSTITUTE
APPROVAL OF THE TRANSACTIONS CONTEMPLATED THEREBY. WE URGE YOU TO CONSIDER
CAREFULLY THESE IMPORTANT MATTERS, WHICH ARE DESCRIBED IN THE ACCOMPANYING
PROSPECTUS-JOINT PROXY STATEMENT.

Sincerely,

/s/ JED M. HIERS

--------------------------------------
Jed M. Hiers
President and Chief Executive Officer
<PAGE> 5

C&L BANK OF BRISTOL

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD , 1999
A.M.
C&L BANK OF BRISTOL
HIGHWAY 20 AND BAKER STREET
BRISTOL, FLORIDA 32321

C&L Bank of Bristol, a Florida corporation, will hold a special meeting of
stockholders to vote on the following:

To consider and vote upon a proposal to approve a Share Exchange Agreement,
dated as of February 25, 1999, among The Banc Corporation, a Delaware
corporation headquartered in Birmingham, Alabama, C&L Banking Corporation, a
Florida corporation headquartered in Bristol, Florida, C&L Bank of Bristol, a
Florida corporation and a subsidiary of C&L Banking Corporation, and Bristol
Acquisition Corporation, a subsidiary of the Corporation, and the transactions
contemplated thereby. The Share Exchange Agreement is included in the
accompanying Prospectus-Joint Proxy Statement as Annex B.

If the proposed share exchange is completed, the stockholders of Bank of
Bristol, except for C&L Banking Corporation, will receive the number of shares
of Corporation common stock calculated as discussed in the attached
Prospectus-Joint Proxy Statement for each share of Bank of Bristol common stock
they own. After the share exchange, Bank of Bristol will become a wholly-owned
subsidiary of the Corporation. Consummation of the share exchange is subject to
certain conditions, including the approval and adoption of the share exchange by
holders of at least a majority of the Bank of Bristol common stock entitled to
vote at the special meeting.

Stockholders of Bank of Bristol have a right to dissent from the proposed
share exchange and obtain payment in cash of the appraised or fair value of
their shares of Bank of Bristol common stock by complying with the applicable
provisions of Florida law. The full text of Section 658.45 of the Florida
Banking Code, which sets forth the procedures to be followed by stockholders who
choose to dissent under applicable law, are included as Annex E to the
Prospectus-Joint Proxy Statement and should be read carefully.

Only stockholders of record at the close of business on , 1999,
will be entitled to notice of and to vote at the Bank of Bristol special meeting
or any adjournments or postponements thereof.

The Board of Directors of Bank of Bristol unanimously recommends that
holders of Bank of Bristol common stock vote "FOR" the proposals listed above.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE BANK OF BRISTOL
SPECIAL MEETING REGARDLESS OF THE NUMBER OF SHARES YOU OWN. EVEN IF YOU PLAN TO
ATTEND THE BANK OF BRISTOL SPECIAL MEETING, WE URGE YOU TO COMPLETE, SIGN AND
DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE PROVIDED AS PROMPTLY
AS POSSIBLE. IF YOU ATTEND THE BANK OF BRISTOL SPECIAL MEETING, YOU MAY VOTE
EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU AT ANY TIME
PRIOR TO ITS EXERCISE IN THE MANNER DESCRIBED IN THE PROSPECTUS-JOINT PROXY
STATEMENT.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ JED M. HIERS

--------------------------------------
Jed M. Hiers
President and Chief Executive Officer
, 1999
<PAGE> 6

C&L BANK OF BLOUNTSTOWN

To Our Stockholders:

I would like to invite you to attend the special meeting of stockholders of
C&L Bank of Blountstown. The date, time and place of the special meeting are as
follows:
, 1999
a.m. local time
W.T. Neal Civic Center
Highway 71 North
Blountstown, Florida 32424

At this meeting, you will be asked to consider and vote upon the merger of
Bank of Blountstown and Bank of Bristol, a subsidiary of C&L Banking
Corporation. Immediately prior to the merger, C&L will be merged into The Banc
Corporation. If the merger is completed, Bank of Blountstown will merge with the
Bank of Bristol and the combined banking operations of the Bank of Bristol and
Bank of Blountstown will be conducted through Bank of Bristol, which will be a
subsidiary of the Corporation.

Additionally, if the merger is completed, you will receive the number of
shares of Corporation common stock calculated as discussed in the attached
Prospectus-Joint Proxy Statement, unless you exercise dissenters' rights of
appraisal. The Bank of Blountstown merger is subject to certain conditions,
including the approval of the Bank of Blountstown merger by holders of a
majority of the Bank of Blountstown common stock entitled to vote at the
meeting. The exchange of your shares of Bank of Blountstown common stock for
Corporation common stock in the Bank of Blountstown merger is intended to be a
tax-free reorganization for federal income tax purposes. The Bank of Blountstown
merger is described in greater detail in the accompanying Prospectus-Joint Proxy
Statement.

THE BOARD OF DIRECTORS OF BANK OF BLOUNTSTOWN UNANIMOUSLY RECOMMENDS THAT
YOU VOTE "FOR" APPROVAL OF THE BANK OF BLOUNTSTOWN MERGER, WHICH APPROVAL WILL
CONSTITUTE APPROVAL OF THE TRANSACTIONS CONTEMPLATED THEREBY, INCLUDING THE BANK
OF BLOUNTSTOWN MERGER. WE URGE YOU TO CONSIDER CAREFULLY THESE IMPORTANT
MATTERS, WHICH ARE DESCRIBED IN THE ACCOMPANYING PROSPECTUS-JOINT PROXY
STATEMENT.

Sincerely,

/s/ JED M. HIERS

--------------------------------------
Jed M. Hiers
President
<PAGE> 7

C&L BANK OF BLOUNTSTOWN

NOTICE OF SPECIAL MEETING OF STOCKHOLDERS
TO BE HELD , 1999
A.M.
W. T. NEAL CIVIC CENTER,
HIGHWAY 71 NORTH
BLOUNTSTOWN, FLORIDA 32424

C&L Bank of Blountstown, a Florida corporation, will hold a special meeting
of stockholders to vote on the following:

To consider and vote upon a proposal to approve a Plan and Agreement of
Merger, dated as of February 25, 1999, among The Banc Corporation, a Delaware
corporation headquartered in Birmingham, Alabama, and C&L Banking Corporation, a
Florida corporation headquartered in Bristol, Florida, C&L Bank of Bristol, a
Florida corporation and a subsidiary of C&L Banking Corporation, and Bank of
Blountstown, and the transactions contemplated thereby. The Bank of Blountstown
Plan of Merger is included in the accompanying Prospectus-Joint Proxy Statement
as Annex C.

If the proposed merger is completed, the Bank of Blountstown will merge
into the Bank of Bristol, with Bank of Bristol as the surviving corporation.
Bank of Blountstown stockholders will receive the number of shares of
Corporation common stock calculated as discussed in the attached
Prospectus-Joint Proxy Statement for each share of Bank of Blountstown that they
own. Consummation of the Bank of Blountstown merger is subject to certain
conditions, including the approval and adoption of the Bank of Blountstown Plan
of Merger by holders of at least a majority of the Bank of Blountstown common
stock entitled to vote at the special meeting.

Stockholders of Bank of Blountstown have a right to dissent from the
proposed Bank of Blountstown merger and obtain payment in cash of the appraised
or fair value of their shares of Bank of Blountstown common stock by complying
with the applicable provisions of Florida law. The full text of Section 658.44
of the Florida Banking Code, which sets forth the procedures to be followed by
stockholders who choose to dissent under applicable law, are included as Annex E
to the Prospectus-Joint Proxy Statement and should be read carefully.

Only stockholders of record at the close of business on ,
1999, will be entitled to notice of and to vote at the Bank of Blountstown
special meeting or any adjournments or postponements thereof.

The Board of Directors of Bank of Blountstown unanimously recommends that
holders of Bank of Blountstown common stock vote "FOR" the proposals listed
above.

IT IS IMPORTANT THAT YOUR SHARES BE REPRESENTED AT THE BANK OF BLOUNTSTOWN
SPECIAL MEETING REGARDLESS OF THE NUMBER OF SHARES YOU OWN. EVEN IF YOU PLAN TO
ATTEND THE BANK OF BLOUNTSTOWN SPECIAL MEETING, WE URGE YOU TO COMPLETE, SIGN
AND DATE THE ENCLOSED PROXY CARD AND RETURN IT IN THE ENVELOPE PROVIDED AS
PROMPTLY AS POSSIBLE. IF YOU ATTEND THE BANK OF BLOUNTSTOWN SPECIAL MEETING, YOU
MAY VOTE EITHER IN PERSON OR BY PROXY. ANY PROXY GIVEN MAY BE REVOKED BY YOU AT
ANY TIME PRIOR TO ITS EXERCISE IN THE MANNER DESCRIBED IN THE PROSPECTUS-JOINT
PROXY STATEMENT.

BY ORDER OF THE BOARD OF DIRECTORS

/s/ JED M. HIERS

--------------------------------------
Jed M. Hiers
President

, 1999
<PAGE> 8

PROPOSED MERGERS -- YOUR VOTE IS VERY IMPORTANT

The Board of Directors of The Banc Corporation has approved the two mergers
and the share exchange which would result in C&L Banking Corporation and C&L
Bank of Blountstown being merged into The Banc Corporation or one of its
subsidiaries. The Board of Directors of each of C&L and C&L Bank of Blountstown,
has approved its company's merger with The Banc Corporation. The Boards of
Director of The Banc Corporation, Bristol Acquisition Corporation and C&L Bank
of Bristol have approved the share exchange which would result in Bank of
Bristol becoming a wholly-owned subsidiary of The Banc Corporation.

As a stockholder of C&L, Bank of Bristol or Bank of Blountstown, the number
of shares of Corporation common stock you will receive if the proposed mergers
and share exchange are completed will not be finalized until shortly before the
special meetings to consider the mergers:

C&L Stockholders: You will receive approximately $790.64 worth of
Corporation common stock for each share of C&L common stock you own. The actual
number of shares of Corporation common stock you receive will depend upon the
market performance of Corporation common stock. It is likely to be between
79.0639 and 56.4742 shares of Corporation common stock for each share of C&L
stock you own.

Bank of Bristol Stockholders: You will receive approximately $655.80 worth
of Corporation common stock for each share of Bank of Bristol common stock you
own. The actual number of shares of Corporation common stock you receive will
depend upon the market performance of Corporation common stock. It is likely to
be between 65.5803 and 46.8431 shares of Corporation common stock for each share
of Bank of Bristol stock you own.

Bank of Blountstown Stockholders: You will receive approximately $85.33
worth of Corporation common stock for each share of Bank of Blountstown common
stock you own. The actual number of shares of Corporation common stock you
receive will depend upon the market performance of Corporation common stock. It
is likely to be between 8.5331 and 6.0951 shares of Corporation common stock for
each share of Bank of Blountstown stock you own.

The mergers and the share exchange cannot be completed unless the
stockholders of C&L, Bank of Bristol and Bank of Blountstown approve them. The
Board of Directors of C&L, Bank of Bristol and Bank of Blountstown have
scheduled special meetings to vote on the mergers as follows:

<TABLE>
<S> <C> <C>
C&L BANK OF BRISTOL
C&L BANKING CORPORATION , 1999 C&L BANK OF BLOUNTSTOWN
, 1999 a.m. , 1999
a.m C&L Bank of Bristol a.m.
C&L Bank of Bristol Highway 20 and W.T. Neal Civic Center
Highway 20 and Baker Baker Street Highway 71 North
Street Bristol, Florida Blountstown, Florida
Bristol, Florida 32321 32321 32424
</TABLE>

YOUR VOTE IS IMPORTANT. PLEASE TAKE THE TIME TO VOTE ON THE PROPOSALS BY
COMPLETING AND MAILING THE ENCLOSED PROXY CARD, EVEN IF YOU PLAN TO ATTEND YOUR
STOCKHOLDERS MEETING. THIS PROSPECTUS-JOINT PROXY STATEMENT PROVIDES YOU WITH
DETAILED INFORMATION ABOUT THE PROPOSED MERGERS AND SHARE EXCHANGE. IN ADDITION,
YOU MAY OBTAIN INFORMATION ABOUT THE BANC CORPORATION FROM DOCUMENTS THAT WE
HAVE FILED WITH THE SECURITIES AND EXCHANGE COMMISSION. WE ENCOURAGE YOU TO READ
THIS ENTIRE DOCUMENT CAREFULLY.

Please note these securities:

- are not bank accounts or deposits;

- are not federally insured by the FDIC; and

- are not insured by any other state or federal agency.

NEITHER THE SECURITIES EXCHANGE COMMISSION NOR ANY STATE SECURITIES COMMISSION
HAS APPROVED OR DISAPPROVED OF THESE SECURITIES OR DETERMINED IF THIS PROSPECTUS
IS TRUTHFUL OR COMPLETE. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL
OFFENSE.

This Prospectus-Joint Proxy Statement is dated , 1999, and is
first being mailed to stockholders of C&L, Bank of Bristol and Bank of
Blountstown on or about , 1999.
<PAGE> 9

FORWARD-LOOKING STATEMENTS

Each company makes forward-looking statements in this Prospectus-Joint
Proxy Statement that are subject to risks or uncertainties that could cause
actual results to differ materially from those contemplated by the
forward-looking statements. These forward-looking statements include information
about possible or assumed future results of operations or performance of the
combined company after the proposed mergers, future economic performance, plans
and objectives of management for future operations and other financial items
that are based on the beliefs and assumptions made by and currently available to
management. When we use the words "estimate," "project," "intend," "anticipate,"
"expect" and similar expressions, we are making forward-looking statements. Many
possible events or factors could affect the future financial results and
performance of each of our companies and the combined company after the proposed
mergers. This could cause results or performance to differ materially from those
expressed on our forward-looking statements. You are cautioned not to place
undue reliance on these forward looking statements, which speak only to the date
of this Prospectus-Joint Proxy Statement. In addition, you should consider
carefully these risks when you vote on the mergers and share exchange. These
events could include any of the following:

- We may have more trouble obtaining regulatory approvals for the proposed
mergers than expected;

- Our revenues following the mergers and our other recent acquisitions may
be lower or our costs may be greater, than expected, or we may not fully
or timely realize our expected cost savings from the mergers;

- We may have more trouble integrating acquired businesses or retaining key
personnel or customers than expected;

- Competitive pressures among depository or other financial institutions
may increase significantly;

- General economic or business conditions may be less favorable than
expected either nationally or in the states where the companies do
business;

- Adverse changes may occur in the market for stocks of smaller or
community banks;

- It may be more expensive, or take longer, than expected to integrate our
information systems; and

- Legislative or regulatory changes may adversely affect our business.

All subsequent written and oral forward-looking statements attributable to
us or persons acting on our behalf are expressly qualified in their entirety by
the cautionary statements contained or referred to in the paragraph above. For
additional information, please refer to the discussion under "Risk Factors" on
page .
---------------------

YOU SHOULD RELY ONLY ON INFORMATION PROVIDED IN THIS PROSPECTUS-JOINT PROXY
STATEMENT. NEITHER THE CORPORATION, C&L, BANK OF BRISTOL NOR BANK OF BLOUNTSTOWN
HAS AUTHORIZED ANYONE ELSE TO PROVIDE YOU WITH DIFFERENT INFORMATION. THE
INFORMATION IN THIS PROSPECTUS-JOINT PROXY STATEMENT ABOUT THE CORPORATION AND
ITS SUBSIDIARIES HAS BEEN SUPPLIED BY THE CORPORATION; THE INFORMATION IN THIS
PROSPECTUS-JOINT PROXY STATEMENT ABOUT C&L AND BANK OF BRISTOL HAS BEEN SUPPLIED
BY C&L; AND THE INFORMATION IN THIS PROSPECTUS-JOINT PROXY STATEMENT ABOUT BANK
OF BLOUNTSTOWN HAS BEEN SUPPLIED BY BANK OF BLOUNTSTOWN. ALTHOUGH NEITHER THE
CORPORATION, C&L NOR BANK OF BLOUNTSTOWN HAS ACTUAL KNOWLEDGE THAT WOULD
INDICATE THAT ANY STATEMENTS OR INFORMATION (INCLUDING FINANCIAL STATEMENTS)
RELATING TO THE OTHER PARTY CONTAINED HEREIN ARE INACCURATE OR INCOMPLETE,
NEITHER THE CORPORATION, ON THE ONE HAND, NOR C&L OR BANK OF BLOUNTSTOWN, ON THE
OTHER HAND, WARRANTS THE ACCURACY OR COMPLETENESS OF SUCH STATEMENTS OR
INFORMATION AS THEY RELATE TO ANY OTHER PARTY. THE CORPORATION IS NOT MAKING AN
OFFER OF THESE SECURITIES IN ANY STATE WHERE THE OFFER IS NOT PERMITTED. C&L,
BANK OF BRISTOL AND BANK OF BLOUNTSTOWN ARE NOT SOLICITING PROXIES IN ANY STATE
WHERE THE SOLICITATION OF PROXIES IS NOT PERMITTED.

i
<PAGE> 10

TABLE OF CONTENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
FORWARD-LOOKING STATEMENTS.................................. i
QUESTIONS AND ANSWERS ABOUT THE MERGERS..................... viii
SUMMARY OF PROSPECTUS-JOINT PROXY STATEMENT................. 1
The Companies............................................. 1
The Banc Corporation................................... 1
C&L Banking Corporation................................ 1
C&L Bank of Bristol.................................... 2
C&L Bank of Blountstown................................ 2
Recent Developments of the Corporation.................... 2
Our Reasons for the Mergers and Share Exchange............ 2
Management of the Surviving Corporation................... 3
The Special Meetings...................................... 3
Our Recommendations to Stockholders....................... 3
Vote Required............................................. 3
THE MERGER BETWEEN THE CORPORATION AND C&L.................. 4
What C&L Stockholders Will Receive........................ 4
Other Interests of Officers and Directors of C&L in the
C&L Merger............................................. 4
Conditions to the C&L Merger.............................. 5
No Solicitation By C&L.................................... 5
Regulatory Approvals...................................... 5
Termination of the C&L Plan of Merger..................... 5
Accounting Treatment...................................... 6
Opinion of Financial Advisor.............................. 6
Material Federal Income Tax Consequences.................. 6
Dissenters' Rights of C&L Stockholders.................... 6
THE SHARE EXCHANGE AMONG THE CORPORATION, BRISTOL
ACQUISITION CORPORATION AND BANK OF BRISTOL............... 6
What Bank of Bristol Stockholders Will Receive............ 6
Conditions to the Share Exchange.......................... 7
Termination of the Share Exchange......................... 7
Accounting Treatment...................................... 7
Material Federal Income Tax Consequences.................. 7
Dissenters' Rights of Bank of Bristol Stockholders........ 8
THE MERGER AMONG THE CORPORATION, BANK OF BLOUNTSTOWN AND
BANK OF BRISTOL........................................... 8
What Bank of Blountstown Stockholders Will Receive........ 8
Other Interests of Officers and Directors of Bank of
Blountstown in the Bank of Blountstown Merger.......... 9
Conditions to the Bank of Blountstown Merger.............. 9
No Solicitation By Bank of Blountstown.................... 9
Regulatory Approvals...................................... 9
Termination of the Bank of Blountstown Plan of Merger..... 10
Accounting Treatment...................................... 10
Opinion of Financial Advisor.............................. 10
Material Federal Income Tax Consequences.................. 10
Dissenters' Rights of Bank of Blountstown Stockholders.... 11
Selected Historical and Pro Forma Financial Data.......... 11
Risk Factors.............................................. 11
</TABLE>

ii
<PAGE> 11

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Market Information and Dividend Policy.................... 11
Listing of Corporation Common Stock....................... 12
Comparative Per Share Information......................... 12
RISK FACTORS................................................ 14
The Corporation's recent acquisitions and its proposed
mergers involve integration risks and may impact future
earnings............................................... 14
The mergers and the share exchange are conditioned on the
completion of each other............................... 15
The Corporation's ability to sustain growth involves
risks.................................................. 15
The Corporation cannot predict loan losses or the adequacy
of the allowance for loan losses....................... 15
The fluctuations in interest rates may affect the
Corporation's interest income.......................... 15
Geographic concentration and significance of local
economic conditions may affect the Corporation's
profitability.......................................... 15
The Corporation's Year 2000 readiness may affect
operations and revenues of the Corporation............. 16
Review of the Computer Systems......................... 16
Year 2000 Merger Policy................................ 16
Contingency Plans...................................... 17
The Corporation is subject to extensive governmental
regulation............................................. 17
The Corporation's Restated Certificate of Incorporation
and Bylaws and Delaware law may prevent takeover by
another company........................................ 17
Issuance of preferred stock may have possible adverse
effects................................................ 18
There are restrictions on the Corporation's ability to pay
dividends.............................................. 18
The Corporation is dependent on key management............ 18
The banking industry is highly competitive................ 19
Management of the Corporation holds a large portion of
Corporation common stock............................... 19
Possible volatility of stock price may affect the market
price of Corporation common stock...................... 19
Stockholders may experience risks relating to federal
income taxes........................................... 19
THE SPECIAL MEETINGS........................................ 20
The C&L Special Meeting................................... 20
Date, Place and Time................................... 20
Record Date, Quorum and Voting......................... 20
Vote Required.......................................... 20
Voting and Revocation of Proxies....................... 20
Solicitation of Proxies................................ 20
The Bank of Bristol Special Meeting....................... 21
Date, Place and Time................................... 21
Record Date, Quorum and Voting......................... 21
Vote Required.......................................... 21
Voting and Revocation of Proxies....................... 21
Solicitation of Proxies................................ 22
The Bank of Blountstown Special Meeting................... 22
Date, Place and Time................................... 22
Record Date, Quorum and Voting......................... 22
Vote Required.......................................... 22
Voting and Revocation of Proxies....................... 23
Solicitation of Proxies................................ 23
THE C&L MERGER.............................................. 23
Terms of the C&L Merger................................... 23
Background of and Reasons for the Mergers and Share
Exchange; Recommendation of C&L Board of Directors..... 24
Background of the Mergers.............................. 24
Reasons for the Mergers................................ 25
</TABLE>

iii
<PAGE> 12

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Opinion of C&L's Financial Advisor........................ 26
Effective Time of the Merger.............................. 30
Exchange of Certificates.................................. 30
Conditions to the C&L Merger.............................. 31
Representations and Covenants............................. 33
Regulatory Approvals...................................... 34
Business Pending the Merger............................... 35
Resale of Corporation Common Stock by Affiliates.......... 35
Interests of Certain Persons in the C&L Merger............ 36
Accounting Treatment...................................... 36
Material Federal Income Tax Consequences.................. 37
No Solicitation of Transactions........................... 38
Expenses.................................................. 38
Indemnification........................................... 38
Rights of Dissenting Stockholders......................... 40
THE SHARE EXCHANGE.......................................... 40
Terms of the Share Exchange............................... 40
Background of and Reasons for the Share Exchange;
Recommendation of Bank of Bristol Board of Directors... 41
Opinion of Bank of Bristol's Financial Advisor............ 41
Effective Time of the Share Exchange...................... 41
Exchange of Certificates.................................. 42
Conditions to the Share Exchange.......................... 43
Representations and Covenants............................. 43
Regulatory Approvals...................................... 43
Resale of Corporation Common Stock by Affiliates.......... 44
Interests of Certain Persons in the Share Exchange........ 44
Accounting Treatment...................................... 44
Material Federal Income Tax Consequences.................. 45
Expenses.................................................. 45
Indemnification........................................... 45
Rights of Dissenting Stockholders......................... 47
THE BANK OF BLOUNTSTOWN MERGER.............................. 47
Terms of the Bank of Blountstown Merger................... 48
Background of and Reasons for the Bank of Blountstown
Merger; Recommendations of Bank of Blountstown Board of
Directors.............................................. 48
Opinion of Bank of Blountstown's Financial Advisor........ 48
Effective Time of the Merger.............................. 48
Exchange of Certificates.................................. 49
Conditions to the Bank of Blountstown Merger.............. 51
Representations and Covenants............................. 51
Regulatory Approvals...................................... 52
Business Pending the Merger............................... 53
Resale of Corporation Common Stock by Affiliates.......... 53
Interests of Certain Persons in the Bank of Blountstown
Merger................................................. 54
Accounting Treatment...................................... 54
Material Federal Income Tax Consequences.................. 55
No Solicitation of Transactions........................... 56
Expenses.................................................. 56
Indemnification........................................... 56
Rights of Dissenting Stockholders......................... 56
</TABLE>

iv
<PAGE> 13

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
OPERATIONS AND MANAGEMENT OF THE CORPORATION AFTER THE
MERGERS................................................... 55
Operations................................................ 55
Management................................................ 55
THE BANC CORPORATION AND SUBSIDIARIES; CONDENSED PRO FORMA
STATEMENT OF CONDITION (UNAUDITED)........................ 56
SELECTED SUPPLEMENTAL FINANCIAL DATA........................ 61
SUPPLEMENTAL MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS............. 62
Basis of Presentation..................................... 62
Year 2000 Compliance...................................... 63
Results Of Operations..................................... 64
Net Interest Income....................................... 66
CONSOLIDATED AVERAGE BALANCE INTEREST/INCOME/EXPENSE AND
YIELD/RATES TAXABLE EQUIVALENT BASIS...................... 67
Market Risk -- Interest Rate Sensitivity.................. 68
Provision and Allowance for Loan Losses................... 69
Earning Assets............................................ 71
Deposits and Other Interest-Bearing Liabilities........... 73
Noninterest Expense....................................... 74
Regulatory Capital Table.................................. 74
Impact of Inflation....................................... 74
Recent Operating Results.................................. 75
BUSINESS OF THE CORPORATION................................. 76
General................................................... 76
Recent Developments....................................... 77
Strategy.................................................. 77
Market Areas.............................................. 78
Lending Activities........................................ 78
Loan Portfolio......................................... 78
Credit Procedures and Review........................... 79
Deposits.................................................. 79
Competition............................................... 79
Market Information........................................ 80
Properties................................................ 80
Employees................................................. 80
Legal Proceedings......................................... 80
Where You Can Find Additional Information................. 80
SUPERVISION AND REGULATION.................................. 81
The Corporation -- Bank Holding Company................... 81
The Corporation -- Thrift Holding Company................. 84
The Bank.................................................. 84
Emerald Coast Bank........................................ 87
Instability of Regulatory Structure....................... 90
Enforcement Authority..................................... 91
Effect on Economic Environment............................ 91
MANAGEMENT OF CORPORATION................................... 92
Directors and Executive Officers.......................... 92
Classified Board of Directors............................. 95
Committees of the Board of Directors...................... 96
Executive Officer Compensation............................ 97
Director Compensation..................................... 98
</TABLE>

v
<PAGE> 14

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Employment Agreements..................................... 98
Compensation Committee Interlocks and Insider
Participation.......................................... 100
Incentive Plans........................................... 100
Certain Relationships and Related Transactions............ 101
PRINCIPAL STOCKHOLDERS OF THE CORPORATION................... 102
SELECTED FINANCIAL DATA -- C&L BANKING CORPORATION.......... 104
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS -- C&L.......................... 105
Basis of Presentation..................................... 105
Year 2000 Readiness Disclosure............................ 105
Results of Operations..................................... 106
Net Interest Income....................................... 107
Provision and Allowance for Loan Losses................... 109
Earning Assets............................................ 111
Deposits and Other Interest-Bearing Liabilities........... 112
Regulatory Capital Table.................................. 113
Impact of Inflation....................................... 113
BUSINESS OF C&L AND BANK OF BRISTOL......................... 114
Business and Properties................................... 114
Competition............................................... 114
Legal Proceedings......................................... 114
Management................................................ 115
Summary of Employment Contract of Jed M. Hiers............ 115
Market for the C&L Common Stock........................... 115
Market for the Bank of Bristol Common Stock............... 116
SELECTED FINANCIAL DATA -- BANK OF BLOUNTSTOWN.............. 117
MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS -- C&L BANK OF BLOUNTSTOWN...... 118
Basis of Presentation..................................... 118
Year 2000 Readiness Disclosure............................ 118
Results of Operations..................................... 119
Net Interest Income....................................... 120
Provision and Allowance for Loan Losses................... 122
Earning Assets............................................ 125
Deposits and Other Interest-Bearing Liabilities........... 126
Regulatory Capital Table.................................. 127
Impact of Inflation....................................... 127
BUSINESS OF BANK OF BLOUNTSTOWN............................. 128
Business and Properties................................... 128
Competition............................................... 128
Legal Proceedings......................................... 128
Management................................................ 129
Market for the Bank of Blountstown Common Stock........... 129
COMPARISON OF RIGHTS OF C&L STOCKHOLDERS, BANK OF BRISTOL
STOCKHOLDERS, BANK OF BLOUNTSTOWN STOCKHOLDERS AND
CORPORATION STOCKHOLDERS.................................. 130
Classes and Series of Capital Stock....................... 130
Size and Election of the Board of Directors............... 130
Removal of Directors...................................... 131
Dividends................................................. 131
Conversion and Dissolution................................ 132
</TABLE>

vi
<PAGE> 15

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
Amendment or Repeal of the Certificate of Incorporation
and Bylaws............................................. 133
Special Meetings of Stockholders.......................... 133
Liability of Directors.................................... 134
DESCRIPTION OF CAPITAL STOCK OF THE CORPORATION............. 135
Authorized Capital Stock.................................. 135
Corporation Common Stock.................................. 135
Corporation Preferred Stock............................... 136
Certain Provisions of the Corporation Certificate and
Delaware Law........................................... 136
Limitations on Liability of Officers and Directors........ 137
Transfer Agent and Registrar.............................. 138
EXPERTS..................................................... 138
LEGAL MATTERS............................................... 138
ADDITIONAL INFORMATION...................................... 138
Other Business............................................ 138
</TABLE>

vii
<PAGE> 16

QUESTIONS AND ANSWERS ABOUT THE MERGERS

Q: WHAT DO I NEED TO DO NOW?

A: After carefully reading and considering the information contained in this
document, please fill out and sign your proxy card. Mail your signed proxy
card in the enclosed return envelope as soon as possible so that your shares
may be represented at your special meeting.

Q: WHAT WILL I RECEIVE?

A: The number of shares of Corporation common stock you will receive for your
shares of C&L, Bank of Bristol or Bank of Blountstown common stock will not
be finalized until three days before the special meetings. The number of
shares of Corporation common stock you will receive for the shares of C&L,
Bank of Bristol or Bank of Blountstown common stock that you own is
calculated in three steps. First, the total number of shares of Corporation
common stock to be exchanged in each transaction is calculated by dividing
$12,866,857.42 for C&L, $249,205.19 for Bank of Bristol and $8,533,142.58 for
Bank of Blountstown by the closing date trading price. The closing date
trading price is the twenty trading day average of the last sales price for
Corporation common stock on Nasdaq, ending three trading days prior to the
special meetings. Second, the exchange ratio is calculated by dividing the
total number of shares of Corporation common stock to be exchanged in each
transaction by the total number of shares of C&L, Bank of Bristol or Bank of
Blountstown common stock outstanding. Third, the number of shares of
Corporation common stock you will receive is equal to the number of shares of
C&L, Bank of Bristol or Bank of Blountstown common stock that you own
multiplied by the exchange ratio.

If the closing date trading price is greater than $14.00, the closing date
trading price will be fixed at $14.00 and the exchange ratio will be fixed at
56.4742, 46.8431 and 6.0951 shares of Corporation common stock for each share
of C&L, Bank of Bristol or Bank of Blountstown common stock you own.

The following table shows the number of shares of Corporation common stock to
be exchanged for your shares assuming a range of closing date trading prices.

NUMBER OF SHARES OF CORPORATION COMMON STOCK TO BE
EXCHANGED FOR EACH SHARE OF COMMON STOCK OF:

<TABLE>
<CAPTION>
CLOSING DATE BANK OF BANK OF
TRADING PRICE C&L BRISTOL BLOUNTSTOWN
- ------------- ------- ------- -----------
<S> <C> <C> <C>
$10.00 79.0639 65.5803 8.5331
$11.00 71.8763 59.6185 7.7574
$12.00 65.8866 54.6503 7.1110
$13.00 60.8184 50.4464 6.5640
$14.00 or greater 56.4742 46.8431 6.0951
</TABLE>

Q: CAN I CHANGE MY VOTE AFTER I HAVE MAILED MY SIGNED PROXY CARD?

A: Yes. You can change your vote at any time before your proxy is voted at your
special meeting. You can do this in one of three ways. First, you can send a
written notice stating that you would like to revoke your proxy. Second, you
can complete and submit a new proxy card. If you choose either of these two
methods, you must submit your notice of revocation or your new proxy card to
Jed M. Hiers at the address below if you are a C&L stockholder, to Jed M.
Hiers at the address below, if you are a Bank of Blountstown stockholder, and
to Jed M. Hiers at the address below if you are a Bank of Bristol
stockholder. Third, you can attend the special meeting for your company and
vote in person. Simply attending the meeting, however, will not revoke your
proxy.

Q: SHOULD I SEND IN MY STOCK CERTIFICATES NOW?

A: No. After the mergers and the share exchange are completed, we will send you
written instructions on exchanging your stock certificates.

viii
<PAGE> 17

Q: WHEN DO YOU EXPECT THE MERGERS AND THE SHARE EXCHANGE TO BE COMPLETED?

A: We are working towards completing the mergers and the share exchange as
quickly as possible. In addition to stockholder approvals, we must also
obtain regulatory approvals. We expect to complete the mergers and the share
exchange by June 30, 1999.

Q: WHAT ARE THE TAX CONSEQUENCES OF THE MERGERS AND THE SHARE EXCHANGE?

A: The receipt of Corporation common stock in the mergers and the share exchange
generally will be tax-free to stockholders for federal income tax purposes.
To review the tax consequences in greater detail, see pages , and .

Q: WHO CAN HELP ANSWER MY QUESTIONS?

A: If you have more questions about the mergers or the share exchange, you
should contact:

<TABLE>
<S> <C> <C>
C&L stockholders: Bank of Bristol stockholders: Bank of Blountstown
C&L Banking Corporation C&L Bank of Bristol stockholders:
Post Office Box 550 Post Office Box 550 C&L Bank of Blountstown
Bristol, Florida 32321 Bristol, Florida 32321 307 W. Central Avenue
Attention: Jed M. Hiers Attention: Jed M. Hiers Blountstown, Florida 32424
Telephone: (850) 643-2221 Telephone: (850) 643-2221 Attention: Jed M. Hiers
Telephone: (850) 674-5900
</TABLE>

ix
<PAGE> 18

SUMMARY OF PROSPECTUS-JOINT PROXY STATEMENT

This summary highlights selected information from this document and may not
contain all of the information that is important to you. You should read
carefully this entire document and the documents to which we have referred you.
This will help you to understand the mergers, the share exchange and related
matters fully and their legal terms.

THE COMPANIES
(See pages , , and )

The Banc Corporation. The Banc Corporation is a registered bank holding
company and registered thrift holding company incorporated in Delaware and
headquartered in Birmingham, Alabama. The Corporation provides banking and other
financial services in Alabama and Florida through its banking subsidiaries, The
Bank and Emerald Coast Bank. The Bank, an Alabama banking corporation
headquartered in Birmingham, Alabama, is 99.75% owned by the Corporation and has
17 locations in Alabama. Emerald Coast Bank is a federally chartered thrift
which was acquired by the Corporation on February 12, 1999. Emerald Coast Bank
has four locations in the panhandle of Florida.

The recent acquisition of banks and other financial institutions have
contributed significantly to the Corporation's growth. The following chart lists
the Corporation's recent acquisitions and their dates of completion:

<TABLE>
<S> <C> <C>
- - Commercial Bancshares of Roanoke, Inc. and its subsidiary, October 16, 1998
- - City National Corporation and its subsidiary, October 30, 1998
- - First Citizens Bancorp, Inc. and its subsidiary, October 30, 1998
- - Commerce Bank of Alabama, November 6, 1998
- - Emerald Coast Bancshares, Inc. and its subsidiary, February 12, 1999
</TABLE>

The principal executive offices of the Corporation, The Bank and Emerald
Coast Bank are:

<TABLE>
<S> <C> <C>
The Banc Corporation The Bank Emerald Coast Bank
17 North 20th Street 17 North 20th Street 7522 Front Beach Road
Birmingham, Alabama 35203 Birmingham, Alabama 35203 Panama City Beach, Florida 32408
(205) 326-2265 (205) 326-2265 (850) 230-9800
</TABLE>

As used in this Prospectus-Joint Proxy Statement, the term "Corporation" refers
to The Banc Corporation and its respective subsidiaries and affiliates,
including The Bank and Emerald Coast Bank unless the context requires otherwise.

C&L Banking Corporation. C&L, established in 1987, is a registered bank
holding company and incorporated under Florida law. Through its subsidiary, C&L
Bank of Bristol, C&L provides community banking services in Bristol, Florida. As
of December 31, 1998, C&L had total assets of approximately $48.9 million, loans
of approximately $34.9 million, deposits of approximately $43.4 million and
stockholders' equity of approximately $4.9 million. The principal executive
offices of C&L are:

C&L Banking Corporation
Highway 20 and Baker Street
Post Office Box 550
Bristol, Florida 32321
Telephone: (850) 643-2221

1
<PAGE> 19

C&L Bank of Bristol. C&L Bank of Bristol, established in 1975, is a
Florida banking corporation and 98.1% owned subsidiary of C&L. C&L Bank of
Bristol provides community banking services in Bristol, Florida. The principal
executive offices of Bank of Bristol are:

C&L Bank of Bristol
Highway 20 and Baker Street
Post Office Box 550
Bristol, Florida 32321
Telephone: (850) 643-2221

C&L Bank of Blountstown. C&L Bank of Blountstown, established in 1987, is
a Florida banking corporation that provides community banking services in
Blountstown, Florida and Altha, Florida. As of December 31, 1998, Bank of
Blountstown had total assets of approximately $56.8 million, loans of
approximately $31.7 million, deposits of approximately $52.3 million and
stockholders' equity of approximately $3.9 million. The principal executive
offices of Bank of Blountstown are:

C&L Bank of Blountstown
307 W. Central Avenue
Blountstown, Florida 32424
Telephone: (850) 674-5900

RECENT DEVELOPMENTS OF THE CORPORATION

BankersTrust of Alabama, Inc. On January 13, 1999, the Corporation entered
into an agreement to acquire BankersTrust of Alabama, Inc., an Alabama bank
holding company. BankersTrust owns 100% of BankersTrust of Madison, an Alabama
banking corporation, with locations in Huntsville and Madison, Alabama. The
BankersTrust acquisition is structured to be accounted for as a purchase.

Public Offering of Corporation Common Stock. During the fourth quarter of
1998, the Corporation completed an underwritten public offering of 1,000,000
shares of Corporation common stock resulting in net proceeds to the Corporation
of approximately $9.6 million. On January 10, 1999, the underwriters of the
public offering exercised their overallotment option to purchase an additional
150,000 shares of Corporation common stock resulting in net proceeds to the
Corporation of approximately $1.5 million. The Corporation used the proceeds
received from this offering to repay debt incurred for the acquisition of
Commercial Bancshares of Roanoke, Inc. and for working capital.

Recent Operating Results. On April 28, 1999, the Corporation announced its
operating results for the first quarter ended March 31, 1999. For the first
quarter of 1999, net income was $504,000, or $.04 per share on a basic and
diluted basis, compared to $652,000, or $.06 per share on a basic and diluted
basis for the first quarter of 1998. See page .

OUR REASONS FOR THE MERGERS AND SHARE EXCHANGE

The Boards of Directors of the Corporation, C&L, Bank of Bristol and Bank
of Blountstown, have identified various benefits that are likely to result from
the mergers and share exchange. The Boards of Directors expect the mergers and
share exchange to:

- Enhance the franchise and resources of the companies;

- Increase the presence of the Corporation in certain geographical areas;

- Increase the profitability of the combined operations through cost
savings, operating efficiencies, economies of scale, lower financing
costs and stronger market positions; and

- Provide liquidity to the stockholders of C&L, Bank of Bristol and Bank of
Blountstown by giving them a security for which there is a public trading
market.

2
<PAGE> 20

These and other reasons identified by each board for recommending and approving
the mergers and the share exchange are explained in greater detail on pages
through , pages through and pages through of this document.

MANAGEMENT OF THE SURVIVING CORPORATION
(See pages , , and )

After the mergers, the Corporation will be managed by the same Board of
Directors and executive officers as existed before the mergers except that Jerry
Smith, a director of C&L and Bank of Blountstown, will join the Board of
Directors of the Corporation.

THE SPECIAL MEETINGS
(See pages , and )

The special meetings to vote on the proposed mergers or share exchange will
be held on the dates, times and places as follows:

<TABLE>
<S> <C> <C>
C&L BANKING CORPORATION C&L BANK OF BRISTOL C&L BANK OF BLOUNTSTOWN
, 1999 , 1999 , 1999
a.m a.m. a.m.
C&L Bank of Bristol C&L Bank of Bristol W.T. Neal Civic Center
Highway 20 and Baker Street Highway 20 and Baker Street Highway 71 North
Bristol, Florida 32321 Bristol, Florida 32321 Blountstown, Florida 32424
</TABLE>

OUR RECOMMENDATIONS TO STOCKHOLDERS

To C&L Stockholders:

The C&L Board of Directors believes that the C&L merger is in the best
interests of C&L and its stockholders and recommends that C&L stockholders vote
for the proposal to approve and adopt the C&L Plan of Merger.

To Bank of Bristol Stockholders:

The Bank of Bristol Board of Directors believes that the share exchange is
in the best interests of Bank of Bristol and its stockholders and recommends
that Bank of Bristol stockholders vote for the proposal to approve and adopt the
Share Exchange Agreement.

To Bank of Blountstown Stockholders:

The Bank of Blountstown Board of Directors believes that the Bank of
Blountstown merger is in the best interests of Bank of Blountstown and its
stockholders and recommends that Bank of Blountstown stockholders vote for the
proposal to approve and adopt the Bank of Blountstown Plan of Merger.

VOTE REQUIRED

To approve the C&L merger, a majority of the C&L common stock entitled to
vote at the meeting must vote in favor of the C&L Plan of Merger. The directors
of C&L, who collectively own approximately 71.34% of the outstanding C&L common
stock, have appointed James A. Taylor as their proxy to vote their shares in
favor of the C&L Plan of Merger. Therefore, approval of the C&L merger is
assured.

To approve the share exchange, a majority of the shares of Bank of Bristol
common stock entitled to vote at the meeting must vote in favor of the share
exchange. C&L owns approximately 98.1% of the outstanding shares of Bank of
Bristol common stock and has agreed to vote in favor of the share exchange.
Therefore, approval of the share exchange is assured.

To approve the Bank of Blountstown merger, a majority of the shares of Bank
of Blountstown common stock entitled to vote at the meeting must vote in favor
of the Bank of Blountstown Plan of Merger. The

3
<PAGE> 21

directors of Bank of Blountstown, who collectively own approximately 52.06% of
the voting power of the outstanding Bank of Blountstown common stock, have
appointed James A. Taylor as their proxy to vote their Bank of Blountstown
shares in favor of the Bank of Blountstown Plan of Merger. Therefore, approval
of the Bank of Blountstown merger is assured.

THE MERGER BETWEEN THE CORPORATION AND C&L

The C&L Plan of Merger is included as Annex A to this Prospectus-Joint
Proxy Statement. You are encouraged to read the C&L Plan of Merger because it is
the legal document that governs the C&L merger.

WHAT C&L STOCKHOLDERS WILL RECEIVE
(See page )

As a result of the C&L merger, each outstanding share of C&L common stock
will be converted into shares of Corporation common stock. The number of shares
of Corporation common stock that you will receive in exchange for your shares of
C&L common stock is calculated as follows:.

- Step 1. Total number of shares to be exchanged.

The total number of shares of Corporation common stock to be exchanged is
calculated by dividing $12,866,857.42 by the closing date trading price.
The closing date trading price is the twenty trading day average last sales
price for Corporation common stock on Nasdaq, ending three trading days
prior to the special meeting.

- Step 2. The exchange ratio.

The exchange ratio is the total number of shares of Corporation common
stock to be exchanged divided by the total number of shares of C&L common
stock outstanding.

- Step 3. Number of shares you will receive.

You will receive the number of shares of Corporation common stock equal to
the number of shares of C&L common stock that you own multiplied by the
exchange ratio.

If the closing date trading price is greater than $14.00, the closing date
trading price will be fixed at $14.00 and you will receive 56.4742 shares of
Corporation common stock for each share of C&L common stock you own.

The number of shares of Corporation common stock you will receive for your
shares of C&L common stock will not be finalized until three days before the
special meeting. The exchange ratio was negotiated between C&L and the
Corporation giving consideration to the factors set forth in "The C&L Merger --
Background of the Merger." In view of the wide variety of factors considered in
connection with its evaluation of the C&L merger, the C&L Board of Directors did
not quantify or otherwise assign relative weights to the specific factors
considered in reaching its determination.

You should not send in your stock certificates until instructed to do so
after the C&L merger is completed.

OTHER INTERESTS OF OFFICERS AND DIRECTORS OF C&L IN THE C&L MERGER
(See page )

You should be aware that the officers and directors of C&L, all of whom are
also stockholders of C&L, have interests in the C&L merger that are different
from or in addition to your interests. If the C&L merger is consummated, Jed M.
Hiers, currently the Chief Executive Officer, President and a director of C&L,
will receive an employment contract from the Corporation and Jerry Smith, a
director of C&L and Bank of Blountstown, will join the Board of Directors of the
Corporation.

In addition, the Corporation will maintain C&L's current policy regarding
the officers' and directors' liability insurance for at least four years for the
current officers and directors of C&L.

4
<PAGE> 22

CONDITIONS TO THE C&L MERGER
(See page )

The completion of the C&L merger depends upon a number of conditions,
including the following:

- Approval of the C&L Plan of Merger by the C&L stockholders;

- No law shall have been enacted or injunction entered that effectively
prohibits the C&L merger;

- The registration statement filed with the SEC with respect to the shares
of Corporation common stock to be received by the C&L stockholders shall
have been declared effective;

- Receipt of legal opinions regarding certain tax consequences of the C&L
merger;

- Receipt of an accountant's letter regarding accounting for the C&L merger
as a pooling of interests;

- The shares of Corporation common stock to be received by the C&L
stockholders shall have been listed on Nasdaq;

- Receipt of all necessary regulatory approvals and consents;

- Holders of no more than 10% of the outstanding shares of C&L giving
written notice of dissent; and

- The merger occurring simultaneously with the Corporation's acquisition of
Bank of Blountstown.

Except for stockholder approval and other legal requirements, any condition
to the C&L merger may be waived by the company entitled to assert the condition.
The C&L merger and the Bank of Blountstown merger are conditioned upon each
other, and therefore, the stockholders of both C&L and Bank of Blountstown must
approve their respective plan of merger in order for both mergers to be
completed.

NO SOLICITATION BY C&L
(See page )

C&L has agreed that it will not initiate or encourage any discussions
regarding a business combination of C&L with any other party.

REGULATORY APPROVALS
(See page )

The C&L merger must be approved by the Board of Governors of the Federal
Reserve and the Florida Banking Department. We have filed all of the required
notices and applications with the Federal Reserve Board and the Florida Banking
Department.

TERMINATION OF THE C&L PLAN OF MERGER
(See page )

The Corporation and C&L can agree to terminate the C&L Plan of Merger
without completing the C&L merger. Either the Corporation or C&L can terminate
the C&L Plan of Merger if any of the following occurs:

- The C&L merger is not completed by September 30, 1999;

- The approval of the C&L stockholders is not received;

- A court or other governmental authority permanently prohibits the C&L
merger;

- The other party materially breaches any of its representations or
warranties or obligations under the C&L Plan of Merger; or

- The closing date trading price of Corporation common stock is less than
or equal to $10.00.

The Corporation can terminate the C&L Plan of Merger if the C&L Board of
Directors withdraws, modifies or amends its approval of the C&L Plan of Merger
in any way adverse to the Corporation or recommends an alternative transaction.

5
<PAGE> 23

ACCOUNTING TREATMENT
(See page )

We expect the C&L merger to qualify as a pooling of interests, which means
that the Corporation and C&L will be treated as if they had always been combined
for accounting and financial reporting purposes. The C&L merger is conditioned
on receiving this accounting treatment.

OPINION OF FINANCIAL ADVISOR
(See page )

We have conditioned the C&L merger on C&L's receipt of fairness opinions
from Alex Sheshunoff & Co. as to the fairness of the merger consideration from a
financial point of view to the stockholders of C&L as of March 5, 1999, and as
of the most practicable and closest date prior to the mailing of this
Prospectus-Joint Proxy Statement. C&L has received an opinion from Sheshunoff
that the C&L merger is fair to the stockholders of C&L from a financial point of
view as of March 5, 1999 and as of , 1999, the most practicable and
closest date prior to the mailing of this Prospectus-Joint Proxy Statement.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES
(See page )

The C&L merger is structured so that you should not recognize a gain or
loss for federal income tax purposes on the exchange of shares of C&L common
stock for shares of Corporation common stock. Federal income tax may be payable,
however, on cash received by C&L stockholders instead of fractional shares or in
connection with their exercise of dissenters' rights. We will not complete the
merger unless we receive legal opinions from counsel that the merger will not be
taxable for federal income tax purposes.

The tax consequences of the C&L merger to you will depend on the facts of
your own situation. You are advised to consult your tax advisor as to the tax
consequences of the C&L merger to you.

DISSENTERS' RIGHTS OF C&L STOCKHOLDERS
(See page )

You have the right to dissent from the C&L merger under Florida law and
receive payment in cash of the "fair value" of your shares if you do not vote in
favor of the merger and give written notice to C&L prior to the special meeting
that you plan to dissent from the merger.

THE SHARE EXCHANGE AMONG THE CORPORATION, BRISTOL ACQUISITION
CORPORATION AND BANK OF BRISTOL

The Share Exchange Agreement is included as Annex B to this
Prospectus-Joint Proxy Statement. You are encouraged to read the Share Exchange
Agreement because it is the legal document that governs the share exchange.

WHAT BANK OF BRISTOL STOCKHOLDERS WILL RECEIVE
(See page )

As a result of the share exchange, the outstanding shares of Bank of
Bristol common stock not owned by C&L will be converted into shares of
Corporation common stock. The number of shares of Corporation common stock that
you will receive in exchange for your shares of Bank of Bristol common stock is
calculated as follows:

- Step 1. Total number of shares to be exchanged.

The total number of shares of Corporation common stock to be exchanged is
calculated by dividing $249,205.19 by the closing date trading price. The
closing date trading price is the twenty trading day average last sales
price for Corporation common stock on Nasdaq, ending three trading days
prior to the special meeting.

6
<PAGE> 24

- Step 2. The exchange ratio.

The exchange ratio is the total number of shares of Corporation common
stock to be exchanged divided by the total number of shares of Bank of
Bristol common stock outstanding not owned by C&L Banking Corporation.

- Step 3. Number of shares you will receive.

You will receive the number of shares of Corporation common stock equal to
the number of shares of Bank of Bristol common stock that you own
multiplied by the exchange ratio.

If the closing date trading price is greater than $14.00, the closing date
trading price will be fixed at $14.00 and you will receive 46.8431 shares of
Corporation common stock for each share of Bank of Bristol common stock you own.

The number of shares of Corporation common stock you will receive for your
shares of Bank of Bristol common stock will not be finalized until three days
before the special meeting. Bank of Bristol stockholders will receive
Corporation common stock from Bristol Acquisition Corporation, a subsidiary of
the Corporation.

You should not send in your stock certificates until instructed to do so
after the share exchange is completed.

CONDITIONS TO THE SHARE EXCHANGE
(See page )

The completion of the share exchange depends upon a number of conditions,
including the following:

- approval of the Bank of Bristol stockholders;

- no pending or threatened litigation which is sought to restrain or
prohibit the consummation of the share exchange;

- the completion of the C&L merger.

Except for stockholder approval and other legal requirements, any condition
to the share exchange may be waived by the company entitled to assert the
condition.

TERMINATION OF THE SHARE EXCHANGE
(See page )

The Corporation, Bristol Acquisition Corporation and Bank of Bristol can
agree to terminate the share exchange for the following reasons:

- by written consent of either both the Corporation and Bristol Acquisition
Corporation or by Bank of Bristol; or

- by any party if the conditions to the party's obligations have not been
met or waived.

ACCOUNTING TREATMENT
(See page )

We expect the share exchange to qualify as a pooling of interests which
means that Corporation and Bank of Bristol will be treated as if they have
always been combined for accounting and financial reporting purposes.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES
(See page )

The share exchange is structured so that you should not recognize a gain or
loss for federal income tax purposes on the exchange of shares of Bank of
Bristol common stock for shares of Corporation common stock. Federal income tax
may be payable, however, on cash received by Bank of Bristol stockholders
instead of fractional shares.

7
<PAGE> 25

The tax consequences of the Bank of Bristol merger to you will depend on
the facts of your own situation. You are advised to consult your tax advisor as
to the tax consequences of the Bank of Bristol merger to you.

DISSENTERS' RIGHTS OF BANK OF BRISTOL STOCKHOLDERS
(See page )

You have the right to dissent from the share exchange under Florida law and
receive payment of the "fair value" of your shares if you do not vote in favor
of the share exchange and give written notice to Bank of Bristol prior to the
special meeting that you plan to dissent from the share exchange.

THE MERGER AMONG THE CORPORATION, BANK OF BLOUNTSTOWN
AND BANK OF BRISTOL

The Bank of Blountstown Plan of Merger is included as Annex C to this
Prospectus-Joint Proxy Statement. You are encouraged to read the Bank of
Blountstown Plan of Merger because it is the legal document that governs the
Bank of Blountstown merger.

WHAT BANK OF BLOUNTSTOWN STOCKHOLDERS WILL RECEIVE
(See page )

As a result of the Bank of Blountstown merger, each outstanding share of
Bank of Blountstown common stock will be converted into shares of Corporation
common stock. The number of shares of Corporation common stock that you will
receive in exchange for your shares of Bank of Blountstown common stock is
calculated as follows:

- Step 1. Total number of shares to be exchanged.

The total number of shares of Corporation common stock to be exchanged is
calculated by dividing $8,533,142.58 by the closing date trading price. The
closing date trading price is the twenty trading day average last sales
price for Corporation common stock on Nasdaq, ending three trading days
prior to the special meeting.

- Step 2. The exchange ratio.

The exchange ratio is the total number of shares of Corporation common
stock to be exchanged divided by the total number of shares of Bank of
Blountstown common stock outstanding.

- Step 3. Number of shares you will receive.

You will receive the number of shares of Corporation common stock equal to
the number of shares of Bank of Blountstown common stock that you own
multiplied by the exchange ratio.

If the closing date trading price is greater than $14.00, the closing date
trading price will be fixed at $14.00 and you will receive 6.0951 shares of
Corporation common stock for each share of Bank of Blountstown common stock you
own.

The number of shares of Corporation common stock you will receive for your
shares of Bank of Blountstown common stock will not be finalized until three
days before the special meeting. The exchange ratio was negotiated between Bank
of Blountstown and the Corporation giving consideration to the factors set forth
in "The Bank of Blountstown Merger -- Background of the Merger." In view of the
wide variety of factors considered in connection with its evaluation of the Bank
of Blountstown merger, the Bank of Blountstown Board of Directors did not
quantify or otherwise assign relative weights to the specific factors considered
in reaching its determination.

You should not send in your stock certificates until instructed to do so
after the Bank of Blountstown merger is completed.

8
<PAGE> 26

OTHER INTERESTS OF OFFICERS AND DIRECTORS OF BANK OF BLOUNTSTOWN IN THE BANK OF
BLOUNTSTOWN MERGER
(See page )

You should be aware that a number of officers and directors of Bank of
Blountstown have interests in the Bank of Blountstown merger that are different
from or in addition to your interests. If the Bank of Blountstown merger is
consummated, Jed M. Hiers, currently the President and a director of Bank of
Blountstown, will receive an employment contract from the Corporation, and Jerry
Smith, a director of Bank of Blountstown and C&L, will join the Corporation
Board of Directors.

In addition, the Corporation will maintain Bank of Blountstown's current
policy of officers' and directors' insurance for at least four years for the
current officers and directors of Bank of Blountstown.

CONDITIONS TO THE BANK OF BLOUNTSTOWN MERGER
(See page )

The completion of the Bank of Blountstown merger depends upon a number of
conditions, including the following:

- Approval of the Bank of Blountstown Plan of Merger by the Bank of
Blountstown stockholders;

- No law shall have been enacted or injunction entered that effectively
prohibits the Bank of Blountstown merger;

- The registration statement filed with the SEC with respect to the shares
of Corporation common stock to be received by the Bank of Blountstown
stockholders shall have been declared effective;

- Receipt of legal opinions regarding certain tax consequences of the Bank
of Blountstown merger;

- Receipt of an accountant's letter regarding accounting for the Bank of
Blountstown merger as a pooling of interests;

- Shares of Corporation common stock to be issued have been listed on
Nasdaq;

- Receipt of all necessary regulatory approvals and consents;

- Holders of no more than 10% of the outstanding shares of Bank of
Blountstown giving notice of dissent;

- The Corporation, C&L and Bank of Bristol shall have completed the share
exchange; and

- The merger occurring simultaneously with the Corporation's acquisition of
C&L.

Except for stockholder approval and other legal requirements, any condition
to the Bank of Blountstown merger may be waived by the company entitled to
assert the condition. The C&L merger and the Bank of Blountstown merger are
conditioned upon each other, and therefore, the stockholders of both C&L and
Bank of Blountstown must approve their respective Plan of Merger in order for
both mergers to be completed.

NO SOLICITATION BY BANK OF BLOUNTSTOWN
(See page )

Bank of Blountstown has agreed that it will not initiate or encourage any
discussions regarding a business combination of Bank of Blountstown with any
other party.

REGULATORY APPROVALS
(See page )

The Bank of Blountstown merger must be approved by the Federal Deposit
Insurance Corporation and the Florida Banking Department. We have filed all of
the necessary notices and applications with the FDIC and the Florida Banking
Department.

9
<PAGE> 27

TERMINATION OF THE BANK OF BLOUNTSTOWN PLAN OF MERGER
(See page )

The Corporation and Bank of Blountstown can agree to terminate the Bank of
Blountstown Plan of Merger without completing the Bank of Blountstown merger.
Either the Corporation or Bank of Blountstown can terminate the Bank of
Blountstown Plan of Merger if any of the following occurs:

- The Bank of Blountstown merger is not completed by September 30, 1999;

- The approval of the Bank of Blountstown stockholders is not received;

- A court or other governmental authority permanently prohibits the Bank of
Blountstown merger;

- The other party materially breaches any of its representations or
warranties or obligations under the Bank of Blountstown Plan of Merger;
or

- The closing date trading price of Corporation common stock is less than
or equal to $10.00.

The Corporation can terminate the Bank of Blountstown Plan of Merger if the
Bank of Blountstown Board of Directors withdraws, modifies or amends its
approval of the Bank of Blountstown Plan of Merger in any way adverse to the
Corporation or recommends an alternative transaction.

ACCOUNTING TREATMENT
(See page )

We expect the Bank of Blountstown merger to qualify as a pooling of
interests, which means that the Corporation and Bank of Blountstown will be
treated as if they had always been combined for accounting and financial
reporting purposes. The Bank of Blountstown merger is conditioned on receiving
this accounting treatment.

OPINION OF FINANCIAL ADVISOR
(See page )

We have conditioned the Bank of Blountstown merger on Bank of Blountstown's
receipt of fairness opinions from Alex Sheshunoff & Co. and as to the fairness
of the merger consideration from a financial point of view to the stockholders
of Bank of Blountstown as of March 5, 1999 and as the most practicable and
closest date prior to the mailing of this Prospectus-Joint Proxy Statement. Bank
of Blountstown has received an opinion from Sheshunoff that the Bank of
Blountstown merger is fair to the stockholders of Bank of Blountstown from a
financial point of view as of March 5, 1999 and as of , 1999, the most
practicable and closest date prior to the mailing of this Prospectus-Joint Proxy
Statement.

MATERIAL FEDERAL INCOME TAX CONSEQUENCES
(See page )

The Bank of Blountstown merger is structured so that you should not
recognize a gain or loss for federal income tax purposes on the exchange of
shares of Bank of Blountstown common stock for shares of Corporation common
stock. Federal income tax may be payable, however, on cash received by Bank of
Blountstown stockholders instead of fractional shares or in connection with
their exercise of dissenters' rights. We will not complete the merger unless we
receive legal opinions from counsel that the merger will not be taxable for
federal income tax purposes.

The tax consequences of the Bank of Blountstown merger to you will depend
on the facts of your own situation. You are advised to consult your tax advisor
as to the tax consequences of the Bank of Blountstown merger to you.

10
<PAGE> 28

DISSENTERS' RIGHTS OF BANK OF BLOUNTSTOWN STOCKHOLDERS
(See page )

You have the right to dissent from the Bank of Blountstown merger under
Florida law and receive payment in cash of the "fair value" of your shares if
you do not vote in favor of the merger and give Bank of Blountstown written
notice of your intent to dissent from the merger.

SELECTED HISTORICAL AND PRO FORMA FINANCIAL DATA
(See page )

The table below presents certain unaudited condensed supplemental
historical financial and operating data for the Corporation and certain
unaudited pro forma condensed financial and operating data for the Corporation
after giving effect to (1) the mergers as if they had each occurred as of
January 1, 1998, and (2) the pro forma adjustments described in the Notes to the
Unaudited Pro Forma Condensed Financial Statements of the Corporation which
appear elsewhere in this Prospectus -- Joint Proxy Statement. The amount of pro
forma combined net income for the year ended December 31, 1998, shown below
reflects adjustments which give effect to factors attributable to the mergers.
The pro forma financial information should be read in conjunction with the
financial statements and notes thereto appearing elsewhere in this
Prospectus-Joint Proxy Statement. The pro forma condensed statement of financial
condition information and net income are not necessarily indicative of the
combined financial position at consummation of the mergers or the results of
operations following consummation of the mergers.

<TABLE>
<CAPTION>
AS OF AND FOR THE
YEAR ENDED
DECEMBER 31, 1998
----------------------
PRO FORMA
ACTUAL COMBINED
--------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Assets...................................................... $524,394 $629,642
Loans, net of unearned income............................... 365,379 431,930
Deposits.................................................... 435,366 530,593
Stockholders' equity........................................ 57,211 66,061
Net (loss) income........................................... (367) 285
Leverage ratio.............................................. 11.01% 10.58%
Tier 1 risk-based capital ratio............................. 13.87 13.90
Total risk-based capital ratio.............................. 14.99 15.04
</TABLE>

RISK FACTORS
(See page )

See "Risk Factors" for a discussion of certain risk factors related to the
mergers and the combined companies.

MARKET INFORMATION AND DIVIDEND POLICY
(See page )

Corporation common stock currently trades on the Nasdaq National Market
System under the trading symbol "TBNC." Before the Corporation's public offering
on December 10, 1998, there was no public market for the Corporation common
stock. On February 24, 1999, the last full trading day prior to the public
announcement of the proposed merger, the Corporation common stock closed at
$10.12 per share on Nasdaq. On , 1999, the Corporation common stock
closed at $ per share. There is no established trading market for the
common stock of C&L, Bank of Bristol or Bank of Blountstown.

The Corporation has not paid any dividends this year. Any dividends paid by
the Corporation in the future will be subject to certain state law restrictions,
federal restrictions and the judgment of the Board of Directors of the
Corporation. There can be no assurance that dividends will be paid in the
future.

11
<PAGE> 29

LISTING OF CORPORATION COMMON STOCK
(See page )

The Corporation will list the shares of Corporation common stock to be
issued in connection with the mergers and share exchange with Nasdaq.

COMPARATIVE PER SHARE INFORMATION

The following summary presents selected comparative per share information
for (1) the Corporation on a supplemental basis in comparison with pro forma
information giving effect to the mergers on a pooling of interests basis, and
(2) C&L and Bank of Blountstown on a historical basis in comparison with pro
forma equivalent information after giving effect to the mergers, assuming the
various closing date trading prices noted in the table below. The supplemental
and pro forma financial information should be read in conjunction with the
supplemental consolidated financial statements of the Corporation, the
historical consolidated financial statements of C&L and Bank of Blountstown and
the related notes thereto. See "Index to Financial Statements."

The following information is not necessarily indicative of the combined
results of operations or combined financial position that would have resulted
had the mergers been consummated at the beginning of the periods indicated, nor
is it necessarily indicative of the future combined results of operations or
financial position.

<TABLE>
<CAPTION>
PER COMMON SHARES
-------------------------------------------
DILUTED NET INCOME (LOSS) STOCKHOLDERS'
YEAR ENDED DECEMBER 31 EQUITY
--------------------------- -------------
1996 1997 1998 1998
------- ------- ------- -------------
<S> <C> <C> <C> <C>
Corporation
Historical.............................................. .15 .20 (.03) $ 4.78
Pro forma combined assuming closing date trading price
of:(1)
$10.................................................. .23 .22 .02 4.67
11.................................................. .24 .23 .02 4.74
12.................................................. .24 .23 .02 4.80
13.................................................. .24 .23 .02 4.84
14.................................................. .25 .24 .02 4.89
C&L
Historical.............................................. 36.51 42.98 35.39 300.17
Pro forma equivalent assuming closing date trading price
of:(2)
$10.................................................. 18.18 17.39 1.58 369.44
11.................................................. 17.25 16.53 1.44 340.60
12.................................................. 15.81 15.15 1.32 315.93
13.................................................. 14.60 13.99 1.22 294.59
14.................................................. 14.12 13.55 1.13 275.96
Bank of Blountstown
Historical.............................................. 4.86 .19 .76 38.71
Pro forma equivalent assuming closing date trading price
of:(2)
$10.................................................. 1.96 1.88 .17 39.87
11.................................................. 1.86 1.78 .16 36.76
12.................................................. 1.71 1.64 .14 34.10
13.................................................. 1.58 1.51 .13 31.79
14.................................................. 1.52 1.46 .12 29.78
</TABLE>

12
<PAGE> 30

<TABLE>
<CAPTION>
PER COMMON SHARES
------------------------
DIVIDENDS PER SHARE
YEAR ENDED DECEMBER 31
------------------------
1996 1997 1998
------ ------ ------
<S> <C> <C> <C>
Corporation
Historical................................................ $ .08 $ .09 $ --
C&L
Historical................................................ 2.05 3.07 3.07
Pro forma equivalent assuming closing date trading price
of:(2)
$10.................................................... 4.96 5.61 1.78
11.................................................... 4.70 5.31 1.69
12.................................................... 4.47 5.04 1.60
13.................................................... 4.25 4.80 1.53
14.................................................... 4.06 4.58 1.46
Bank of Blountstown
Historical................................................ .60 .60 .60
Pro forma equivalent assuming closing date trading price
of:(2)
$10.................................................... .54 .60 .19
11.................................................... .51 .57 .18
12.................................................... .48 .54 .17
13.................................................... .46 .52 .16
14.................................................... .44 .49 .16
</TABLE>

- ---------------

(1) Assumes both of the mergers close. See "Risk Factors" and "Condensed
Combined Pro Forma Financial Information."
(2) C&L and Bank of Blountstown pro forma equivalent per common share data is
calculated by multiplying the pro forma combined amounts by the respective
exchange ratios of:

NUMBER OF SHARES OF CORPORATION COMMON STOCK TO BE
EXCHANGED FOR EACH SHARE OF COMMON STOCK OF:

<TABLE>
<CAPTION>
CLOSING DATE BANK OF
TRADING PRICE C&L BLOUNTSTOWN
- ----------------- ------- -----------
<S> <C> <C>
$10.00 79.0639 8.5331
$11.00 71.8763 7.7574
$12.00 65.8866 7.1110
$13.00 60.8184 6.5640
$14.00 56.4742 6.0951
$14.00 or greater 56.4742 6.0951
</TABLE>

13
<PAGE> 31

RISK FACTORS

If the mergers and the share exchange are consummated, you will receive
shares of Corporation common stock in exchange for your shares of either C&L
common stock, Bank of Bristol common stock or Bank of Blountstown common stock.
In deciding whether to approve the mergers and the share exchange you should
carefully consider the risks listed below associated with an investment in
Corporation common stock. Specifically, there are risks and uncertainties that
could affect the Corporation's future financial results and that may cause the
Corporation's future earnings and financial condition to be less favorable than
the Corporation's expectations.

Some of the risks and uncertainties relate to economic conditions generally
and would affect other financial institutions in similar ways. These aspects are
discussed above under the heading "Forward Looking Statements." This section
addresses particular risks and uncertainties that are specific to the
Corporation.

THE CORPORATION'S RECENT ACQUISITIONS AND ITS PROPOSED MERGERS INVOLVE
INTEGRATION RISKS AND MAY IMPACT FUTURE EARNINGS

Since September 30, 1998, the Corporation has acquired five financial
institutions, and it currently has three such acquisitions pending, including
the proposed mergers. The most significant transactions were the mergers of each
of Commerce Bank of Alabama, First Citizens Bancorp, Inc. and City National
Corporation with the Corporation, by virtue of the size of those three companies
relative to the Corporation and the fact that the Corporation became a publicly
traded company as a result of those transactions.

The Corporation's expectations concerning future earnings depend in part on
its being able to combine the operations of the acquired institutions with the
Corporation's own operations promptly and efficiently, and also on the
Corporation being correct in its assumptions about the financial impact of the
acquisitions.

The risks and uncertainties that may affect the Corporation's future
earnings and financial condition include the following:

- The Corporation's revenues after the proposed mergers and other recent
acquisitions may be lower than expected.

Particularly in connection with the Commerce Bank of Alabama, First
Citizens Bancorp and City National Corporation acquisitions, the Corporation
estimated that it could enhance revenues from combining their separate
operations with the Corporation. There is a risk that such revenue enhancements
may not be achieved and also a risk that the revenues of other acquired
institutions may erode over time.

- The Corporation's restructuring charges in recent acquisitions may be
higher than expected.

The Corporation has recorded restructuring and merger-related charges in
connection with its recently completed acquisitions. There is a risk there may
be additional costs and charges resulting from these transactions that exceed
the charges the Corporation has recorded for financial reporting and accounting
purposes.

- The Corporation may have more trouble integrating acquired businesses or
retaining key personnel than expected.

Converting the systems and procedures of each acquired institution to the
Corporation's systems is an important part of the Corporation's acquisition
program. There is a risk that the conversion of an acquired institution may not
be completed on schedule or may be more difficult and costly than expected.
There is also a risk that the Corporation may not be able to retain key
personnel of an acquired institution, which could cause the acquired operations
to perform below expectations.

- The Corporation's operating costs after the mergers and other recent
acquisitions may be greater than expected, and the Corporation's costs
savings from the mergers and other recent acquisitions may be less than
expected, or the Corporation may be unable to obtain those cost savings
as soon as expected.

You should also refer to the discussion above under the heading
"Forward-Looking Statements."

14
<PAGE> 32

THE MERGERS AND THE SHARE EXCHANGE ARE CONDITIONED ON THE COMPLETION OF EACH
OTHER

Completion of each merger and the share exchange is conditioned upon
completion of the other. Therefore, failure by the Corporation to complete one
of the transactions would mean that all of these transactions would fail.

THE CORPORATION'S ABILITY TO SUSTAIN GROWTH INVOLVES RISKS

The Corporation believes its future growth will depend on its ability to
expand its business through:

- internal growth;

- the opening of new branch offices in new markets; and

- the acquisition of other financial institutions or branches.

Furthermore, the Corporation's continued growth and profitability depend on
the Corporation's ability:

- to manage its growth;

- to attract and retain skilled employees;

- to finance its growth, if necessary, at an acceptable cost; and

- to expand the capabilities of the Corporation's management information
systems.

The Corporation's growth strategy could have a material adverse effect on
the Corporation's financial condition and results of operations if the
Corporation is not able to manage its growth successfully or address adequately
all of the changing demands its planned growth may create.

THE CORPORATION CANNOT PREDICT LOAN LOSSES OR THE ADEQUACY OF THE ALLOWANCE FOR
LOAN LOSSES

Lending money is an essential part of the banking business. However,
borrowers do not always repay their loans. The Corporation attempts to maintain
an appropriate allowance for loan losses to provide for potential losses in its
loan portfolio.

There is no precise method of predicting loan losses; therefore, there can
be no assurance that the allowance for loan losses will be sufficient to absorb
future loan losses. Excess loan losses could have a material adverse effect on
the Corporation's financial condition and results of operations. See
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Corporation -- Allocation of the Allowance for Loan Losses."

THE FLUCTUATIONS IN INTEREST RATES MAY AFFECT THE CORPORATION'S INTEREST INCOME

The Corporation's operating results are dependent to a significant degree
on its net interest income. Net interest income is the difference between
interest earned and interest paid and it will change as interest rates
fluctuate. Interest rates are largely dependent on the rate of interest charged
by the Federal Reserve for funds it makes available to institutions. Changes in
the interest rates may have an adverse effect on the deposit levels, net
interest margin, loan demand or the business and earnings of the Corporation and
its subsidiaries. See "Management's Discussion and Analysis of Financial
Condition and Results of Operations -- Corporation."

GEOGRAPHIC CONCENTRATION AND SIGNIFICANCE OF LOCAL ECONOMIC CONDITIONS MAY
AFFECT THE CORPORATION'S PROFITABILITY

Substantially all of The Bank's deposits and assets at December 31, 1998,
were derived from operations in relatively rural markets of Alabama while
Emerald Coast Bank's revenues were derived from operations in markets in Florida
which depend on tourism. Consequently, the Corporation's profitability may be
negatively affected by factors that have a significant impact on agriculture and
tourism, including weather. Some of The

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<PAGE> 33

Bank's and Emerald Bank's market areas have experienced severe weather in 1998,
primarily heavy rains and flooding. See "Business of the Corporation."

The success of the Corporation depends on the general economic conditions
in the geographic markets served by the Corporation's banking subsidiaries.
Although current economic conditions in these markets are favorable, there is no
assurance that favorable economic conditions will continue. Adverse changes in
economic conditions in the geographic markets that the banks serve would likely
impair the Corporation's banking subsidiaries' ability to collect loans and
could otherwise negatively affect the Corporation's financial condition and
results of operations. See "Business of the Corporation."

THE CORPORATION'S YEAR 2000 READINESS MAY AFFECT OPERATIONS AND REVENUES OF THE
CORPORATION

The Year 2000 Issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the
Corporation's computer programs or hardware that have date-sensitive software or
embedded chips may recognize a date using "00" as the year 1900 rather than the
year 2000. This could cause a system failure or miscalculations resulting in
disruptions of operations, including, among other things, a temporary inability
to process transactions, send statements or engage in similar normal business
activities.

Review of the Computer Systems. The Corporation has completed a review of
its material computer applications to identify ways the Year 2000 may affect its
computer systems. The Corporation's computer applications are divided into two
categories, those maintained internally by the Corporation's information
technology group and those maintained externally by the Corporation's vendors.
For internally maintained applications, revisions were implemented during the
first quarter of 1999. The Corporation expects that the total cost associated
with these revisions will not have a material impact on the financial condition
of the Corporation. These costs were primarily incurred during 1998 and were
charged to expenses as incurred. For externally maintained systems, the
Corporation has received written confirmation from its vendors that each system
is currently Year 2000 compliant or will be made Year 2000 compliant during
1999. The costs to be incurred by the Corporation with respect to externally
maintained systems is expected to be minimal.

Year 2000 Merger Policy. The Corporation has adopted a Year 2000 Merger
Policy to address Year 2000 compliance on a stand-alone basis and with C&L and
Bank of Blountstown in the context, and assuming completion, of the mergers.
This policy, adopted by the Board of Directors of the Corporation, defines not
only the techniques and procedures to resolve Year 2000 issues, but also
establishes a management function for reviewing and coordinating Year 2000
efforts in C&L and Bank of Blountstown. The Year 2000 Merger Policy is designed
to act as a guide to C&L and Bank of Blountstown in dealing with Year 2000
issues and to insure compliance of the Corporation both before and after the
mergers.

The Corporation is using this policy to insure that C&L and Bank of
Blountstown follow a logical and planned process for assessing, testing,
renovation and establishing contingencies for effective systems. This policy
includes environmental, security, communications and other embedded chip systems
as well as computers. The Corporation is also addressing additional Year 2000
risk factors that may be significantly influenced by activities related to the
mergers, including: delayed or alternate schedules for the closing of the
mergers; the inadequate allocation of resources to Year 2000 issues by one or
both C&L and Bank of Blountstown; and the potential costs of completing
renovation or replacement of non-compliant systems of one or both C&L and Bank
of Blountstown.

Because of the uncertainty of timing of the mergers and because the mergers
may involve the replacement of current systems, each company is approaching the
Year 2000 issue from two different scenarios. One, C&L and Bank of Blountstown
assume that the mergers will take place as scheduled and that merger related
operational changes might provide a reasonable answer to some of the problems
presented by non-compliant systems. Second, each of C&L and Bank of Blountstown
assumes that the mergers will be significantly delayed or cancelled. In this
situation, C&L and Bank of Blountstown must plan how noncompliant systems can be
renovated or replaced without the merger related operational changes. Therefore,
each of C&L and Bank of Blountstown is proceeding with its individual Year 2000
project. Each project includes a contingency plan to address the possibility
that scheduled merger related systems changes

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<PAGE> 34

might not take place. The Corporation, through the Year 2000 Merger Plan, is
providing coordination between C&L and Bank of Blountstown to insure that each
is adequate and to reduce the duplication of efforts within the surviving
corporation.

Contingency Plans. Assessment and the establishment of mission-critical
priorities have been completed in C&L and Bank of Blountstown with the testing
phase currently in process. Contingency plans to address possible failure of
currently compliant or renovated mission-critical systems are currently in the
development process and should be ready for approval by C&L's and Bank of
Blountstown's Year 2000 steering committees and boards of directors during the
month of September.

The Corporation believes that all of its material applications will be Year
2000 compliant before the end of 1999 and does not expect the costs of attaining
compliance to have a material adverse effect on the financial condition and
operating results of the Corporation. The Corporation has developed contingency
plans to address the possible failure of its currently compliant or renovated
systems. However, because of the many uncertainties associated with Year 2000
compliance issues, and because the Corporation's assessment is necessarily based
on information from C&L and Bank of Blountstown as well as third party vendors,
there can be no assurance that the Corporation's assessment is correct. For a
discussion of the Corporation's assessment of its potential Year 2000 exposure
and the status of the Corporation's program to become Year 2000 compliant, see
"Management's Discussion and Analysis of Financial Condition and Results of
Operations -- Year 2000 Compliance" for each of the Corporation, C&L and Bank of
Blountstown.

THE CORPORATION IS SUBJECT TO EXTENSIVE GOVERNMENTAL REGULATION

Bank and thrift holding companies, banks and thrifts operate in a highly
regulated environment and are subject to extensive supervision and examination
by several federal and state regulatory agencies. The Corporation is subject to
the Bank Holding Company Act and to regulation and supervision by the Federal
Reserve Board and the Office of Thrift Supervision. Emerald Coast Bank is
subject to supervision and regulation by the Office of Thrift Supervision. The
Bank is subject to supervision and regulation by the state regulatory
authorities and the FDIC. Regulatory agencies such as the FDIC, the OTS and the
Alabama Banking Department can prohibit or place significant restrictions on The
Bank's and Emerald Coast Bank's operations or force The Bank and Emerald Coast
Bank to take prompt corrective action if the agencies deem The Bank's or Emerald
Coast Bank's activities to be unsafe or unsound. These regulations are intended
primarily for the protection of depositors and consumers, rather than for the
benefit of stockholders. The Corporation is subject to changes in federal and
state law, as well as changes in regulatory and governmental policies, income
tax laws and accounting principles. The Corporation cannot predict the future
effect of any of those potential changes, but they could materially adversely
affect the Corporation's business and operations.

From time to time, legislation is proposed or enacted that would increase
the cost of doing business, limit or expand permissible activities or affect the
competitive balance between banks and other financial and non-financial
institutions. Congress, the Alabama legislature and various state and federal
bank regulatory agencies frequently propose changes to the laws and regulations
governing the operations and taxation of banks and other financial institutions.
The recent authorization of interstate branching is likely to increase branching
and merger activity and enhance competition among financial institutions. It is
impossible to predict the likelihood of additional changes and the effects these
changes might have on the Corporation or the bank to be acquired in the mergers.
See "Supervision and Regulation."

THE CORPORATION'S RESTATED CERTIFICATE OF INCORPORATION AND BYLAWS AND DELAWARE
LAW MAY PREVENT TAKEOVER BY ANOTHER COMPANY

The Corporation's Restated Certificate of Incorporation, its Bylaws and
Delaware law all contain provisions that could discourage potential acquisition
proposals, delay or prevent a change in control of the Corporation and limit the
price that investors may be willing to pay in the future for shares of
Corporation common stock. The Corporation's Restated Certificate of
Incorporation divides the Board of Directors of the Corporation into three
classes serving staggered terms. One class is elected each year and no more than
one-third of the seats of on the Board of Directors of the Corporation will be
up for election at each annual meeting

17
<PAGE> 35

of stockholders. The classification of the Board of Directors of the Corporation
could make it more difficult for a company to acquire control of the
Corporation. Additionally, the Corporation can issue, without further
stockholder approval, preferred stock with rights and privileges that could be
senior to the Corporation common stock.

Further, Delaware law, subject to certain exceptions, prohibits the
Corporation, without approval of the Board of Directors of the Corporation, from
engaging in a broad range of business combinations with any "interested
stockholder" for a period of three years following the date that such
stockholder became an interested stockholder. An "interested stockholder" is
generally a stockholder who owns 15% of the outstanding Corporation common
stock. See "Management of the Corporation -- Classified Board of Directors,"
"Description of Capital Stock -- Certain Provisions of the Corporation's
Certificate and Delaware Law" and "-- Possible Adverse Effects of the Issuance
of Preferred Stock."

ISSUANCE OF PREFERRED STOCK MAY HAVE POSSIBLE ADVERSE EFFECTS

The Corporation is authorized to issue up to 5,000,000 shares of preferred
stock, $.001 per share. The Board of Directors of the Corporation may designate
the rights and preferences of Corporation preferred stock. If Corporation
preferred stock were to be issued, its effects on the holders of Corporation
common stock could include the following:

- reduction of the amount of money otherwise available for the payment of
dividends on Corporation common stock if dividends are payable on
Corporation preferred stock;

- restrictions on dividends on Corporation common stock if dividends on
Corporation preferred stock are in arrears;

- dilution of the voting power of Corporation common stock if the
Corporation preferred stock has voting rights, including a possible
"veto" power if the Corporation preferred stock has class voting rights;

- dilution of the equity interest of holders of Corporation common stock if
Corporation preferred stock is convertible, and is converted into
Corporation common stock; and

- restrictions on the rights of holders of Corporation common stock to
share in the Corporation's assets upon liquidation until satisfaction of
any liquidation preference granted to the holders of Corporation
preferred stock.

Holders of Corporation common stock have no preemptive rights to purchase
or otherwise acquire any Corporation preferred stock that may be issued. See
"Description of Capital Stock of the Corporation."

THERE ARE RESTRICTIONS ON THE CORPORATION'S ABILITY TO PAY DIVIDENDS

The Corporation must comply with Delaware law and federal bank regulations
before it can pay dividends. The Board of Directors of the Corporation must
authorize the Corporation to pay dividends and there must be sufficient income
to pay dividends. The Corporation conducts its principal business operations
through its subsidiaries. The Corporation will derive cash available to pay
dividends primarily, if not entirely, from dividends paid to the Corporation by
its subsidiaries. Certain state and federal regulations restrict the ability of
the Corporation's subsidiaries to pay dividends to the Corporation. The
Corporation has never paid dividends, and there can be no assurance that
dividends will be paid in the future.

THE CORPORATION IS DEPENDENT ON KEY MANAGEMENT

At this stage of the Corporation's development, its prospects for success
depend, to a significant degree, on the efforts of James A. Taylor, the
Corporation's Chairman of the Board, Chief Executive Officer and President.
There is no assurance that Mr. Taylor's services will remain available to the
Corporation indefinitely or that the Corporation will be successful under his
management. The Corporation maintains key employee insurance on Mr. Taylor in
the amount of $6 million. See "Management of the Corporation" and "Principal
Stockholders of the Corporation."

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<PAGE> 36

THE BANKING INDUSTRY IS HIGHLY COMPETITIVE

The Bank and Emerald Coast Bank compete with many types of financial
institutions including other commercial banks, savings associations, credit
unions, mortgage banking companies, securities brokerage companies, insurance
companies and money market mutual funds operating in Alabama, the Florida
panhandle and elsewhere. Many of these competitors have substantially greater
resources and lending limits than we do and offer certain services that we may
not provide. In addition, non-depository institution competitors are generally
not subject to the extensive regulation applicable to the Corporation, The Bank
and Emerald Coast Bank. Pursuant to the Riegle-Neal Interstate Banking and
Branching Efficiency Act, commercial banks may now acquire financial
institutions nationwide, further increasing competition. The long-term success
of the Corporation will be dependent on the ability of the Corporation's
subsidiaries to compete successfully with other financial institutions in their
respective market areas. See "Business of the Corporation -- Competition."

MANAGEMENT OF THE CORPORATION HOLDS A LARGE PORTION OF CORPORATION COMMON STOCK

As of March 31, 1999, the Corporation's directors and executive officers
own or control approximately 37.39% of the outstanding shares of Corporation
common stock. See "Principal Stockholders of the Corporation." Accordingly, if
the directors and executive officers were to act in concert, they would likely
control the Board of Directors of the Corporation and therefore the business and
policies of the Corporation. As a result, the Corporation's management has
significant control of the Corporation.

POSSIBLE VOLATILITY OF STOCK PRICE MAY AFFECT THE MARKET PRICE OF CORPORATION
COMMON STOCK

Corporation common stock trades on the Nasdaq National Market System under
the symbol "TBNC." This Nasdaq listing of Corporation common stock provides a
public market for holders of Corporation common stock to sell their securities.
Because the Corporation common stock has been listed on Nasdaq since December
10, 1998, Corporation common stock has a limited trading history. The
Corporation cannot guarantee that:

- the market for Corporation common stock on Nasdaq will be liquid;

- that you will be able to sell your Corporation common stock; or

- that you will be able to sell your Corporation common stock at any
particular price.

Even with a public market on Nasdaq for the holders of Corporation common
stock, the market price of Corporation common stock could fluctuate
significantly due to variations in quarterly and yearly results of operations,
general trends in the banking industry and other factors. Stocks of financial
institutions are particularly affected by changes in interest rates.
Additionally, in recent years and especially in recent months, there have been
price and volume fluctuations in the stock market that have often been unrelated
or disproportionate to the operating performance of affected companies. These
broad fluctuations might adversely affect the market price of the Corporation
common stock.

STOCKHOLDERS MAY EXPERIENCE RISKS RELATING TO FEDERAL INCOME TAXES

If either merger or the share exchange did not constitute a tax-free
reorganization under Section 368(a) of the Internal Revenue Code, each
stockholder involved in that merger or share exchange would recognize gain or
loss equal to the difference between the fair market value of Corporation common
stock received plus any cash received in lieu of fractional shares and such
stockholder's basis in the shares exchanged for Corporation common stock. See
"The C&L Merger -- Material Federal Income Tax Consequences," and "The Share
Exchange -- Material Federal Income Tax Consequences" and "The Bank of
Blountstown Merger -- Material Federal Income Tax Consequences."

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<PAGE> 37

THE SPECIAL MEETINGS

THE C&L SPECIAL MEETING

This Prospectus-Joint Proxy Statement is being furnished to C&L
stockholders in connection with the solicitation of proxies by the C&L Board of
Directors for use at the C&L special meeting to consider and vote upon the
approval of the C&L Plan of Merger. Each copy of this Prospectus-Joint Proxy
Statement mailed or delivered to C&L stockholders is accompanied by a form of
Proxy for use at the C&L special meeting.

This Prospectus-Joint Proxy Statement is also furnished to C&L stockholders
as a Prospectus in connection with the issuance to them of shares of Corporation
common stock upon consummation of the C&L merger.

Date, Place and Time. The C&L special meeting is to be held at the
principal executive offices of C&L Bank of Bristol at Highway 20 and Baker
Street, Bristol Florida 32321, on , 1999, at a.m.

Record Date, Quorum and Voting. The C&L Board of Directors has fixed the
close of business on , 1999, as the record date for the
determination of the C&L stockholders entitled to receive notice of and to vote
at the C&L special meeting. The presence, in person or by Proxy, of the holders
of a majority of the shares of C&L common stock entitled to vote at the C&L
special meeting will constitute a quorum. Each stockholder of record as of the
C&L record date is entitled to one vote for each share then held.

Vote Required. As of the C&L record date, there were 16,274 shares of C&L
common stock outstanding. Approval and adoption of the C&L Plan of Merger
requires the affirmative vote of a majority of all outstanding C&L common stock
entitled to vote thereon; as a result, failures to vote and abstentions will be
the equivalents of votes against the C&L Plan of Merger. Accordingly, approval
and adoption of the C&L Plan of Merger at the C&L special meeting will require
the affirmative vote of the holders of at least 8,138 shares of C&L common
stock.

As of the C&L record date, directors and executive officers of C&L
beneficially owned or held a proxy for an aggregate of 11,611 shares of C&L
common stock, or approximately 71.34% of the C&L common stock, outstanding on
such date. The directors of C&L have appointed James A. Taylor as their proxy to
vote the shares of C&L common stock beneficially owned by them for the C&L Plan
of Merger. Therefore, approval of the C&L merger is assured.

See "The C&L Merger -- Conditions to the Merger."

Voting and Revocation of Proxies. Shares of C&L common stock represented
by a Proxy properly signed and received at or prior to the C&L special meeting,
unless subsequently revoked, will be voted in accordance with the instructions
thereon. IF A PROXY IS PROPERLY EXECUTED AND RETURNED WITHOUT INDICATING ANY
VOTING INSTRUCTIONS, SHARES OF C&L COMMON STOCK REPRESENTED BY THE PROXY WILL BE
VOTED FOR APPROVAL AND ADOPTION OF THE C&L PLAN OF MERGER. Any Proxy given
pursuant to the solicitation may be revoked by the person giving the Proxy at
any time before the Proxy is voted by filing an instrument revoking it or by
delivering a duly executed Proxy bearing a later date to Jed M. Hiers at C&L
prior to or at the C&L special meeting, or by voting in person at the C&L
special meeting. Attendance at the C&L special meeting will not in and of itself
constitute a revocation of a Proxy. Only votes cast FOR approval of the C&L Plan
of Merger or other matters constitute affirmative votes. Abstentions and votes
that are withheld will, therefore, have the same effect as votes AGAINST
approval of the C&L Plan of Merger, so it is important that you return your
Proxy properly executed.

The C&L Board of Directors is not aware of any business to be acted upon at
the C&L special meeting other than as described in this Prospectus-Joint Proxy
Statement. If, however, other matters are properly brought before the C&L
special meeting, or any adjournments or postponements thereof, the persons
appointed as proxies will have discretion to vote or act thereon according to
their best judgment and subject to applicable rules of the SEC.

Solicitation of Proxies. In addition to solicitation by mail, directors,
officers and employees of C&L, who will not be specifically compensated for such
services, may solicit proxies from the stockholders of C&L

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<PAGE> 38

personally or by telephone or other forms of communication. Except as otherwise
provided in the C&L Plan of Merger, C&L will bear its own expenses in connection
with the solicitation of proxies for the C&L special meeting. See "The C&L
Merger -- Expenses."

C&L STOCKHOLDERS SHOULD NOT SEND STOCK CERTIFICATES WITH THEIR PROXY CARDS.
THE PROCEDURE FOR THE EXCHANGE OF SHARES AFTER THE C&L MERGER IS CONSUMMATED IS
DESCRIBED AT PAGE IN THIS PROSPECTUS-JOINT PROXY STATEMENT. SEE "THE C&L
MERGER -- EXCHANGE OF CERTIFICATES."

THE BANK OF BRISTOL SPECIAL MEETING

This Prospectus-Joint Proxy Statement is being furnished to Bank of Bristol
stockholders in connection with the solicitation of proxies by the Bank of
Bristol Board of Directors for use at the Bank of Bristol special meeting to
consider and vote upon the approval of the share exchange and to transact such
other business as may properly come before the Bank of Bristol special meeting
or any adjournments or postponements thereof. Each copy of this Prospectus-Joint
Proxy Statement mailed or delivered to Bank of Bristol stockholders is
accompanied by a form of Proxy for use at the Bank of Bristol special meeting.

This Prospectus-Joint Proxy Statement is also furnished to Bank of Bristol
stockholders as a Prospectus in connection with the issuance to them of shares
of Corporation common stock upon consummation of the share exchange.

Date, Place and Time. The Bank of Bristol special meeting is to be held at
the principal executive offices of Bank of Bristol at Highway 20 and Baker
Street, Bristol, Florida 32321, on , 1999, at a.m.

Record Date, Quorum and Voting. The Bank of Bristol Board of Directors has
fixed the close of business on , 1999, as the record date for the
determination of the Bank of Bristol stockholders entitled to receive notice of
and to vote at the Bank of Bristol special meeting. The presence, in person or
by Proxy, of the holders of a majority of the shares of Bank of Bristol common
stock entitled to vote at the Bank of Bristol special meeting will constitute a
quorum. Each stockholder of record as of the Bank of Bristol record date is
entitled to one vote for each share then held.

Vote Required. As of the Bank of Bristol record date, there were 20,000
shares of Bank of Bristol common stock outstanding. Approval and adoption of the
share exchange requires the affirmative vote of a majority of all outstanding
Bank of Bristol common stock entitled to vote thereon; as a result, failures to
vote and abstentions will be the equivalents of votes against the share
exchange. Accordingly, approval and adoption of the share exchange at the Bank
of Bristol special meeting will require the affirmative vote of the holders of
at least 10,001 shares of Bank of Bristol common stock.

As of the Bank of Bristol record date, C&L beneficially owned or held a
proxy for an aggregate of 19,620 shares of Bank of Bristol common stock, or
approximately 98.1% of the Bank of Bristol common stock, outstanding on such
date. The directors of C&L have indicated their intentions to vote the shares of
Bank of Bristol common stock beneficially owned by C&L FOR the share exchange.
Therefore, approval of the share exchange is assured.

See "The Share Exchange -- Conditions to the Share Exchange."

Voting and Revocation of Proxies. Shares of Bank of Bristol common stock
represented by a Proxy properly signed and received at or prior to the Bank of
Bristol special meeting, unless subsequently revoked, will be voted in
accordance with the instructions thereon. IF A PROXY IS PROPERLY EXECUTED AND
RETURNED WITHOUT INDICATING ANY VOTING INSTRUCTIONS, SHARES OF BANK OF BRISTOL
COMMON STOCK REPRESENTED BY THE PROXY WILL BE VOTED FOR APPROVAL AND ADOPTION OF
THE SHARE EXCHANGE. Any Proxy given pursuant to the solicitation may be revoked
by the person giving the Proxy at any time before the Proxy is voted by filing
an instrument revoking it or by delivering a duly executed Proxy bearing a later
date to Jed M. Hiers at Bank of Bristol prior to or at the Bank of Bristol
special meeting, or by voting in person at the Bank of Bristol special meeting.
Attendance at the Bank of Bristol special meeting will not in and of itself
constitute a revocation of a Proxy. Only votes cast FOR approval of the share
exchange or other matters constitute affirmative votes. Abstentions

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<PAGE> 39

and votes that are withheld will, therefore, have the same effect as votes
AGAINST approval of the share exchange, so it is important that you return your
Proxy properly executed.

The Bank of Bristol Board of Directors is not aware of any business to be
acted upon at the Bank of Bristol special meeting other than as described in
this Prospectus-Joint Proxy Statement. If, however, other matters are properly
brought before the Bank of Bristol special meeting, or any adjournments or
postponements, the persons appointed as proxies will have discretion to vote or
act thereon according to their best judgment and subject to applicable rules of
the SEC.

Solicitation of Proxies. In addition to solicitation by mail, directors,
officers and employees of Bank of Bristol, who will not be specifically
compensated for such services, may solicit proxies from the stockholders of Bank
of Bristol personally or by telephone or other forms of communication. Except as
otherwise provided in the share exchange, Bank of Bristol will bear its own
expenses in connection with the solicitation of proxies for the Bank of Bristol
special meeting. See "The Share Exchange -- Expenses."

BANK OF BRISTOL STOCKHOLDERS SHOULD NOT SEND STOCK CERTIFICATES WITH THEIR
PROXY CARDS. THE PROCEDURE FOR THE EXCHANGE OF SHARES AFTER THE SHARE EXCHANGE
IS CONSUMMATED IS DESCRIBED ON PAGE IN THIS PROSPECTUS-JOINT PROXY
STATEMENT. SEE "THE SHARE EXCHANGE -- EXCHANGE OF CERTIFICATES."

THE BANK OF BLOUNTSTOWN SPECIAL MEETING

This Prospectus-Joint Proxy Statement is being furnished to Bank of
Blountstown stockholders in connection with the solicitation of proxies by the
Bank of Blountstown Board of Directors for use at the Bank of Blountstown
special meeting to consider and vote upon the approval of the Bank of
Blountstown Plan of Merger and to transact such other business as may properly
come before the Bank of Blountstown special meeting or any adjournments or
postponements thereof. Each copy of this Prospectus-Joint Proxy Statement mailed
or delivered to Bank of Blountstown stockholders is accompanied by a form of
Proxy for use at the Bank of Blountstown special meeting.

This Prospectus-Joint Proxy Statement is also furnished to Bank of
Blountstown stockholders as a Prospectus in connection with the issuance to them
of shares of Corporation common stock upon consummation of the Bank of
Blountstown merger.

Date, Place and Time. The Bank of Blountstown special meeting is to be
held at W. T. Neal Civic Center, Highway 71 North, Blountstown, Florida 32424,
on , 1999, at a.m.

Record Date, Quorum and Voting. The Bank of Blountstown Board of Directors
has fixed the close of business on , 1999, as the record date for the
determination of the Bank of Blountstown stockholders entitled to receive notice
of and to vote at the Bank of Blountstown special meeting. The presence, in
person or by Proxy, of the holders of a majority of the shares of Bank of
Blountstown common stock entitled to vote at the Bank of Blountstown special
meeting will constitute a quorum. Each stockholder of record as of the Bank of
Blountstown record date is entitled to one vote for each share then held.

Vote Required. As of the Bank of Blountstown record date, there were
100,000 shares of Bank of Blountstown common stock outstanding. Approval and
adoption of the Bank of Blountstown Plan of Merger requires the affirmative vote
of a majority of all outstanding Bank of Blountstown common stock entitled to
vote thereon; as a result, failures to vote and abstentions will be the
equivalents of votes against the Bank of Blountstown Plan of Merger.
Accordingly, approval and adoption of the Bank of Blountstown Plan of Merger at
the Bank of Blountstown special meeting will require the affirmative vote of the
holders of at least 50,001 shares of Bank of Blountstown common stock.

As of the Bank of Blountstown record date, directors and executive officers
of Bank of Blountstown beneficially owned or held a proxy for an aggregate of
52,059 shares of Bank of Blountstown common stock, or approximately 52.06% of
the Bank of Blountstown common stock, outstanding on such date. The directors of
Bank of Blountstown have appointed James A. Taylor as their proxy to vote the
shares of Bank of Blountstown common stock beneficially owned by them FOR the
Bank of Blountstown Plan of Merger. Therefore, approval of the Bank of
Blountstown is assured.

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<PAGE> 40

See "The Bank of Blountstown Merger -- Conditions to the Merger."

Voting and Revocation of Proxies. Shares of Bank of Blountstown common
stock represented by a Proxy properly signed and received at or prior to the
Bank of Blountstown special meeting, unless subsequently revoked, will be voted
in accordance with the instructions thereon. IF A PROXY IS PROPERLY EXECUTED AND
RETURNED WITHOUT INDICATING ANY VOTING INSTRUCTIONS, SHARES OF BANK OF
BLOUNTSTOWN COMMON STOCK REPRESENTED BY THE PROXY WILL BE VOTED FOR APPROVAL AND
ADOPTION OF THE BANK OF BLOUNTSTOWN PLAN OF MERGER. Any Proxy given pursuant to
the solicitation may be revoked by the person giving the Proxy at any time
before the Proxy is voted by filing an instrument revoking it or by delivering a
duly executed Proxy bearing a later date to Jed M. Hiers at Bank of Blountstown
prior to or at the Bank of Blountstown special meeting, or by voting in person
at the Bank of Blountstown special meeting. Attendance at the Bank of
Blountstown special meeting will not in and of itself constitute a revocation of
a Proxy. Only votes cast FOR approval of the Bank of Blountstown Plan of Merger
or other matters constitute affirmative votes. Abstentions and votes that are
withheld will, therefore, have the same effect as votes AGAINST approval of the
Bank of Blountstown Plan of Merger, so it is important that you return your
Proxy properly executed.

The Bank of Blountstown Board of Directors is not aware of any business to
be acted upon at the Bank of Blountstown special meeting other than as described
in this Prospectus-Joint Proxy Statement. If, however, other matters are
properly brought before the Bank of Blountstown special meeting, or any
adjournments or postponements thereof, the persons appointed as proxies will
have discretion to vote or act thereon according to their best judgment and
subject to applicable rules of the SEC.

Solicitation of Proxies. In addition to solicitation by mail, directors,
officers and employees of Bank of Blountstown, who will not be specifically
compensated for such services, may solicit proxies from the stockholders of Bank
of Blountstown personally or by telephone or other forms of communication.
Except as otherwise provided in the Bank of Blountstown Plan of Merger, Bank of
Blountstown will bear its own expenses in connection with the solicitation of
proxies for the Bank of Blountstown special meeting. See "The Bank of
Blountstown Merger -- Expenses."

BANK OF BLOUNTSTOWN STOCKHOLDERS SHOULD NOT SEND STOCK CERTIFICATES WITH
THEIR PROXY CARDS. THE PROCEDURE FOR THE EXCHANGE OF SHARES AFTER THE BANK OF
BLOUNTSTOWN MERGER IS CONSUMMATED IS DESCRIBED ON PAGE IN THIS
PROSPECTUS-JOINT PROXY STATEMENT. SEE "THE BANK OF BLOUNTSTOWN
MERGER -- EXCHANGE OF CERTIFICATES."

THE C&L MERGER

The description of the C&L merger contained in this Prospectus-Joint Proxy
Statement summarizes the principal provisions of the C&L Plan of Merger. This
description is not complete and is qualified in its entirety by reference to the
C&L Plan of Merger, the full text of which is attached hereto as Annex A. All
C&L stockholders are urged to read Annex A carefully in its entirety.

On February 25, 1999, the Corporation entered into a Plan and Agreement of
Merger with C&L pursuant to which C&L is to be merged with and into the
Corporation. As of December 31, 1998, C&L had total assets of approximately
$48.9 million, deposits of approximately $43.4 million and stockholders' equity
of approximately $4.9 million. C&L's subsidiary bank, Bank of Bristol, is based
in Bristol, Florida. See "Business of C&L" and "Pro Forma Condensed Financial
Information."

TERMS OF THE C&L MERGER

The Corporation will acquire C&L by means of the merger of C&L with and
into the Corporation, with the Corporation being the surviving corporation. The
Certificate of Incorporation and the Bylaws of the Corporation in effect at the
effective time of the C&L merger will govern the Corporation until amended or
repealed in accordance with applicable law. At the effective time, the
Corporation shall continue as the surviving corporation under the name "The Banc
Corporation."

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The Corporation has agreed to exchange $12,866,857.42 of its common stock
for all of the issued and outstanding C&L common stock. The total number of
shares of Corporation common stock to be issued in the C&L merger is equal to
$12,866,857.42 divided by the closing date trading price. The closing date
trading price is the twenty trading day average last sales price for Corporation
common stock on Nasdaq, ending three trading days before the special meeting.
The closing date trading price cannot be higher than $14.00 per share or lower
than $10.00 per share. The number of shares of Corporation common stock to be
exchanged for each share of C&L common stock will be an exchange ratio
determined by dividing the total number of shares of Corporation common stock by
the total number of shares of issued and outstanding C&L common stock. You will
receive the number of shares of Corporation common stock equal to the number of
shares of C&L common stock you own multiplied by this exchange ratio. Therefore,
the number of shares of Corporation common stock you will receive will not be
finalized until three trading days prior to the special meeting. If the closing
date trading price had been calculated as of , 1999, it would have
been $ and the exchange ratio would have been shares of
Corporation common stock for each share of C&L common stock.

If the merger has not been completed by July 31, 1999, the total merger
consideration will be increased by any earnings of C&L from August 1, 1999,
through the most reasonably practicable date that the earnings can be determined
prior to the special meeting. This amount will be added to the total
consideration the Corporation has agreed to pay to acquire C&L prior to the
calculation of the exchange ratio. The C&L merger will not be completed if the
Bank of Blountstown merger is not approved and completed.

BACKGROUND OF AND REASONS FOR THE MERGERS AND SHARE EXCHANGE; RECOMMENDATION OF
C&L BOARD OF DIRECTORS

Background of the Mergers. During the last several years, there have been
significant developments in the banking and financial services industry. These
developments have included the increased emphasis and dependence on automation
and specialization of products and services, increased competition from other
financial institutions, and a trend toward consolidation and geographic
expansion, combined with a relaxation of regulatory restrictions on interstate
conduct of business of financial institutions.

In December 1996, the Boards of Directors of C&L (references in this
section to C&L include Bank of Bristol unless otherwise noted) and Bank of
Blountstown authorized the officers of C&L and Bank of Blountstown,
respectively, to investigate various matters relating to the maximization of
C&L's and Bank of Blountstown's stockholders' value, including the possibility
of positioning the institutions to become eligible to elect tax treatment under
Subchapter S of the Internal Revenue Code, a possible merger of Bank of Bristol
and Bank of Blountstown, and the possible sale or merger of C&L and Bank of
Blountstown with another institution. After considering the various options, the
Boards of Directors of C&L and Bank of Blountstown determined that a sale or
merger of C&L and Bank of Blountstown into another institution would provide the
greatest return to stockholders. The Boards of Directors of C&L and Bank of
Blountstown believed that, due to the cost savings and earnings enhancements an
acquiror would achieve through the purchase of both C&L and Bank of Blountstown
after certain managerial and asset quality enhancements at Bank of Blountstown,
stockholder value would be maximized by the sale of C&L and Bank of Blountstown
together.

During March and April, 1998, C&L and Bank of Blountstown received
non-binding indications of interest from two lending institutions which may have
had interest in acquiring C&L and Bank of Blountstown. C&L and Bank of
Blountstown subsequently entered into satisfactory confidentiality agreements
with each of those two institutions and then distributed confidential
information to such entities. During April and May 1998, these two institutions
conducted due diligence. Upon conclusion of their due diligence, both
institutions verbally indicated to Mr. Jerry M. Smith their continuing interest
in a possible acquisition transaction. Both of these non-binding indications
contemplated all stock "pooling-of-interests" transactions.

In April 1998, the Boards of Directors of C&L and Bank of Blountstown
determined that, on the basis of opportunities to reduce costs and pursue other
actions to improve earnings further at C&L and Bank of Blountstown, the views of
the respective Boards of Directors of the prospects for C&L and Bank of
Blountstown, the prices being offered, and in view of issues regarding the loan
portfolio of Bank of

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<PAGE> 42

Blountstown, the indications of interest received to that point should not be
acted upon until certain steps were taken with regard to effecting cost savings
and improving the quality of the loan portfolio of Bank of Blountstown. In May
1998, the Bank of Blountstown implemented asset quality enhancements, and both
C&L and Bank of Blountstown began implementing certain cost savings including
the selection of one president for both banks.

In June 1998, the C&L Board of Directors received a non-binding indication
of interest from a third institution. This institution did not conduct due
diligence, however, and the C&L Board of Directors determined that, on the basis
of the price offered and the probable price to be commanded by both companies
together, action on this proposal should also be delayed until such time as the
operational improvements and cost savings could be reflected in a combined price
for both entities.

From October through December 1998, discussions continued with the two
original interested institutions. In January 1999, C&L and Bank of Blountstown
received a non-binding indication of interest from the Corporation. C&L and Bank
of Blountstown subsequently distributed confidential information to the
Corporation upon the Corporation's execution and C&L's and Bank of Blountstown's
receipt of a confidentiality agreement satisfactory to C&L and Bank of
Blountstown. During January 1999, the Corporation conducted due diligence. On
January 25, 1999, the C&L and Bank of Blountstown Boards of Directors met to
consider the three remaining proposals, including the Corporation's proposal,
all of which contemplated a tax-free transaction with all the consideration to
consist of common stock. The respective Boards of Directors based their
decisions on a number of factors, including, without limitation, the
then-prevailing stock market values, price to tangible book value and price
earnings multiples of the common stock of all three interested institutions, and
the value of recent comparable bank mergers and acquisitions. On the basis of
these and other factors, the C&L and Bank of Blountstown Boards of Directors
then authorized the execution of a letter of intent with the Corporation. In a
joint meeting on February 23, 1999, the respective Boards of Directors of C&L,
Bank of Bristol and Bank of Blountstown, assisted by their advisors, considered
the factors set forth below, and authorized the execution of the C&L Plan of
Merger, the Bank of Blountstown Plan of Merger and the Share Exchange Agreement.

Reasons for the Mergers. In approving the C&L merger, the Bank of
Blountstown merger and the share exchange, the directors of C&L, Bank of Bristol
and Bank of Blountstown considered a number of factors. Without assigning any
relative or specific weights to the factors, the respective Boards of Directors
considered the following material factors:

(a) information concerning the business, operations, earnings, asset
quality, and financial condition of the Corporation (and other potential
merger partners) from which the respective Boards of Directors determined
that the Corporation is a high quality, well-managed institution with
favorable prospects for future growth in its business, earnings and share
price;

(b) the similar community banking cultures and business philosophies
of the Corporation, C&L and Bank of Blountstown, particularly with respect
to community lending philosophy, customer satisfaction, and efficiency and
credit quality;

(c) the likely impact of the proposed mergers on the employees and
customers of C&L and its subsidiaries and of Bank of Blountstown, on the
communities in which C&L and Bank of Blountstown presently conduct their
business, and on C&L's and Bank of Blountstown's other constituencies in
view of the Corporation's commitment to community banking;

(d) the exchange ratio of the mergers from a number of valuation
perspectives, as presented by Sheshunoff (see "-- Opinion of C&L's
Financial Advisor," "The Share Exchange -- Opinion of Bank of Bristol's
Financial Advisor" and "The Bank of Blountstown Merger -- Opinion of Bank
of Blountstown's Financial Advisor");

(e) the opinion of Sheshunoff that the exchange ratios are fair to the
stockholders of C&L, Bank of Bristol and Bank of Blountstown from a
financial point of view (see "-- Opinion of C&L's Financial Advisor");

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<PAGE> 43

(f) the termination provisions of each of the C&L Plan of Merger and
the Bank of Blountstown Plan of Merger applicable in the event of a
significant decline in the price of the Corporation common stock prior to
the consummation of the mergers (see "-- Waiver, Amendment, and Termination
of the Agreement");

(g) the treatment of the mergers as a pooling of interests for
financial accounting purposes and as a tax-free reorganization for federal
income tax purposes (see "-- Material Federal Income Tax Consequences" and
"-- Accounting Treatment");

(h) the commitment of the Corporation to keep the Bank of Bristol
Board of Directors in place through at least the end of 1999, and the
placement of Mr. Jerry Smith on the Corporation Board of Directors,
ensuring that the current directors of C&L, Bank of Bristol and Bank of
Blountstown will have a significant voice in how Bank of Bristol is
operated after consummation of the mergers and the share exchange;

(i) the likelihood of the mergers and the share exchange being
approved by applicable regulatory authorities without undue conditions or
delay;

(j) the alternatives to the mergers, including remaining independent
institutions in light of the current economic conditions of C&L's and Bank
of Blountstown's markets; and

(k) the financial terms of recent business combinations in the
financial services industry and a comparison of the multiples of selected
combinations with the terms of the proposed transaction with the
Corporation.

The terms of the mergers and the share exchange were the result of
arm's-length negotiations between representatives of C&L and Bank of Blountstown
and representatives of the Corporation. Based upon the consideration of the
foregoing factors, the Boards of Directors of each of C&L, Bank of Bristol and
Bank of Blountstown unanimously approved the mergers and the share exchange as
being in the best interests of C&L, Bank of Bristol, Bank of Blountstown, their
stockholders and their other constituencies.

THE C&L BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT C&L STOCKHOLDERS
VOTE FOR APPROVAL OF THE C&L PLAN OF MERGER AND THE C&L MERGER.

THE BANK OF BRISTOL BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT BANK OF
BRISTOL STOCKHOLDERS VOTE FOR APPROVAL OF THE SHARE EXCHANGE AGREEMENT AND THE
SHARE EXCHANGE.

THE BANK OF BLOUNTSTOWN BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT BANK
OF BLOUNTSTOWN STOCKHOLDERS VOTE FOR APPROVAL OF THE BANK OF BLOUNTSTOWN PLAN OF
MERGER AND THE BANK OF BLOUNTSTOWN MERGER.

The Plan and Agreement of Merger included at Annex A supersedes all
previous agreements between C&L and the Corporation and sets forth the terms of
the C&L merger described in this Prospectus-Joint Proxy Statement.

OPINION OF C&L'S FINANCIAL ADVISOR

C&L and Bank of Blountstown retained the Advisor to provide its opinion of
the fairness from a financial viewpoint, of the merger consideration to be
received by the stockholders of C&L, Bank of Bristol, and Bank of Blountstown in
connection with the transactions with the Corporation. As part of its investment
banking business, the Advisor is regularly engaged in the valuation of
securities in connection with mergers and acquisitions and valuations for
estate, corporate and other purposes. The Boards of Directors of C&L and Bank of
Blountstown retained the Advisor based upon its experience as a financial
advisor in mergers and acquisitions of financial institutions and its knowledge
of financial institutions. Neither C&L, nor Bank of Bristol, nor Bank of
Blountstown retained the Advisor to negotiate the proposed transactions and the
terms and conditions of the transactions were negotiated directly by and between
C&L, Bank of Bristol, Bank of Blountstown, and the Corporation.

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<PAGE> 44

On February 23, 1999, the Advisor rendered its oral opinions that, as of
such date, the merger consideration was fair, from a financial point of view, to
the stockholders of C&L and Bank of Blountstown. The Advisor rendered its
written Fairness Opinions as of March 5, 1999 and its updated Fairness Opinions
as of April 20, 1999. The Advisor rendered its written Fairness Opinion as to
the fairness, from a financial point of view, of the consideration to be
received by the stockholders of the Bank of Bristol as of April 20, 1999.

The full text of the Fairness Opinions which set forth, among other things,
assumptions made, procedures followed, matters considered and limitations on the
review undertaken, are attached as Annexes F, G and H to this
Prospectus -- Joint Proxy Statement. The stockholders of C&L, Bank of Bristol,
and Bank of Blountstown are urged to read the Advisor's Fairness Opinions
carefully and in their entirety. The Fairness Opinions are addressed to the
Boards of Directors of C&L and Bank of Blountstown, and do not constitute a
recommendation to any stockholder of C&L, Bank of Bristol or Bank of Blountstown
as to how such stockholder should vote at the C&L, Bank of Bristol or Bank of
Blountstown special meetings.

In connection with the Fairness Opinions, the Advisor:

1. reviewed the Plans of Merger and the Share Exchange Agreement;

2. reviewed certain publicly available financial statements and regulatory
information concerning the Corporation, C&L and Bank of Blountstown,
respectively;

3. reviewed certain internal financial statements and other financial and
operating data of C&L and Bank of Blountstown provided to the Advisor by
the management of C&L and Bank of Blountstown;

4. reviewed the reported market prices and trading activity for the
Corporation's common stock;

5. discussed the past and current operations, financial condition and
future prospects of C&L and Bank of Blountstown with their respective
executive managements;

6. discussed the past and current operations, financial condition and
future prospects of the Corporation with its executive management;

7. compared C&L, Bank of Blountstown and the Corporation from a financial
point of view with certain other banking companies that the Advisor
deemed to be relevant;

8. compared the financial performance of the Corporation and the market
prices and trading activity of the Corporation's common stock with that
of certain other indices of publicly traded equity securities;

9. reviewed the financial terms, to the extent publicly available, of
certain comparable merger transactions in the Southeastern United States
and in Florida; and

10. performed such other analyses and reviews as the Advisor deemed
appropriate.

In connection with its review, the Advisor relied upon and assumed the
accuracy and completeness of all of the foregoing information provided to it or
made publicly available, and the Advisor did not assume any responsibility for
independent verification of such information. The Advisor assumed that internal
confidential financial projections provided by C&L and Bank of Blountstown were
reasonably prepared reflecting the best currently available estimates and
judgments of the future financial performance of C&L and Bank of Blountstown and
did not independently verify the validity of such assumptions. The Advisor did
not make any independent evaluation or appraisal of the assets or liabilities of
C&L or Bank of Blountstown, nor was the Advisor furnished with any such
appraisals. The Advisor did not examine any individual loan files of C&L or Bank
of Blountstown. The Advisor is not an expert in the evaluation of loan
portfolios for the purposes of assessing the adequacy of the allowance for
losses with respect thereto and has assumed that such allowance is, in the
aggregate, adequate to cover such losses.

With respect to the Corporation, the Advisor did not conduct any
independent evaluation or appraisal of the assets, liabilities or business
prospects of the Corporation, was not furnished with any evaluations or
appraisals, and did not review any individual credit files of the Corporation.

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<PAGE> 45

The Fairness Opinions are necessarily based on economic, market and other
conditions as in effect on, and the information made available to the Advisor as
of April 19, 1999.

In rendering the Fairness Opinions, the Advisor performed a variety of
financial analyses. The preparation of an opinion involves various
determinations as to the most appropriate and relevant methods of financial
analysis and the application of those methods to the particular circumstances.
Consequently, the Fairness Opinions are not readily susceptible to partial
analysis of summary description. Moreover, the evaluation of fairness, from a
financial point of view, of the merger consideration is to some extent
subjective, based on the experience and judgment of the Advisor, and not merely
the result of mathematical analysis of financial data. Accordingly,
notwithstanding the separate factors summarized below, the Advisor believes that
its analyses must be considered as a whole and that selecting portions of its
analyses and of the factors considered by it, without considering all analyses
and factors, could create an incomplete view of the evaluation process
underlying its opinion. The ranges of valuations resulting from any particular
analysis described below should not be taken to be the Advisor's view of the
actual value of C&L, Bank of Bristol or Bank of Blountstown.

In performing its analyses, the Advisor made numerous assumptions with
respect to industry performance, business and economic conditions and other
matters, many of which are beyond the control of C&L and Bank of Blountstown.
The analyses performed by the Advisor are not necessarily indicative of actual
values or future results, which may be significantly more or less favorable than
suggested by such analyses, nor are they appraisals. In addition, the Advisor's
analyses should not be viewed as determinative of the opinions of the Boards of
Directors or the management of C&L and Bank of Blountstown with respect to the
value of C&L, Bank of Bristol or Bank of Blountstown.

The following is a summary of the analyses performed by the Advisor in
connection with its opinions updated as of April 20, 1999. The following
discussion contains financial information concerning C&L, Bank of Blountstown
and the Corporation as of December 30, 1998 and market information as of April
19, 1999.

Analysis of Selected Transactions. The Advisor performed an analysis of
premiums paid in selected pending or recently completed acquisitions of banking
organizations in Florida and in the Southeastern United States with comparable
characteristics to the mergers. Two sets of comparable transactions were
analyzed to ensure a thorough comparison.

The first set of comparable transactions consisted of a group of comparable
transactions based upon the geographical market area of Florida for which
pricing data was available. These comparable transactions consisted of eight
mergers and acquisitions of banks located in Florida with assets of less than
$75 million which announced or completed between January 1, 1998 and April 19,
1999. The analysis yielded multiples of the purchase price in these transactions
relative to:

1. Book value ranging from 2.09 times to 3.55 times with an average of 2.76
times and a median of 2.82 times (compared with the multiples implied in
the mergers of 2.52 times December 30, 1998 book value for C&L and Bank
of Bristol, and 2.02 times December 30, 1998 book value for Bank of
Blountstown);

2. Last twelve months earnings ranging from 16.9 times to 47.5 times with
an average of 26.2 times and a median of 22.7 times (compared with the
multiples implied in the mergers of 16.5 times last twelve months
earnings as of December 30, 1998 for C&L and Bank of Bristol, and 20.9
times last twelve months earnings as of December 30, 1998 for Bank of
Blountstown);

3. Total assets ranging between 12.9% and 35.7% with an average of 26.3%
and a median of 27.3% (compared with the multiples implied in the
mergers of 26.5% of December 30, 1998 total assets for C&L and Bank of
Bristol, and 14.8% of December 30, 1998 total assets for Bank of
Blountstown); and

4. Total deposits ranging from 14.1% to 43.2% with an average of 30.4% and
a median of 31.0% (compared with the multiples implied in the mergers of
29.8% of deposits as of December 30, 1998 for C&L and Bank of Bristol,
and 16.1% of deposits as of December 30, 1998 for Bank of Blountstown).

The second set of comparable transactions consisted of a group of
comparable transactions based upon the profitability, asset size and
geographical market area of C&L and Bank of Blountstown for which pricing

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<PAGE> 46

data is available. These comparable transactions specifically consisted of
forty-four mergers and acquisitions of banks in the Southeast with total assets
of less than $75 million and which announced or completed between January 1,
1998 and April 19, 1999. The analysis yielded multiples of the purchase price in
these transactions relative to:

1. Book value ranging from 1.22 times to 3.81 times with an average of 2.50
times and a median of 2.52 times (compared with the multiples implied in
the mergers of 2.52 times December 30, 1998 book value for C&L and Bank
of Bristol, and 2.02 times December 30, 1998 book value for Bank of
Blountstown);

2. Last twelve months earnings ranging from 12.6 times to 47.5 times with
an average of 24.3 times and a median of 22.2 times (compared with the
multiples implied in the mergers of 16.5 times last twelve months
earnings as of December 30, 1998 for C&L and Bank of Bristol, and 20.9
times last twelve months earnings as of December 30, 1998 for Bank of
Blountstown);

3. Total assets ranging between 12.9% and 51.1% with an average of 25.4%
and a median of 24.5% (compared with the multiples implied in the
mergers of 26.5% of December 30, 1998 total assets for C&L and Bank of
Bristol, and 14.8% of December 30, 1998 total assets for Bank of
Blountstown); and

4. Total deposits ranging from 14.1% to 59.2% with an average of 29.5% and
a median of 27.7% (compared with the multiples implied in the mergers of
29.8% of deposits as of December 30, 1998 for C&L and Bank of Bristol,
and 16.1% of deposits as of December 30, 1998 for Bank of Blountstown).

Discounted Cash Flow Analysis. Using discounted cash flow analysis, the
Advisor estimated the present value of the future after-tax cash flow streams
that C&L and Bank of Blountstown each could produce through the year 2003, under
various circumstances, assuming that each performed in accordance with the
earnings/return projections management provided for the separate banks.

With respect to C&L, the Advisor estimated the terminal value for Bank of
Bristol at the end of 2003 by capitalizing the final period projected earnings
by the quotient of (i) the assumed annual growth rate of the earnings of Bank of
Bristol plus one and (ii) the difference between a range of required rates of
return and the assumed annual growth rate of earnings in (i) above. This
produced a range of terminal values per share of $528.00 to $661.00. The Advisor
then discounted the annual cash flow streams (defined as all earnings in excess
of that required to maintain a tangible equity to asset ratio of 6.0%) and the
terminal values using discount rates ranging from 12% to 14%. The discount range
was chosen to reflect different assumptions regarding the required rates of
return of Bank of Bristol and the inherent risk surrounding the underlying
projections. This discounted cash flow analysis indicated a range of values per
share of $464.00 to $575.00, compared to the value per share of the merger
consideration to Bank of Bristol stockholders of $650.47 as of April 19, 1999.
Converting these indicated values into per share values for C&L stockholders
yields a range of values of $570.00 to $706.00, compared to the value per share
of the merger consideration to C&L stockholders of $784.21 as of April 19, 1999.

The Advisor also estimated the terminal value for Bank of Blountstown at
the end of 2003 by capitalizing the final period projected earnings by the
quotient of (i) the assumed annual growth rate of the earnings of Bank of
Blountstown plus one and (ii) the difference between a range of required rates
of return and the assumed annual growth rate of earnings in (i) above. This
produced a range of terminal values per share of $73.00 to $91.00. The Advisor
then discounted the annual cash flow streams (defined as all earnings in excess
of that required to maintain a tangible equity to asset ratio of 6.0%) and the
terminal values using discount rates ranging from 12% to 14%. The discount range
was chosen to reflect different assumptions regarding the required rates of
return of Bank of Blountstown and the inherent risk surrounding the underlying
projections. This discounted cash flow analysis indicated a range of values per
share of $64.00 to $79.00, compared to the value per share of the merger
consideration to Bank of Blountstown stockholders of $84.64 as of April 19,
1999.

Comparable Company Analysis. The Advisor compared selected stock market
results of the Corporation to the publicly available corresponding data of other
composites which the Advisor deemed to be relevant, including SNL Securities,
L.P.'s (i) index of all publicly traded banks and (ii) the SNL index of banks
with

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<PAGE> 47

assets of less than $500 million and the S&P 500. Although the Corporation's
common stock price has exhibited some recent weakness relative to the selected
indices, this weakness in itself is not material to the fairness from a
financial point of view of the merger consideration to be received by
stockholders of C&L, Bank of Bristol, or Bank of Blountstown as of the date of
the Fairness Opinions. The trading history for the Corporation's common stock is
relatively short as the initial public offering of the Corporation's common
stock occurred in December 1998. As a result, there is a greater than normal
probability that the stock price will experience above average volatility in the
immediate future.

No company or transaction used in the comparable company and comparable
transaction analyses is identical to C&L, Bank of Blountstown, the Corporation
or the mergers. Accordingly, an analysis of the results of the foregoing
necessarily involves complex considerations and judgments concerning differences
in financial and operating characteristics of C&L, Bank of Blountstown and the
Corporation and other factors that could affect the public trading value of the
companies to which they are being compared. Mathematical analysis (such as
determining the average or median) is not in itself a meaningful method of using
comparable transaction data or comparable company data.

Pursuant to an engagement letter dated February 1, 1999, between Bank of
Blountstown and the Advisor, Bank of Blountstown agreed to pay the Advisor a fee
of $20,000. Pursuant to an engagement letter dated February 1, 1999 amended by a
letter amendment dated April 26, 1999 between C&L and the Advisor, C&L agreed to
pay the Advisor fees of $22,000.

C&L and Bank of Blountstown also agreed to indemnify and hold harmless the
Advisor and its officers and employees against certain liabilities in connection
with its services under the engagement letters and the amendment, except for
liabilities resulting from the negligence, violation of law or regulation or bad
faith of the Advisor or any matter for which the Advisor may have strict
liability.

The Fairness Opinions are directed only to the question of whether the
merger consideration and the consideration to be paid pursuant to the share
exchange is fair and equitable from a financial perspective and do not
constitute a recommendation to any C&L, Bank of Bristol, or Bank of Blountstown
stockholder to vote in favor of either of the mergers or the share exchange. No
limitations were imposed on the Advisor regarding the scope of its investigation
or otherwise by C&L, Bank of Bristol, or Bank of Blountstown.

Based on the results of the various analyses described above, the Advisor
concluded that the merger consideration and the consideration to be paid
pursuant to the share exchange to be received by C&L, Bank of Bristol, and Bank
of Blountstown stockholders pursuant to the mergers and the share exchange is
fair, from a financial point of view, to the stockholders of C&L, Bank of
Bristol, and Bank of Blountstown.

EFFECTIVE TIME OF THE MERGER

Subject to the provisions of the C&L Plan of Merger, Articles of Merger and
a Certificate of Merger shall be duly executed and, on the closing date, or as
soon thereafter as reasonably practicable, filed with the Florida Secretary of
State in accordance with Florida law, and with the Delaware Secretary of State
in accordance with Delaware law. It is presently anticipated that such filings
will be made as soon as practicable after the C&L Special Meeting and in
conjunction with similar filings relating to the share exchange and Bank of
Blountstown merger, and that the effective time will occur upon the filings,
although there can be no assurance as to whether or when the C&L merger will
occur.

EXCHANGE OF CERTIFICATES

As soon as reasonably practicable after the effective time, SunTrust Bank
(the "Exchange Agent") will mail to each C&L stockholder of record (1) a letter
of transmittal, and (2) instructions for use in effecting the surrender of the
certificates representing shares of C&L common stock in exchange for
certificates representing shares of Corporation common stock. The letter of
transmittal will specify that delivery will be effected, and risk of loss and
title to the certificates will pass, only upon delivery of the certificates to
the Corporation and shall be in the form as the Corporation may reasonably
specify. When a C&L stockholder surrenders his certificate to the Exchange
Agent, together with a letter of transmittal, duly executed, and such

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other documents as may reasonably be required by the Corporation, that
stockholder shall be entitled to receive in exchange a certificate representing
that number of whole shares of Corporation common stock which that stockholder
has the right to receive pursuant to the provisions of the C&L Plan of Merger.

If a transfer of ownership of C&L common stock is not registered in the
transfer records of C&L, a certificate representing the proper number of shares
of Corporation common stock may be issued to a person other than the person in
whose name the certificate so surrendered is registered, if the certificate
shall be properly endorsed or otherwise be in proper form for transfer and the
person requesting the issuance shall pay any transfer or other taxes required by
reason of the issuance of shares of Corporation common stock to a person other
than the registered holder of the certificate or establish to the satisfaction
of the Corporation that such tax has been paid or is not applicable.

Until surrendered as contemplated by the C&L Plan of Merger, each
certificate shall be deemed at any time after the effective time to represent
only the right to receive Corporation common stock and cash for fractional
shares to which the holder of the certificates is entitled. No interest will be
paid or will accrue on any cash payable in lieu of any fractional shares of
Corporation common stock. To the extent permitted by law, former holders of
record of C&L common stock shall be entitled to vote the number of shares of
Corporation common stock into which their respective shares of C&L common stock
are converted after the effective time at any meeting of Corporation
stockholders, regardless of whether such holders have received their
certificates representing Corporation common stock in accordance with the C&L
Plan of Merger.

No certificates or scrip representing fractional shares of Corporation
common stock shall be issued upon conversion of C&L common stock, and the
fractional share interests will not entitle the owner thereof to vote or to any
rights of a stockholder of the Corporation. Notwithstanding any other provision
of the C&L Plan of Merger, each holder of C&L common stock exchanged pursuant to
the C&L merger who would otherwise have been entitled to receive a fraction of a
share of Corporation common stock shall receive cash instead of fractional
shares of Corporation common stock, an amount equal to $ per share (based on
a closing price of $ ).

At the effective time of the C&L merger, C&L stockholders will cease to be,
and shall have no rights as, C&L stockholders other than:

- the right to receive the number of shares of Corporation common
stock into which the shares of C&L common stock have been converted,

- any fractional share payment,

- any dividends or other distributions to which they may be entitled
under the C&L Plan of Merger, and

- the right to perfect dissenter's rights, if such have been properly
exercised.

Neither the Corporation, C&L nor the Exchange Agent will be liable to any
holder of C&L common stock for any shares of Corporation common stock or any
related dividends or other distributions or cash in lieu of fractional shares
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.

CONDITIONS TO THE C&L MERGER

The C&L Plan of Merger is subject to a number of conditions, some of which
are mutual and others of which are applicable to either the Corporation or C&L.
Though most of the conditions will not be satisfied until immediately before the
effective time of the C&L merger, the companies believe that they are currently
in material compliance with the conditions.

The obligation of the Corporation to complete the C&L merger is subject to
the following conditions:

- No material adverse changes shall have occurred in the business,
operations or financial condition of C&L.

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<PAGE> 49

- Except as otherwise provided therein, the representations and warranties
of C&L contained in the C&L Plan of Merger shall be true and correct.

- C&L shall have performed and complied with all covenants, agreements and
conditions required by the C&L Plan of Merger.

- The Corporation shall have received an opinion of C&L's legal counsel,
Jenkens & Gilchrist, P.C., as to certain legal matters.

- The Corporation shall have received an opinion from Haskell Slaughter &
Young, L.L.C. as to the federal income tax consequences of the C&L
merger.

- The Corporation shall have received from Ernst & Young LLP a letter,
dated as of the date of the mailing of this Prospectus-Joint Proxy
Statement and as of the closing date, in form and substance reasonably
satisfactory to Corporation and customary in scope and substance for
letters delivered by independent public accountants in connection with
pooling of interests transactions similar to the C&L merger.

- The C&L merger shall occur simultaneously with and be conditioned on the
Corporation's acquisition of Bank of Blountstown.

The obligation of C&L to consummate the C&L merger is subject to, among
others, the following conditions:

- No material adverse changes shall have occurred in the business,
operations or financial condition of Corporation.

- Except as otherwise provided therein, the representations and warranties
of the Corporation contained in the C&L Plan of Merger shall be true and
correct.

- The Corporation shall have performed and complied with all covenants,
agreements and conditions required by the C&L Plan of Merger to be
performed or complied with in all material respects.

- C&L shall have received an opinion of Haskell Slaughter & Young, L.L.C.,
legal counsel for the Corporation, as to certain legal matters.

- C&L shall have received from Ernst & Young LLP a letter dated as of the
date of the mailing of this Prospectus-Joint Proxy Statement and as of
the closing date, in form and substance reasonably satisfactory to C&L
and customary in scope and substance for letters delivered by independent
public accountants in connection with registration statements similar to
the Registration Statement and pooling of interests transactions similar
to the C&L merger.

- C&L shall have received an opinion from Jenkens & Gilchrist, P.C., that,
for federal income tax purposes, the C&L merger will constitute a
tax-free reorganization;

- C&L shall have received opinions dated as of March 5, 1999 and as of the
most reasonably practicable date prior to mailing the Prospectus-Joint
Proxy Statement from Alex Sheshunoff & Co. that the transaction is fair
from a financial point of view to its stockholders.

- The C&L merger shall occur simultaneously with and be conditioned on the
Corporation's acquisition of Bank of Blountstown.

The obligation of each of the Corporation and C&L to consummate the C&L
merger is subject to certain additional conditions, including the following:

- The Registration Statement shall have been declared effective and shall
not be subject to a stop order of the SEC, and all applicable federal
securities and state blue sky laws shall have been complied with.

- The shares of Corporation common stock to be issued in connection with
the C&L merger shall have been approved for listing on Nasdaq.

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<PAGE> 50

- No legal proceeding shall have been threatened or pending before any
court, administrative or governmental agency which, in the reasonable
opinion of C&L or Corporation, presents a significant risk of restraint
or prohibition of the transactions contemplated by the C&L Plan of Merger
or the attainment of material damages or other relief against C&L or its
stockholders or the Corporation or its stockholders in connection
therewith.

- The C&L merger shall have been approved by holders of majority of the
outstanding C&L common stock entitled to vote thereon.

- Receipt of all authorizations, approvals and consents of any third
parties as well as the expiration of applicable waiting periods,
including federal or state governmental or regulatory bodies and
officials, necessary for the consummation of the C&L Plan of Merger and
for the continuation in all material respects of the business of the
Corporation and C&L, without interruption after the effective time, in
substantially the manner in which such business is now conducted, and no
such authorizations or approvals shall contain any conditions or
restrictions that C&L or the Corporation reasonably believes will
materially restrict or limit the business or activities of the
Corporation or have a material adverse effect on their businesses,
operations or financial conditions taken as a whole.

- Holders of not more than ten percent (10%) of the outstanding shares of
C&L common stock shall have voted against approval of, and given notice
in writing to C&L at or prior to the C&L stockholders' meeting that they
dissent from the transaction contemplated by the C&L Plan of Merger.

- The Corporation and Bank of Bristol shall have entered into the Share
Exchange Agreement providing for the share exchange to immediately follow
consummation of the C&L merger.

- The Corporation, Bank of Bristol and Jed M. Hiers shall have entered into
an employment agreement providing for Mr. Hiers' continued employment
with Bank of Bristol after the effective time.

Before or at the effective time, either the Corporation or C&L, or both,
acting through their respective Boards of Directors, chief executive officers or
other authorized officers, may:

- waive any default in the performance of any term of the C&L Plan of
Merger by the other party,

- waive or extend the time for the compliance or fulfillment by the other
party of any and all of its obligations under the C&L Plan of Merger, and

- waive any of the conditions precedent to the obligations of such party
under the C&L Plan of Merger, except any condition (such as required
regulatory or C&L stockholder approval) that, if not satisfied, would
result in the violation of any applicable law or governmental regulation.

However, the C&L merger and Bank of Blountstown merger are conditioned upon each
other, and, therefore, both mergers must be approved.

REPRESENTATIONS AND COVENANTS

Under the C&L Plan of Merger, the Corporation and C&L have each made a
number of representations regarding the organization and capital structures of
the respective companies and their subsidiaries, their operations, financial
condition and other matters, including their authority to enter into the C&L
Plan of Merger and to consummate the C&L merger.

REGULATORY APPROVALS

The C&L merger must be approved by the Federal Reserve Board and the
Florida Banking Department. The Corporation filed the appropriate notices and
applications with the Federal Reserve Board on April 15, 1999 and the Florida
Banking Department on April 28, 1999.

Certain persons, such as states' attorneys general and private parties,
could challenge the C&L merger as violative of the antitrust laws and seek to
enjoin the consummation of the C&L merger and, in the case of private persons,
also seek to obtain treble damages. There can be no assurance that a challenge
to the C&L

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<PAGE> 51

merger on antitrust grounds will not be made or, if such a challenge is made,
that it will not be successful. Neither the Corporation nor C&L intends to seek
any further stockholder approval or authorization of the C&L Plan of Merger as a
result of any action that it may take to resist or resolve any Department of
Justice or other objections, unless required to do so by applicable law.

BUSINESS PENDING THE MERGER

The C&L Plan of Merger provides that, during the period from the date of
the C&L Plan of Merger to the effective time, except as provided in the C&L Plan
of Merger, C&L, and C&L will cause its subsidiary, Bank of Bristol, to conduct
their business in the ordinary course in material compliance with all applicable
laws and use their respective reasonable best efforts to preserve intact their
business organizations, to keep available to the Corporation and the surviving
corporation the services of the present employees of C&L and maintain the
goodwill of customers, suppliers and others having business dealings with C&L
and Bank of Bristol.

Under the C&L Plan of Merger, C&L will not do or will not permit Bank of
Bristol to do the following:

- encumber any asset or enter into any transaction or make any contract or
commitment relating to its properties, assets or businesses, other than
in the ordinary course of business.

- change the articles of incorporation or bylaws of C&L or Bank of Bristol.

- change the number of shares of capital stock of C&L or Bank of Bristol
issued and outstanding or cause any material change in the capital
structure of C&L.

- enter into any contract or commitment, other than deposits, loan
commitments and investments or the sale of other real estate owned in the
ordinary course of business of C&L or Bank of Bristol, extending for more
than one year or involving payment by C&L or Bank of Bristol of more than
$25,000 in any one contract or related series of contracts or otherwise
materially affecting its business.

- enter into any employment agreement or other agreement with any employee
of C&L or Bank of Bristol or increase any C&L or Bank of Bristol
employee's salary or benefits except for normal annual increases as
agreed to by Corporation in writing, or modify or amend any employee
benefit plan.

- pay dividends or make distributions with respect to C&L stock, except as
provided by the C&L Plan of Merger.

- will not make any loan in excess of $100,000 without providing the
Corporation with all relevant documents related thereto and giving the
Corporation a reasonable opportunity to review such loan and comment
thereon.

- sell the securities it owns and will not purchase any new securities
other than securities of a type and duration as C&L has previously
purchased under its investment policy without the Corporation's approval.

- obligate C&L under all employment, severance or other agreements between
C&L and its respective employees related to the termination of such
agreements in excess of the amounts described in the employment
agreements.

- take any action to cause any material adverse change in the condition
(financial or otherwise), assets, liabilities or business of C&L.

- take any action to cause any material adverse change in the character of
the assets or liabilities of C&L.

- make any capital improvements, except for ordinary maintenance and
repairs, or any purchase of property by C&L at a cost in excess of
$25,000, other than supplies in the ordinary course of business.

- make any material change in the accounting methods or practices of C&L
unless required by law, regulation, GAAP or RAP, as the case may be.

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<PAGE> 52

- will not cause any loss incurred or accrued for by C&L as a result of
environmental problems which has or would be expected to have a material
adverse effect on the financial position of C&L.

RESALE OF CORPORATION COMMON STOCK BY AFFILIATES

Corporation common stock to be issued to C&L stockholders in connection
with the C&L merger will be registered under the Securities Act. Corporation
common stock received by the C&L stockholders upon consummation of the merger
will be freely transferable under the Securities Act, except for shares issued
to any person who may be deemed an "affiliate" of C&L or the Corporation within
the meaning of Rule 145 under the Securities Act. "Affiliates" are generally
defined as persons who control, are controlled by, or are under common control
with C&L or the Corporation at the time of the C&L special meeting. Affiliates
generally include directors and some executive officers of C&L or the
Corporation and major stockholders of the Corporation and C&L. Generally, all
shares of Corporation common stock received by affiliates may not be sold until
the Corporation publishes at least one full month of the combined results of
operations of the Corporation and C&L. In addition, affiliates of C&L or the
Corporation must sell their shares of Corporation common stock acquired in
connection with the C&L merger in compliance with Rule 145 or another applicable
exemption from the registration requirements of the Securities Act.

In general, under Rule 145, for one year following the effective time, an
affiliate (together with certain related persons) would be entitled to sell
shares of Corporation common stock acquired in the C&L merger only through
unsolicited "broker transactions" or in transactions directly with a "market
maker," as such terms are defined in Rule 144 under the Securities Act.
Additionally, the number of shares to be sold by an affiliate (together with
certain related persons and certain persons acting in concert) during that
one-year period within any three-month period for purposes of Rule 145 may not
exceed the greater of 1% of the outstanding shares of Corporation common stock
or the average weekly trading volume of the stock during the four calendar weeks
preceding such sale. Rule 145 would remain available to affiliates only if the
Corporation remained current with its information filings with the SEC under the
Exchange Act. One year after the effective time, an affiliate of C&L would be
able to sell its shares of Corporation common stock without the manner of sale
or volume limitations, provided that the Corporation was current with its
Securities Exchange Act information filings and such affiliate was no longer an
affiliate of the Corporation. Two years after the effective time, an affiliate
of C&L would be able to sell its shares of Corporation common stock without any
restrictions so long as the affiliate was not, and had not been for at least
three months before selling, an affiliate of the Corporation.

INTERESTS OF CERTAIN PERSONS IN THE C&L MERGER

In considering the recommendation of the Board of Directors of C&L with
respect to the C&L Plan of Merger and the transactions contemplated thereby, C&L
stockholders should be aware that certain members of the management of C&L and
the Board of Directors of C&L have certain interests in the C&L merger that are
in addition to the interests of C&L stockholders generally.

The Corporation has agreed in the C&L Plan of Merger to take all necessary
action to nominate and elect Jerry M. Smith as a director of the Corporation
upon consummation of the C&L merger and related transactions. Mr. Smith will
also receive a $15,000 fee for assisting the Board of Directors of C&L in the
negotiation of the C&L merger.

Pursuant to the C&L Plan of Merger, the Corporation will enter into an
employment agreement with Jed M. Hiers. Mr. Hiers will be employed as President
of Bank of Bristol. The agreement also provides that Mr. Hiers will receive
other benefits such life and health insurance, participation in Corporation
retirement plans, dues for various civic clubs, standard vacation days, and
participation in other executive compensation plans. The agreement is for a term
of three years. If Mr. Hiers is terminated for any reason other than cause, as
defined in the agreement, Mr. Hiers shall receive his annual compensation for
the remaining term of the agreement and may not, directly or indirectly, carry
on or do similar business or solicit similar business with any customer, Bank of
Bristol or its subsidiaries in Calhoun County, Florida, Liberty County, Florida
or in any county located west of Calhoun or Liberty County, Florida. The terms
of this agreement have resulted from

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<PAGE> 53

arm's length negotiation between the parties involved in connection with the
execution of the C&L Plan of Merger.

Pursuant to the C&L Plan of Merger, the Corporation shall maintain for four
years after the effective time C&L's current policy, or a similar policy, of
directors' and officers' liability for the benefit of the individuals who, at or
before the effective time, were directors or officers of C&L with respect to
matters occurring before the effective time.

As of the record date, directors and executive officers of C&L beneficially
owned an aggregate of 11,611 shares of C&L common stock, representing 71.34% of
the shares outstanding. Therefore, approval of the C&L merger is assured. The
directors and executive officers of C&L would receive a total of % of
Corporation common stock issued to C&L stockholders in the C&L merger. The
directors of C&L have appointed James A. Taylor, the Chairman of the Board of
the Corporation, as proxy to vote their shares of C&L common stock for the C&L
Plan of Merger. See "Principal Stockholders of C&L -- Security Ownership of
Management."

ACCOUNTING TREATMENT

Consummation of the C&L merger is conditioned upon the receipt by the
Corporation and C&L of letters from Ernst & Young LLP, dated as of the date of
the mailing of the Prospectus-Joint Proxy Statement and as of the closing date
of the C&L merger, that the C&L merger will qualify for pooling of interests
accounting treatment if consummated in accordance with the C&L Plan of Merger.
The Corporation and C&L have agreed not to intentionally take any action that
would disqualify the C&L merger as a pooling-of-interests for accounting
purposes.

Under the pooling of interests method of accounting, the historical basis
of the assets and liabilities of the Corporation and C&L will be combined at the
effective time and carried forward at their previously recorded amounts, the
stockholders' equity accounts of the Corporation and C&L will be combined on the
Corporation's consolidated balance sheet and no goodwill or other intangible
assets will be created. Consolidated financial statements of the Corporation
issued after the C&L merger will be restated retroactively to reflect the
consolidated operations of the Corporation and C&L as if the C&L merger had
taken place prior to the periods covered by such consolidated financial
statements.

The unaudited pro forma financial information contained in this
Prospectus-Joint Proxy Statement has been prepared using the pooling of
interests accounting method to account for the C&L merger. See "Pro Forma
Condensed Financial Information."

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

The following is a discussion of material federal income tax consequences
of the C&L merger and the exchange by the C&L stockholders of C&L common stock
for shares of Corporation common stock. Each stockholder's individual
circumstances may affect the tax consequences of the C&L merger to him or her.
In addition, no information is provided in this Prospectus-Joint Proxy Statement
with respect to the tax consequences of the C&L merger under applicable foreign,
state or local laws.

Neither the Corporation nor C&L has requested or will receive an advance
ruling from the Internal Revenue Service ("IRS") as to the federal income tax
consequences of the C&L merger. The respective obligations of C&L and the
Corporation to consummate the C&L merger were conditioned upon receipt of
certain legal opinions relating to the federal income tax consequences of the
C&L merger in form and substance satisfactory to C&L and the Corporation and
their respective counsel, which have been received and are exhibits to the
Registration Statement. The opinions of the Corporation's and C&L's counsel are
based upon the facts that are described in this Prospectus-Joint Proxy Statement
and upon certain customary representations made by the management of C&L and by
the management of the Corporation. These opinions are also based upon the
Internal Revenue Code of 1986 (the "Internal Revenue Code"), regulations
currently in effect thereunder, current administrative rulings and practice by
the IRS and judicial authority, all of which are subject to change. Any such
change could affect the continuing validity of such opinions and this
discussion. In addition, an opinion of counsel is not binding upon the IRS, and
there can be no assurance, and

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<PAGE> 54

none is given, that the IRS will not take a position which is contrary to one or
more positions reflected in the opinions of such counsel, or that such opinions
will be upheld by the courts if challenged by the IRS. Furthermore, the
Corporation and C&L have agreed in the C&L Plan of Merger not to take any action
which would disqualify the C&L merger as a reorganization which is tax-free to
the stockholders of C&L pursuant to Section 368(a) of the Internal Revenue Code.
EACH C&L STOCKHOLDER IS URGED TO CONSULT SUCH STOCKHOLDER'S PERSONAL TAX AND
FINANCIAL ADVISORS AS TO THE SPECIFIC FEDERAL INCOME TAX CONSEQUENCES TO SUCH
STOCKHOLDER, BASED ON SUCH STOCKHOLDER'S OWN PARTICULAR STATUS AND
CIRCUMSTANCES, AND ALSO AS TO ANY STATE, LOCAL, FOREIGN OR OTHER TAX
CONSEQUENCES ARISING OUT OF THE C&L MERGER.

It is a condition to the obligation of the Corporation to proceed with the
C&L merger that the Corporation shall have received an opinion from Haskell
Slaughter & Young, L.L.C., its counsel, which it has received, and it is a
condition to the obligation of C&L to proceed with the C&L merger that C&L shall
have received an opinion from Jenkens & Gilchrist, P.C., its counsel, which it
has received, concerning the material federal income tax consequences of the C&L
merger. The opinions received by the Corporation and C&L reflect and support the
following:

- Provided the C&L merger qualifies as a statutory merger under applicable
state corporate law, the C&L merger will constitute a reorganization
within the meaning of Section 368(a) of the Internal Revenue Code, and
the Corporation and C&L will each be a party to the reorganization within
the meaning of Section 368(b) of the Internal Revenue Code.

- No gain or loss will be recognized by the Corporation or C&L as a result
of the C&L merger.

- No gain or loss will be recognized by a C&L stockholder who receives
solely shares of Corporation common stock in exchange for C&L common
stock.

- The receipt of cash in lieu of fractional shares of Corporation common
stock will be treated as if the fractional shares were distributed as
part of the exchange and then were redeemed by the Corporation. These
payments will be treated as having been received as distributions in full
payment in exchange for the stock redeemed as provided in Section 302(a)
of the Internal Revenue Code, provided the redemption is not essentially
equivalent to a dividend.

- The aggregate tax basis of the shares of Corporation common stock
received by a C&L stockholder will be equal to the aggregate tax basis of
the C&L common stock exchanged therefore, excluding any basis allocable
to a fractional share of Corporation common stock for which cash is
received.

- The holding period of the shares of Corporation common stock received by
a C&L stockholder will include the holding period or periods of the C&L
common stock exchanged therefore, provided that the C&L common stock is
held as a capital asset within the meaning of Section 1221 of the
Internal Revenue Code at the effective time.

- Where cash is received by a C&L stockholder in exchange for his shares of
C&L common stock pursuant to the exercise of dissenters' rights, such
cash will be treated as having been received in redemption of his C&L
common stock, subject to the provisions and limitations of Section 302 of
the Internal Revenue Code.

The discussion above is intended only as a summary of the material federal
income tax consequences of the C&L merger and is not a complete analysis or
listing of all potential tax effects relevant to a decision whether to vote in
favor of approval and adoption of the C&L Plan of Merger and the C&L merger.

NO SOLICITATION OF TRANSACTIONS

Under the C&L Plan of Merger, C&L is restricted in its ability to
participate in discussions and negotiate with any person concerning any proposal
to acquire C&L upon a merger, purchase of assets, purchase of or tender offer
for C&L common stock or similar acquisition transaction. C&L has also agreed,
except to the extent legally required for the Board of Directors of C&L to
discharge its fiduciary duties, not to make any information regarding C&L
available to any person for the purpose of affecting or causing a merger,
consolidation or disposition of C&L, or its assets or common stock.

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EXPENSES

The Corporation and C&L shall pay their own costs and expenses incurred in
connection with the C&L Plan of Merger and the transactions contemplated
thereby.

INDEMNIFICATION

The Corporation's Restated Certificate of Incorporation and Bylaws provide
for the elimination of directors' liability for monetary damages arising from a
breach of certain fiduciary obligations and for the indemnification of
directors, officers and agents to the full extent permitted by Delaware law.
These provisions generally provide for indemnification in the absence of gross
negligence or willful misconduct and cannot be amended without the affirmative
vote of a majority of the outstanding shares of Corporation common stock
entitled to vote thereon.

By operation of law under Delaware law and Florida law, all rights to
indemnification for acts or omissions occurring prior to the effective time now
existing in favor of the current or former directors or officers of C&L as
provided in its articles of incorporation or bylaws shall survive the merger and
shall continue in effect in accordance with their terms.

Insofar as indemnification for liabilities arising under the Securities Act
may be permitted to directors, officers or persons controlling the Corporation
pursuant to the foregoing provisions, the Corporation has been informed that in
the opinion of the SEC such indemnification is against public policy as
expressed in the Securities Act and is therefore unenforceable.

RIGHTS OF DISSENTING STOCKHOLDERS

The following discussion is not a complete statement of the law relating to
dissenters' rights and is qualified in its entirety by reference to Annex D,
which contains the full text of Sections 607.1301 through 607.1320 of the
Florida Business Corporation Act. Pursuant to Sections 607.1301 through
607.1320, any stockholder of a corporation has the right to dissent from, and
obtain payment of the "fair value" of his or her shares in the event of a
consummation of a plan of merger to which the corporation is a party if the
stockholder is entitled to vote on the merger. A person having a beneficial
interest in C&L common stock which is held of record in the name of another
person, such as a broker or nominee, must act promptly to cause the record
stockholder to timely and properly follow the steps summarized below to perfect
whatever dissenters' rights the beneficial stockholder may have.

Sections 607.1301 through 607.1320 of the Florida Business Corporation Act
provide for rights of appraisal of the value of the shares for which the
stockholder of record (1) has delivered notice in writing to C&L before the vote
is taken that he or she intends to demand a cash payment for his shares if the
C&L merger is consummated and (2) does not vote in favor of the C&L merger. A
proxy or vote against the C&L merger does not constitute such notice of intent
to demand payment. A stockholder may dissent as to less than all of the shares
registered in his name. The rights of a partial dissenter are determined as if
the shares as to which such holder dissents and other shares held by the holder
are registered in different names of C&L stockholders. Within ten (10) days
after the C&L special meeting, the Corporation will send to each C&L stockholder
who has given such dissent notice to C&L a written notice of the authorization
of the C&L Plan of Merger by the C&L stockholders. Within twenty (20) days after
the date of such notice the stockholder must submit a notice of election to
dissent and a written demand for payment of the fair value of his shares to the
Corporation. Simultaneously with the filing of the election to dissent, the C&L
stockholder shall submit his certificates representing shares of C&L common
stock to the Corporation for notation thereon that such demand has been made.

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The dissenters notice should be sent to:

Mr. Jed M. Hiers
C&L Banking Corporation
Post Office Box 550
Bristol, Florida 32321

Upon filing a notice of election to dissent, the C&L stockholder shall
thereafter be entitled only to payment as provided under Section 607.1301
through 607.1320 of the Florida Business Corporations Act, and the C&L
stockholder shall not be entitled to vote or exercise any other rights of a C&L
stockholder. A notice of election to dissent may be withdrawn in writing by the
C&L stockholder at any time before an offer to pay for his shares is made by the
Corporation. After the Corporation makes such an offer, the notice of election
to dissent may not be withdrawn unless the Corporation consents thereto.

Within ten (10) days after the expiration of the period in which C&L
stockholders may file their notices of election to dissent, or within ten (10)
days after the C&L merger is completed, whichever is later (but in no case later
than ninety (90) days from the C&L stockholder's special meeting), the
Corporation will offer to pay each dissenting C&L stockholder who has demanded
payment in accordance with Sections 607.1301 through 607.1320 of the Florida
Business Corporation Act an amount which the Corporation estimated to be the
fair value of the shares, and each dissenting C&L stockholder who has demanded
payment in accordance with Sections 607.1301 through 607.1320 of the Florida
Business Corporation Act may agree to accept such offer of payment. "Fair Value"
means the value of the shares as of the close of business on the day prior to
the C&L stockholders' special meeting, excluding any appreciation or
depreciation in anticipation of the corporate action unless exclusion would be
inequitable.

If within thirty (30) days after the Corporation makes an offer of payment
to any such C&L stockholder and the C&L stockholder accepts the same, payment
for his or her shares shall be made within ninety (90) days after the making of
such offer or the C&L closing date, whichever is later. Upon receiving payment,
such dissenting C&L stockholder ceases to have any interest in the shares.

If the Corporation fails to make such offer within ten (10) days after the
expiration of the period in which C&L stockholders may file their notices of
election to dissent, or within ten (10) days after the C&L merger is completed,
or if the Corporation makes the offer and any dissenting C&L stockholder fails
to accept the same within the period of thirty (30) days thereafter, then the
Corporation, within thirty (30) days after receipt of written demand from any
dissenting C&L stockholder given within sixty (60) days after the date on which
the C&L merger is completed, shall, or at its election at any time within such
period of sixty (60) days may, file an action in any court of competent
jurisdiction in Calhoun County, Florida, requesting that the fair value of such
shares be determined. The court shall also determine whether each dissenting C&L
stockholder, as to whom the Corporation requests the court to make such
determination, is entitled to receive payment for his or her shares. If the
Corporation fails to file an action, any dissenting C&L stockholder may do so in
the name of the Corporation. All dissenting C&L stockholders (whether or not
residents of the state of Florida), other than C&L stockholders who have agreed
with the Corporation as to the value of their shares, shall be made parties to
the proceeding as an action against their shares. All C&L stockholders who are
proper parties to the proceeding are entitled to judgment against the
Corporation for the amount of the fair value of their shares. The Corporation
shall pay each dissenting C&L stockholder the amount found to be due him or her
within ten (10) days after final determination of the proceedings. Upon payment
of the judgment, the dissenting C&L stockholder shall cease to have any interest
in such shares. The judgment may, at the discretion of the court, include a fair
rate of interest, to be determined by the court. The costs and expenses of any
such proceeding shall be determined by the court and shall be assessed against
the Corporation, but all or any part of such costs and expenses may be
apportioned and assessed as the court deems equitable against any or all of the
dissenting C&L stockholders who are parties to the proceeding, to whom the
Corporation has made an offer to pay for the shares, if the court finds that the
action of such C&L stockholders in failing to accept such offer was arbitrary,
vexatious, or not in good faith.

A C&L stockholder who dissents and obtains payment under these procedures
may not challenge the C&L merger unless the C&L merger is unlawful or fraudulent
with respect to the stockholder or C&L.

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FAILURE OF A C&L STOCKHOLDER TO COMPLY WITH ANY REQUIREMENTS OF THE
PROVISIONS RELATING TO DISSENTERS' RIGHTS OF APPRAISAL WILL RESULT IN A
FORFEITURE BY SUCH C&L STOCKHOLDER OF APPRAISAL RIGHTS.

References herein to applicable statutes are summaries of portions thereof
and do not purport to be complete and are qualified in their entirety by
reference to applicable law. Sections 607.1301 through 607.1320 of the Florida
Business Corporations Act are attached hereto as Annex D. YOU SHOULD READ ANNEX
D CAREFULLY.

THE SHARE EXCHANGE

The description of the share exchange contained in this Prospectus-Joint
Proxy Statement summarizes the principal provisions of the Share Exchange
Agreement. This description is not complete and is qualified in its entirety by
reference to the Share Exchange Agreement, the full text of which is attached
hereto as Annex B. All Bank of Bristol stockholders are urged to read Annex B
carefully in its entirety.

On February 25, 1999, the Corporation entered into a Share Exchange
Agreement with Bank of Bristol, C&L and Bristol Acquisition Corporation pursuant
to which all shares of Bank of Bristol common stock not owned by C&L are to be
exchanged for the number of shares of the Corporation common stock as calculated
below held by Bristol Acquisition Corporation. After the share exchange, Bank of
Bristol will be a wholly owned subsidiary of the Corporation. Bank of Bristol is
a 98.1% owned subsidiary of C&L. Bank of Bristol is based in Bristol, Florida.
See "Business of Bank of Bristol" and "Pro Forma Condensed Financial
Information."

TERMS OF THE SHARE EXCHANGE

In the share exchange, each share of Bank of Bristol common stock not owned
by C&L will be exchanged for shares of Corporation common stock held by Bristol
Acquisition Corporation, a wholly-owned subsidiary of the Corporation. As a
result, the Bank of Bristol will become a wholly owned subsidiary of the
Corporation.

The Corporation has agreed to exchange $249,205.19 of its common stock for
all of the issued and outstanding Bank of Bristol common stock not owned by C&L.
The total number of shares of Corporation common stock to be issued in the Bank
of Bristol merger is equal to $249,205.19 divided by the closing date trading
price. The closing date trading price is the twenty trading day average last
sales price for Corporation common stock on Nasdaq, ending three trading days
before the special meeting. The closing date trading price cannot be higher than
$14.00 per share or lower than $10.00 per share. The number of shares of
Corporation common stock to be exchanged for each share of Bank of Bristol
common stock will be an exchange ratio determined by dividing the total number
of shares of Corporation common stock by the total number of shares of issued
and outstanding Bank of Bristol common stock not owned by C&L. You will receive
the number of shares of Corporation common stock equal to the number of shares
of Bank of Bristol common stock you own multiplied by this exchange ratio.
Therefore, the number of shares of Corporation common stock you will receive
will not be finalized until three trading days prior to the special meeting. If
the closing date trading price had been calculated as of , 1999, it would
have been $ and the exchange ratio would have been shares of
Corporation common stock for each share of Bank of Bristol common stock.

If the merger has not been completed by July 31, 1999, the total merger
consideration will be increased by any earnings of Bank of Bristol from August
1, 1999, through the most reasonably practicable date that the earnings can be
determined prior to the special meeting. This amount will be added to the total
consideration the Corporation has agreed to pay to acquire Bank of Bristol prior
to the calculation of the exchange ratio. The share exchange is conditioned upon
the approval and completion of the C&L merger.

BACKGROUND OF AND REASONS FOR THE SHARE EXCHANGE; RECOMMENDATION OF BANK OF
BRISTOL BOARD OF DIRECTORS

For a complete discussion of the background of and reasons for the mergers
and share exchange, see "The C&L Merger -- Background of and Reasons for the
Mergers and Share Exchange; Recommendations of the C&L Board of Directors" on
pages through of this Prospectus-Joint Proxy Statement.

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THE BANK OF BRISTOL BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT BANK OF
BRISTOL STOCKHOLDERS VOTE FOR APPROVAL OF THE SHARE EXCHANGE AGREEMENT AND THE
SHARE EXCHANGE.

The Share Exchange Agreement included at Annex B sets forth the terms of
the share exchange that are described in this Prospectus-Joint Proxy Statement.
All Bank of Bristol stockholders are urged to read the Share Exchange Agreement
in its entirety.

OPINION OF BANK OF BRISTOL'S FINANCIAL ADVISOR

For a complete discussion of the opinion of Bank of Bristol's financial
advisor, see "The C&L Merger -- Opinion of Financial Advisor" on pages
through of this Prospectus-Joint Proxy Statement.

EFFECTIVE TIME OF THE SHARE EXCHANGE

Subject to the provisions of the Share Exchange Agreement, Articles of
Share Exchange shall be duly executed and, on the closing date, or as soon
thereafter as reasonably practicable, filed with the Florida Banking Department
and the Florida Secretary of State. It is presently anticipated that such filing
will be made as soon as practicable after the Bank of Bristol special meeting
and in conjunction with similar filings relating to the C&L merger, and that the
effective time will occur upon such filing, although there can be no assurance
as to whether or when the share exchange will occur.

EXCHANGE OF CERTIFICATES

As soon as reasonably practicable after the effective time, the
Corporation's Exchange Agent will mail to Bank of Bristol stockholders of record
(1) a letter of transmittal, and (2) instructions for use in effecting the
surrender of the certificates representing shares of Bank of Bristol common
stock in exchange for certificates representing shares of Corporation common
stock. The letter of transmittal will specify that delivery shall be effected,
and risk of loss and title to the certificates will pass, only upon delivery of
the certificates to the Corporation and will be in form as the Corporation may
reasonably specify. When a Bank of Bristol stockholder surrenders his
certificate to the Exchange Agent, together with a letter of transmittal, duly
executed, and such other documents as may reasonably be required by the
Corporation, that stockholder shall be entitled to receive in exchange a
certificate representing that number of whole shares of Corporation common stock
which that stockholder has the right to receive pursuant to the provisions of
the Share Exchange Agreement.

In the event of a transfer of ownership of Bank of Bristol common stock
which is not registered in the transfer records of Bank of Bristol, a
certificate representing the proper number of shares of Corporation common stock
may be issued to a person other than the person in whose name the certificate so
surrendered is registered, if the certificate shall be properly endorsed or
otherwise be in proper form for transfer, and the person requesting such
issuance shall pay any transfer or other taxes required by reason of the
issuance of shares of Corporation common stock to a person other than the
registered holder of such certificate or establish to the satisfaction of the
Corporation that such tax has been paid or is not applicable.

Until surrendered as contemplated by the Share Exchange Agreement, each
certificate shall be deemed at any time after the effective time to represent
only the right to receive Corporation common stock and cash for fractional
shares to which the holder of such certificates is entitled. No interest will be
paid or will accrue on any cash payable in lieu of any fractional shares of
Corporation common stock. To the extent permitted by law, former holders of
record of Bank of Bristol common stock shall be entitled to vote the number of
shares of Corporation common stock into which their respective shares of Bank of
Bristol common stock are converted after the effective time at any meeting of
Corporation stockholders, regardless of whether such holders have received their
certificates representing Corporation common stock in accordance with the Share
Exchange Agreement.

No certificates or scrip representing fractional shares of Corporation
common stock shall be issued upon conversion of Bank of Bristol common stock,
and such fractional share interests will not entitle the owner thereof to vote
or to any rights of a stockholder of the Corporation. Notwithstanding any other
provision of the

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Share Exchange Agreement, each holder of Bank of Bristol common stock exchanged
pursuant to the share exchange who would otherwise have been entitled to receive
a fraction of a share of Corporation common stock shall receive cash, instead of
fractional shares of Corporation common stock in an amount equal to $ per
share.

At the effective time of the share exchange, Bank of Bristol stockholders
will cease to be, and shall have no rights as, holders of Bank of Bristol common
stock, other than:

- the right to receive shares of Corporation common stock into which the
shares of Bank of Bristol common stock have been converted,

- any fractional share payment,

- any dividends or other distributions to which they may be entitled under
the Share Exchange Agreement, and

- the right to perfect any dissenters' rights to the extent that such
rights have been properly exercised.

Neither the Corporation nor Bank of Bristol will be liable to any holder of
Bank of Bristol common stock for any shares of Corporation common stock or any
related dividends or other distributions, or cash in lieu of fractional shares
delivered to a public official pursuant to any applicable abandoned property,
escheat or similar law.

CONDITIONS TO THE SHARE EXCHANGE

The Share Exchange Agreement is subject to a number of conditions, some of
which are mutual and others of which are applicable to either the Corporation or
Bank of Bristol. Though most of the conditions will not be satisfied until
immediately before the effective time of the share exchange, each party believes
that it is currently in material compliance with the conditions.

The obligation of the Corporation to complete the Share Exchange Agreement
is subject to the following conditions:

- No material adverse changes shall have occurred in the business,
operations or financial condition of Bank of Bristol.

- Except as otherwise provided in the Share Exchange Agreement, the
representations and warranties of Bank of Bristol shall be true and
correct.

- Bank of Bristol shall have performed and complied with all covenants,
agreements and conditions required by the Share Exchange Agreement.

- The share exchange is conditioned on the Corporation's acquisition of
C&L.

The obligation of Bank of Bristol to consummate the share exchange is
subject to the following conditions:

- No material adverse changes shall have occurred in the business,
operations or financial condition of Corporation.

- Except as otherwise provided in the Share Exchange Agreement, the
representations and warranties of the Corporation shall be true and
correct.

- The Corporation shall have performed and complied with all covenants,
agreements and conditions required by the Share Exchange Agreement to be
performed or complied with in all material respects.

- The share exchange is conditioned on the Corporation's acquisition of
C&L.

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Before or at the effective time, either the Corporation or Bank of Bristol,
or both, acting through their respective Boards of Directors, chief executive
officers or other authorized officers, may:

- waive any default in the performance of any term of the Share Exchange
Agreement by the other party.

- waive or extend the time for the compliance or fulfillment by the other
party of any and all of its obligations under the Share Exchange
Agreement.

- waive any of the conditions precedent to the obligations of such party
under the Share Exchange Agreement, except any condition such as required
regulatory or Bank of Bristol stockholder approval, that, if not
satisfied, would result in the violation of any applicable law or
governmental regulation.

However, because the share exchange is conditioned upon the C&L merger and
indirectly on the Bank of Blountstown merger, the mergers and the share exchange
must all receive the required regulatory and stockholder approvals.

REPRESENTATIONS AND COVENANTS

Under the Share Exchange Agreement, the Corporation and Bank of Bristol
have each made a number of representations regarding the organization and
capital structures of the respective companies and their subsidiaries, their
operations, financial condition and other matters, including their authority to
enter into the Share Exchange Agreement and to consummate the share exchange.

REGULATORY APPROVALS

The share exchange does not specifically require regulatory approval.
However, the C&L merger must be approved by the Federal Reserve Board and the
Bank of Blountstown merger must be approved by the Florida Banking Department
and by the FDIC. Each of the Federal Reserve Board, the Florida Banking
Department and the FDIC will evaluate all of the related transactions, including
the share exchange, in connection with their respective approval processes.
Applications for requisite approvals have been filed with the Federal Reserve
Board on April 15, 1999, the Florida Banking Department on April 19, 1999 and
April 28, 1999, and the FDIC on April 16, 1999.

Certain persons, such as states' attorneys general and private parties,
could challenge the share exchange as violative of the antitrust laws and seek
to enjoin the consummation of the share exchange and, in the case of private
persons, also seek to obtain treble damages. There can be no assurance that a
challenge to the share exchange on antitrust grounds will not be made or, if
such a challenge is made, that it will not be successful. Neither the
Corporation nor Bank of Bristol intends to seek any further stockholder approval
or authorization of the Share Exchange Agreement as a result of any action that
it may take to resist or resolve any Department of Justice or other objections,
unless required to do so by applicable law.

RESALE OF CORPORATION COMMON STOCK BY AFFILIATES

Corporation common stock to be issued to Bank of Bristol stockholders in
connection with the share exchange will be registered under the Securities Act.
Corporation common stock received by the Bank of Bristol stockholders upon
consummation of the share exchange will be freely transferable under the
Securities Act, except for shares issued to any person who may be deemed an
"affiliate" of Bank of Bristol or the Corporation within the meaning of Rule 145
under the Securities Act. "Affiliates" are generally defined as persons who
control, are controlled by, or are under common control with Bank of Bristol or
the Corporation at the time of the Bank of Bristol special meeting. Affiliates
generally include directors and some executive officers of Bank of Bristol or
the Corporation and major stockholders of the Corporation or Bank of Bristol.
Generally, all shares of Corporation common stock received by affiliates may not
be sold until the Corporation publishes at least one full month of the combined
results of operations of the Corporation and Bank of Bristol. In addition,
affiliates of Bank of Bristol or the Corporation must sell their shares of
Corporation common stock acquired in connection with the share exchange in
compliance with Rule 145 or another applicable exemption from the registration
requirements of the Securities Act.

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In general, under Rule 145, for one year following the effective time, an
affiliate (together with certain related persons) would be entitled to sell
shares of Corporation common stock acquired in the share exchange only through
unsolicited "broker transactions" or in transactions directly with a "market
maker," as such terms are defined in Rule 144 under the Securities Act.
Additionally, the number of shares to be sold by an affiliate (together with
certain related persons and certain persons acting in concert) during such
one-year period within any three-month period for purposes of Rule 145 may not
exceed the greater of 1% of the outstanding shares of Corporation common stock
or the average weekly trading volume of such stock during the four calendar
weeks preceding such sale. Rule 145 would remain available to affiliates only if
the Corporation remained current with its information filings with the SEC under
the Exchange Act. One year after the effective time, an affiliate of Bank of
Bristol would be able to sell such Corporation common stock without such manner
of sale or volume limitations, provided that the Corporation was current with
its Exchange Act information filings and such affiliate was not then an
affiliate of the Corporation. Two years after the effective time, an affiliate
of Bank of Bristol would be able to sell such shares of Corporation common stock
without any restrictions so long as such affiliate was not, and had not been for
at least three months prior thereto, an affiliate of the Corporation.

INTERESTS OF CERTAIN PERSONS IN THE SHARE EXCHANGE

In considering the recommendation of the Board of Directors of Bank of
Bristol with respect to the share exchange and the transactions contemplated
thereby, Bank of Bristol stockholders should be aware that certain members of
the management of Bank of Bristol and the Board of Directors of Bank of Bristol
have certain interests in the share exchange that are in addition to the
interests of stockholders of Bank of Bristol generally.

As of the record date, C&L beneficially owned an aggregate of 19,620 shares
of Bank of Bristol common stock, representing 98.1% of the shares outstanding.
The Board of Directors of C&L has unanimously indicated its intention to vote
the shares of Bank of Bristol common stock beneficially owned by it for the
share exchange. Therefore, stockholder approval of the share exchange is
assured. See "Principal Stockholders of Bank of Bristol -- Security Ownership of
Management."

ACCOUNTING TREATMENT

The share exchange will be treated as a pooling of interests for accounting
purposes. Under the pooling of interests method of accounting, the historical
basis of the assets and liabilities of the Corporation and Bank of Bristol will
be combined at the effective time and carried forward at their previously
recorded amounts, the stockholders' equity accounts of the Corporation and Bank
of Bristol will be combined on the Corporation's consolidated balance sheet and
no goodwill or other intangible assets will be created. Consolidated financial
statements of the Corporation issued after the share exchange will be restated
retroactively to reflect the consolidated operations of the Corporation and Bank
of Bristol as if the share exchange had taken place prior to the periods covered
by such consolidated financial statements.

The unaudited pro forma financial information contained in this
Prospectus-Joint Proxy Statement has been prepared using the pooling of
interests accounting method to account for the share exchange. See "Pro Forma
Condensed Financial Information."

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

The following is a discussion of material federal income tax consequences
of the share exchange and the exchange by the Bank of Bristol stockholders of
Bank of Bristol common stock for shares of Corporation common stock. Each
stockholder's individual circumstances may affect the tax consequences of the
share exchange to him or her. In addition, no information is provided in this
Prospectus-Joint Proxy Statement with respect to the tax consequences of the
share exchange under applicable foreign, state or local laws.

Neither the Corporation nor Bank of Bristol has requested or will receive
an advance ruling from the IRS as to the federal income tax consequences of the
share exchange. The share exchange is intended to constitute for federal income
tax purposes a reorganization within the meaning of Section 368(a) of the
Internal

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Revenue Code. EACH BANK OF BRISTOL STOCKHOLDER IS URGED TO CONSULT SUCH
STOCKHOLDER'S PERSONAL TAX AND FINANCIAL ADVISORS AS TO THE SPECIFIC FEDERAL
INCOME TAX CONSEQUENCES TO SUCH STOCKHOLDER, BASED ON SUCH STOCKHOLDER'S OWN
PARTICULAR STATUS AND CIRCUMSTANCES, AND ALSO AS TO ANY STATE, LOCAL, FOREIGN OR
OTHER TAX CONSEQUENCES ARISING OUT OF THE SHARE EXCHANGE.

EXPENSES

The Corporation, Bristol Acquisition Corporation and Bank of Bristol will
each pay its own costs and expenses incurred in connection with the share
exchange and the transactions contemplated thereby.

INDEMNIFICATION

By operation of law under Delaware law and Florida law, all rights to
indemnification for acts or omissions occurring before the effective time now
existing in favor of the current or former directors or officers of Bank of
Bristol as provided in its articles of incorporation or bylaws shall survive the
share exchange and shall continue in effect in accordance with their terms.

RIGHTS OF DISSENTING STOCKHOLDERS

The following discussion is not a complete statement of the law relating to
dissenters' rights and is qualified in its entirety by reference to Annex D,
which contains the full text of Sections 607.1301 through 607.1320 of the
Florida Business Corporation Act. Pursuant to Sections 607.1301 through
607.1320, any stockholder of a corporation has the right to dissent from, and
obtain payment of the fair value of his or her shares in the event of a
consummation of a plan of merger to which the corporation is a party if the
stockholder is entitled to vote on the merger. A person having a beneficial
interest in Bank of Bristol common stock which is held of record in the name of
another person, such as a broker or nominee, must act promptly to cause the
record stockholder to timely and properly follow the steps summarized below to
perfect whatever dissenter's rights the beneficial stockholder may have.

Sections 607.1301 through 607.1320 of the Florida Business Corporation Act
provide for rights of appraisal of the value of the shares for which the
stockholder of record (1) has delivered notice in writing to Bank of Bristol
before the vote is taken that he intends to demand payment for his shares if the
share exchange is consummated and (2) does not vote in favor of the share
exchange. A proxy or vote against the share exchange does not constitute such
notice of intent to demand payment. A stockholder may dissent as to less than
all of the shares registered in his name. The rights of a partial dissenter are
determined as if the shares as to which such holder dissents and other shares
held by the holder are registered in different names of Bank of Bristol
stockholders. Within ten (10) days after the Bank of Bristol special meeting,
the Corporation will send to each Bank of Bristol stockholder who has given such
dissent notice to Bank of Bristol a written notice of authorization of the Share
Exchange Agreement. Within twenty (20) days after the date of such notice the
stockholder must submit a notice of election to dissent and a written demand for
payment to the Corporation. Simultaneously with the filing of the election to
dissent, the Bank of Bristol stockholder shall submit this certificates
representing shares in Bank of Bristol common stock to the Corporation for
notation thereon that such demand has been made.

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The dissenters notice should be sent to:

Mr. Jed M. Hiers
C&L Bank of Bristol
Post Office Box 550
Bristol, Florida 32321

Upon filing a notice of election to dissent, the Bank of Bristol
stockholder shall thereafter be entitled only to payment as provided under
Section 607.1301 through 607.1320 of the Florida Business Corporation Act, and
the Bank of Bristol stockholder shall not be entitled to vote or exercise any
other rights of a Bank of Bristol stockholder. A notice of election to dissent
may be withdrawn in writing by the Bank of Bristol stockholder at any time
before an offer is made by the Corporation. After the Corporation makes such an
offer, the notice of election to dissent may not be withdrawn unless the
Corporation consents thereto.

Within ten (10) days after the expiration of the period in which Bank of
Bristol stockholders may file their notices of election to dissent, or within
ten (10) days after the share exchange is completed, whichever is later (but in
no case later than ninety (90) days from the Bank of Bristol stockholder's
special meeting), the Corporation will offer to pay each dissenting Bank of
Bristol stockholder who has demanded payment in accordance with Sections
607.1301 through 607.1320 of the Florida Business Corporation Act an amount
which the Corporation estimated to be the fair value of the shares, and each
dissenting Bank of Bristol stockholder may agree to accept such offer of
payment. "Fair Value" means the value of the shares as of the close of business
on the day prior to the Bank of Bristol stockholders' special meeting date,
excluding any appreciation or depreciation in anticipation of the corporate
action unless exclusion would be in equitable.

If within thirty (30) days after the Corporation makes an offer of payment
to any such Bank of Bristol stockholder and the Bank of Bristol stockholder
accepts the same, payment for his or her shares shall be made within ninety (90)
days after the making of such offer or the Bank of Bristol closing date,
whichever is later. Upon receiving payment, such dissenting Bank of Bristol
stockholder ceases to have any interest in the shares.

If the Corporation fails to make such offer within ten (10) days after the
expiration of the period in which Bank of Bristol stockholders may file their
notices of election to dissent, or within ten (10) days after the share exchange
is completed, or if the Corporation makes the offer and any dissenting Bank of
Bristol stockholder fails to accept the same within the period of thirty (30)
days thereafter, then the Corporation, within thirty (30) days after receipt of
written demand from any dissenting Bank of Bristol stockholder given within
sixty (60) days after the date on which the share exchange is completed, shall,
or at its election at any time within such period of sixty (60) days may, file
an action in any court of competent jurisdiction in Calhoun County, Florida,
requesting that the fair value of such shares be determined. The court shall
also determine whether each dissenting Bank of Bristol stockholder, as to whom
the Corporation requests the court to make such determination, is entitled to
receive payment for his or her shares. If the Corporation fails to file an
action, any dissenting Bank of Bristol stockholder may do so in the name of the
Corporation. All dissenting Bank of Bristol stockholders (whether or not
residents of the state of Florida), other than Bank of Bristol stockholders who
have agreed with the Corporation as to the value of their shares, shall be made
parties to the proceeding as an action against their shares. All Bank of Bristol
stockholders who are proper parties to the proceeding are entitled to judgment
against the Corporation for the amount of the fair value of their shares. The
Corporation shall pay each dissenting Bank of Bristol stockholder the amount
found to be due him or her within ten (10) days after final determination of the
proceedings. Upon payment of the judgment, the dissenting Bank of Bristol
stockholder shall cease to have any interest in such shares. The judgment may,
at the discretion of the court, include a fair rate of interest, to be
determined by the court. The costs and expenses of any such proceeding shall be
determined by the court and shall be assessed against the Corporation, but all
or any part of such costs and expenses may be apportioned and assessed as the
court deems equitable against any or all of the dissenting Bank of Bristol
stockholders who are parties to the proceeding, to whom the Corporation has made
an offer to pay for the shares, if the court finds that the action of such Bank
of Bristol stockholders in failing to accept such offer was arbitrary,
vexatious, or not in good faith.

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A Bank of Bristol stockholder who dissents and obtains payment under these
procedures may not challenge the share exchange unless the share exchange is
unlawful or fraudulent with respect to the stockholder or Bank of Bristol.

FAILURE OF A BANK OF BRISTOL STOCKHOLDER TO COMPLY WITH ANY REQUIREMENTS OF
THE PROVISIONS RELATING TO DISSENTERS' RIGHTS OF APPRAISAL WILL RESULT IN A
FORFEITURE BY SUCH BANK OF BRISTOL STOCKHOLDER OF APPRAISAL RIGHTS.

References herein to applicable statutes are summaries of portions thereof
and do not purport to be complete and are qualified in their entirety by
reference to applicable law. Sections 607.1301 through 607.1320 of the Florida
Business Corporations Act attached hereto as Annex D. YOU SHOULD READ ANNEX D
CAREFULLY.

THE BANK OF BLOUNTSTOWN MERGER

The description of the Bank of Blountstown merger contained in this
Prospectus-Joint Proxy Statement summarizes the principal provisions of the Bank
of Blountstown Plan of Merger. This description is not complete and is qualified
in its entirety by reference to the Bank of Blountstown Plan of Merger, the full
text of which is attached hereto as Annex C. All Bank of Blountstown
stockholders are urged to read Annex C carefully in its entirety.

On February 25, 1999, the Corporation entered into a Plan and Agreement of
Merger with Bank of Blountstown pursuant to which Bank of Blountstown is to be
merged with and into Bank of Bristol. As of December 31, 1998, Bank of
Blountstown had total assets of approximately $56.8 million, deposits of
approximately $52.3 million and stockholders' equity of approximately $3.9
million. Bank of Blountstown is based in Blountstown, Florida. See "Business of
Bank of Blountstown" and "Pro Forma Condensed Financial Information."

TERMS OF THE BANK OF BLOUNTSTOWN MERGER

The Corporation will acquire Bank of Blountstown by the merger of Bank of
Blountstown with and into Bank of Bristol, with Bank of Bristol being the
surviving corporation. The Bank of Blountstown merger will occur after the
Corporation's acquisition of the Bank of Bristol through the C&L merger and the
share exchange. The Articles of Incorporation and the Bylaws of Bank of Bristol
in effect at the effective time of the Bank of Blountstown merger will govern
the surviving corporation until amended or repealed in accordance with
applicable law. At the effective time, Bank of Bristol shall continue as the
surviving corporation under the name "C&L Bank."

The Corporation has agreed to exchange $8,533,142.58 of its common stock
for all of the issued and outstanding Bank of Blountstown common stock. The
total number of shares of Corporation common stock to be issued in the Bank of
Blountstown merger is equal to $8,533,142.58 divided by the closing date trading
price. The closing date trading price is the twenty trading day average last
sales price for Corporation common stock on Nasdaq, ending three trading days
before the special meeting. The closing date trading price cannot be higher than
$14.00 per share or lower than $10.00 per share. The number of shares of
Corporation common stock to be exchanged for each share of Bank of Blountstown
common stock will be an exchange ratio determined by dividing the total number
of shares of Corporation common stock to be exchanged by the total number of
shares of issued and outstanding Bank of Blountstown common stock. You will
receive the number of shares of Corporation common stock equal to the number of
shares of Bank of Blountstown common stock you own multiplied by this exchange
ratio. Therefore, the number of shares of Corporation common stock you will
receive will not be finalized until three trading days prior to the special
meeting. If the closing date trading price had been calculated as of
, 1999, it would have been $ and the exchange ratio would have been
shares of Corporation common stock for each share of Bank of
Blountstown common stock.

If the merger has not been completed by July 31, 1999, the total merger
consideration will be increased by any earnings of Bank of Blountstown from
August 1, 1999, through the most reasonably practicable date that the earnings
can be determined prior to the special meeting. This amount will be added to the
total

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consideration the Corporation has agreed to pay to acquire Bank of Blountstown
prior to the calculation of the exchange ratio. The Bank of Blountstown merger
will not be completed if the C&L merger is not approved and completed.

BACKGROUND OF AND REASONS FOR THE BANK OF BLOUNTSTOWN MERGER; RECOMMENDATIONS OF
BANK OF BLOUNTSTOWN BOARD OF DIRECTORS

For a complete discussion of the background of and reasons for the mergers
and share exchange, see "The C&L Merger -- Background of and Reasons for the
Mergers; Recommendations of the C&L Board of Directors" on pages
through of this Prospectus-Joint Proxy Statement.

The Bank of Blountstown Board of Directors unanimously recommends that Bank
of Blountstown stockholders vote FOR approval of the Bank of Blountstown Plan of
Merger and the Bank of Blountstown merger.

The Bank of Blountstown Plan of Merger included at Annex C supersedes all
previous agreements between Bank of Blountstown and the Corporation and sets
forth the terms of the Bank of Blountstown merger described in this
Prospectus-Joint Proxy Statement.

OPINION OF BANK OF BLOUNTSTOWN'S FINANCIAL ADVISOR

For a complete discussion of the opinion of Bank of Blountstown's financial
advisor, see "The C&L Merger -- Opinion of Financial Advisor" on pages
through of this Prospectus-Joint Proxy Statement.

EFFECTIVE TIME OF THE MERGER

Subject to the provisions of the Bank of Blountstown Plan of Merger, a Plan
of Merger and Merger Agreement shall be duly executed and, on the closing date,
or as soon thereafter as reasonably practicable, filed with the Florida Banking
Department in accordance with Florida law. It is presently anticipated that such
filing will be made as soon as practicable after the Bank of Blountstown special
meeting and in conjunction with similar filings relating to the C&L merger and
the share exchange, and that the effective time will occur upon such filing,
although there can be no assurance as to whether or when the Bank of Blountstown
merger will occur.

EXCHANGE OF CERTIFICATES

As soon as reasonably practicable after the effective time, the
Corporation's Exchange Agent will mail to each Bank of Blountstown holder of
record (1) a letter of transmittal, and (2) instructions for use in effecting
the surrender of the certificates representing Bank of Blountstown common stock
in exchange for certificates representing shares of Corporation common stock.
The letter of transmittal will specify that delivery will be effected, and risk
of loss and title to the certificates shall pass, only upon delivery of the
certificates to the Corporation and will be in the form as the Corporation may
reasonably specify. When a Bank of Blountstown stockholder surrenders his
certificate to the Exchange Agent, together with such letter of transmittal,
duly executed, and such other documents as may reasonably be required by the
Corporation, that stockholder shall be entitled to receive in exchange a
certificate representing that number of whole shares of Corporation common stock
which that stockholder has the right to receive pursuant to the provisions of
the Bank of Blountstown Plan of Merger.

If a transfer of ownership of Bank of Blountstown common stock has occurred
which is not registered in the transfer records of Bank of Blountstown, a
certificate representing the proper number of shares of Corporation common stock
may be issued to a person other than the person in whose name the certificate so
surrendered is registered, if certificate shall be properly endorsed or
otherwise be in proper form for transfer and the person requesting such issuance
shall pay any transfer or other taxes required by reason of the issuance of
shares of Corporation common stock to a person other than the registered holder
of such certificate or establish to the satisfaction of the Corporation that
such tax has been paid or is not applicable.

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<PAGE> 66

Until surrendered as contemplated by the Bank of Blountstown Plan of
Merger, each certificate shall be deemed at any time after the effective time to
represent only the right to receive Corporation common stock and cash for
fractional shares to which the holder of such certificates is entitled. No
interest will be paid or will accrue on any cash payable in lieu of any
fractional shares of Corporation common stock. To the extent permitted by law,
former holders of record of Bank of Blountstown common stock shall be entitled
to vote the number of shares of Corporation common stock into which their
respective shares of Bank of Blountstown common stock are converted after the
effective time at any meeting of Corporation stockholders, regardless of whether
such holders have received their certificates representing Corporation common
stock in accordance with the Bank of Blountstown Plan of Merger.

No certificates or scrip representing fractional shares of Corporation
common stock shall be issued upon conversion of Bank of Blountstown common
stock, and such fractional share interests will not entitle the owner thereof to
vote or to any rights of a stockholder of the Corporation. Notwithstanding any
other provision of the Bank of Blountstown Plan of Merger, each holder of Bank
of Blountstown common stock exchanged pursuant to the Bank of Blountstown merger
who would otherwise have been entitled to receive a fraction of a share of
Corporation common stock shall receive cash, instead of fractional shares of
Corporation common stock in an amount equal to per share.

At the effective time of the Bank of Blountstown merger, Bank of
Blountstown stockholders will cease to be, and shall have no rights as, Bank of
Blountstown stockholders other than:

- the right to receive shares of Corporation common stock into which the
shares of Bank of Blountstown common stock have been converted,

- any fractional share payment,

- any dividends or other distributions to which they may be entitled under
the Bank of Blountstown Plan of Merger, and

- the right to perfect any dissenters' rights to the extent that such
rights have been properly exercised.

Neither the Corporation nor Bank of Blountstown will be liable to any
holder of Bank of Blountstown common stock for any shares of Corporation common
stock or any related dividends or other distributions, or cash in lieu of
fractional shares delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law.

CONDITIONS TO THE BANK OF BLOUNTSTOWN MERGER

The Bank of Blountstown Plan of Merger is subject to a number of
conditions, some of which are mutual and others of which are applicable to
either the Corporation or Bank of Blountstown. Though most of the conditions
will not be satisfied until immediately before the effective time of the Bank of
Blountstown merger, the companies believe that they are currently in material
compliance with the conditions.

The obligation of the Corporation to complete the Bank of Blountstown
merger is subject to the following conditions:

- No material adverse changes shall have occurred in the business,
operations or financial condition of Bank of Blountstown.

- Except as otherwise provided therein, the representations and warranties
of Bank of Blountstown contained in the Bank of Blountstown Plan of
Merger shall be true and correct.

- Bank of Blountstown shall have performed and complied with all covenants,
agreements and conditions required by the Bank of Blountstown Plan of
Merger.

- The Corporation shall have received an opinion of Bank of Blountstown's
legal counsel, Jenkens & Gilchrist, P.C., as to certain legal matters.

- Holders of not more than ten percent (10%) of the outstanding shares of
Bank of Blountstown common stock shall have dissented from the
transactions contemplated by the Bank of Blountstown Plan of Merger.

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- The Bank of Blountstown merger shall occur simultaneously with and be
conditioned on the Corporation's acquisition of C&L.

The obligation of Bank of Blountstown to consummate the Bank of Blountstown
merger is subject to, among others, the following conditions:

- No material adverse changes shall have occurred in the business,
operations or financial condition of Corporation.

- Bank of Blountstown shall have received an opinion from Jenkens &
Gilchrist, P.C., that, for federal income tax purposes, the Bank of
Blountstown merger will constitute a tax-free reorganization.

- Except as otherwise provided therein, the representations and warranties
of the Corporation contained in the Bank of Blountstown Plan of Merger
shall be true and correct.

- The Corporation shall have performed and complied with all covenants,
agreements and conditions required by the Bank of Blountstown Plan of
Merger to be performed or complied with in all material respects.

- Bank of Blountstown shall have received an opinion of Haskell Slaughter &
Young, L.L.C., legal counsel for the Corporation as to certain legal
matters.

- Bank of Blountstown shall have received from Ernst & Young LLP a letter
dated the date of the mailing of this Prospectus-Joint Proxy Statement
and the closing date, in form and substance reasonably satisfactory to
Bank of Blountstown and customary in scope and substance for letters
delivered by independent public accountants in connection with
registration statements similar to the Registration Statement and pooling
of interests transactions similar to the Bank of Blountstown merger.

- Bank of Blountstown shall have received an opinion from Alex Sheshunoff &
Co. stating that the transaction is fair from a financial point of view
to its stockholders.

- Bank of Blountstown merger shall occur simultaneously with and be
conditioned on the Corporation's acquisition of C&L.

The obligation of each of the Corporation and Bank of Blountstown to
consummate the Bank of Blountstown merger is subject to certain additional
conditions, including the following:

- The Registration Statement shall have been declared effective and shall
not be subject to a stop order of the SEC, and all applicable state blue
sky laws shall have been complied with.

- The shares of Corporation common stock to be issued in connection with
the Bank of Blountstown merger shall have been approved for listing by
Nasdaq.

- No legal proceeding shall have been threatened or pending before any
court, administrative or governmental agency which, in the reasonable
opinion of Bank of Blountstown or the Corporation, presents a significant
risk of restraint or prohibition of the transactions contemplated by the
Bank of Blountstown Plan of Merger or the attainment of material damages
or other relief against Bank of Blountstown or its stockholders or the
Corporation or its stockholders in connection therewith.

- The Bank of Blountstown merger shall have been approved by holders of
majority of the outstanding Bank of Blountstown common stock entitled to
vote thereon.

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<PAGE> 68

necessary for the consummation of the Bank of Blountstown Plan of Merger
and for the continuation in all material respects of the business of the
Corporation and Bank of Blountstown, without interruption after the
effective time, in substantially the manner in which such business is now
conducted, and no such authorizations or approvals shall contain any
conditions or restrictions that the Corporation reasonably believes will
materially restrict or limit the business or activities of the
Corporation or have a material adverse effect on their businesses,
operations or financial conditions taken as a whole.

- Holders of not more than ten percent (10%) of the outstanding shares of
Bank of Blountstown common stock shall have voted against approval of,
and give notice in writing to Bank of Blountstown at or prior to the Bank
of Blountstown stockholders' meeting that he or she dissents from the
transaction contemplated by Bank of Blountstown Plan of Merger.

- The outstanding shares of Bank of Bristol not owned by C&L shall have
been exchanged for shares of Corporation common stock pursuant to the
Share Exchange Agreement.

Before the effective time, either the Corporation or Bank of Blountstown,
or both, acting through their respective Boards of Directors, chief executive
officers or other authorized officers, may

- waive any default in the performance of any term of the Bank of
Blountstown Plan of Merger by the other party,

- waive or extend the time for the compliance or fulfillment by the other
party of any and all of its obligations under the Bank of Blountstown
Plan of Merger, and

- waive any of the conditions precedent to the obligations of such party
under the Bank of Blountstown Plan of Merger, except any condition (such
as required regulatory or Bank of Blountstown stockholder approval) that,
if not satisfied, would result in the violation of any applicable law or
governmental regulation.

However, the Bank of Blountstown merger and the C&L merger are conditioned upon
each other, and therefore, each merger must be approved and completed.

REPRESENTATIONS AND COVENANTS

Under the Bank of Blountstown Plan of Merger, the Corporation and Bank of
Blountstown have each made a number of representations regarding the
organization and capital structures of the respective companies and their
subsidiaries, their operations, financial condition and other matters, including
their authority to enter into the Bank of Blountstown Plan of Merger and to
consummate the Bank of Blountstown merger.

REGULATORY APPROVALS

The Bank of Blountstown merger must be approved by the Florida Banking
Department and by the FDIC. Applications for the requisite approvals have been
filed with the Florida Banking Department on April 19, 1999 and with the FDIC on
April 16, 1999.

Certain persons, such as states' attorneys general and private parties,
could challenge the Bank of Blountstown merger as violative of the antitrust
laws and seek to enjoin the consummation of the Bank of Blountstown merger and,
in the case of private persons, also seek to obtain treble damages. There can be
no assurance that a challenge to the Bank of Blountstown merger on antitrust
grounds will not be made or, if such a challenge is made, that it will not be
successful. Neither the Corporation nor Bank of Blountstown intends to seek any
further stockholder approval or authorization of the Bank of Blountstown Plan of
Merger as a result of any action that it may take to resist or resolve any
Department of Justice or other objections, unless required to do so by
applicable law.

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BUSINESS PENDING THE MERGER

The Bank of Blountstown Plan of Merger provides that, during the period
from the date of the Bank of Blountstown Plan of Merger to the effective time
Bank of Blountstown will conduct its business in the ordinary course in material
compliance with all applicable laws and use its reasonable best efforts to
preserve intact its business organizations, to keep available to the Corporation
and the surviving corporation the services of the present employees of Bank of
Blountstown and maintain the goodwill of customers, suppliers and others having
business dealings with Bank of Blountstown.

Under the Bank of Blountstown Plan of Merger, Bank of Blountstown will not
do the following:

- encumber any asset or enter into any transaction or make any contract or
commitment relating to its properties, assets or businesses, other than
in the ordinary course of business.

- change the articles of incorporation or bylaws of Bank of Blountstown.

- change the number of shares of capital stock of Bank of Blountstown
issued and outstanding or cause any material change in the capital
structure of Bank of Blountstown.

- enter into any contract or commitment, other than deposits, loan
commitments and investments or the sale of other real estate owned in the
ordinary course of business of Bank of Blountstown, extending for more
than one year or involving payment by Bank of Blountstown of more than
$25,000 in any one contract or related series of contracts or otherwise
materially affecting its business.

- enter into any employment agreement or other agreement with any employee
of Bank of Blountstown or increase any Bank of Blountstown employee's
salary or benefits except for normal annual increases as agreed to by
Corporation in writing, or modify or amend any employee benefit plan.

- pay dividends or make distributions, with respect to Bank of Blountstown
stock.

- sell the securities it owns and will not purchase any new securities
other than securities of a type and duration as Bank of Blountstown has
previously purchased under its investment policy without the
Corporation's approval.

- obligate Bank of Blountstown under all employment, severance or other
agreements between Bank of Blountstown and its respective employees
related to the termination of such agreements in excess of the amounts
described in the employment agreements.

- take any action to cause any material adverse change in the condition
(financial or otherwise), assets, liabilities or business of Bank of
Blountstown.

- take any action to cause any material adverse change in the character of
the assets or liabilities of Bank of Blountstown.

- make any capital improvements, except for ordinary maintenance and
repairs, or any purchase of property by Bank of Blountstown at a cost in
excess of $25,000, other than supplies in the ordinary course of
business.

- make any material change in the accounting methods or practices of Bank
of Blountstown unless required by law, regulation, GAAP or RAP, as the
case may be.

- will not cause any loss incurred or accrued for by Bank of Blountstown as
a result of environmental problems which has or would be expected to have
a material adverse effect on the financial position of Bank of
Blountstown.

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RESALE OF CORPORATION COMMON STOCK BY AFFILIATES

Corporation common stock to be issued to Bank of Blountstown stockholders
in connection with the Bank of Blountstown merger will be registered under the
Securities Act. Corporation common stock received by the Bank of Blountstown
stockholders upon consummation of the merger will be freely transferable under
the Securities Act, except for shares issued to any person who may be deemed an
"affiliate" of Bank of Blountstown or the Corporation within the meaning of Rule
145 under the Securities Act. "Affiliates" are generally defined as persons who
control, are controlled by, or are under common control with Bank of Blountstown
or the Corporation at the time of the Bank of Blountstown special meeting.
Affiliates generally include directors and some executive officers of Bank of
Blountstown or the Corporation and major stockholders of the Corporation and
Bank of Blountstown. Generally, all shares of Corporation common stock received
by affiliates may not be sold until the Corporation publishes at least one full
month of the combined results of operations of the Corporation and Bank of
Blountstown. In addition, affiliates of Bank of Blountstown or the Corporation
must sell their shares of Corporation common stock acquired in connection with
the Bank of Blountstown merger in compliance with Rule 145 or another applicable
exemption from the registration requirements of the Securities Act.

Under Rule 145, for one year following the effective time, an affiliate
(together with certain related persons) would be entitled to sell shares of
Corporation common stock acquired with the Bank of Blountstown merger only
through unsolicited "broker transactions" or in transactions directly with a
"market maker," as such terms are defined in Rule 144 under the Securities Act.
Additionally, the number of shares to be sold by an affiliate (together with
certain related persons and certain persons acting in concert) during one-year
period within any three-month period for purposes of Rule 145 may not exceed the
greater of 1% of the outstanding shares of Corporation common stock or the
average weekly trading volume of stock during the four calendar weeks preceding
such sale. Rule 145 would remain available to affiliates only if the Corporation
remained current with its information filings with the SEC under the Exchange
Act. One year after the effective time, an affiliate of Bank of Blountstown
would be able to sell such Corporation common stock without such manner of sale
or volume limitations, provided that the Corporation was current with its
Exchange Act information filings and such person was no longer then an affiliate
of the Corporation. Two years after the effective time, an affiliate of Bank of
Blountstown would be able to sell those shares of Corporation common stock
without any restrictions so long as the affiliate was not, and had not been for
at least three months prior before selling an affiliate of the Corporation.

INTERESTS OF CERTAIN PERSONS IN THE BANK OF BLOUNTSTOWN MERGER

In considering the recommendation of the Board of Directors of Bank of
Blountstown with respect to the Bank of Blountstown Plan of Merger and the
transactions contemplated thereby, Bank of Blountstown stockholders should be
aware that certain members of the management of Bank of Blountstown and the
Board of Directors of Bank of Blountstown have certain interests in the Bank of
Blountstown merger that are in addition to the interests of stockholders of Bank
of Blountstown generally.

Under the terms of the Bank of Blountstown Plan of Merger, the Corporation
shall maintain for four years after the effective time Bank of Blountstown's
current policy, or a similar policy, of directors' and officers' liability for
the benefit of the individuals who, at or before the effective time, were
directors or officers of Bank of Blountstown with respect to matters occurring
before the effective time.

As of the record date, directors and executive officers of Bank of
Blountstown beneficially owned an aggregate of 52,059 shares of Bank of
Blountstown common stock, representing 52.06% of the shares outstanding.
Therefore, approval of the Bank of Blountstown merger is assured. The executive
officers and directors of Bank of Blountstown will receive a total of % of
Corporation common stock issued to Bank of Blountstown stockholders in the Bank
of Blountstown merger. The directors of Bank of Blountstown have appointed James
A. Taylor, the Chairman of the Board of the Corporation, as proxy to vote their
shares of Bank of Blountstown common stock for the Bank of Blountstown Plan of
Merger. See "Principal Stockholders of Bank of Blountstown -- Security Ownership
of Management."

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ACCOUNTING TREATMENT

Consummation of the Bank of Blountstown merger is conditioned upon the
receipt by the Corporation and Bank of Blountstown of a letter from Ernst &
Young LLP dated as of the date of the mailing of this Prospectus-Joint Proxy
Statement and as of the effective time of the Bank of Blountstown merger that
the Bank of Blountstown merger will qualify for pooling of interests accounting
treatment if consummated in accordance with the Bank of Blountstown Plan of
Merger. The Corporation and Bank of Blountstown have agreed not to intentionally
take any action that would disqualify the Bank of Blountstown merger as a
pooling-of-interests for accounting purposes.

Under the pooling of interests method of accounting, the historical basis
of the assets and liabilities of the Corporation and Bank of Blountstown will be
combined at the effective time and carried forward at their previously recorded
amounts, the stockholders' equity accounts of the Corporation and Bank of
Blountstown will be combined on the Corporation's consolidated balance sheet and
no goodwill or other intangible assets will be created. Consolidated financial
statements of the Corporation issued after the Bank of Blountstown merger will
be restated retroactively to reflect the consolidated operations of the
Corporation and Bank of Blountstown as if the Bank of Blountstown merger had
taken place prior to the periods covered by such consolidated financial
statements.

The unaudited pro forma financial information contained in this
Prospectus-Joint Proxy Statement has been prepared using the pooling of
interests accounting method to account for the Bank of Blountstown merger. See
"Pro Forma Condensed Financial Information."

MATERIAL FEDERAL INCOME TAX CONSEQUENCES

The following is a discussion of material federal income tax consequences
of the Bank of Blountstown merger and the exchange by the Bank of Blountstown
stockholders of Bank of Blountstown common stock for shares of Corporation
common stock. Each stockholder's individual circumstances may affect the tax
consequences of the Bank of Blountstown merger to him or her. In addition, no
information is provided in this Prospectus-Joint Proxy Statement with respect to
the tax consequences of the Bank of Blountstown merger under applicable foreign,
state or local laws.

Neither the Corporation nor Bank of Blountstown has requested or will
receive an advance ruling from the IRS as to the federal income tax consequences
of the Bank of Blountstown merger. The respective obligations of Bank of
Blountstown and the Corporation to consummate the Bank of Blountstown merger
were conditioned upon receipt of certain legal opinions relating to the federal
income tax consequences of the Bank of Blountstown merger in form and substance
satisfactory to Bank of Blountstown and the Corporation and their respective
counsel, which have been received and are exhibits to the Registration
Statement. The opinions of the Corporation's and Bank of Blountstown's counsel
are based upon the facts that are described in this Prospectus-Joint Proxy
Statement and upon certain customary representations made by the management of
Bank of Blountstown and by the management of the Corporation. These opinions are
also based upon the Internal Revenue Code, regulations currently in effect
thereunder, current administrative rulings and practice by the IRS and judicial
authority, all of which are subject to change. Any such change could affect the
continuing validity of such opinions and this discussion. In addition, an
opinion of counsel is not binding upon the IRS, and there can be no assurance,
and none is hereby given, that the IRS will not take a position which is
contrary to one or more positions reflected in the opinions of such counsel, or
that such opinions will be upheld by the courts if challenged by the IRS.
Furthermore, the Corporation and Bank of Blountstown have agreed in the Bank of
Blountstown Plan of Merger not to take any action which would disqualify the
Bank of Blountstown merger as a reorganization which is tax-free to the
stockholders of Bank of Blountstown pursuant to Section 368(a) of the Internal
Revenue Code. EACH BANK OF BLOUNTSTOWN STOCKHOLDER IS URGED TO CONSULT SUCH
STOCKHOLDER'S PERSONAL TAX AND FINANCIAL ADVISORS AS TO THE SPECIFIC FEDERAL
INCOME TAX CONSEQUENCES TO SUCH STOCKHOLDER, BASED ON SUCH STOCKHOLDER'S OWN
PARTICULAR STATUS AND CIRCUMSTANCES, AND ALSO AS TO ANY STATE, LOCAL, FOREIGN OR
OTHER TAX CONSEQUENCES ARISING OUT OF THE BANK OF BLOUNTSTOWN MERGER.

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It is a condition to the obligation of the Corporation to proceed with the
Bank of Blountstown merger that the Corporation shall have received an opinion
from Haskell Slaughter & Young, L.L.C., its counsel, which it has received, and
it is a condition to the obligation of Bank of Blountstown to proceed with the
Bank of Blountstown merger that Bank of Blountstown shall have received an
opinion from Jenkens & Gilchrist, P.C., its counsel, which it has received,
concerning the material federal income tax consequences of the Bank of
Blountstown merger. The opinions received by the Corporation and Bank of
Blountstown reflect and support the following:

- Provided the Bank of Blountstown merger qualifies as a stationary merger
under applicable state corporation law, the Bank of Blountstown merger
will constitute a reorganization within the meaning of Section 368(a) of
the Internal Revenue Code, and the Corporation and Bank of Blountstown
will each be a party to the reorganization within the meaning of Section
368(b) of the Internal Revenue Code.

- No gain or loss will be recognized by the Corporation or Bank of
Blountstown as a result of the Bank of Blountstown merger.

- No gain or loss will be recognized by a Bank of Blountstown stockholder
who receives solely shares of Corporation common stock in exchange for
Bank of Blountstown common stock.

- The aggregate tax basis of the shares of Corporation common stock
received by a Bank of Blountstown stockholder will be equal to the
aggregate tax basis of the Bank of Blountstown common stock exchanged
therefore, excluding any basis allocable to a fractional share of
Corporation common stock for which cash is received.

- The holding period of the shares of Corporation common stock received by
a Bank of Blountstown stockholder will include the holding period or
periods of the Bank of Blountstown common stock exchanged therefore,
provided that the Bank of Blountstown common stock is held as a capital
asset within the meaning of Section 1221 of the Internal Revenue Code at
the effective time.

- Where cash is received by a Bank of Blountstown stockholder in exchange
for his Bank of Blountstown common stock pursuant to the exercise of
dissenters' rights, such cash will be treated as having been received in
redemption of his Bank of Blountstown common stock, subject to the
provisions and limitations of Section 302 of the Internal Revenue Code.

The above discussion is intended only as a summary of the material federal
income tax consequences of the Bank of Blountstown merger and is not a complete
analysis or listing of all potential tax effects relevant to a decision whether
to vote in favor of approval and adoption of the Bank of Blountstown Plan of
Merger and the Bank of Blountstown merger.

NO SOLICITATION OF TRANSACTIONS

Under the Bank of Blountstown Plan of Merger, Bank of Blountstown is
restricted in its ability to participate in discussions and negotiate with such
entities concerning any proposal to acquire Bank of Blountstown upon a merger,
purchase of assets, purchase of or tender offer for Bank of Blountstown common
stock or similar acquisition transaction. Bank of Blountstown has agreed that it
will not, and will direct each officer, director, employee, representative and
agent of Bank of Blountstown not to, directly or indirectly, encourage, solicit,
participate in or initiate discussions or negotiations with or provide any
information to any corporation, partnership, person or other entity or group
(other than the Corporation or an affiliate or associate or agent of the
Corporation) concerning any acquisition transaction. Bank of Blountstown has
further agreed that except to the extent legally required for the discharge by
the Bank of Blountstown Board of Directors of

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<PAGE> 73

its fiduciary duties, it will not make any information concerning Bank of
Blountstown available to any person for the purpose of effecting an acquisition
transaction.

EXPENSES

The Corporation and Bank of Blountstown shall pay their own costs and
expenses incurred in connection with the Bank of Blountstown Plan of Merger and
the transactions contemplated thereby.

INDEMNIFICATION

By operation of law under Delaware law and Florida law, all rights to
indemnification for acts or omissions occurring prior to the effective time now
existing in favor of the current or former directors or officers of Bank of
Blountstown as provided in its articles of incorporation or bylaws shall survive
the merger and shall continue in effect in accordance with their terms.

RIGHTS OF DISSENTING STOCKHOLDERS

The following discussion is not a complete statement of the law relating to
dissenters' rights and is qualified in its entirety by reference to Annex E,
which sets forth the full text of Section 658.44 of the Florida Banking Code.
Under Section 658.44, any stockholder of a corporation has the right to dissent
from, and obtain payment of the fair value of his or her shares in the event of
a consummation of a plan of merger to which the corporation is a party if the
stockholder is entitled to vote on the merger. A person having a beneficial
interest in Bank of Blountstown common stock which is held of record in the name
of another person, such as a broker or nominee, must act promptly to cause the
record stockholder to timely and properly follow the steps summarized below to
perfect whatever dissenter's rights the beneficial stockholder may have.

Section 658.44 of the Florida Banking Code provides for rights of appraisal
of the value of the shares of a stockholder of record who either (1) has
delivered notice in writing to Bank of Blountstown before the vote is taken that
he intends to seek a cash payment if the Bank of Blountstown merger is
consummated or (2) votes against the Bank of Blountstown merger. On or promptly
after the effective time of the Bank of Blountstown merger, the Bank of Bristol
may fix an amount that the Bank of Bristol considers to be not more than the
fair market value of the Bank of Blountstown shares and which it will offer and
pay to all the Bank of Blountstown dissenting stockholders.

The dissenters notice should be sent to:

Mr. Jed M. Hiers
C&L Bank of Blountstown
307 W. Central Avenue
Blountstown, Florida 32424

The Bank of Blountstown dissenting stockholders who have accepted the offer
of fair value made by the Bank of Bristol shall be entitled to receive the fair
value amount for such Bank of Blountstown shares in cash upon surrendering their
Bank of Blountstown stock certificates representing such shares at any time
within thirty (30) days after the effective time of the Bank of Blountstown
merger.

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The Bank of Blountstown dissenting stockholders who do not accept the offer
of fair value made by the Bank of Bristol shall have the value of their Bank of
Blountstown dissenting shares determined by an appraisal. The value of the Bank
of Blountstown dissenting shares shall be determined as of the effective time of
the Bank of Blountstown merger by three appraisers, one to be selected by the
owners of at least two-thirds ( 2/3) of such Bank of Blountstown dissenting
shares, one appraiser to be selected by the Bank of Bristol, and the third to be
selected by the two appraisers so chosen. The value of the Bank of Blountstown
dissenting shares agreed upon by any two of the appraisers shall control and be
final and binding on all parties. If, within ninety (90) days from the effective
time of the Bank of Blountstown merger, for any reason one or more of the
appraisers is not selected as provided herein, or the appraisers fail to
determine the value of such Bank of Blountstown dissenting shares, the Florida
Banking Department shall cause an appraisal of such Bank of Blountstown
dissenting shares to be made which will be final and binding on all parties.

The Bank of Blountstown dissenting stockholders, who have had an appraisal
conducted for the value of their Bank of Blountstown shares, shall be entitled
to receive the fair value amount for such Bank of Blountstown shares in cash
upon surrendering their Bank of Blountstown stock certificates representing such
shares at any time within thirty (30) days after the value of such Bank of
Blountstown shares has been determined by appraisal made on or after the
effective time of the Bank of Blountstown merger.

FAILURE OF A STOCKHOLDER TO COMPLY WITH ANY REQUIREMENTS OF THE PROVISIONS
RELATING TO DISSENTERS' RIGHTS OF APPRAISAL WILL RESULT IN A FORFEITURE BY SUCH
STOCKHOLDER OF APPRAISAL RIGHTS.

References herein to applicable statutes are summaries of portions thereof
and do not purport to be complete and are qualified in their entirety by
reference to applicable law. Section 658.44 of the Florida Banking Code is
attached hereto as Annex E. You should read Annex E carefully.

57
<PAGE> 75

OPERATIONS AND MANAGEMENT OF THE CORPORATION
AFTER THE MERGERS

OPERATIONS

After consummation of the mergers, the surviving bank holding corporation
will operate under the name "The Banc Corporation" and will continue to engage
in the banking business through its banking subsidiaries. The surviving
subsidiary bank will operate under the name "C&L Bank." The operations of each
of the merged companies will be integrated where appropriate with the operations
of the Corporation, The Bank and Emerald Coast Bank.

MANAGEMENT

After the consummation of the mergers, the Corporation will be managed by
the same Board of Directors and executive officers as existed prior to the
mergers, except that Jerry M. Smith will become a member of the Board of
Directors of the Corporation. In addition, Jed M. Hiers will be employed as
President of C&L Bank.

58
<PAGE> 76

THE BANC CORPORATION AND SUBSIDIARIES

CONDENSED PRO FORMA STATEMENT OF CONDITION (UNAUDITED)

The following summary includes (i) the condensed supplemental consolidated
statement of financial condition of the Corporation as of December 31, 1998,
(ii) the condensed consolidated statement of financial condition of C&L as of
December 31, 1998, (iii) the condensed statement of financial condition of Bank
of Blountstown as of December 31, 1998, (vi) adjustments to give effect to the
proposed pooling of interest method business combinations with C&L and Bank of
Blountstown, and (vii) the pro forma combined condensed statements of financial
condition of the Corporation and subsidiaries as if such combinations had
occurred on December 31, 1998.

These pro forma statements should be read in conjunction with the
accompanying notes and the separate consolidated statements of financial
condition of the Corporation, C&L and Bank of Blountstown. The pro forma
information provided below may not be indicative of future results.

AS OF DECEMBER 31, 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
HISTORICAL
---------------------------------------
THE C&L C&L
BANC BANKING BANK OF PRO FORMA PRO FORMA
CORPORATION CORPORATION BLOUNTSTOWN ADJUSTMENTS COMBINED
----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
ASSETS
Cash and due from banks................... $ 25,595 $ 2,695 $ 3,017 $ (477)(a) $ 30,830
Interest bearing deposits in other
banks................................... 158 890 -- -- 1,048
Federal funds sold........................ 14,435 2,582 8,028 -- 25,045
Investment securities available for
sale.................................... 77,442 7,446 8,126 -- 93,014
Investment securities held to maturity.... -- -- 5,194 -- 5,194
Loans held for resale..................... 4,899 -- -- -- 4,899
Loans, net of unearned.................... 365,379 34,894 31,657 -- 431,930
Less: Allowance for loan losses........... (4,533) (849) (1,083) -- (6,465)
-------- ------- ------- -------- --------
Net loans........................ 360,846 34,045 30,574 -- 425,465
-------- ------- ------- -------- --------
Premises and equipment, net............... 28,515 352 799 -- 29,666
Intangibles, net.......................... 867 -- -- -- 867
Other assets.............................. 11,637 927 1,050 -- 13,614
-------- ------- ------- -------- --------
Total assets..................... $524,394 $48,937 $56,788 $ (477) $629,642
======== ======= ======= ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits
Noninterest-bearing..................... $ 67,963 $ 5,273 $ 6,754 $ (477)(a) $ 79,513
Interest-bearing........................ 367,403 38,152 45,525 -- 451,080
-------- ------- ------- -------- --------
Total deposits................... 435,366 43,425 52,279 (477) 530,593
Advances from FHLB and other borrowed
funds................................... 26,860 -- -- -- 26,860
Accrued expenses and other liabilities.... 4,957 627 638 (94)(b) 6,128
-------- ------- ------- -------- --------
Total liabilities................ 467,183 44,052 52,917 (571) 563,581
Stockholders' Equity
Common stock............................ 12 163 1,200 2(b) 14
(1,363)(b)
Surplus................................. 42,888 492 751 2,698(b) 45,586
(1,243)(b)
Retained earnings....................... 14,233 4,233 1,896 -- 20,362
Accumulated other comprehensive
income(loss).......................... 78 (3) 24 -- 99
-------- ------- ------- -------- --------
Total stockholders' equity....... 57,211 4,885 3,871 94 66,061
-------- ------- ------- -------- --------
Total liabilities and
stockholders' equity........... $524,394 $48,937 $56,788 $ (477) $629,642
======== ======= ======= ======== ========
</TABLE>

59
<PAGE> 77

NOTES TO PRO FORMA CONDENSED COMBINED STATEMENT OF FINANCIAL CONDITION

a -- To eliminate intercompany account.

b -- To record the exchange of 1,968,110 shares of the Corporation common stock
for all of the outstanding shares of the following accounted for as a
pooling of interests. The exchange ratio assumes a closing date price of
$11.00 per share.

<TABLE>
<CAPTION>
C&L C&L
BANKING BANK OF BANK OF
CORPORATION BRISTOL BLOUNTSTOWN TOTAL
----------- --------- ----------- ----------
<S> <C> <C> <C> <C>
Outstanding shares of acquired corporation....... 16,274 380 100,000
Assumed exchange ratio........................... 71.8763 59.6185 7.7574
---------- --------- --------
Corporation shares to be issued.................. 1,169,715 22,655 775,740 1,968,110
Par value of shares to be issued at $.001 per
share.......................................... $ 1 $ -- $ 1 $ 2
Total common stock and surplus of acquired
corporation.................................... 655 94 1,951 2,700
---------- --------- -------- ----------
Excess recorded as an increase in contributed
capital..................................... 654 94 1,950 2,698
---------- --------- -------- ----------
To eliminate acquired corporations capital stock
Common stock at par value...................... (163) -- (1,200) (1,363)
Surplus........................................ (492) -- (751) (1,243)
---------- --------- -------- ----------
(655) -- (1,951) (2,606)
---------- --------- -------- ----------
Net change in equity................... $ -- $ 94 $ -- $ 94
========== ========= ======== ==========
</TABLE>

60
<PAGE> 78

THE BANC CORPORATION AND SUBSIDIARIES

CONDENSED PRO FORMA STATEMENTS OF OPERATIONS (UNAUDITED)

The following summaries include (i) the condensed supplemental consolidated
statements of operations of the Corporation for the years ended December 31,
1998, 1997, and 1996, (ii) the condensed consolidated statements of operations
of C&L on a historical basis for the years ended December 31, 1998, 1997, and
1996, (iii) the condensed statements of operations of the Bank of Blountstown on
a historical basis for the years ended December 31, 1998, 1997, and 1996, (iv)
adjustments to give affect to the proposed pooling of interests method
combination with C&L and Bank of Blountstown (vii) the pro forma combined
condensed consolidated statements of operations of the Corporation as if such
combinations had occurred on January 1, 1996.

These pro forma statements should be read in conjunction with the
accompanying notes, the supplemental consolidated statements of operations of
the Corporation, and the separate consolidated statements of operations for C&L
and the Bank of Blountstown. The pro forma information may not necessarily be
indicative of future results.

FOR THE YEAR ENDED DECEMBER 31, 1998
(IN THOUSANDS)

<TABLE>
<CAPTION>
HISTORICAL
---------------------------------------
THE C&L C&L
BANC BANKING BANK OF PRO FORMA PRO FORMA
CORPORATION CORPORATION BLOUNTSTOWN ADJUSTMENTS COMBINED
----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Interest income.......................... $34,009 $ 4,102 $ 4,361 $ -- $42,472
Interest expense......................... 15,918 1,948 2,340 -- 20,206
------- ------- ------- ------- -------
Net interest income............ 18,091 2,154 2,021 -- 22,266
Provision for loan losses................ 3,433 440 784 -- 4,657
------- ------- ------- ------- -------
Net interest income after provision for
loan losses......................... 14,658 1,714 1,237 -- 17,609
Noninterest income....................... 2,949 501 352 -- 3,802
Securities gains......................... 272 -- 7 279
Noninterest expenses..................... 19,224 1,316 1,589 -- 22,129
------- ------- ------- ------- -------
(Loss) income before income taxes...... (1,345) 899 7 -- (439)
Income tax expense(benefit).............. (978) 323 (69) -- (724)
------- ------- ------- ------- -------
Net (loss) income...................... $ (367) $ 576 $ 76 $ -- $ 285
======= ======= ======= ======= =======
Basic and diluted net (loss) income per
share.................................. $ (0.03) $ 35.39 $ 0.76 $ 0.02
======= ======= ======= =======
Average number of shares
outstanding -- basic and dilutive...... 11,011 16 100 12,979
======= ======= ======= =======
</TABLE>

61
<PAGE> 79

FOR THE YEAR ENDED DECEMBER 31, 1997
(IN THOUSANDS)

<TABLE>
<CAPTION>
HISTORICAL
---------------------------------------
THE C&L C&L
BANC BANKING BANK OF PRO FORMA PRO FORMA
CORPORATION CORPORATION BLOUNTSTOWN ADJUSTMENTS COMBINED
----------- ----------- ----------- ----------- ---------
<S> <C> <C> <C> <C> <C>
Interest income.......................... $25,704 $3,609 $4,391 $ -- $33,704
Interest expense......................... 11,952 1,580 2,261 -- 15,793
------- ------ ------ ------- -------
Net interest income.................... 13,752 2,029 2,130 -- 17,911
Provision for loan losses................ 1,849 112 723 -- 2,684
------- ------ ------ ------- -------
Net interest income after provision for
loan losses......................... 11,903 1,917 1,407 -- 15,227
Noninterest income....................... 2,103 376 318 -- 2,797
Securities gains......................... 217 3 -- 220
Noninterest expenses..................... 11,849 1,224 1,702 -- 14,775
------- ------ ------ ------- -------
Income before income taxes............. 2,374 1,072 23 -- 3,469
Income tax expense....................... 696 373 4 -- 1,073
------- ------ ------ ------- -------
Net income............................. $ 1,678 $ 699 $ 19 $ -- $ 2,396
======= ====== ====== ======= =======
Basic and diluted net income per share... $ 0.20 $42.98 $ 0.19 $ 0.23
======= ====== ====== =======
Average number of shares outstanding
-- basic............................... 8,449 16 100 10,417
======= ====== ====== =======
-- diluted............................. 8,568 16 100 10,536
======= ====== ====== =======
</TABLE>

62
<PAGE> 80

FOR THE YEAR ENDED DECEMBER 31, 1996
(IN THOUSANDS)

<TABLE>
<CAPTION>
HISTORICAL
----------------------------------------
THE C&L C&L
BANC BANKING BANK OF PRO FORMA PRO FORMA
CORPORATION CORPORATION BLOUNTSTOWN ADJUSTMENTS COMBINED
----------- ----------- ------------ ------------ ---------
<S> <C> <C> <C> <C> <C>
Interest income........................ $17,974 $3,134 $4,099 $ -- $25,207
Interest expense....................... 8,025 1,354 2,108 -- 11,487
------- ------ ------ ------ -------
Net interest income.................. 9,949 1,780 1,991 -- 13,720
Provision for loan losses.............. 966 77 192 -- 1,235
------- ------ ------ ------ -------
Net interest income after provision
for loan losses................... 8,983 1,703 1,799 -- 12,485
Noninterest income..................... 1,914 333 299 -- 2,546
Securities gains....................... 52 22 26 100
Noninterest expenses................... 9,456 1,148 1,427 -- 12,031
------- ------ ------ ------ -------
Income before income taxes........... 1,493 910 697 -- 3,100
Income tax expense..................... 390 316 211 -- 917
------- ------ ------ ------ -------
Net income........................ $ 1,103 $ 594 $ 486 $ -- $ 2,183
======= ====== ====== ====== =======
Basic and diluted net income per
share................................ $ 0.15 $36.51 $ 4.86 $ 0.24
======= ====== ====== =======
Average number of shares outstanding
-- basic............................ 7,217 16 100 9,185
======= ====== ====== =======
-- diluted.......................... 7,314 16 100 9,282
======= ====== ====== =======
</TABLE>

63
<PAGE> 81

SELECTED SUPPLEMENTAL FINANCIAL DATA

The following table sets forth selected financial data for the Corporation
derived from the Corporation's supplemental consolidated financial statements
and should be read in conjunction with the related supplemental consolidated
financial statements and notes thereto. See "The Banc Corporation and
Subsidiaries Supplemental Consolidated Financial Statements."

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,(2)(3)
-----------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- --------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
SELECTED STATEMENT OF FINANCIAL CONDITION
DATA:
Total assets.............................. $524,394 $363,710 $272,172 $200,739 $149,515
Loans, net of unearned income............. 365,379 216,830 153,074 101,484 70,213
Investment securities..................... 77,442 82,440 77,738 64,905 53,242
Deposits.................................. 435,366 306,785 234,884 173,106 131,701
Stockholders' equity...................... 57,211 45,497 33,346 25,146 17,000
SELECTED STATEMENT OF OPERATIONS DATA:
Interest income........................... 34,009 25,704 17,974 13,820 10,800
Interest expense.......................... 15,918 11,952 8,025 5,932 4,086
-------- -------- -------- -------- --------
Net interest income............. 18,091 13,752 9,949 7,888 6,714
Provision for loan losses................. 3,433 1,849 966 550 167
Noninterest income........................ 3,221 2,320 1,966 1,621 1,461
Merger related costs...................... 1,466 -- -- -- --
Other noninterest expense................. 17,758 11,849 9,456 7,285 5,524
-------- -------- -------- -------- --------
Income (loss) before tax.................. (1,345) 2,374 1,493 1,674 2,484
Income tax (benefit) expense.............. (978) 696 390 326 638
-------- -------- -------- -------- --------
Net (loss) income............... $ (367) $ 1,678 $ 1,103 $ 1,348 $ 1,846
======== ======== ======== ======== ========
PER SHARE DATA:
Net (loss) income-basic and diluted....... $ (.03) $ .20 $ .15 $ .21 $ .34
Book value................................ 4.78 4.39 4.09 3.79 3.18
Dividends (1)............................. -- .09 .08 .08 .07
PERFORMANCE RATIOS:
Return on average assets.................. (.08)% .53% .49% .76% 1.26%
Return on average equity.................. (.78) 4.79 3.87 6.02 10.91
ASSET QUALITY RATIOS:
Allowance for loan losses to nonperforming
loans................................... 142.50% 108.30% 85.70% 190.34% 210.47%
Allowance for loan losses to loans, net of
unearned income......................... 1.24 1.16 1.15 1.46 1.77
Nonperforming loans to loans, net of
unearned income......................... .87 1.07 1.34 .76 .84
Net loan charge-offs to average loans..... .65 .57 .57 .37 .25
</TABLE>

- ---------------

(1) Dividends per share represent dividends paid on the common stock of the
Corporation's predecessor Warrior Capital Corporation.
(2) Information for all prior periods has been restated for the poolings of
interests completed during 1998 and February 1999.
(3) The selected financial data includes the financial data for Emerald Coast
Bancshares, Inc. since the date of its inception, August 30, 1996.

64
<PAGE> 82

SUPPLEMENTAL MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS -- CORPORATION

BASIS OF PRESENTATION

The following is a narrative discussion and analysis of significant changes
in the Corporation's results of operations and financial condition. This
discussion should be read in conjunction with the supplemental consolidated
financial statements and selected financial data included elsewhere in this
document.

The Corporation was established in April 1998 so that Warrior Capital
Corporation, a registered Alabama bank holding company could merge into the
Corporation and thereby change its name to "The Banc Corporation" and its
domicile from Alabama to Delaware. Warrior merged with the Corporation on
September 24, 1998. Before it merged with Warrior, the Corporation was a shell
corporation with no independent operations. The principal subsidiaries of the
Corporation are The Bank, a bank organized and existing under the laws of
Alabama and headquartered in Birmingham, Alabama, and Emerald Coast Bank, a
federally-chartered thrift headquartered in Panama City Beach, Florida.

Recently Completed Acquisitions. The acquisitions of other banks and
related institutions have contributed significantly to the Corporation's growth
since the Warrior merger. The following chart lists the Corporation's business
combinations completed during 1998 and to date in 1999:

<TABLE>
<CAPTION>
1998
----------------------------------------------------------
DATE COMPLETED COMPANY ACQUIRED BANKING LOCATIONS
- -------------- ---------------- -----------------
<S> <C> <C>
October 16, 1998.......... Commercial Bancshares of Roanoke, Alabama(2)
Roanoke, Inc.
October 30, 1998.......... First Citizens Bancorp, Inc. Monroeville(2) and Frisco
City, Alabama
October 30, 1998.......... City National Corporation Sylacauga, Childersburg
and Mignon, Alabama
November 6, 1998.......... Commerce Bank of Alabama Albertville, Gadsden,
Guntersville and Rainbow
City, Alabama
</TABLE>

<TABLE>
<CAPTION>
1999
----------------------------------------------------------
DATE COMPLETED COMPANY ACQUIRED BANKING LOCATIONS
- -------------- ---------------- -----------------
<S> <C> <C>
February 12, 1999......... Emerald Coast Bancshares, Inc. Panama City Beach, Destin,
Seagrove and Bay Point,
Florida
</TABLE>

Pending Acquisitions. The following chart lists three other financial
institutions the Corporation has agreed to acquire since January 1, 1999:

<TABLE>
<CAPTION>
DATE OF AGREEMENT COMPANY TO BE ACQUIRED BANKING LOCATIONS
- ----------------- ---------------------- -----------------
<S> <C> <C>
January 13, 1999.......... BankersTrust of Alabama, Inc. Huntsville and Madison,
Alabama
February 25, 1999......... C&L Banking Corporation Bristol, Florida
February 25, 1999......... C&L Bank of Blountstown Blountstown and Altha,
Florida
</TABLE>

This discussion contains information and forward-looking statements that
are based on the Corporation's belief as well as certain assumptions made by,
and information currently available to, the Corporation with respect to its
ability to achieve the operating results it expects relating to the
recently-completed and pending acquisitions; the ability of the Corporation to
achieve anticipated cost savings and revenue enhancements with respect to the
acquired operations; the assimilation of the acquired operations by the
Corporation, including installing the Corporation's centralized policy
oversight, credit review and management systems at the acquired institutions;
the absence of material contingencies related to the acquired operations; the
adequacy of

65
<PAGE> 83

the allowance for loan losses; the effect of legal proceedings on the
Corporation's financial condition, results of operations and liquidity; Year
2000 compliance issues and market risk disclosures, as well as other
information. The risks and uncertainties that may affect operations,
performance, growth projections and the results of the Corporation's business
include, but are not limited to, fluctuations in the economy, the relative
strength and weakness in the commercial and consumer sector and in the real
estate market, the actions taken by the Federal Reserve for the purpose of
managing the economy, interest rate movements, the impact of competitive
products, services and pricing, timely development by the Corporation of
technology enhancements for its products and operating systems, legislation and
similar matters. Although management of the Corporation believes that the
expectations reflected in such forward-looking statements are reasonable, it can
give no assurance that such expectations will prove to be correct. Actual
results may vary materially from those anticipated, estimated, projected or
expected.

YEAR 2000 COMPLIANCE

The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of the
Corporation's computer programs or hardware that have date-sensitive software or
embedded chips may recognize a date using "00" as the year 1900 rather than the
year 2000. This could cause a system failure or miscalculations resulting in
disruptions of operations, including, among other things, a temporary inability
to process transactions, send statements or engage in similar normal business
activities.

The Corporation has a five-step plan to resolve the Year 2000 Issue for its
Alabama based operations:

- establishing awareness of and educating key personnel with respect to
Year 2000 issues and the Corporation's plan to address those potential
problems;

- identifying significant systems and assessing potential Year 2000 issues
relating to those systems;

- renovating and repairing noncompliant systems;

- testing and validating solutions; and

- implementing those solutions.

To date, the Corporation has completed the first three steps and expects to
complete the remaining steps during the second and third quarters of 1999. The
Corporation determined that it needed to upgrade significant portions of its
software and hardware so that those systems will utilize dates beyond December
31, 1999. The Corporation presently believes that with these upgrades of its
existing software and hardware, potential Year 2000 issues can be mitigated.

The Corporation adopted a Year 2000 Merger Policy to address Year 2000
issues related to the Corporation's acquisitions. The Year 2000 Merger Policy is
designed to act as a guide for both the Corporation and its acquired entities in
addressing Year 2000 issues. The Corporation is using this policy to ensure that
both the Corporation and its acquired entities follow a logical and planned
process for identifying, assessing and remediating Year 2000 issues and testing
and implementing those solutions.

The Corporation is utilizing both internal and external resources to
reprogram, replace and test software and other components of its systems for
Year 2000 modifications. Modifications have been scheduled to ensure that
mission-critical systems are completed in time to allow for extended testing.

The Corporation's systems are divided into two categories, those maintained
internally by the Corporation's information systems personnel and those provided
by external vendors. For internally maintained systems, revisions were
implemented during the first quarter of 1999. The Corporation has already
installed the Year 2000 releases provided by vendors on its core-business
systems and is on target to complete century date testing and validation of
these core business systems. For the remainder of the externally maintained
systems, the Corporation has received written confirmation from its vendors that
each system will be made Year 2000 compliant in 1999. The Corporation will
continue to assess with its vendors the status of their Year 2000 compliance and
install any necessary additional code releases through 1999.

66
<PAGE> 84

The majority of the Corporation's software is supplied by third parties
affecting most significant systems of the Corporation. The Corporation has begun
formal communications with all of its significant suppliers and large customers
to determine the extent to which the Corporation is vulnerable to those third
parties' failure to remediate their own Year 2000 issues. The Corporation is
applying the majority of its resources that are allocated to the Year 2000 Issue
to installing and testing vendor releases. To date, the Corporation is not aware
of any external agent with a Year 2000 issue that would have a material adverse
effect on the Corporation's financial condition or results of operations.

The combined projected total cost of the Year 2000 project for The Bank and
Emerald Coast Bank is currently estimated at approximately $360,000 and is being
funded through operating cash flows. As of December 31, 1998, the Corporation
has incurred $145,000 in expenses, with $2,000 and $143,000 expensed in 1997 and
1998, respectively. The majority of the remaining cost will be spent on
converting Commercial Bancshares of Roanoke and First Citizens Bank to its
centralized data processing system. These conversions are scheduled to be
completed in the first half of 1999. The other banks acquired in 1998 were
converted in 1998. Emerald Coast Bank will continue to process data on its own
system in the foreseeable future. The costs of the project and the date on which
the Corporation plans to complete Year 2000 modifications are based on
management's best estimates, which were derived utilizing numerous assumptions
of future events including the continued availability of certain resources,
third party modification plans and other factors. However, there can be no
assurance that these estimates will be achieved, and actual results could differ
materially from those plans.

The Corporation believes it has an effective program in place to resolve
the Year 2000 Issue in a timely manner. However, disruptions in the economy that
are beyond the Corporation's control resulting from Year 2000 issues could
materially adversely affect the Corporation. Furthermore, the Corporation has no
means of ensuring that third parties that it does not control will be Year 2000
compliant. The Corporation believes that failure of third parties to address
their Year 2000 problems in a timely fashion presents the greatest likelihood of
the Corporation not being Year 2000 compliant. Such a failure could materially
adversely impact the Corporation's operations, the estimated costs of the Year
2000 project and the target dates for completion. The effect of non-compliance
by third parties is not determinable at this time. The Corporation could be
subject to litigation for computer systems product failure, including equipment
shutdown or failure to properly date business records. The amount of potential
liability, if any and lost revenue cannot be reasonably estimated at this time.

The Corporation is currently developing contingency plans in the event that
efforts to renovate the Corporation's systems are not fully successful or are
not completed in accordance with current expectations. The contingency plans
address risk factors related to the Corporation's acquisitions, including the
inadequate allocation of resources to Year 2000 issues by one or more of the
acquired companies; and the potential costs of completing renovation or
replacement of non-compliant systems of one or more of the acquired companies.

During 1998, Emerald Coast Bank established a committee to review all
computer-based systems and applications. This committee developed an action plan
for identifying, renovating, testing and implementing required solutions to
ensure that its computer and information systems will function properly in the
year 2000. This plan, which has been approved by the Board of Directors of
Emerald Coast Bank provides a goal of having all of the Emerald Coast Banks'
systems and applications evaluated, tested and updated where necessary to
address the year 2000 problem by June 30, 1999. In addition, the plan requires
Emerald Coast Bank to develop a detailed contingency plan and business
resumption plan in the event of an unanticipated failure (i.e. power outage,
telecommunications failure, etc.) It is expected that this portion of the plan
will also be developed and tested prior to June 30, 1999. As of March 31, 1999,
the committee estimated that Emerald Coast Bank was 90% complete toward reaching
its goal of Year 2000 readiness.

RESULTS OF OPERATIONS

Year Ended December 31, 1998, compared with years ended December 31, 1997 and
1996

Net income (loss) decreased $2.1 million, to ($367,000) for the year ended
December 31, 1998, from $1.7 million for the year ended December 31, 1997,
primarily because of (a) increased loan loss reserves and

67
<PAGE> 85

(b) non-recurring expenses incurred for the Corporation's recently completed
mergers. Without the non-recurring charges operating earnings for the year ended
December 31, 1998 would have decreased 34.5% to $1.1 million from 1997 net
income of $1.7 million, and decreased 0.4% from 1996 net income of $1.1 million.

The Corporation's return on average assets in 1998 was (.08)%, compared to
.53% in 1997 and .49% in 1996. Return on average equity was (.78)% in 1998
compared to 4.79% in 1997 and 3.87% in 1996. Average equity to average assets
was 10.9% in 1998 compared to 11.0% in 1997 and 12.7% in 1996.

Net interest income increased $4.3 million, or 31.6% to $18.1 million for
the year ended December 31, 1998, from $13.8 million for the year ended December
31, 1997, which increased $3.8 million, or 38.2% from $9.9 million in 1996.
Interest income increased $8.3 million, or 32.3% to $34.0 million for the year
ended December 31, 1998 from $25.7 million for the year ended December 31, 1997,
which increased $7.7 million, or 43.0%, from $18.0 million for the year ended
December 31, 1996.

The increase in interest income is attributable to an increase in average
earning assets, which consist primarily of loans. A significant portion of the
loan growth is due to the opening of a branch office in Birmingham, Alabama on
July 1, 1998; and the growth of the Emerald operations. Average loans increased
$83.7 million or 43.9% to $274.6 million during 1998 from $190.9 million for the
year ended December 31, 1997, which increased $70.8 million or 59.0% from $120.1
million for the year 1996.

Interest expense increased $3.9 million, or 33.2% to $15.9 million for the
year ended December 31, 1998 from $12.0 million for the year ended December 31,
1997, which increased $4.0 million, or 48.9% from $8.0 million in 1996. The
increase in interest expense is a result of the opening of the Birmingham branch
on July 1, 1998, and the growth of the Emerald operations. Average
interest-bearing deposits increased $75.9 million, or 31.9% to $314.1 million
for 1998, from $238.1 million for 1997 which increased $74.9 million, or 45.0%
from $164.3 million in 1996.

The provision for loan losses was $3.4 million for the year ended December
31, 1998 compared to $1.8 million in 1997 and $966,000 in 1996. The
Corporation's allowance for loan losses as a percentage of loans was 1.24%,
1.16% and 1.15% at December 31, 1998, 1997 and 1996, respectively. The allowance
for loan losses as a percentage of period-end nonperforming loans was 142.5% at
December 31, 1998, compared to 108.3% at December 31, 1997 and 85.7% at December
31, 1996. The Corporation had net charge-offs of $1.8 million in 1998, resulting
in a ratio of net charge-offs to average loans of .65%. This compares to $1.1
million or .57% in 1997 and $683,000 or .57% in 1996.

Noninterest income increased $901,000, or 38.8% to $3.2 million in 1998,
from $2.3 million in 1997, which increased $354,000, or 18.0% from $2.0 million
in 1996, primarily as the result of additional customer service charges and fees
and gains from sales of residential mortgage loans.

Noninterest expense increased $7.4 million, or 62.2% to $19.2 million in
1998 from $11.8 million in 1997, which increased $2.4 million, or 25.3% from
$9.5 million in 1996. The increase is primarily attributable to increases in
salaries and employee benefits, occupancy expenses due to the opening of new
offices, the creation of new departments and the conversion of the data
processing system. Another major component of the increase in noninterest
expense is approximately $1.5 million incurred in legal, accounting and printing
expenses related to the Corporations recent acquisitions and the write off of
obsolete equipment.

The Corporation's income tax benefit for 1998 was $978,000 (72.7%) on a
loss of $1.3 million. For 1997 and 1996, the Corporation's income tax expense
was $696,000 (29.3%) and $390,000 (26.1%) on pre-tax income of $2.4 million and
$1.5 million, respectively. The primary difference in the effective tax rate and
the federal statutory rate (34%) for 1998 arose from the recognition of a
rehabilitation tax credit of $1.5 million (net of a valuation allowance)
generated from the restoration of the Corporation's headquarters, the John A.
Hand building. The rate differences for 1997 and 1996 are related to the
Corporation's investment in tax-free state, county and municipal securities.

The Corporation's determination of the realization of the deferred tax
asset is based upon management's judgment of various future events and
uncertainties, including the timing and amount of future income earned by the
Corporation's subsidiaries and the implementation of various tax planning
strategies to maximize

68
<PAGE> 86

realization of the deferred tax asset. The Corporation believes that the
Corporation's subsidiaries may be able to generate sufficient operating earnings
to realize the deferred tax benefits. However, a portion of the amount of the
deferred tax asset that can be realized in any year is subject to certain
statutory federal income tax limitations. Because of these uncertainties, a
valuation allowance has been established. The Corporation periodically evaluates
the realizability of the deferred tax asset and, if necessary, adjusts the
valuation allowance accordingly.

NET INTEREST INCOME

The largest component of the Corporation's net income is its net interest
income, which is the difference between the income earned on interest earning
assets and interest paid on deposits and borrowings used in support of such
assets. Net interest income is determined by the rates earned on the
Corporation's interest earning assets and the rates paid on its interest-bearing
liabilities, the relative amounts of interest earning assets and
interest-bearing liabilities, and the degree of mismatch and the maturity and
repricing characteristics of its interest-earning assets and interest-bearing
liabilities. Net interest income divided by average interest-earning assets
represents the Corporation's net interest margin.

Average Balances, Income, Expenses and Rates. The following tables depict,
on a tax-equivalent basis for the periods indicated, certain information related
to the Corporation's average balance sheet and its average yields on assets and
average costs of liabilities. Such yields are derived by dividing income or
expense by the average balance of the corresponding assets or liabilities.
Average balances have been derived from daily averages.

69
<PAGE> 87

CONSOLIDATED AVERAGE BALANCE INTEREST/INCOME/EXPENSE
AND YIELD/RATES TAXABLE EQUIVALENT BASIS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------------------------------------------------------------
1998 1997 1996
--------------------------- --------------------------- ---------------------------
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
-------- ------- ------ -------- ------- ------ -------- ------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Earning assets:
Loans, net of unearned income(1)...... $274,596 $27,430 9.99% $190,881 $19,378 10.15% $120,064 $12,698 10.58%
Investment securities
Taxable............................. 78,446 4,725 6.02 73,818 4,795 6.50 55,497 3,613 6.51
Tax-exempt.......................... 14,081 953 6.77 8,441 661 7.83 9,771 799 8.18
-------- ------- -------- ------- -------- -------
Total investment securities..... 92,527 5,678 6.14 82,259 5,456 6.63 65,268 4,412 6.76
Federal funds sold.................. 15,857 941 5.93 17,105 955 5.58 19,466 1,002 5.15
Other investments................... 2,585 198 7.66 1,140 83 7.28 812 65 8.00
-------- ------- -------- ------- -------- -------
Total interest-earning assets... 385,565 34,247 8.88 291,385 25,872 8.88 205,610 18,177 8.84
Noninterest-earning assets:
Cash and due from banks............... 17,061 12,415 9,080
Premises and equipment................ 22,272 8,341 4,200
Accrued interest and other assets..... 8,567 7,730 7,474
Allowance for loan losses............. (4,185) (2,381) (1,587)
-------- -------- --------
Total assets.................... $429,280 $317,490 $224,777
======== ======== ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Interest-bearing liabilities:
Demand deposits....................... $ 90,274 $ 3,031 3.36% $ 51,115 $ 1,859 3.64% $ 33,581 $ 1,045 3.11%
Savings deposits...................... 25,402 743 2.92 27,303 791 2.90 26,178 796 3.04
Time deposits......................... 198,405 11,554 5.82 159,743 9,173 5.74 104,525 6,156 5.89
Other borrowings...................... 11,543 590 5.11 2,437 129 5.29 620 28 4.52
-------- ------- ---- -------- ------- ----- -------- ------- -----
Total interest-bearing
liabilities................... 325,624 15,918 4.89 240,598 11,952 4.97 164,904 8,025 4.87
Noninterest-bearing liabilities:
Demand deposits....................... 50,039 39,453 29,029
Accrued interest and other
liabilities......................... 6,778 2,396 2,319
Stockholders' equity.................. 46,839 35,043 28,525
-------- -------- --------
Total liabilities and
stockholders' equity.......... $429,280 $317,490 $224,777
======== ======== ========
Net interest income/net interest
spread................................ 18,329 3.99% 13,920 3.91% 10,152 3.97%
==== ===== =====
Net yield on earning assets............. 4.75% 4.78% 4.94%
==== ===== =====
Taxable equivalent adjustment:
Investment securities(2).............. 238 168 203
------- ------- -------
Net interest income............. $18,091 $13,752 $ 9,949
======= ======= =======
</TABLE>

- ---------------

(1) Nonaccrual loans of an immaterial amount are included in loans net of
unearned income. No adjustment has been made for these loans in the
calculation of yields.
(2) Interest income and yields are presented on a fully taxable equivalent basis
using a tax rate of 34 percent.

70
<PAGE> 88

Analysis of Changes in Net Interest Income. The following table sets
forth, on a taxable equivalent basis, the effect which the varying levels of
earning assets and interest-bearing liabilities and the applicable rates have
had on changes in net income for the years ended December 31, 1998 and 1997.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------------------------------
1998 VS 1997 1997 VS 1996
--------------------------- ---------------------------
CHANGES DUE TO CHANGES DUE TO
INCREASE -------------- INCREASE --------------
(DECREASE) RATE VOLUME (DECREASE) RATE VOLUME
---------- ----- ------ ---------- ----- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Increase (decrease) in:
Income from earning assets:
Interest and fees on loans... $8,052 $(313) $8,365 $6,680 $(521) $7,201
Interest on securities:
Taxable................. (70) (350) 280 1,182 (8) 1,190
Tax-exempt.............. 292 (97) 389 (138) (34) (104)
Interest on federal funds....... (14) 60 (74) (47) 84 (131)
Interest on other investments... 115 5 110 18 (6) 24
------ ----- ------ ------ ----- ------
Total interest income... 8,375 (695) 9,070 7,695 (485) 8,180
------ ----- ------ ------ ----- ------
Expense from interest-bearing
liabilities:
Interest on demand deposits..... 1,172 (252) 1,424 814 190 624
Interest on savings deposits.... (48) 7 (55) (5) (38) 33
Interest on time deposits....... 2,381 161 2,220 3,017 (156) 3,173
Interest on other borrowings.... 461 (21) 482 101 7 94
------ ----- ------ ------ ----- ------
Total interest
expense............... 3,966 (105) 4,071 3,927 3 3,924
------ ----- ------ ------ ----- ------
Net interest income..... $4,409 $(590) $4,999 $3,768 $(488) $4,256
====== ===== ====== ====== ===== ======
</TABLE>

- ---------------

(1) The change in interest due to both rate and volume has been allocated to
volume and rate changes in proportion to the relationship of the absolute
dollar amounts of the changes in rate.

MARKET RISK -- INTEREST RATE SENSITIVITY

Market risk is the risk of loss arising from adverse changes in the fair
value of financial instruments due to a change in interest rates, exchange rates
and equity prices. The Corporation's primary market risk is interest rate risk.

The primary objective of Asset/Liability management is to manage interest
rate risk and achieve reasonable stability in net interest income throughout
interest rate cycles. This is achieved by maintaining the proper balance of
interest rate sensitive earning assets and interest rate sensitive liabilities.
The relationship of rate sensitive earning assets to rate sensitive liabilities
is the principal factor in projecting the effect that fluctuating interest rates
will have on future net interest income. Rate sensitive earning assets and
interest-bearing liabilities are those that can be repriced to current market
rates within a relatively short time period.

Over the next twelve months approximately $34.2 million more
interest-bearing liabilities than interest earning assets can be repriced to
current market rates. As a result, the one-year cumulative gap (the ratio of
rate sensitive assets to rate sensitive liabilities) at December 31, 1998, was
0.88, indicating a slightly liability sensitive position. However, the
Corporation's interest rate risk is heavily asset sensitive during the first
ninety days of 1999. As of December 31, 1998, the Corporation's interest rate
risk model indicated that projected net interest income would increase on an
annual basis by 2.6% assuming an instantaneous increase in interest rates of 200
basis points, or decrease on an annual basis by 3.4%, assuming an instantaneous
decrease of 200 basis points.

The Corporation attempts to manage the one-year gap position as close to
even as possible. This ensures the Corporation of avoiding wide variances in
case of a rapid change in its interest rate environment. Also,

71
<PAGE> 89

certain products that are classified as being rate sensitive do not reprice on a
contractual basis. These products include regular savings, interest-bearing
transaction accounts, money market and now accounts. The rates paid on these
accounts are not typically directly related to market interest rates and
management exercises some discretion in adjusting these rates as market rates
change. In the event of a rapid shift in interest rates, management would
attempt to take certain actions to mitigate the negative impact to net interest
income. These actions include but are not limited to, restructuring of
interest-earning assets, seeking alternative funding sources and entering into
interest rate swap agreements.

The Corporation evaluates interest rate sensitivity risk and then
formulates guidelines regarding asset generation and repricing, funding sources
and pricing and off-balance sheet commitments in order to decrease interest rate
sensitivity risk. The Corporation uses computer simulations to measure the net
income effect of various interest rate scenarios. The modeling reflects interest
rate changes and the related impact on net income over specified periods of
time.

The goal of liquidity management is to provide adequate funds to meet
changes in loan and lease demand or any potential unexpected deposit
withdrawals. Additionally, management strives to maximize its earnings by
investing its excess funds in securities and other securitized loan assets with
maturities matching its offsetting liabilities. See the "Selected Loan Maturity
and Interest Rate Sensitivity" and the "Maturity Distribution of Investment
Securities" tables.

PROVISION AND ALLOWANCE FOR LOAN LOSSES

The Corporation maintains an allowance for loan losses at a level that it
believes is adequate to absorb estimated losses inherent in the loan portfolio,
plus estimated losses associated with off-balance sheet credit instruments such
as letters of credits and unfunded lines of credit. The Corporation prepares an
analysis to assess the risk in the loan portfolio and to determine the adequacy
of the allowance for loan losses. Generally, the Corporation estimates the
allowance using factors such as historical loss experience based on volume and
types of loans, volume and trends in delinquencies and non-accruals, national
and local economic conditions and other pertinent information.

The Bank's personnel conducts a review of all loans over $250,000 and a
sample of loans less than $250,000 in its Alabama operations. Emerald Coast Bank
uses an outside independent group that reviews 25% of all new loans closed and
all loans greater than $250,000 on a quarterly basis. The loans are reviewed for
proper documentation as well as loan quality. Specific reserves are allocated
based on these reviews. General reserves are allocated based on the
aforementioned factors. Thus, there can be no assurance that charge-offs in
future periods will not exceed the allowance for loan losses or that additional
increases in the allowance for loan losses will not be required. The adequacy of
the allowance for loan losses and the effectiveness of the Corporation's
monitoring and analysis system are also reviewed periodically by the banking
regulators.

Additions to the allowance for loan losses, which are expensed on the
Corporation's statement of operations, are made periodically to maintain the
allowance at an appropriate level based on the analysis of the potential risk in
the loan portfolio. Loan losses and recoveries are charged or credited directly
to the allowance. Total loans net of unearned income increased 68.5% to $365.4
million for the year ended December 31, 1998 from $216.8 million at December 31,
1997. While loan growth was significant in 1998, it was well diversified between
commercial, industrial, agricultural, consumer and mortgage loans. Commercial,
industrial and agricultural loans increased $66.1 million, or 91.7%, consumer
loans increased $20.8 million, or 44.0% and mortgage loans increased $37.8
million, or 48.5%.

Net charge-offs increased 63.2% over the same period from $1.1 million in
1997 to $1.8 million in 1998. The ratio of net charge-offs to average loans has
increased in each of the past four years, averaging 0.54%, with the last two
years being 0.65% in 1998 and 0.57% in 1997. Historically, net charge-offs have
been more significant for commercial and consumer loans. Allowance for loan
losses as a percentage of non-performing loans increased to 142.5% at December
31, 1998 from 108.3% at December 31, 1997. The dollar level of nonperforming
loans has remained consistent for the past three years; however, with the
dramatic increase in loan volume, the actual dollar amount could increase in the
future. The allowance as a percentage of period

72
<PAGE> 90

ending loans at December 31, 1998 was 1.24%. The average allowance as a
percentage of period ending loans for the last three years has been 1.18%.

The following table summarizes certain information with respect to the
Corporation's allowance for loan losses and the composition of charge-offs and
recoveries for the periods indicated.

SUMMARY OF LOAN LOSS EXPERIENCE

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
---------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Allowance for loan losses at beginning of
period..................................... $ 2,516 $ 1,760 $ 1,477 $ 1,246 $ 1,251
Allowance of acquired bank................... 368 -- -- -- --
Charge-offs:
Commercial, industrial and agricultural.... 818 537 67 7 125
Real estate................................ 311 57 46 58 --
Consumer................................... 1,225 779 731 403 149
-------- -------- -------- -------- -------
Total charge-offs.................. 2,354 1,373 844 468 274
Recoveries:
Commercial, industrial and agricultural.... 94 40 22 24 3
Real estate................................ 81 23 5 3 1
Consumer................................... 395 217 134 122 99
-------- -------- -------- -------- -------
Total recoveries................... 570 280 161 149 103
-------- -------- -------- -------- -------
Net charge-offs.............................. 1,784 1,093 683 319 171
Provision for loan losses.................... 3,433 1,849 966 550 166
-------- -------- -------- -------- -------
Allowance for loan losses at end of period... $ 4,533 $ 2,516 $ 1,760 $ 1,477 $ 1,246
======== ======== ======== ======== =======
Loans at end of period, net of unearned
income..................................... $365,379 $216,830 $153,074 $101,484 $70,213
Average loans, net of unearned income........ 274,596 190,881 120,064 85,229 68,600
Ratio of ending allowance to ending loans.... 1.24% 1.16% 1.15% 1.46% 1.77%
Ratio of net charge-offs to average loans.... 0.65 0.57 0.57 0.37 0.25
Net charge-offs as a percentage of:
Provision for loan losses.................. 52.0 59.1 70.7 58.0 103.0
Allowance for loan losses.................. 39.4 43.4 38.8 21.6 13.7
Allowance for loan losses as a percentage of
nonperforming loans........................ 142.5 108.3 85.7 190.3 210.5
</TABLE>

Allocation of Allowance. The Corporation historically has allocated its
allowance for loan losses to specific loan categories. Although the allowance is
allocated, it is available to absorb losses in the entire loan portfolio.

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------------------------------------------------------------------------------
1998 1997 1996 1995 1994
----------------- ----------------- ----------------- ----------------- -----------------
PERCENT PERCENT PERCENT PERCENT PERCENT
AMOUNT OF TOTAL AMOUNT OF TOTAL AMOUNT OF TOTAL AMOUNT OF TOTAL AMOUNT OF TOTAL
------ -------- ------ -------- ------ -------- ------ -------- ------ --------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Domestic
Commercial, industrial and
agricultural.............. $1,859 41% $ 805 32% $ 510 29% $ 340 23% $ 170 14%
Real
estate -- Construction.... 181 4 151 6 70 4 62 4 50 4
Real estate -- Mortgage..... 272 6 931 37 669 38 573 38 574 46
Consumer.................... 2,176 48 604 24 493 28 496 34 440 35
Other....................... 45 1 25 1 18 1 6 1 12 1
------ --- ------ --- ------ --- ------ --- ------ ---
$4,533 100% $2,516 100% $1,760 100% $1,477 100% $1,246 100%
====== === ====== === ====== === ====== === ====== ===
</TABLE>

73
<PAGE> 91

Nonperforming Assets. The following table represents the Corporation's
nonperforming assets for the dates indicated.

NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS

<TABLE>
<CAPTION>
DECEMBER 31
--------------------------------------
1998 1997 1996 1995 1994
------ ------ ------ ---- ----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Nonaccrual............................................... $ 946 $1,029 $1,478 $420 $249
Past due (contractually past due 90 days or more)........ 2,234 1,294 576 356 343
Restructured............................................. -- -- -- -- --
------ ------ ------ ---- ----
$3,180 $2,323 $2,054 $776 $592
====== ====== ====== ==== ====
</TABLE>

A delinquent loan is generally placed on nonaccrual status when it becomes
90 days or more past due and management believes, after considering economic and
business conditions and collection efforts, that the borrower's financial
condition is such that the collection of interest is doubtful. When a loan is
placed on nonaccrual status, all interest which has been accrued on the loan but
remains unpaid is reserved and deducted from earnings as a reduction of reported
interest income. No additional interest income is accrued on the loan balance
until the collection of both principal and interest becomes reasonably certain.
When a problem loan is finally resolved, there may ultimately be an actual
write-down or charge-off of the principal balance of the loan, which would
necessitate additional charges to earnings.

EARNING ASSETS

Loans. Loans are the largest category of earning assets and typically
provide higher yields than other types of earning assets. Associated with the
higher loan yields are the inherent credit and liquidity risks which management
attempts to control and counterbalance. At December 31, 1998, total loans net of
unearned income were $365.4 million, an increase of $148.6 million from $216.8
million at December 31, 1997. Average loans increased $83.7 million for the same
period. Loans averaged $274.6 million in 1998 compared to $190.9 million in 1997
and $120.1 million in 1996. At December 31, 1997, total loans net of unearned
income were $216.8 million compared to $153.0 million at December 31, 1996, and
$101.5 million at December 31, 1995.

DISTRIBUTION OF LOANS BY CATEGORY

<TABLE>
<CAPTION>
DECEMBER 31
---------------------------------------------------
1998 1997 1996 1995 1994
-------- -------- -------- -------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Commercial, industrial and agricultural...... $138,190 $ 72,086 $ 45,494 $ 23,488 $ 9,777
Real estate -- construction.................. 35,647 17,730 5,604 4,272 2,881
Real estate -- mortgage...................... 115,894 78,071 59,808 39,682 32,975
Consumer..................................... 67,968 47,187 40,731 34,293 25,236
Other........................................ 8,468 2,995 2,861 443 669
-------- -------- -------- -------- -------
Total loans........................ $366,167 $218,069 $154,498 $102,178 $71,538
Unearned income.............................. (788) (1,239) (1,424) (694) (1,325)
Allowance for loan losses.................... (4,533) (2,516) (1,760) (1,477) (1,246)
-------- -------- -------- -------- -------
Net loans.......................... $360,846 $214,314 $151,314 $100,007 $68,967
======== ======== ======== ======== =======
</TABLE>

74
<PAGE> 92

The repayment of loans in the loan portfolio as they mature is also a
source of liquidity for the Corporation. The following table sets forth the
Corporation's loans maturing within specified intervals at December 31, 1998.

SELECTED LOAN MATURITY AND INTEREST RATE SENSITIVITY

<TABLE>
<CAPTION>
RATE STRUCTURE FOR LOANS MATURING
MATURITY OVER ONE YEAR
- ----------------------------------------------------- ---------------------------------
OVER ONE YEAR
ONE YEAR THROUGH FIVE PREDETERMINED FLOATING OR
OR LESS YEARS OVER FIVE YEARS TOTAL INTEREST RATE ADJUSTABLE RATE
- -------- ------------- --------------- -------- -------------- ----------------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
$171,467 $145,821 $48,091 $365,379 $154,870 $39,042
========= ======== ======= ======== ======== =======
</TABLE>

The information presented in the above table is based on the contractual
maturities of the individual loans, including loans which may be subject to
renewal at their contractual maturity. Renewal of such loans is subject to
review and credit approval, as well as modification of terms upon their
maturity. Consequently, management believes this treatment presents fairly the
maturity and repricing structure of the loan portfolio.

Investment Securities. The investment securities portfolio is a
significant component of the Corporation's total earning assets. Total
securities averaged $92.5 million in 1998, compared to $82.3 million in 1997 and
$65.3 million in 1996. At December 31, 1998, the Corporation's securities
portfolio totaled $77.4 million.

The following table sets forth the book value of the securities held by the
Corporation at the dates indicated.

INVESTMENT PORTFOLIO

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1998 1997
------- -------
(IN THOUSANDS)
<S> <C> <C>
U.S. Treasury and Government agencies....................... $ 7,055 $48,273
State and political subdivisions............................ 18,245 11,244
Mortgage-backed securities.................................. 48,894 18,976
Other investments........................................... 3,095 3,528
------- -------
Total investment securities....................... $77,289 $82,021
======= =======
</TABLE>

The following table shows the scheduled maturities and average yields of
securities held at December 31, 1998.

MATURITY DISTRIBUTION OF INVESTMENT SECURITIES

<TABLE>
<CAPTION>
MATURING
-------------------------------------------------------------------------------------
AFTER ONE BUT AFTER FIVE BUT
WITHIN ONE WITHIN FIVE WITHIN TEN
YEAR YEARS YEARS AFTER TEN YEARS TOTAL
-------------- --------------- -------------- --------------- ---------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
------ ----- ------- ----- ------ ----- ------- ----- ------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Securities available for sale:
U.S. Treasury and Govt Agencies...... $ 847 4.12% $ 1,704 5.72% $4,004 6.65% $ 500 7.01% $ 7,055 6.15%
State and political subdivisions..... 231 5.84 4,012 5.75 2,647 6.22 11,355 5.20 18,245 5.48
Mortgage-backed securities........... 1,991 5.21 6,294 6.33 2,536 6.92 38,073 6.39 48,894 6.36
Other investments.................... 563 6.46 1,319 6.47 269 5.51 944 5.94 3,095 6.24
------ ------- ------ ------- -------
Total investments.............. $3,632 5.19% $13,329 6.09% $9,456 6.57% $50,872 6.12% $77,289 6.13%
====== ======= ====== ======= =======
</TABLE>

Short-Term Investments. Short-term investments, which consist primarily of
federal funds sold, averaged $15.9 million in 1998, compared to $17.1 million in
1997 and $19.5 million in 1996. These funds are a primary source of the
Corporation's liquidity and are generally invested on an overnight basis.

75
<PAGE> 93

DEPOSITS AND OTHER INTEREST-BEARING LIABILITIES

Deposits. Average total deposits increased $86.5 million, or 31.2% to
$364.1 million during 1998, from $277.6 million in 1997. Average total deposits
increased $84.3 million, or 43.6% to $277.6 million during 1997, from $193.3
million in 1996.

The following table sets forth average deposits of the Corporation by
category for the periods indicated.

AVERAGE DEPOSITS

<TABLE>
<CAPTION>
AVERAGE FOR THE YEAR
---------------------------------------------------------------------------
1998 1997 1996
----------------------- ----------------------- -----------------------
AVERAGE AVERAGE AVERAGE
AMOUNT AVERAGE AMOUNT AVERAGE AMOUNT AVERAGE
OUTSTANDING RATE PAID OUTSTANDING RATE PAID OUTSTANDING RATE PAID
----------- --------- ----------- --------- ----------- ---------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Noninterest bearing demand
deposits...................... $ 50,039 --% $ 39,453 --% $ 29,029 --%
Interest bearing demand
deposits...................... 90,274 3.36 51,115 3.64 33,581 3.11
Savings deposits................ 25,402 2.92 27,303 2.90 26,178 3.04
Time deposits................... 198,405 5.82 159,743 5.74 104,525 5.89
-------- -------- --------
Total average
deposits............ $364,120 4.21% $277,614 4.26% $193,313 4.14%
======== ======== ========
</TABLE>

Deposits, and particularly core deposits, have historically been the
Corporation's primary source of funding and have enabled the Corporation to meet
successfully both its short-term and long-term liquidity needs. The Corporation
anticipates that such deposits will continue to be its primary source of funding
in the future. The Corporation's loan to deposit ratio was 82.9% at December 31,
1998, compared to 69.9% at December 31, 1997. The maturity distribution of the
Corporation's time deposits over $100,000 at December 31, 1998 is shown in the
following table.

MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE

<TABLE>
<CAPTION>
AT DECEMBER 31, 1998
- -------------------------------------------------
UNDER 3-6 6-12 OVER
3 MONTHS MONTHS MONTHS 12 MONTHS TOTAL
- -------- ------ ------- --------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
$31,686 $7,848 $15,540 $11,705 $66,779
======= ====== ======= ======= =======
</TABLE>

Approximately 47.4 % of the Corporation's time deposits over $100,000 had
scheduled maturities within three months. The Corporation believes that large
denomination certificate of deposit customers tend to be extremely sensitive to
interest rate levels, making these deposits less reliable sources of funding for
liquidity planning purposes than core deposits. While some financial
institutions partially fund their balance sheets using large certificates of
deposits obtained through brokers, these broker deposits are generally expensive
and are unreliable as long-term funding sources. Accordingly, the Corporation
does not actively solicit brokered deposits.

76
<PAGE> 94

Advances from Federal Home Loan Bank. In order to meet additional loan
demand, the Corporation borrowed $23.2 million from the FHLB during 1998. The
following is a summary of advances from the FHLB outstanding as of December 31,
1998.

<TABLE>
<CAPTION>
INTEREST
MATURITY DATE RATE AMOUNT
- ------------- -------- -------
<S> <C> <C>
February 6, 2003............................................ 4.99% $15,660
April 2, 2003............................................... 5.52 2,000
March 26, 2008.............................................. 5.51 1,000
June 23, 2008............................................... 5.51 1,500
July 10, 2008............................................... 4.99 3,000
-------
$23,160
=======
</TABLE>

The advances are secured by FHLB stock and a blanket lien on certain
residential real estate loans.

NONINTEREST EXPENSE

Noninterest expense increased $7.4 million, or 62.2% to $19.2 million in
1998 from $11.8 million in 1997. The increase is primarily attributable to the
increases in salaries and employee benefits, occupancy expenses, the creation of
new departments and the conversion of the data processing system. During 1998,
the Corporation was formed and staffed appropriately to manage its growth. New
branches were opened for The Bank in Birmingham and Decatur in 1998 and for
Emerald Coast Bank in 1997, resulting in increased salaries and benefits and
occupancy expense. Emerald Coast Bank sold all of its branch locations in 1998
in a sale-lease back transaction which resulted in an increase in rent expense
of approximately $150,000. The various data processing systems acquired were
consolidated into a new operations center which was staffed with existing
employees. Salaries and benefits increased $2.7 million and occupancy expense
increased $957,000. The other major component of the increase in noninterest
expense was $1.5 million incurred in legal, accounting and printing expenses
related to the Corporation's recent acquisitions and the write off of obsolete
equipment and software.

REGULATORY CAPITAL TABLE

The table below represents the Corporation's actual regulatory and minimum
regulatory capital requirements at December 31, 1998 (Dollars in thousands):

<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED
UNDER PROMPT
FOR CAPITAL CORRECTIVE
ADEQUACY ACTION
ACTUAL PURPOSES PROVISIONS
--------------- --------------- ---------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------- ----- ------- ----- ------- -----
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1998:
Total Capital (to Risk
Weighted Assets)............ $60,923 14.99% $32,519 8.00% $40,649 10.00%
Tier 1 Capital (to Risk
Weighted Assets)............ 56,393 13.87 16,260 4.00 24,389 6.00
Tier 1 Capital (to Average
Assets)..................... 56,393 11.01 20,482 4.00 25,603 5.00
</TABLE>

IMPACT OF INFLATION

Unlike most industrial companies, the assets and liabilities of financial
institutions such as the Corporation are primarily monetary in nature.
Therefore, interest rates have a more significant effect on the Corporation's
performance than do the effects of changes in the general rate of inflation and
changes in prices. In addition, interest rates do not necessarily move in the
same direction or in the same magnitude as the prices of goods and services. The
Corporation seeks to manage the relationships between interest sensitive assets
and liabilities in order to protect against wide interest rate fluctuations,
including those resulting from inflation.

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<PAGE> 95

RECENT OPERATING RESULTS

On April 28, 1999, the Corporation announced earnings for the first quarter
ended March 31, 1999. For the first quarter of 1999, net income was $504,000, or
$.04 per share on a basic and diluted basis, compared to $652,000, or $.06 per
share on a basic and diluted basis for the first quarter of 1998. Net interest
income for the first quarter of 1999 was $5.6 million compared to $3.8 million
for the same period in 1998. Noninterest income for the first quarter of 1999
was $882,000 compared to $872,000 for the same period in 1998. Noninterest
expense for the first quarter of 1999 was $5.6 million compared to $3.4 million
for the same period in 1998.

The provision for loan losses for the first quarter of 1999 was $224,000
compared to $410,000 for the same period in 1998. The allowance for loan losses
at March 31, 1999 was $4.7 million or 1.17% of loans, net of unearned income,
compared to $4.5 million or 1.25% at December 31, 1998. The allowance for loan
losses as a percent of nonperforming loans was 183.70% at March 31, 1999,
compared to 142.50% at December 31, 1998.

As of March 31, 1999 compared to December 31, 1998, total assets increased
to $536.9 million from $524.4 million; loans increased to $404.7 million from
$365.4 million; deposits increased to $448.6 million from $435.4 million, and
stockholders' equity increased to $59.5 million from $57.2 million.

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<PAGE> 96

BUSINESS OF THE CORPORATION

GENERAL

The Banc Corporation is a bank holding company registered under the Bank
Holding Company Act of 1956 ("BHCA") and a thrift holding company registered
under the Home Owner's Loan Act, incorporated under the laws of Delaware in
April 1998 and headquartered in Birmingham, Alabama. The Corporation was
established so that Warrior Capital Corporation could merge into the Corporation
and thereby change its name to "The Banc Corporation" and its domicile from
Alabama to Delaware. Warrior merged with the Corporation on September 24, 1998.
During the fourth quarter of 1998 and first quarter 1999, the Corporation
acquired one bank and four bank holding companies:

<TABLE>
<S> <C>
Commercial Bancshares of Roanoke, Inc., and its bank
subsidiary................................................ October 16, 1998
City National Corporation, and its bank subsidiary.......... October 30, 1998
First Citizens Bancshares, Inc., and its bank subsidiary.... October 30, 1998
Commerce Bank of Alabama.................................... November 6, 1998
Emerald Coast Bancshares, Inc., and its bank subsidiary..... February 12, 1999
</TABLE>

The Corporation has two banking subsidiaries, The Bank and Emerald Coast
Bank. The Bank is an Alabama banking corporation headquartered in Birmingham,
Alabama, and is 99.75% owned by the Corporation. The Bank became a subsidiary of
the Corporation as a result of the Warrior merger. The Bank has been in business
as a full service commercial and retail bank since it was established in 1957
and had five branches at the time of the Warrior merger. Through The Bank, the
Corporation has 17 locations in Alabama.

On February 12, 1999, the Corporation acquired Emerald Coast Bancshares,
Inc., a Florida bank holding company, in exchange for approximately 1,379,958
shares of Corporation common stock in a transaction that was accounted for as a
pooling of interests. As a result of the merger, Emerald Coast Bank, a Florida
banking corporation, and Emerald Coast Financial Management, Inc., a Florida
corporation, became subsidiaries of the Corporation. Emerald Coast Bank was
converted into a federally chartered thrift regulated by the Office of Thrift
Supervision in order to facilitate the acquisition and merger. Emerald Coast
Bank is now a wholly-owned subsidiary of the Corporation with four locations in
Panama City Beach, Destin, Seagrove and Bay Point, Florida. Emerald Coast Bank
has one subsidiary, Emerald Coast Financial Management, Inc., a Florida
corporation. As of December 31, 1998, Emerald Coast Bancshares, Inc. had total
assets of approximately $83.6 million, loans of approximately $66.0 million,
total deposits of approximately $69.4 million, and total stockholder's equity of
approximately $5.7 million.

As of December 31, 1998, the Corporation had assets of approximately $524
million, loans of approximately $365 million, deposits of approximately $435
million and stockholders equity of approximately $57 million. The Corporation's
management team has historically been successful in the integration of multiple
community banking organizations. The Corporation has also retained the existing
boards of directors at each of its acquired banks in order to ensure
personalized, responsive, quality service for individuals and local and regional
businesses. The Corporation believes that its operating philosophy of
decentralized decision making supplemented by centralized policy oversight,
credit review and management systems will result in significant internal loan
and deposit growth. The Corporation's growth strategy also includes opening new
branches as well as the acquisition of other financial institutions and
branches.

The principal executive offices of the Corporation and The Bank are located
at 17 North 20th Street, Birmingham, Alabama 35203, and the telephone number is
(205) 326-2265. The principal executive offices of Emerald Coast Bank are
located at 7522 Front Beach Road, Panama City Beach, Florida 32408, and its
telephone number is (850) 230-9800. As used in this Prospectus-Joint Proxy
Statement, the term "Corporation" refers to The Banc Corporation and its
respective subsidiaries and affiliates, including The Bank and Emerald Coast
Bank, unless the context requires otherwise.

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<PAGE> 97

RECENT DEVELOPMENTS

During the fourth quarter of 1998, the Corporation completed an
underwritten public offering of 1,000,000 shares of Corporation common stock
resulting in net proceeds to the Corporation of approximately $9.6 million. On
January 10, 1999, the underwriters of the public offering exercised their
overallotment option to purchase an additional 150,000 shares of Corporation
common stock resulting in net proceeds to the Corporation of approximately $1.5
million. The Corporation used the proceeds received from this offering to repay
debt incurred for the acquisition of Commercial Bancshares of Roanoke, Inc. and
for working capital.

On January 13, 1999, the Corporation entered into an agreement to acquire
BankersTrust of Alabama, Inc. BankersTrust is an Alabama bank holding company.
BankersTrust's subsidiary has branches in Huntsville and Madison, Alabama. The
BankersTrust acquisition is a purchase transaction. The BankersTrust acquisition
is subject to regulatory approval and approval by the BankersTrust stockholders.

On April 28, 1999, the Corporation announced its operating results for the
first quarter ended March 31, 1999. For the first quarter of 1999, net income
was $504,000, or $.04 per share on a basic and diluted basis, compared to
$652,000, or $.06 per share on a basic and diluted basis for the first quarter
of 1998. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- The Corporation -- Recent Developments."

STRATEGY

Operations. The Corporation operates primarily in non-metropolitan areas,
except for its Birmingham, Alabama, operations which commenced July 1, 1998. The
Corporation targets individuals and local and regional businesses that prefer
local bank decision making and personalized service. As a result of this
strategy, the Corporation operates on a decentralized basis, emphasizing local
knowledge and authority to make credit decisions. The Corporation believes this
strategy enables The Bank and Emerald Coast Bank to generate high yielding loans
and to attract and retain low cost core deposits that provide substantially all
of The Bank's and Emerald Coast Bank's funding requirements. The Bank has eight
presidents and chief executive officers each of whom is responsible for the
day-to-day operations and decisions for the branches under his or her
supervision. The president and chief executive officer of Emerald Coast Bank,
who is responsible for the day-to-day operations and decisions of Emerald Coast
Bank. The Corporation supplements this decentralized management approach with
centralized policy oversight, credit review and management systems. The
Corporation implements administrative and operations policies at each of its
locations while retaining local management and directors as an advisory board to
capitalize on their knowledge of the local community.

The Bank and Emerald Coast Bank focus on residential mortgage, consumer,
commercial and real estate construction lending to customers in each of their
respective local markets. The Bank and Emerald Coast Bank also offer a variety
of deposit programs to individuals and to businesses and other organizations at
interest rates generally consistent with local market conditions. In addition,
The Bank and Emerald Coast Bank offer individual retirement and KEOGH accounts,
safe deposit and night depository facilities and additional services such as the
sale of traveler's checks, money orders and cashier's checks.

Growth. The Corporation believes its future growth will depend primarily
on the expansion of the business of its banking subsidiaries through internal
growth, the opening of new branch offices in new markets and the acquisition of
other financial institutions and branches. The ability to grow profitably
through the opening or acquisition of new branches will depend primarily on,
among other things, the Corporation's ability to identify profitable, growing
markets and branch locations within such markets, attract necessary deposits to
operate such branches profitably and locate sound loans and investment
opportunities within such markets. See "Risk Factors -- Ability to Sustain
Growth; Profitability and Potential Need for Additional Capital."

MARKET AREAS

Through The Bank, the Corporation operates in Birmingham, Alabama, and its
suburbs of Warrior, Morris and Mt. Olive, Alabama, in relatively rural northern
Jefferson County. The Bank also operates

80
<PAGE> 98

branches in Albertville, Childersburg, Decatur, Frisco City, Gadsden,
Guntersville, Mignon, Monroeville (2), Rainbow City, Roanoke (2), and Sylacauga,
Alabama. Through Emerald Coast Bank, the Corporation operates in Destin, Panama
City Beach, Seagrove and Bay Point, Florida.

LENDING ACTIVITIES

General. Through its subsidiaries, the Corporation offers a range of
lending services, including real estate, consumer and commercial loans,
primarily to individuals and businesses and other organizations that are located
in or conduct a substantial portion of their business in The Bank's and Emerald
Coast Bank's market areas. The Corporation's total loans at December 31, 1998,
were $365 million, or 79% of total earning assets. The interest rates charged on
loans vary with the degree of risk, maturity and amount of the loan and are
further subject to competitive pressures, money market rates, availability of
funds and government regulations. The Corporation has no foreign loans or loans
for highly leveraged transactions.

Loan Portfolio

Real Estate Loans. Loans secured by real estate are a significant
component of the Corporation's loan portfolio, constituting $152 million, or 41%
of total loans at December 31, 1998. The Corporation's primary type of real
estate loan is single family first mortgage loans, typically structured with
fixed or adjustable interest rates, based on market conditions. Fixed rate loans
usually have terms of five years or less, with payments through the date of
maturity generally based on a 15 to 30-year amortization schedule. Adjustable
rate loans generally have a term of 15 years. The Bank and Emerald Coast Bank
charge an origination fee on these loans.

The Bank's and Emerald Coast Bank's nonresidential mortgage loans include
commercial, industrial and raw land loans. The commercial real estate loans are
typically used to provide financing for retail establishments, offices and
manufacturing facilities. The Bank and Emerald Coast Bank generally require
nonresidential mortgage loans to have an 80% loan-to-value ratio and usually
underwrite their commercial loans on the basis of the borrower's cash flow and
ability to service the debt from earnings, rather than on the basis of the value
of the collateral. Terms are typically five years and may have payments through
the date of maturity based on a 15 to 30 year amortization schedule.
Construction loans usually have a term of twelve months and generally require
personal guarantees.

Commercial, Industrial, and Agricultural Loans. The Bank and Emerald Coast
Bank make loans for commercial purposes in various lines of business. These
loans are typically made on terms up to 5 years at fixed or variable rates and
are secured by accounts receivable, inventory or, in the case of equipment
loans, the financed equipment. The Bank and Emerald Coast Bank attempt to reduce
their credit risk on commercial loans by limiting the loan to value ratio to 65%
on loans secured by accounts receivable or inventory and 75% on equipment loans.
The Bank and Emerald Coast Bank also make unsecured commercial loans.
Commercial, industrial and agricultural loans constituted $138 million, or 38%
of the Corporation's loan portfolio at December 31, 1998.

Consumer Loans. Consumer lending includes installment lending to
individuals in The Bank's and Emerald Coast Bank's market areas and consists of
loans to purchase automobiles, recreational vehicles, mobile homes and
appliances. Consumer loans constituted $68 million, or 19% of the Corporation's
loan portfolio at December 31, 1998. Consumer loans are underwritten based on
the borrower's income, current debt, credit history and collateral. Terms
generally range from four to five years on automobile loans and one to three
years on other consumer loans.

Credit Procedures and Review

Loan Approval. There are credit risks associated with making any loan.
These include prepayment risks, risks resulting from uncertainties in the future
value of collateral, risks resulting from changes in economic and industry
conditions and risks inherent in dealing with individual borrowers. In
particular, longer maturities increase the risk that economic conditions will
change and adversely affect collectability.

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<PAGE> 99

The Corporation attempts to minimize loan losses through various means and
uses generally recognized under writing criteria. In particular, on larger
credits, the Corporation generally relies on the cash flow of a debtor as the
source of repayment and secondarily on the value of the underlying collateral.
In addition, the Corporation attempts to utilize shorter loan terms in order to
reduce the risk of a decline in the value of such collateral.

The Corporation addresses repayment risks by adhering to internal credit
policies and procedures that include officer and customer lending limits, a
multi-layered loan approval process for larger loans, periodic documentation
examination and follow-up procedures for any exceptions to credit policies. The
point in the Corporation's loan approval process at which a loan is approved
depends on the size of the borrower's credit relationship with the Corporation.

Loan Review. The Corporation has a loan review process designed to promote
early identification of credit quality problems. All loan officers are charged
with the responsibility of reviewing at least quarterly all past due loans in
their respective portfolios. Loan officers establish a watch list of loans to be
reviewed quarterly by The Bank's and Emerald Coast Bank's Board of Directors.
The Chief Lending Officer of The Bank and Emerald Coast Bank along with other
officers also conducts a regular centralized internal review which tests
compliance with loan policy and documentation for all loans over $250,000 and a
sampling of smaller loans.

DEPOSITS

The principal sources of funds for The Bank and Emerald Coast Bank are core
deposits, consisting of demand deposits, interest-bearing transaction accounts,
money market accounts, savings deposits and certificates of deposit. Transaction
accounts include checking, money market and negotiable order of withdrawal
accounts that provide the banks with a source of fee income and cross-marketing
opportunities, as well as a low-cost source of funds. Time and savings accounts
also provide a relatively stable and low-cost source of funding. The largest
source of funds for The Bank and Emerald Coast Bank is certificates of deposit.
Certificates of deposit in excess of $100,000 are held primarily by customers in
The Bank's and Emerald Coast Bank's market areas.

Deposit rates are set weekly by senior management of The Bank and Emerald
Coast Bank, subject to approval by management of the Corporation. Management
believes that the rates The Bank and Emerald Coast Bank offer are competitive
with those offered by competing institutions in The Bank's and Emerald Coast
Bank's market areas. The Bank and Emerald Coast Bank focus on customer service,
not high rates, to attract and retain deposits.

COMPETITION

The Bank and Emerald Coast Bank encounter strong competition both in making
loans and attracting deposits. Competition among financial institutions is based
upon interest rates offered on deposit accounts, interest rates charged on loans
and other credit and service charges. Customers also consider the quality and
scope of the services rendered, the convenience of banking facilities and, in
the case of loans to commercial borrowers, relative lending limits, and may also
consider the fact that other banks offer certain services, such as trust
services, that The Bank and Emerald Coast Bank do not currently provide. In
addition, most of the Corporation's non-bank competitors are not subject to the
same extensive federal regulations that govern bank holding companies, federally
insured banks and federally insured thrifts. See "Supervision and Regulation."

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<PAGE> 100

MARKET INFORMATION

Before the Corporation's public offering on December 10, 1998, there was no
public market for Corporation common stock. Corporation common stock currently
trades on the Nasdaq National Market System under the symbol "TBNC." As of
December 31, 1998, the Corporation has not paid any dividends. Warrior, however,
paid dividends in the past.

<TABLE>
<CAPTION>
HIGH LOW
---- ---
<S> <C> <C>
1998
December 10 through December 31........................... $14.38 $11.78
1999
First Quarter............................................. 12.81 9.75
Second Quarter (through April , 1999)................... -- --
</TABLE>

As of March 31, 1999, there were holders of record of
Corporation common stock.

PROPERTIES

The Corporation owns the John A. Hand building, a 21-story office building
located at 17 North 20th Street, Birmingham, Alabama 35203, in which the
Corporation's headquarters are located and in which The Bank is located. The
Corporation also owns each of The Bank's locations in Alabama, including
Warrior, Morris, Mt. Olive, Decatur, Albertville, Guntersville, Rainbow City,
Monroeville, Frisco City, Sylacauga, Childersburg, Mignon and Roanoke. The
Corporation leases The Bank's locations in Gadsden and Monroeville, Alabama and
Emerald Coast Bank's locations in Panama City Beach, Destin, Seagrove and Bay
Point, Florida.

EMPLOYEES

As of March 31, 1999, the Corporation and its subsidiaries had
approximately 268 employees.

LEGAL PROCEEDINGS

While the Corporation may from time to time be a party to various legal
proceedings arising from the ordinary course of its business, the Corporation
believes that there are currently no proceedings threatened or pending against
the Corporation at this time that will individually, or in the aggregate,
materially or adversely effect the Corporation's business or financial
condition.

WHERE YOU CAN FIND ADDITIONAL INFORMATION

At your request, we will provide to you, without charge, a copy of any of
the exhibits to our Registration Statement incorporated by reference in this
Prospectus-Joint Proxy Statement. If you want more information, write or call us
at:

The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203
Attention: Debbie Peoples
Telephone: (205) 326-2265
Facsimile: (205) 326-3479

Our fiscal year ends December 31. We will provide to our stockholders
annual reports containing audited financial statements and other appropriate
reports. You may read and copy any reports, statements or other information we
file with the SEC at the SEC's public reference rooms at Room 1024, 450 Fifth
Street, N.W., Judiciary Plaza, Washington, D.C. Those reports, statements and
other information should be available for inspection and copying at the regional
offices of the SEC located at Seven World Trade Center, 13th Floor, New York,
New York, and at Citicorp Center, 500 West Madison Street, Chicago, Illinois.

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<PAGE> 101

You can request copies of these documents upon payment of a duplicating fee
by writing to the SEC at Public Reference Section, 450 Fifth Street, NW,
Washington, D.C. 20549. Please call the SEC at 1-800-SEC-0330 for further
information on the operation of the public reference rooms. The SEC maintains an
Internet site that contains reports proxy and information statements and other
information. Our SEC filings are available to the public on the SEC Internet
site at http:www.sec.gov.

SUPERVISION AND REGULATION

The supervision and regulation of bank holding and thrift companies and
their subsidiaries is intended primarily for the protection of depositors, the
deposit insurance funds of the FDIC and the banking system as a whole, not for
the protection of bank holding company stockholders or creditors. The banking
agencies have broad enforcement power over bank holding companies and banks
including the power to impose substantial fines and other penalties for
violation of laws and regulations.

The following description summarizes some of the laws to which the
Corporation, The Bank and Emerald Coast Bank are subject. References herein to
applicable statutes and regulations are brief summaries thereof, do not purport
to be complete and are qualified in their entirety by reference to such statutes
and regulations.

THE CORPORATION -- BANK HOLDING COMPANY

The Corporation is a bank holding company registered under the BHCA and it
is subject to supervision, regulation and examination by the Federal Reserve
Board. The BHCA and other federal laws subject bank and thrift holding companies
to particular restrictions on the types of activities in which they may engage
and to a range of supervisory requirements and activities, including regulatory
enforcement actions for violations of laws and regulations.

Regulatory Restrictions on Dividends; Source of Strength. It is the policy
of the Federal Reserve Board that bank holding companies should pay cash
dividends on common stock only out of income available over the past year and
only if prospective earnings retention is consistent with the organization's
expected future needs and financial condition. The policy provides that bank
holding companies should not maintain a level of cash dividends that undermines
the bank holding company's ability to serve as a source of strength to its
banking subsidiaries.

The Corporation's principal source of funds to pay dividends on the shares
of Corporation common stock will be cash dividends that the Corporation receives
from its subsidiaries. The payment of dividends by The Bank and Emerald Coast
Bank to the Corporation is subject to certain restrictions imposed by state and
federal banking laws, regulations and authorities. As of December 31, 1999, an
aggregate of approximately $486,000 was available for payment of dividends by
The Bank and Emerald Coast Bank to the Corporation under applicable
restrictions, without regulatory approval. See "-- The Bank" and "-- Emerald
Coast Bank."

The federal banking statutes prohibit federally insured banks from making
any capital distributions, including a dividend payment if, after making the
distribution, the institution would be "undercapitalized" as defined by statute.
In addition, the relevant federal regulatory agencies also have authority to
prohibit an insured bank from engaging in an unsafe or unsound practice, as
determined by the agency, in conducting an activity. The payment of dividends
could be deemed to constitute such an unsafe or unsound practice, depending on
the financial conditions of The Bank and other bank and thrift subsidiaries.
Regulatory authorities could impose administratively stricter limitations on the
ability of The Bank and other bank and thrift subsidiaries to pay dividends to
the Corporation if such limits were deemed appropriate to preserve certain
capital adequacy requirements.

Under Federal Reserve Board policy, a bank holding company is expected to
act as a source of financial strength to each of its banking subsidiaries and
commit resources to their support. Such support may be required by the Federal
Reserve Board at times when, absent this policy, a holding company may not be
inclined to provide it. A bank holding company, in certain circumstances, could
be required to guarantee the capital plan of an undercapitalized banking
subsidiary.

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<PAGE> 102

In the event of a bank holding company's bankruptcy under Chapter 11 of the
U.S. Bankruptcy Code, the bankruptcy trustee will be deemed to have assumed and
is required to cure immediately any deficit under any commitment by the debtor
holding company to any of the federal banking agencies to maintain the capital
of an insured depository institution, and any claim for breach of such
obligation will generally have priority over most other unsecured claims.

Activities "Closely Related" to Banking. The BHCA prohibits a bank holding
company, with certain limited exceptions, from acquiring direct or indirect
ownership or control of any voting shares of any company which is not a bank or
from engaging in any activities other than those of banking, managing or
controlling banks and certain other subsidiaries, or furnishing services to or
performing services for its subsidiaries. One principal exception to these
prohibitions allows the acquisition of interests in companies whose activities
are found by the Federal Reserve Board, or order or regulation, to be so closely
related to banking or managing or controlling banks, as to be a proper incident
thereto. Some of the activities that have been determined to be closely related
to banking are making or servicing loans, performing certain data processing
services, acting as an investment or financial advisor to certain investment
trusts and investment companies and providing securities brokerage services.
Other activities approved by the Federal Reserve Board include consumer
financial counseling, tax planning and tax preparation, futures and options
advisory services, check guaranty services, collection agency and credit bureau
services and personal property appraisals. In approving acquisitions by bank
holding companies of companies engaged in banking-related activities, the
Federal Reserve Board considers a number of factors and weighs the expected
benefits to the public, such as greater convenience and increased competition or
gains in efficiency, against the risks of possible adverse effects, such as
undue concentration of resources, decreased or unfair competition, conflicts of
interest, or unsound banking practices. The Federal Reserve Board is also
empowered to differentiate between activities commenced de novo and activities
commenced through acquisition of a going concern.

Securities Activities. The Federal Reserve Board has approved applications
by bank holding companies to engage, through nonbank subsidiaries, in certain
securities-related activities which may include underwriting of municipal
revenue bonds, commercial paper, consumer receivable-related securities and
one-to-four family mortgage-backed securities, provided that the affiliates
would not be "principally engaged" in such activities for purposes of Section 20
of the Glass-Steagall Act. In limited situations, holding companies may be able
to use such subsidiaries to underwrite and deal in corporate debt and equity
securities.

Safe and Sound Banking Practices. Bank holding companies are not permitted
to engage in unsafe or unsound banking practices. The Federal Reserve Board's
Regulation Y, for example, generally requires a holding company to give the
Federal Reserve Board prior notice of any redemption or repurchase of its own
equity securities, if the consideration to be paid, together with the
consideration paid for any repurchases or redemptions in the preceding year, is
equal to 10% or more of the company's consolidated net worth. The Federal
Reserve Board may oppose the transaction if it believes that the transaction
would constitute an unsafe or unsound practice or would violate any law or
regulation. Depending upon the circumstances, the Federal Reserve Board could
take the position that paying a dividend would constitute an unsafe or unsound
banking practice.

The Federal Reserve Board has broad authority to prohibit activities of
bank holding companies and their non-banking subsidiaries which represent unsafe
or unsound banking practices or which constitute violations of laws or
regulations, and can assess civil money penalties for certain activities
conducted on a knowing and reckless basis, if those activities caused a
substantial loss to a depository institution. The penalties can be as high as
$1,000,000 for each day the activity continues.

Anti-Tying Restrictions. Bank holding companies and their affiliates are
prohibited from tying the provision of certain services, such as extensions of
credit, to other services offered by a holding company or its affiliates.

Capital Adequacy Requirements. The Federal Reserve Board has adopted a
system using risk-based capital guidelines to evaluate the capital adequacy of
bank holding companies. Under the guidelines, specific categories of assets are
assigned different risk weights, based generally on the perceived credit risk of
the asset. These risk weights are multiplied by corresponding asset balances to
determine a "risk-weighted" asset base.

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<PAGE> 103

The guidelines require a minimum total risk-based capital ratio of 8.0% of which
at least 4.0% is required to consist of Tier 1 capital elements. Total capital
is the sum of Tier 1 and Tier 2 capital. As of December 31, 1998, the
Corporation's ratio of Tier 1 capital to total risk-weighted assets was 13.87%,
and its ratio of total capital to total risk-weighted assets was 14.99%. See
"Supplemental Condensed Pro Forma Information" and "Management's Discussion and
Analysis of Financial Condition and Results of Operations -- Capital Resources."

In addition to the risk-based capital guidelines, the Federal Reserve Board
uses a leverage ratio as an additional tool to evaluate the capital adequacy of
bank holding companies. The leverage ratio is a company's Tier 1 capital divided
by its average total consolidated assets. Certain highly-rated bank holding
companies may maintain a minimum leverage ratio of 3.0%, but other bank holding
companies may be required to maintain a leverage ratio of up to 200 basis points
or more above the regulatory minimum. The Corporation is required to maintain a
leverage ratio of 4%. As of December 31, 1998, the Corporation's leverage ratio
was 11.01%. See "Supplemental Condensed Pro Forma Information."

The federal banking agencies' risk-based and leverage ratios are minimum
supervisory ratios generally applicable to banking organizations that meet
certain specified criteria, assuming that they have the highest regulatory
rating. Banking organizations not meeting these criteria are expected to operate
with capital positions well above the minimum ratios. The federal bank
regulatory agencies may set capital requirements for a particular banking
organizations that are higher than the minimum ratios when circumstances
warrant. Federal Reserve Board guidelines also provide that banking
organizations experiencing internal growth or making acquisitions will be
expected to maintain strong capital positions substantially above the minimum
supervisory levels, without significant reliance on intangible assets.

Imposition of Liability for Undercapitalized Subsidiaries. Bank regulators
are required to take "prompt corrective action" to resolve problems associated
with insured depository institutions whose capital declines below certain
levels. In the event an institution becomes "undercapitalized," it must submit a
capital restoration plan. The capital restoration plan will not be accepted by
the regulators unless each company having control of the undercapitalized
institution guarantees the subsidiary's compliance with the capital restoration
plan up to a certain specified amount. Any such guarantee from a depository
institution's holding company is entitled to a priority of payment in
bankruptcy.

The aggregate liability of the holding company of an undercapitalized bank
is limited to the lesser of 5% of the institution's assets at the time it became
undercapitalized or the amount necessary to cause the institution to be
"adequately capitalized." The bank regulators have greater enforcement power in
situations where an institution becomes "significantly" or "critically"
undercapitalized or fails to submit a capital restoration plan. For example, a
bank holding company controlling such an institution can be required to obtain
prior Federal Reserve Board approval of proposed dividends or might be required
to consent to a consolidation or to divest the troubled institution or other
affiliates.

Acquisitions by Bank Holding Companies. The BHCA requires every bank
holding company to obtain the prior approval of the Federal Reserve Board before
it may acquire all or substantially all of the assets of any bank, or ownership
or control of any voting shares of any bank, if after such acquisition it would
own or control, directly or indirectly, more than 5% of the voting shares of
such bank. In approving bank acquisitions by bank holding companies, the Federal
Reserve Board is required to consider the financial and managerial resources and
future prospects of the bank holding company and the banks concerned, the
convenience and needs of the communities to be served and various competitive
factors.

Control Acquisitions. The Change in Bank Control Act prohibits a person or
group of persons from acquiring "control" of a bank holding company unless the
Federal Reserve Board has been notified and has not objected to the transaction.
Under a rebuttable presumption established by the Federal Reserve Board, the
acquisition of 10% or more of a class of voting stock of a bank holding company
with a class of securities registered under Section 12 of the Exchange Act,
would, under the circumstances set forth in the presumption, constitute
acquisition of control of that bank holding company.

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In addition, any company is required to obtain the approval of the Federal
Reserve Board under the BHCA before acquiring 25% (and bank holding companies
are required to obtain approval of the Federal Reserve Board before acquiring 5%
) or more of the outstanding common stock of the Corporation, or otherwise
obtaining control or a "controlling influence" over the Corporation.

THE CORPORATION -- THRIFT HOLDING COMPANY

In addition to being a registered bank holding company, by virtue of the
acquisition of Emerald Coast Bank on February 12, 1999, the Corporation is a
thrift holding company as defined by the Home Owners' Loan Act ("HOLA"). As
such, the Corporation is subject to OTS regulation, examination, supervision and
reporting requirements. As a thrift subsidiary of a thrift holding company,
Emerald Coast Bank is subject to regulation by the OTS and subject to certain
restrictions in its dealings with the Corporation and affiliates thereof.

Qualified Thrift Lender Test. In general, under HOLA thrifts must maintain
at least 60% of their portfolio assets in specific, qualified investments. The
1997 Omnibus Appropriations Act allows assets such as mortgage backed
securities, credit cards, small business loans and other types of loans (in
applicable percentages) to qualify under this test.

Restrictions on Acquisitions. Thrift holding companies are prohibited from
acquiring, without prior approval of the OTS, (1) control of any other thrift or
thrift holding company or substantially all the assets thereof or (2) more than
5% of the voting shares of a thrift or holding company thereof which is not a
subsidiary. Under certain circumstances, a registered thrift holding company is
permitted to acquire, with the approval of the OTS, up to 15% of the voting
shares of an undercapitalized thrift pursuant to a "qualified stock issuance"
without that thrift being deemed controlled by the holding company. In order for
the shares acquired to constitute a "qualified stock issuance," the shares must
consist of previously unissued stock or treasury shares, the shares must be
acquired for cash, the thrift holding company's other subsidiaries must have
tangible capital of at least 6 1/2% of total assets, there must not be more than
one common director or officer between the thrift holding company and the
issuing thrift and transactions between the thrift and the thrift holding
company and any of its affiliates must conform to Sections 23A and 23B of the
Federal Reserve Board Act. Except with the prior approval of the OTS, no
director or officer of a thrift holding company or person owning or controlling
by proxy or otherwise more than 25% of such company's stock, may also acquire
control of any thrift, other than a subsidiary thrift, or of any other thrift
holding company.

THE BANK

The deposits of The Bank are insured by the Bank Insurance Fund ("BIF") of
the FDIC. The Bank is a not member of the Federal Reserve System; therefore, The
Bank is subject to supervision and regulation by the FDIC and the Alabama
Banking Department. Such supervision and regulation subjects The Bank to special
restrictions, requirements, potential enforcement actions and periodic
examination by the FDIC and the Alabama Banking Department. Because the Federal
Reserve Board regulates the bank holding company parent of The Bank, the Federal
Reserve Board also has supervisory authority which directly affects The Bank.

Branching. Under Alabama law, an Alabama-chartered bank can establish a
branch anywhere in Alabama provided that the branch is approved in advance by
the Alabama Banking Department. The branch must also be approved by the FDIC
which considers a number of factors, including financial history, capital
adequacy, earnings prospects, character of management, needs of the community
and consistency with corporate powers.

Restrictions on Transactions With Affiliates and Insiders. Transactions
between The Bank and its affiliates, including the Corporation, are subject to
Section 23A of the Federal Reserve Act. In general, Section 23A imposes limits
on the amount of such transactions, and also requires certain levels of
collateral for loans to affiliated parties. It also limits the amount of
advances to third parties which are collateralized by the securities or
obligations of the Corporation or its subsidiaries.

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Affiliate transactions are also subject to Section 23B of the Federal
Reserve Act which generally requires that certain transactions between The Bank
and its respective affiliates be on terms substantially the same, or at least as
favorable to such bank, as those prevailing at the time for comparable
transactions with or involving other nonaffiliated persons.

The restrictions on loans to directors, executive officers, principal
stockholders and their related interests (collectively referred to herein as
"insiders") contained in the Federal Reserve Act and Regulation O apply to all
insured institutions and their subsidiaries and holding companies. These
restrictions include limits on loans to one borrower and conditions that must be
met before such a loan can be made. There is also an aggregate limitation on all
loans to insiders and their related interests. These loans cannot exceed the
institution's total unimpaired capital and surplus, and the FDIC may determine
that a lesser amount is appropriate. Insiders are subject to enforcement actions
for knowingly accepting loans in violation of applicable restrictions.

Restrictions on Distribution of Subsidiary Bank Dividends and
Assets. Dividends paid by The Bank have provided a substantial part of the
Corporation's operating funds and, for the foreseeable future, it is anticipated
that dividends paid by The Bank to the Corporation will continue to be the
Corporation's principal source of operating funds. Capital adequacy requirements
serve to limit the amount of dividends that may be paid by The Bank. Under
federal law, The Bank can not pay a dividend if, after paying the dividend, The
Bank would be "undercapitalized." The FDIC may declare a dividend payment to be
unsafe and unsound even though The Bank would continue to meet its capital
requirements after the dividend.

Because the Corporation is a legal entity separate and distinct from its
subsidiaries, its right to participate in the distribution of assets of any
subsidiary upon the subsidiary's liquidation or reorganization will be subject
to the prior claims of the subsidiary's creditors. In the event of a liquidation
or other resolution of an insured depository institution, the claims of
depositors and other general or subordinated creditors are entitled to a
priority of payment over the claims of holders of any obligation of the
institution to its stockholders, including any depository institution holding
company such as the Corporation or any stockholder or creditor thereof.

Examinations. The FDIC periodically examines and evaluates insured banks.
Based upon such an evaluation, the FDIC may revalue the assets of the
institution and require that it establish specific reserves to compensate for
the difference between the FDIC-determined value and the bank's established book
value of such assets. The Alabama Banking Department also periodically conducts
examinations of state banks.

Capital Adequacy Requirements. The FDIC has adopted regulations
establishing minimum requirements for the capital adequacy of insured
institutions. The FDIC may establish higher minimum requirements if, for
example, a bank has previously received special attention or has a high
susceptibility to interest rate risk.

The FDIC's risk-based capital guidelines generally require state banks to
have a minimum of Tier 1 capital to total risk-weighted assets of 4.0% and a
ratio of total capital to total risk-weighted assets of 8.0%. The capital
categories have the same definitions for The Bank as for the Corporation. As of
December 31, 1998, The Bank's ratio of Tier 1 capital to total risk-weighted
assets was 10.67% and its ratio of total capital to total risk-weighted assets
was 11.85%. See "Management's Discussion and Analysis of Financial Condition and
Results of Operations -- Corporation."

Corrective Measures for Capital Deficiencies. The federal banking
regulators are required to take "prompt corrective action" with respect to
capital-deficient institutions. Agency regulations define, for each capital
category, the levels at which institutions are "well-capitalized," "adequately
capitalized," "under capitalized," "significantly under capitalized" and
"critically under capitalized." A "well capitalized" bank has a total risk based
capital ratio of 10.0% or higher; a Tier 1 risk based capital ratio of 6.0% or
higher; a leverage ratio of 5.0% or higher; and is not subject to any written
agreement, order or directive requiring it to maintain a specific capital level
for any capital measure. An "adequately capitalized" bank has a total risk based
capital ratio of 8.0% or higher; a Tier 1 risk based capital ratio of 4.0% or
higher; a leverage ratio of 4.0% or higher (3.0% or higher if the bank was rated
a CAMEL 1 in its most recent examination report and is not experiencing
significant growth); and does not meet the criteria for a well capitalized bank.
A bank is "under capitalized" if it fails to meet any one of the ratios required
to be adequately capitalized. The Bank is classified as "well capitalized" for
purposes of the FDIC's prompt corrective action regulations.

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In addition to requiring undercapitalized institutions to submit a capital
restoration plan, agency regulations contain broad restrictions on certain
activities of undercapitalized institutions including asset growth,
acquisitions, branch establishment and expansion into new lines of business.
With certain exceptions, an insured depository institution is prohibited from
making capital distributions, including dividends, and is prohibited from paying
management fees to control persons if the institution would be undercapitalized
after any such distribution or payment.

As an institution's capital decreases, the FDIC's enforcement powers become
more extensive. A significantly undercapitalized institution is subject to
mandated capital raising activities, restrictions on interest rates paid and
transactions with affiliates, removal of management, and other restrictions. The
FDIC has only very limited discretion in dealing with a critically
undercapitalized institution and is virtually required to appoint a receiver or
conservator.

Banks with risk-based capital and leverage ratios below the required
minimums may also be subject to certain administrative actions, including the
termination of deposit insurance upon notice and hearing, or a temporary
suspension of insurance without a hearing in the event the institution has no
tangible capital.

Deposit Insurance Assessments. The Bank must pay assessments to the FDIC
for federal deposit insurance protection. The FDIC has adopted a risk based
assessment system as required by the Federal Deposit Insurance Corporation
Improvements Act ("FDICIA"). Under this system, FDIC-insured depository
institutions pay insurance premiums at rates based on their risk classification.
Institutions assigned to higher-risk classifications are generally institutions
that pose a greater risk of loss to their respective deposit insurance funds and
pay assessments at higher rates than institutions that pose a lower risk. An
institution's risk classification is assigned based on its capital levels and
the level of supervisory concern the institution poses to the regulators. In
addition, the FDIC can impose special assessments in certain instances. The
current range of BIF assessments is between 0% and 0.27% of deposits.

The FDIC established a process for raising or lowering all rates for
insured institutions semi-annually if conditions warrant a change. Under this
new system, the FDIC has the flexibility to adjust the assessment rate schedule
twice a year without seeking prior public comment, but only within a range of
five cents per $100 above or below the premium schedule adopted. Changes in the
rate schedule outside the five cent range above or below the current schedule
can be made by the FDIC only after a full rule making with opportunity for
public comment.

On September 30, 1996, President Clinton signed into law an act that
contained a comprehensive approach to recapitalizing the SAIF and to assure the
payment of the Financial Corporation's ("FICO") bond obligations. Under this
act, banks insured under the BIF are required to pay a portion of the interest
due on bonds that were issued by FICO to help shore up the ailing Federal
Savings and Loan Insurance Corporation in 1987. The BIF rate must equal
one-fifth of the Savings Association Insurance Fund ("SAIF") rate through
year-end 1999, or until the insurance funds are merged, whichever occurs first.
Thereafter, BIF and SAIF payers will be assessed pro rata for the FICO bond
obligations. With regard to the assessment for the FICO obligation, the current
BIF rate is .0126% of deposits.

Enforcement Powers. The FDIC and the other federal banking agencies have
broad enforcement powers, including the power to terminate deposit insurance,
impose substantial fines and other civil and criminal penalties and appoint a
conservator or receiver. Failure to comply with applicable laws, regulations and
supervisory agreements could subject the Corporation or its banking
subsidiaries, as well as officers, directors and other institution-affiliated
parties of these organizations, to administrative sanctions and substantial
civil money penalties. The appropriate federal banking agency may appoint the
FDIC as conservator or receiver for a banking institution (or the FDIC may
appoint itself, under certain circumstances) if any one or more of a number of
circumstances exist, including, without limitation, the fact that the banking
institution is undercapitalized and has no reasonable prospect of becoming
adequately capitalized; fails to become adequately capitalized when required to
do so; fails to submit a timely and acceptable capital restoration plan; or
materially fails to implement an accepted capital restoration plan. The Alabama
Banking Department also has broad enforcement powers over The Bank including the
power to impose orders, remove officers and directors, impose fines and appoint
supervisors and conservators.

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Brokered Deposit Restrictions. Adequately capitalized institutions cannot
accept, renew or roll over brokered deposits except with a waiver from the FDIC
and are subject to restrictions on the interest rates that can be paid on such
deposits. Undercapitalized institutions may not accept, renew or roll over
brokered deposits.

Cross-Guarantee Provisions. The Financial Institutions Reform, Recovery
and Enforcement Act of 1989 ("FIRREA") contains a "cross-guarantee" provision
which generally makes commonly controlled insured depository institutions liable
to the FDIC for any losses incurred in connection with the failure of a commonly
controlled depository institution.

Community Reinvestment Act. The Community Reinvestment Act of 1977 ("CRA")
and the regulations issued thereunder are intended to encourage banks to help
meet the credit needs of their service area, including low and moderate income
neighborhoods, consistent with the safe and sound operations of the banks. These
regulations also provide for regulatory assessment of a bank's record in meeting
the needs of its service area when considering applications to establish
branches, merger applications and applications to acquire the assets and assume
the liabilities of another bank. FIRREA requires federal banking agencies to
make public a rating of a bank's performance under the CRA. In the case of a
bank holding company, the CRA performance record of the banks involved in the
transaction are reviewed in connection with the filing of an application to
acquire ownership or control of shares or assets of a bank or to merge with any
other bank holding company. An unsatisfactory record can substantially delay or
block the transaction. The Bank's CRA rating is satisfactory.

Consumer Laws and Regulations. In addition to the laws and regulations
discussed herein, The Bank is also subject to certain consumer laws and
regulations that are designed to protect consumers in transactions with banks.
While the list set forth herein is not exhaustive, these laws and regulations
include the Truth in Lending Act, the Truth in Savings Act, the Electronic Funds
Transfer Act, the Expedited Funds Availability Act, the Equal Credit Opportunity
Act and the Fair Housing Act, among others. These laws and regulations mandate
certain disclosure requirements and regulate the manner in which financial
institutions must deal with customers when taking deposits, making loans to or
engaging in other types of transactions with such customers.

EMERALD COAST BANK

The deposits of Emerald Coast Bank are insured up to $100,000 per insured
member by the SAIF administered by the FDIC and are backed by the full faith and
credit of the U.S. Government. As insurer, the FDIC is authorized to conduct
examinations of, and to require reporting by, FDIC-insured institutions. It also
may prohibit any FDIC-insured institution from engaging in any activity the FDIC
determines by regulation or order to pose a serious threat to the FDIC. The FDIC
also has the authority to initiate enforcement actions against thrifts, after
giving the OTS an opportunity to take such action.

Branching. Current OTS policy generally permits a federally-chartered
thrift to establish branch offices outside of its home state if the thrift meets
the domestic building and loan test in Section 7701(a)(19) of the Code, or the
asset composition test of subparagraph (c) of that section, and if, with respect
to each state outside of its home state where the thrift has established
branches, the branches, taken alone, also satisfy one of the two tax tests. A
thrift seeking to take advantage of this authority would have to have a
branching application approved by the OTS, which would consider the regulatory
capital of the thrift and its record under the CRA among other things.

Restrictions on Transactions with Affiliates and Insiders. Transactions
between a thrift and its "affiliates" are subject to quantitative and
qualitative restrictions under Sections 23A and 23B of the Federal Reserve Act.
Affiliates of a thrift include, among other entities, the thrift's holding
company and companies that are under common control with the thrift.

In general, Sections 23A and 23B and OTS regulations issued in connection
therewith limit the extent to which a thrift or its subsidiaries may engage in
certain "covered transactions" with affiliates to an amount equal to 10% of the
thrift's capital and surplus, in the case of covered transactions with any one
affiliate, and to

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an amount equal to 20% of such capital and surplus, in the case of covered
transactions with all affiliates. In addition, a thrift and its subsidiaries may
engage in covered transactions and certain other transactions only on terms or
under circumstances that are substantially the same, or at least as favorable to
the thrift or its subsidiary, as those prevailing at the time for comparable
transactions with non-affiliated companies. A "covered transaction" is defined
to include a loan or extension of credit to an affiliate; a purchase of
investment securities issued by an affiliate; a purchase of assets from an
affiliate, with certain exceptions; the acceptance of securities issued by an
affiliate as collateral for a loan or extension of credit to any party; or the
issuance of a guarantee, acceptance, or letter of credit on behalf of an
affiliate.

In addition, under the OTS regulations, a thrift may not make a loan or
extension of credit to an affiliate unless the affiliate is engaged only in
activities permissible for bank holding companies; a thrift may not purchase or
invest in securities of an affiliate other than shares of a subsidiary; a thrift
and its subsidiaries may not purchase a low-quality asset from an affiliate; and
covered transactions and certain other transactions between a thrift or its
subsidiaries and an affiliate must be on terms and conditions that are
consistent with safe and sound banking practices. With certain exceptions, each
loan or extension of credit by a thrift to an affiliate must be secured by
collateral with a market value ranging from 100% to 130% depending on the type
of collateral of the amount of the loan or extension of credit.

The OTS regulation generally excludes all non-bank and non-thrift
subsidiaries of thrifts from treatment as affiliates, except to the extent that
the OTS or the Federal Reserve Board decides to treat such subsidiaries as
affiliates. The regulation also requires thrifts to make and retain records that
reflect affiliate transactions in reasonable detail, and provides that certain
classes of thrifts may be required to give the OTS prior notice of affiliate
transactions.

Restrictions on Distributions of Subsidiary Thrift Dividends and
Capital. OTS regulations govern capital distributions by thrifts, which include
cash dividends, stock redemptions or repurchases, cash-out mergers, interest
payments on certain convertible debt and other transactions charged to the
capital account of a thrift to make capital distributions. Generally, the
regulation creates a safe harbor for specified levels of capital distributions
from thrifts meeting at least their minimum capital requirements, so long as
such thrifts notify the OTS and receive no objection to the distribution from
the OTS. Thrifts and distributions that do not qualify for the safe harbor are
required to obtain prior OTS approval before making any capital distributions.

Generally, thrifts that before and after the proposed distribution meet or
exceed their fully phased-in capital requirements, or Tier 1 thrifts, may make
capital distributions during any calendar year equal to the higher of (1) 100%
of net income for the calendar year-to-date plus 50% of its "surplus capital
ratio" at the beginning of the calendar year or (2) 75% of net income over the
most recent four-quarter period. The "surplus capital ratio" is defined to mean
the percentage by which the thrift's ratio of total capital to assets exceeds
the ratio of its fully phased-in capital requirement to assets. "Fully phased-in
capital requirement" is defined to mean a thrift's capital requirement under the
statutory and regulatory standards, as modified to reflect any applicable
individual minimum capital requirement imposed on the thrift. Failure to meet
fully phased-in or minimum capital requirements will result in further
restrictions on capital distributions including possible prohibition without
explicit OTS approval. See "Capital Requirements."

In order to make distributions under these safe harbors, Tier 1 and Tier 2
thrifts must submit written notice to the OTS 30 days prior to making the
distribution. The OTS may object to the distribution during that 30-day period
based on safety and soundness concerns. In addition, a Tier 1 thrift deemed to
be in need of more than normal supervision by the OTS may be downgraded to a
Tier 2 or Tier 3 thrift as a result of such a determination. Emerald Coast Bank
currently is a Tier 1 institution for purposes of the regulation dealing with
capital distributions.

The OTS has also imposed additional requirements that would require thrifts
with more than a "normal" level of interest rate risk to maintain additional
capital. Certain exceptions would apply based upon capitalization and size of a
thrift. Emerald Coast Bank believes that it would not be deemed to have more
than a "normal" level of interest rate risk.

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Capital Adequacy Requirements. Current OTS capital standards require
thrifts to satisfy three different capital requirements. Under these standards,
thrifts must maintain "tangible" capital equal to 1.5% of adjusted total assets,
"core" capital equal to 3% of adjusted total assets and "total" capital (a
combination of core and "supplementary" capital) equal to 8% of "risk-weighted"
assets. For purposes of the regulation, core capital generally consists of
common stockholders' equity including retained earnings, non-cumulative
perpetual preferred stock and related surplus minority interests in the equity
accounts of fully consolidated subsidiaries, certain non-withdrawable accounts
and pledged deposits and "qualifying supervisory goodwill." Tangible capital is
given the same definition as core capital but does not include qualifying
supervisory goodwill and is reduced by the amount of all the thrift's intangible
assets. Emerald Coast Bank currently meets all capital requirements imposed by
federal law.

Corrective Measures for Capital Deficiencies. The prompt corrective action
regulation of the OTS requires certain mandatory actions and authorizes certain
other discretionary actions to be taken by the OTS against a thrift that falls
within certain undercapitalized capital categories specified in the regulation.

The regulation establishes five categories of capital classification:
"well-capitalized", "adequately capitalized", "undercapitalized", "significantly
undercapitalized", and "critically undercapitalized." Under the regulation, the
risk-based capital, leverage capital, and tangible capital ratios are used to
determine an institution's capital classification. At December 31, 1998, Emerald
Coast Bank met the capital requirements of a "well capitalized" institution
under applicable OTS regulations.

In general, the prompt corrective action regulation prohibits an insured
depository institution from declaring any dividends, making any other capital
distribution, or paying a management fee to a controlling person if, following
the distribution or payment, the institution would be within any of the three
undercapitalized categories. In addition, adequately capitalized institutions
may accept brokered deposits only with a waiver from the FDIC and are subject to
restrictions on the interest rates that can be paid on such deposits.
Undercapitalized institutions may not accept, renew, or roll-over brokered
deposits.

If the OTS determines that an institution is in an unsafe or unsound
condition, or if the institution is deemed to be engaging in an unsafe and
unsound practice, the OTS may, if the institution is well capitalized,
reclassify it as adequately capitalized; if the institution is adequately
capitalized, but not well capitalized, require it to comply with restrictions
applicable to undercapitalized institutions; and if the institution is
undercapitalized, require it to comply with certain restrictions applicable to
significantly undercapitalized institutions.

Deposit Insurance Assessments. The deposits of Emerald Coast Bank are
currently insured by the SAIF. Both the SAIF and the BIF, the federal deposit
insurance fund that covers commercial bank deposits, are required by law to
attain and thereafter maintain a reserve ratio of 1.25% of insured deposits. The
BIF had achieved a fully funded status in contrast to the SAIF and, therefore,
the FDIC substantially reduced the average deposit insurance premium paid by
commercial banks to a level approximately 75% below the average premium paid by
thrifts.

The under funded status of the SAIF had resulted in the introduction of
federal legislation intended to, among other things, recapitalize the SAIF and
address the resulting premium disparity. On September 30, 1996, the Omnibus
Appropriations Act was signed into law. The legislation authorized a one-time
charge on SAIF insured deposits at a rate of $.657 per $100.00 of March 31, 1995
deposits. Additional provisions of the Act included new BIF and SAIF premiums
and the merger of BIF and SAIF. The new BIF and SAIF premiums include a premium
for repayment of the FICO bonds plus any regular insurance assessment, currently
nothing for the lowest risk category institutions.

The FDIC may terminate the deposit insurance of any insured depository
institution if it determines after a hearing that the institution has engaged or
is engaging in unsafe or unsound practices, is in an unsafe or unsound condition
to continue operations, or has violated any applicable law, regulation, order or
any condition imposed by an agreement with the FDIC. It also may suspend deposit
insurance temporarily during the hearing process for the permanent termination
of insurance, if the institution has no tangible capital. If insurance of
accounts is terminated, the accounts at the institution at the time of the
termination, less

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subsequent withdrawals, shall continue to be insured for a period of six months
to two years, as determined by the FDIC. Management is aware of no existing
circumstances which would result in termination of Emerald Coast Bank's deposit
insurance.

Enforcement Powers. The OTS' enforcement authority includes, among other
things, the ability to assess civil money penalties, to issue cease and desist
or removal orders and to initiate injunctive actions. In general, these
enforcement actions may be initiated for violations of laws and regulations and
unsafe or unsound practices. Other actions or inactions may provide the basis
for enforcement action, including misleading or untimely reports filed with the
OTS.

Federal Home Loan Bank System. Emerald Coast Bank is a member of the FHLB
of Atlanta, which is one of 12 regional FHLBs that administers the home
financing credit function of the thrifts. Each FHLB serves as a reserve or
central bank for its members within its assigned region. It is funded primarily
from proceeds derived from the sale of consolidated obligations of the FHLB
System. It makes loans to members in accordance with the policies and procedures
established by the Board of Directors of the FHLB.

As a member, Emerald Coast Bank is required to purchase and maintain stock
in the FHLB of Atlanta in an amount equal to at least 1% of its aggregate unpaid
residential mortgage loans, home purchase contracts or similar obligations at
the beginning of each year or 5% of its advances from the FHLB of Atlanta,
whichever is greater. At December 31, 1998, Emerald Coast Bank had $225,000 in
FHLB stock (2,250 shares), which was in compliance with this requirement.

Liquidity Requirements. Each thrift is required to maintain an average
daily balance of liquid assets, including cash, certain time deposits and
savings accounts, bankers' acceptances, certain government obligations, and
certain other investments, in each calendar quarter equal to a certain
percentage of the sum of either: (i) its liquidity base (consisting of certain
net withdrawable accounts plus short-term borrowings) as of the end of the
preceding calendar quarter, or (ii) the average daily balance of its liquidity
base during the preceding quarter. The liquidity requirement may vary from time
to time (between 4% and 10%) depending upon economic conditions and savings
flows of all thrifts. Emerald Coast Bank meets such liquidity requirements.

Community Reinvestment Act and Fair Lending Developments. Emerald Coast
Bank is subject to certain fair lending requirements and reporting obligations
involving home mortgage lending operations and CRA activities. A thrift's
compliance with its CRA obligations is based on a performance-based evaluation
system which bases CRA ratings on an institution's lending service and
investment performance. When a holding company applies for approval to acquire
another financial institution or financial institution holding company, the OTS
will review the assessment of each subsidiary thrift of the applicant. Such
records may be the basis for denying the application. Emerald Coast Bank's CRA
rating is satisfactory.

INSTABILITY OF REGULATORY STRUCTURE

Various legislation is from time to time introduced in Congress, including
proposals to overhaul the bank regulatory system, expand the insurance,
securities and certain other powers of banking institutions and bank holding
companies, limit the investments that a depository institution may make with
insured funds, restrict the powers of thrift holding companies and restrict the
powers of or eliminate the thrift charter. Such legislation may change banking
statutes and the operating environment of the Corporation and its subsidiaries
in substantial and unpredictable ways.

Specifically, a financial services modernization bill cleared the Senate
Banking Committee on March 4, 1999, and is targeted for a floor vote during the
first two weeks of May 1999. The measure would allow bank holding companies to
engage in a broad array of financial activities, including insurance, securities
underwriting and merchant banking. National banks with $1 billion or less in
assets could engage in those activities through operating subsidiaries. The
House Banking Committee cleared its version of the financial services
modernization legislation on March 11, 1999. Like the Senate measure, the House
bill would allow new cross-industry business combinations; however, the House
bill would do so by means of newly created financial holding companies and
affiliated firms. Securities affiliates would be required to comply with all
applicable

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federal securities laws, including registration and other requirements
applicable to broker-dealers. The House bill also provides that insurance
activities shall be subject to specified state insurance regulations and
supervision. The Senate bill includes similar insurance provisions, but unlike
the House bill, it does not prohibit national banks from underwriting title
insurance. The Corporation cannot determine the ultimate effect that potential
legislation, if enacted, or implementing regulations with respect thereto, would
have on the financial condition or results of operations of the Corporation or
its subsidiaries.

ENFORCEMENT AUTHORITY

One of the major additional burdens imposed on the banking industry by
FDICIA is the increased ability of banking regulators to monitor the activities
of banks and thrifts and their holding companies. In addition, the Federal
Reserve Board and FDIC are possessed of extensive authority to police unsafe or
unsound practices and violations of applicable laws and regulations by
depository institutions and their holding companies. For example, the FDIC may
terminate the deposit insurance of any institution which it determines has
engaged in an unsafe or unsound practice. The agencies can also assess civil
money penalties, issue cease and desist or removal orders, seek injunctions and
publicly disclose such actions. FDICIA, FIRREA and other laws have expanded the
agencies' authority in recent years, and the agencies have not yet fully tested
the limits of their powers.

EFFECT ON ECONOMIC ENVIRONMENT

The policies of regulatory authorities, especially the monetary policy of
the Federal Reserve Board, have a significant effect on the operating results of
bank holding companies and their subsidiaries. Among the means available to the
Federal Reserve Board to affect the money supply are open market operations in
U.S. Government securities, changes in the discount rate on member bank
borrowings and changes in reserve requirements against member bank deposits.
These means are used in varying combinations to influence overall growth and
distribution of bank loans, investments and deposits, and their use may affect
interest rates charged on loans or paid for deposits.

Federal Reserve Board monetary policies have materially affected the
operating results of commercial banks in the past and are expected to continue
to do so in the future. The nature of future monetary policies and the effect of
such policies on the business and earnings of the Corporation and its
subsidiaries cannot be predicted.

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MANAGEMENT OF CORPORATION

DIRECTORS AND EXECUTIVE OFFICERS

The following table sets forth certain information about the executive
officers and directors of the Corporation as of , 1999:

<TABLE>
<CAPTION>
NAME AGE POSITION WITH CORPORATION
---- --- -------------------------
<S> <C> <C>
James A. Taylor....................... 57 Chairman of the Board, Chief Executive
Officer and President
David R. Carter....................... 46 Executive Vice President, Chief
Financial Officer and Director
Terry DuBose.......................... 51 Vice Chairman
James Mailon Kent, Jr. (1)............ 58 Vice Chairman
Larry D. Striplin, Jr. (1)............ 69 Vice Chairman
James A. Taylor, Jr................... 34 Executive Vice President, General
Counsel, Secretary and Director
James R. Andrews, M.D................. 56 Director
Charles Barkley....................... 35 Director
Neal R. Berte, Ed.D................... 58 Director
W. T. Campbell, Jr.................... 52 Director
Peter N. Dichiara (2)................. 44 Director
K. Earl Durden (2).................... 62 Director
Steven C. Hays........................ 42 Director
Larry R. House........................ 54 Director
Thomas E. Jernigan, Jr. (2)........... 33 Director
Randall E. Jones...................... 45 Director
Mayer Mitchell........................ 66 Director
Ronald W. Orso, M.D. (1).............. 52 Director
Harold W. Ripps....................... 60 Director
Richard M. Scrushy.................... 45 Director
Michael E. Stephens................... 55 Director
Marie Swift........................... 57 Director
T. Mandell Tillman.................... 50 Director
Johnny Wallis......................... 70 Director
</TABLE>

- ---------------

(1) Member of the Compensation Committee
(2) Member of the Audit Committee

James A. Taylor has been Chairman of the Board and Chief Executive Officer
of the Corporation since its incorporation in 1998. Mr. Taylor has served as
President of the Corporation since February 1999. Mr. Taylor served as President
of the Corporation from its incorporation until November 1998. Mr. Taylor served
as Chairman of the Board, President and Chief Executive Officer of Warrior
Capital Corporation from October 1997 until it was merged into the Corporation
on September 24, 1998. Mr. Taylor was Founder, Chairman of the Board and Chief
Executive Officer of Alabama National BanCorporation, a publicly-traded bank
holding company based in Birmingham, Alabama, from its incorporation in 1986
until his retirement in April 1996. From 1981 until 1996, Mr. Taylor served as
Chairman of the Board and Chief Executive Officer of various banks and bank
holding companies that ultimately comprised Alabama National BanCorporation. Mr.
Taylor is also on the Board of Directors of the American Sports Medicine
Institute.

David R. Carter has been Executive Vice President and Chief Financial
Officer of the Corporation since September 1998. Mr. Carter has served as a
director of the Corporation since December 1998. Mr. Carter served as Executive
Vice President and Chief Financial Officer of Warrior Capital Corporation from
April 1998 until it was merged into the Corporation on September 24, 1998. Mr.
Carter served as a consultant to

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<PAGE> 113

Warrior Capital Corporation from January 1998 until April 1998. From June 1995
through January 1998, Mr. Carter served as the Chief Financial Officer of Roxco,
Ltd., a regional construction company. From February 1981 through January 1995,
Mr. Carter served in various capacities with Trustmark, a publicly-traded bank
holding company based in Jackson, Mississippi, including Chief Financial Officer
from September 1988 until January 1995.

Terry DuBose has been a director of the Corporation and served as Vice
Chairman since December 1998. Mr. DuBose served as Chief Executive Officer and
President of Emerald Coast Bancshares, Inc. from its inception in 1996 until it
was merged into the Corporation on February 12, 1999. Mr. DuBose served as
Chairman of the Board, President and Chief Executive Officer of SouthTrust of
Northwest Florida Holding Company from January 1987 until 1996. Mr. DuBose
served as President and Chief Executive Officer of First Bank of Marianna from
1978 until it was acquired by SouthTrust in 1987. Mr. DuBose serves on the Board
of Directors of the Florida Banking Association, the Florida Government
Relations Counsel and the Florida Community Bankers Counsel.

James Mailon Kent, Jr. has been a director of the Corporation since
September 1998 and served as a director of Warrior Capital Corporation from
October 1997 until it was merged into the Corporation on September 24, 1998. Mr.
Kent has served as Vice Chairman of the Corporation since December 1998. Mr.
Kent served as a director of Alabama National BanCorporation from 1988 until
1996 and served as Vice Chairman of Alabama National BanCorporation from 1988
until 1994. Mr. Kent has been the owner of Mailon Kent Insurance Agency in
Birmingham, Alabama for over 20 years.

Larry D. Striplin, Jr. has been a member of the Board of Directors of the
Corporation since September 1998 and served as a director of Warrior Capital
Corporation from October 1997 until it was merged into the Corporation on
September 24, 1998. Mr. Striplin has served as Vice Chairman of the Corporation
since December 1998. Since October 1995, Mr. Striplin has been the Chairman and
Chief Executive Officer of Nelson-Brantley Glass Contractors, Inc. and Chairman
and Chief Executive Officer of Clearview Properties, Inc. Until October 1995,
Mr. Striplin had been Chairman of the Board and Chief Executive Officer of
Circle "S" Industries, Inc., a privately-owned bonding wire manufacturer. Mr.
Striplin is a member of the Board of Directors of MedPartners, Inc., a
publicly-traded healthcare company, HEALTHSOUTH Corporation, a publicly-traded
provider of rehabilitative health care services, and Kulicke & Soffa Industries,
Inc., a publicly-traded manufacturer of electronic equipment.

James A. Taylor, Jr. has been Executive Vice President and General Counsel
of the Corporation since September 1998. Mr. Taylor has served as a director of
the Corporation since December 1998 and Secretary of the Corporation since
December 1998. Mr. Taylor was a director of Warrior Capital Corporation from
October 1997 until it was merged into the Corporation on September 24, 1998 and
served as Executive Vice President and General Counsel of Warrior Capital
Corporation from April 1998 until September 1998. From June 1996 until April
1998, Mr. Taylor served as Vice President -- Legal Services for MedPartners,
Inc. From July 1994 until December 1996, Mr. Taylor served as outside general
counsel to Alabama National BanCorporation. From August 1990 until March 1996,
Mr. Taylor was in private practice with a law firm in Birmingham, Alabama. Mr.
Taylor is the son of James A. Taylor.

James R. Andrews, M.D. has been a director of the Corporation since
September 1998 and served as a director of Warrior Capital Corporation from
October 1997 until it was merged into the Corporation on September 24, 1998. Dr.
Andrews served as a director of Alabama National BanCorporation from 1989 until
1996. Dr. Andrews has practiced as an orthopedic surgeon specializing in
sports-related injuries for over 25 years.

Charles Barkley has been a director of the Corporation since September 1998
and served as a director of Warrior Capital Corporation from October 1997 until
it was merged into the Corporation on September 24, 1998. Mr. Barkley has been a
professional basketball player for over 14 years and currently plays with the
Houston Rockets of the National Basketball Association.

Neal R. Berte, Ed.D. has been a director of the Corporation since it was
merged into the Corporation on September 24, 1998. Dr. Berte has been the
President of Birmingham-Southern College since 1975.

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<PAGE> 114

W.T. Campbell, Jr. has been a director of the Corporation since October 30,
1998. Mr. Campbell served as President of City National Corporation and Chairman
of the Board of Directors of City National until it was merged into the
Corporation on October 30, 1998, and was a director of City National Bank. Mr.
Campbell is a practicing attorney in Sylacauga, Alabama with the firm of McKay
and Campbell.

Peter N. Dichiara has been a director of the Corporation since September
1998 and served as a director of Warrior Capital Corporation from 1984 until it
was merged into the Corporation on September 24, 1998. Mr. Dichiara has been the
President of City Wholesale Grocery, a grocery supply company based in
Birmingham, Alabama since October 1983.

K. Earl Durden has been a director of the Corporation since December 1998.
Mr. Durden served as a Director of Emerald Coast Bancshares, Inc. from its
inception in 1996 until it was merged into the Corporation on February 12, 1999.
Mr. Durden is the President, Chief Executive Officer and a director of Rail
Management Corporation. Mr. Durden also serves as President and a director of
the following companies: Copper Basin Railway, Inc., KWT Railway, Galveston
Railway, Inc. and Grizzard Transfer, Inc., a small trucking company. Mr. Durden
also serves as Chairman, Executive Committee member and a director of the
American Short Line and Regional Railroad Association. Mr. Durden has been
heavily involved in the acquisition, ownership, start up and operation of short
line railroads for the past 19 years.

Steven C. Hays has been a director of the Corporation since November 6,
1998. Mr. Hays served as a director of Commerce Bank of Alabama from April 1995
until it was merged into The Bank on November 6, 1998. Mr. Hays also served as
Executive Vice President of Steel Processing Services, Inc. from 1981 until the
sale of the company in 1993. He presently manages a number of personal
investments.

Larry R. House has been a director of the Corporation since September 1998
and served as a director of Warrior Capital Corporation from October 1997 until
it was merged into the Corporation on September 24, 1998. From 1985 to 1992, he
was Chief Operating Officer of HEALTHSOUTH Rehabilitation Corporation, now
HEALTHSOUTH Corporation. From 1992 to 1993, Mr. House was President of
HEALTHSOUTH International, Inc. From 1993 to 1998, Mr. House served as Chairman
of the Board and Chief Executive Officer of MedPartners, Inc.. Mr. House is a
member of the Board of Directors of the American Sports Medicine Institute.

Thomas E. Jernigan, Jr. has been a director of the Corporation since
September 1998 and served as a director of Warrior Capital Corporation from
December 1997 until it was merged into the Corporation on September 24, 1998.
Mr. Jernigan has been the President of Marathon Corporation, a privately-held
investment management company based in Birmingham, Alabama for over two years.
Mr. Jernigan has been employed by Marathon Corporation since 1989. Mr.
Jernigan's father, Thomas E. Jernigan, holds the title of "Director Emeritus," a
non-voting position.

Randall E. Jones has been a director of the Corporation since November 6,
1998. Mr. Jones served as a director of Commerce Bank of Alabama from April 1995
until it was merged into The Bank on November 6, 1998. Mr. Jones is the owner
and President of Randy Jones Insurance Agency, Inc., representing Nationwide
Insurance Company since 1978. He is a past president of the Albertville Rotary
Club and the Albertville Chamber of Commerce.

Mayer Mitchell has been a director of the Corporation since September 1998
and served as a director of Warrior Capital Corporation from December 1997 until
it was merged into the Corporation on September 24, 1998. He served as Chairman
and Chief Executive Officer of The Mitchell Company, a real estate development
firm based in Mobile, Alabama, from September 1955 until his retirement from
that company on December 31, 1986. He is currently a co-owner of Mitchell
Brothers, Inc., a private investment company. Mr. Mitchell is a former National
President and Chairman of the Board of Directors of the American Israel Public
Affairs Committee ("AIPAC") and a past member of the Board of Directors of
AmSouth Bank N.A. of Mobile and Altus Bank of Mobile.

Ronald W. Orso, M.D. has been a director of the Corporation since September
1998 and served as a director of Warrior Capital Corporation from October 1997
until it was merged into the Corporation on September 24, 1998. Dr. Orso served
as a director of Alabama National BanCorporation from 1988 until 1997.
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<PAGE> 115

Dr. Orso has practiced in the field of obstetrics and gynecology for over 23
years. He is the past Chairman of the Department of Obstetrics and Gynecology
and the past president of the Medical Staff at Baptist Medical Center in
Birmingham.

Harold W. Ripps has been a director of the Corporation since September 1998
and served as a director of Warrior Capital Corporation from December 1997 until
it was merged into the Corporation on September 24, 1998. He has served as a
trustee of Colonial Properties Trust since 1995. In 1969, Mr. Ripps founded The
Rime Companies, a real estate development, construction and management firm,
headquartered in Birmingham, Alabama, specializing in the development of
multi-family properties. Mr. Ripps has served The Rime Companies in an executive
capacity since that time.

Richard M. Scrushy has been a director of the Corporation since September
1998 and served as a director of Warrior Capital Corporation from December 1997
until it was merged into the Corporation on September 24, 1998. Since 1984, Mr.
Scrushy has been Chairman of the Board and Chief Executive Officer of
HEALTHSOUTH Corporation. Mr. Scrushy has been a director of MedPartners, Inc.
since January 1993 and served as its Chairman of the Board of Directors from
January 1998 through October 1998.

Michael Stephens has been a director of the Corporation since September
1998 and served as a director of Warrior Capital Corporation from December 1997
until it was merged into the Corporation on September 24, 1998. He has been the
Chairman and Chief Executive Officer of S Enterprises, Inc. He founded and was
Chairman and Chief Executive Officer of ReLife, a publicly-traded rehabilitation
company based in Birmingham, Alabama from 1986 until 1994. Mr. Stephens also
serves on the Board of Directors of Rehabilitation Designs of America based in
Kansas City, Kansas, and PsychPartners, Inc. based in Birmingham, Alabama.

Marie Swift has been a director of the Corporation since September 1998 and
served as a director of Warrior Capital Corporation from its incorporation in
1982 until it was merged into the Corporation on September 24, 1998. Ms. Swift
served as Secretary of the Corporation from September 1998 to December 1998. Ms.
Swift has been President of The Bank of Warrior Capital Corporation since
January 1998 prior to that she served as Senior Vice President of The Bank
beginning in 1982.

T. Mandell Tillman has been a director of the Corporation since the
November 6, 1998. Mr. Tillman was a director of Commerce Bank of Alabama from
April 1995 until it was merged into The Bank on November 6, 1998. Mr. Tillman
has served as Chairman of the Board of Real Property Services, Inc. since 1985.
He holds the MAI and CRE designations.

Johnny Wallis has been a director of the Corporation since September 1998
and served as director of Warrior Capital Corporation from its incorporation in
1982 until it was merged into the Corporation on September 24, 1998. Mr. Wallis
served as the Chairman of the Board, President and Chief Executive Officer of
Warrior Capital Corporation until October 1997. Mr. Wallis served as President
of The Bank until January 1998, and continues to serve as Chief Executive
Officer of The Bank of Warrior.

CLASSIFIED BOARD OF DIRECTORS

Pursuant to the terms of the Corporation's Restated Certificate of
Incorporation (the "Corporation Certificate") and the Corporation's Bylaws, the
Board of Directors of the Corporation is divided into three classes, with each
class being as nearly equal in number as reasonably possible. One class holds
office for a term that will expire at the annual meeting of stockholders to be
held in 1999, a second class holds office for a term that will expire at the
annual meeting of stockholders to be held in 2000, and a third class holds
office for a term that will expire at the annual meeting of stockholders to be
held in 2001. Each director holds office for the term to which he is elected and
until his successor is duly elected and qualified. At each annual meeting of
stockholders of the Corporation, the successors to the class of directors whose
terms expire at such meeting are elected to hold office for a term expiring at
the annual meeting of stockholders held in the third year following the year of
their election. Messrs. Barkley, Campbell, Durden, Jernigan, Jr., Mitchell,
Ripps, Taylor, Jr., and Tillman have terms expiring in 1999, Messrs. Dichiara,
Hays, House, Jones, Scrushy, Stephens and Wallis and Ms. Swift have terms
expiring in 2000, and Messrs. Berte, Carter, DuBose, Kent,

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and Striplin and Taylor, and Drs. Andrews and Orso have terms expiring in 2001.
The Board of Directors of the Corporation elects officers annually, and these
officers serve at the discretion of the Board of Directors of the Corporation.

COMMITTEES OF THE BOARD OF DIRECTORS

The Board of Directors of the Corporation has two committees: the Audit
Committee and the Compensation Committee.

The Audit Committee has the responsibility for reviewing and supervising
the financial controls of the Corporation. The Audit Committee makes
recommendations to the Board of Directors of the Corporation with respect to the
audit of the Corporation's financial statements and the appointment of
independent auditors, reviews significant audit and accounting policies and
practices, meets with the Corporation's independent public auditors concerning,
among other things, the scope of audits and reports, and reviews the performance
of overall accounting and financial controls of the Corporation. The Audit
Committee consists of Messrs. Dichiara, Durden and Jernigan, Jr.

The Compensation Committee has the responsibility for reviewing the
performance of the officers of the Corporation and recommending to the Board of
Directors of the Corporation's annual salary and bonus amounts for all officers
of the Corporation. The Compensation Committee consists of Messrs. Kent, Jr.,
Striplin, Jr. and Dr. Orso.

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EXECUTIVE OFFICER COMPENSATION

Executive Officer Compensation. The following table presents certain
information concerning compensation paid or accrued for services rendered to the
Corporation in all capacities during the years ended December 31, 1998, 1997 and
1996, for the chief executive officer and the four other most highly compensated
executive officers of the Corporation whose total annual salary and bonus in the
last fiscal year exceeded $100,000. These executive officers are referred to
collectively as the "named executive officers."

SUMMARY COMPENSATION TABLE

<TABLE>
<CAPTION>
LONG-TERM
COMPENSATION
ANNUAL COMPENSATION(1) AWARDS
----------------------------------------------- ------------
OTHER SECURITIES
ANNUAL UNDERLYING
NAME AND PRINCIPAL POSITION HELD YEAR SALARY ($) BONUS ($) COMPENSATION(2) OPTIONS (#)
-------------------------------- ---- ---------- --------- --------------- ------------
<S> <C> <C> <C> <C> <C>
James A. Taylor(3)....................... 1998 $161,111 $96,667 $31,113 $125,000
Chairman of the Board and 1997 25,000 -- 4,200 --
Chief Executive Officer 1996 -- -- -- --
Terry DuBose............................. 1998 175,000 25,000 17,916 --
Vice Chairman of the Board, 1997 160,718 -- 17,524 --
Chairman of the Board and 1996 63,000 -- 6,500 --
and Chief Executive Officer of
Emerald Coast Bank
J. Daniel Sizemore(3).................... 1998 158,583 17,217 26,400 --
former President and Chief 1997 108,233 39,706 15,700 2,335
Operating Officer 1996 103,161 30,000 21,236 2,335
David R. Carter(4)....................... 1998 162,000 25,000 8,968 50,000
Executive Vice President, Chief 1997 -- -- -- --
Financial Officer and Director 1996 -- -- -- --
Johnny Wallis(5)......................... 1998 150,000 6,250 24,774 5,000
Director; Chairman and Chief 1997 108,450 37,025 25,636 --
Executive Officer of The Bank of 1996 104,100 14,300 21,652 --
Warrior
</TABLE>

- ---------------

(1) Dollar value of perquisites and other benefits were less than the lesser of
$50,000 or 10% of total salary and bonus for each named executive officer.
(2) Represents the dollar value of insurance premiums paid by the Corporation
with respect to life, health, dental and disability insurance and automobile
allowance for the benefit of, and board fees received by, the named
executive officer.
(3) Mr. Sizemore resigned his position as President and Chief Operating Officer
in February 1999 and currently serves as consultant to the Corporation.
James A. Taylor currently serves as President of the Corporation.
(4) Mr. Carter received $40,500 in consultation fees in 1998, which is included
in his reported 1998 salary.
(5) Mr. Wallis served as Chairman of the Board, President and Chief Executive
Officer of the Corporation from its incorporation in 1982 until October
1997. Mr. Wallis served as President of The Bank until January 1998, and now
serves as Chief Executive Officer of The Bank of Warrior Capital
Corporation.

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Option Grants in 1998. The following table contains information concerning
the grant of stock options under the Corporation's stock option plans to the
named executive officers.

OPTION/SAR GRANTS IN LAST FISCAL YEAR

<TABLE>
<CAPTION>
INDIVIDUAL GRANTS
-----------------------------------------------------------------------------------
PERCENT OF
TOTAL
NUMBER OF OPTIONS/SARS EXERCISE
SECURITIES UNDERLYING GRANTED TO OF
OPTIONS/SARS EMPLOYEES IN BASE PRICE EXPIRATION GRANT DATE
NAME GRANTED (#) FISCAL YEAR ($/SH) DATE PRESENT VALUE $(1)
---- --------------------- ------------ ---------- ---------- ------------------
<S> <C> <C> <C> <C> <C>
James A. Taylor................ 125,000 30.39% $11.00 11/5/2008 $516,250
Terry DuBose................... -- -- 11.00 -- --
J. Daniel Sizemore............. -- -- -- -- --
David R. Carter................ 50,000 12.15 11.00 11/5/2008 206,500
Johnny Wallis.................. 5,000 1.20 11.00 11/5/2008 20,650
</TABLE>

- ---------------

(1) Grant value is determined using the Black-Scholes option pricing model
assuming (a) option life equal to 80%, (b) an average volatility for the
banking industry, (c) a risk free rate of return of 4.68%, and (d) dividend
yield of 0%.

Aggregated Option Exercises in 1998 and Option Values at Year End. The
following table provides information with respect to options exercised by the
named executive officers during 1998 and the number and value of securities
underlying unexercised options held by the named executive officers at December
31, 1998.

AGGREGATED OPTION/SAR EXERCISES IN LAST FISCAL YEAR AND
YEAR-END OPTION/SAR VALUES

<TABLE>
<CAPTION>
NUMBER OF SECURITIES VALUE OF UNEXERCISED
UNDERLYING UNEXERCISED IN-THE-MONEY
OPTIONS/SARS AT OPTIONS/SARS AT
FISCAL YEAR-END FISCAL YEAR-END
SHARES VALUE (#) ($)
ACQUIRED ON REALIZED EXERCISABLE/ EXERCISABLE/
NAME EXERCISE(#) ($) UNEXERCISABLE UNEXERCISABLE
- ---- ----------- -------- ---------------------- --------------------
<S> <C> <C> <C> <C>
James A. Taylor..................... -- -- 25,000/100,000 35,750/143,000
Terry DuBose........................ -- -- -- --
J. Daniel Sizemore.................. -- -- 51,055 407,003
David R. Carter..................... -- -- 10,000/40,000 14,300/57,200
Johnny Wallis....................... -- -- 1,000/4,000 1,430/5,720
</TABLE>

DIRECTOR COMPENSATION

Directors of the Corporation receive $1,500 compensation for each board
meeting attended and a retainer of $1,500 per quarter for serving as directors
of the Corporation. Directors are eligible to receive grants of stock options
under the Amended and Restated 1998 Stock Incentive Plan of The Banc
Corporation. See "-- Executive Officer Compensation -- Option Grants in 1998"
and "Principal Stockholders of the Corporation."

EMPLOYMENT AGREEMENTS

Pursuant to the executive employment agreement entered into between the
Corporation and James A. Taylor in October 1997, Mr. Taylor will serve as
Chairman of the Board and Chief Executive Officer of the Corporation and
Chairman of the Board of The Bank. In addition, Mr. Taylor will be nominated to
serve as a director of the Corporation and each of its subsidiaries. Mr. Taylor
will receive a minimum annual base compensation of $250,000 in the first three
years of the agreement plus a bonus of 15% of the base amount per quarter.

Under this agreement, Mr. Taylor will be entitled to receive other benefits
including a car allowance, country club dues and may participate in other
executive compensation plans. The agreement is for a term of
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<PAGE> 119

three years which renews daily, and it is terminable by the Corporation only
upon three years notice. If Mr. Taylor is terminated for any reason other than
cause (including constructive termination), he shall receive three years base
compensation, directors' fees and all benefits or their cash equivalents and be
entitled to a "gross-up" payment to cover any excise tax imposed on any
severance payment to him.

The Corporation entered into a deferred compensation agreement with Mr.
Taylor on July 23, 1998. That agreement provides that the Corporation shall fund
the premium of two life insurance policies on Mr. Taylor's life which will
provide a split dollar benefit to the Corporation and Mr. Taylor's estate in the
event of his death. Upon the termination of Mr. Taylor's employment for reasons
other than death or cause (as defined in the agreement), Mr. Taylor will become
entitled to receive 15 annual payments in the approximate amount of $140,000
commencing April 15, 2007.

The Corporation had an employment agreement with J. Daniel Sizemore from
November 6, 1998, until he resigned his employment on February 15, 1999. Mr.
Sizemore was employed in November 1998 as President and Chief Operating Officer
of the Corporation, President and Chief Executive Officer of The Bank and
President of The Bank's Albertville branch. In addition, Mr. Sizemore was a
director of the Corporation and each of its subsidiary banks. The agreement
provided for minimum annual compensation of $270,000 including salary,
director's fees and bonuses and entitled Mr. Sizemore to receive other benefits
such as a car allowance, country club dues and life insurance and participation
in other executive compensation plans. The agreement was for a term of three
years, was renewable daily and was terminable by the employer only upon three
years' notice.

On February 15, 1999, Mr. Sizemore and the Corporation entered into a
three-year Non-Competition and Referral Agreement pursuant to which Mr. Sizemore
resigned from the Corporation and terminated his employment. Under this
agreement, Mr. Sizemore will receive a total of $240,000: $20,000 each month
from March 1999 to August 1999, $10,000 each month from September 1999 to
February 2000, and $5,000 per month from March 2000 to February 2001. As part of
this agreement, Mr. Sizemore agreed to refer $12,000,000 in loans to the
Corporation's subsidiaries. In addition, Mr. Sizemore agreed not to compete
directly or indirectly with the Corporation and not to solicit the employment of
any employee of the Corporation.

The Corporation entered into an employment agreement with Terry DuBose on
February 12, 1999. Under the terms of his employment agreement, Mr. DuBose will
serve as Vice Chairman of the Corporation and Chairman of the Board and Chief
Executive Officer of Emerald Coast Bank. The agreement is for a term of three
years which is renewable daily for a three-year term and terminable by the
Corporation only upon three years' notice. Mr. DuBose will receive a minimum
annual compensation of $235,000 of which $60,000 is payable by the Corporation
and $175,000 is payable by Emerald Coast Bank. In addition, Mr. DuBose is
entitled to receive other benefits including performance bonuses, payment of
country club fees and dues, life insurance, an automobile and payment of
reasonable travel expenses, and may participate in all benefit plans provided by
the Corporation. If Mr. DuBose is terminated for any reason other than cause as
defined in his employment agreement, Mr. DuBose shall receive his annual
compensation for the three years following his termination. In the event of the
change in control as defined in his employment agreement, the Corporation shall
pay Mr. DuBose his average monthly compensation as calculated per the agreement
for thirty-six months.

On January 1, 1998, The Bank entered into an employment agreement with
Johnny Wallis, a director of the Corporation. Mr. Wallis serves as Chairman of
the Board and Chief Executive Officer of The Bank of Warrior. The term of the
agreement is for three years and will be reviewed annually by the Board of
Directors of The Bank. Mr. Wallis receives a base salary of $100,000. Under the
agreement, The Bank must provide Mr. Wallis with an automobile.

The Corporation has entered into an employment agreement with James A.
Taylor, Jr., dated as of January 1, 1999. Under his employment agreement, Mr.
Taylor, Jr. will serve as the Executive Vice President, General Counsel and
Secretary of the Corporation and Executive Vice President, General Counsel and
Secretary of The Bank. In addition, Mr. Taylor, Jr. will be nominated to serve
as a director of the Corporation and its subsidiaries. Mr. Taylor, Jr. will
receive a base salary of $162,500 per year and is eligible for bonuses.
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<PAGE> 120

In addition, he is entitled to receive other benefits including a car allowance
and country club or athletic club dues and may participate in all other
executive compensation plans. The term of the agreement is three years, and it
will be reviewed at least annually by the Board of Directors of the Corporation
for the extension of the term for another year. If Mr. Taylor, Jr. is terminated
for any reason other than "cause" as defined in the agreement, he shall receive
three years' base compensation, director's fees and all benefits or their cash
equivalents and be entitled to a "gross up" payment to cover any excise tax
imposed on any severance payment to Mr. Taylor, Jr.

During the three-year term of the employment agreement entered into among
the Corporation, The Bank and W.T. Campbell, Jr. on October 30, 1998, Mr.
Campbell will serve as the Chairman of the Board for The Bank of Sylacauga. Mr.
Campbell will receive a minimum annual salary of $135,000. The agreement
provides that Mr. Campbell will be entitled to receive other benefits including
a life insurance policy and may participate in other executive compensation
plans. The agreement is terminable by the Corporation only upon prior notice for
a period equal to the remaining term. If Mr. Campbell is terminated for any
reason other than cause as defined in the agreement, Mr. Campbell shall receive
his annual compensation for three years following termination and may not,
directly or indirectly, carry on or do similar business or solicit similar
business with any customer of the Corporation in any county where the
Corporation or its subsidiaries do business.

On January 1, 1998, The Bank entered into an employment agreement with
Marie Swift, a director of the Corporation. Ms. Swift serves as President of The
Bank of Warrior. The term of the agreement is for three years and will be
reviewed annually by the Board of Directors. Ms. Swift receives a base salary of
$100,000 per year plus any bonus which may be approved by the Board of Directors
of The Bank. Under the agreement, The Bank must provide Ms. Swift with an
automobile.

COMPENSATION COMMITTEE INTERLOCKS AND INSIDER PARTICIPATION

Messrs. Kent, Jr., Striplin, Jr. and Dr. Orso comprise the Compensation
Committee.

INCENTIVE PLANS

Corporation Incentive Plan. The objectives of the Amended and Restated
1998 Stock Incentive Plan of The Banc Corporation are to further the growth and
development of the Corporation and its subsidiaries by (1) encouraging selected
Participants who contribute or are expected to contribute materially to the
Corporation's success to obtain proprietary interests in the Corporation to
encourage them to promote the best interests of the Corporation and (2)
affording the Corporation a means of attracting qualified personnel. A total of
1,000,000 shares of Corporation Common Stock are covered by the Corporation
Incentive Plan. Such shares of Corporation Common Stock may be in whole or in
part, authorized but unissued shares or issued shares which have been reacquired
by the Corporation. The Corporation Incentive Plan authorizes the grant of
options to purchase Corporation Common Stock intended to qualify as incentive
stock options under Section 422 of the Internal Revenue Code of 1986, and the
grant of options that do not qualify as Incentive Options Section 422 of the
Internal Revenue Code. The Corporation Incentive Plans also authorized other
awards including awards of stock appreciation rights, restricted stock awards
and performance shares.

The Corporation Incentive Plan is administered by the Compensation
Committee of the Board of Directors of the Corporation. The Compensation
Committee, subject to the approval of the Board of Directors and the provisions
of the Corporation Incentive Plan, has full power to determine the types of
awards to be granted, to select the individuals to whom awards will be granted,
to fix the number of shares that each optionee may purchase, to set the terms
and conditions of each option, and to determine all other matters relating to
the Corporation Incentive Plan. The Corporation Incentive Plan provides that the
Compensation Committee will select grantees from among employees, officers,
directors, consultants, agents, independent contractors and other persons who
contributed are expected to contribute materially to the success of the
Corporation or its subsidiaries.

The option exercise price of each option shall be determined by the
Compensation Committee, but shall not be less than 100% of the fair market value
of the shares on the date of grant in the case of incentive
103
<PAGE> 121

options. No incentive option may be granted to any employee who owns at the date
of grant stock representing in excess of 10% of the combined voting power of all
classes of stock of the Corporation or a subsidiary unless the exercise price
for stock subject to such options is at least 110% of the fair market value of
such stock at the time of grant and the option term does not exceed five years.
The aggregate fair market value of stock with regard to which incentive options
are exercisable by an individual for the first time during any calendar year may
not exceed $100,000. The terms and conditions of each option shall be fixed from
time to time by the Compensation Committee. The Compensation Committee has
approved grants under the Corporation Incentive Plan of options to purchase
524,000 shares at an exercise price equal to the higher of (1) the Offering
price hereunder or (2) "fair market value", as defined in the Corporation
Incentive Plan, on the date of the grant.

The Commerce Option Plan. On May 4, 1995, the Commerce Bank of Alabama,
Inc. stockholders adopted the Commerce Bank of Alabama Incentive Stock Option
Plan for the benefit of key employees of Commerce. The Commerce Option Plan
authorizes the grant of options to purchase Commerce Common Stock intended to
qualify as Incentive Options and the grant of non-qualified options.

The Commerce Option Plan was assumed by the Corporation pursuant to the
merger of Commerce with and into The Bank. As of December 31, 1998, there were
outstanding options under the Commerce Option Plan to purchase 82,384 shares of
Corporation common stock at prices between $4.30 and $6.24 per share.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

The Bank and Emerald Coast Bank have entered into transactions with their
directors, executive officers, significant stockholders and their affiliates.
Such transactions were made in the ordinary course of business on substantially
the same terms and conditions, including interest rates and collateral, as those
prevailing at the same time for comparable transactions with other customers,
and did not, in the opinion of management of The Bank and Emerald Coast Bank
involve more than normal credit risk or present other unfavorable features.

During 1998, Warrior Capital Corporation sold a total of 495,000 shares of
Warrior Capital Corporation common stock at $4.79 per share to various executive
officers and directors of the Corporation. James A. Taylor, James A. Taylor,
Jr., Richard M. Scrushy and James R. Andrews each purchased 210,000, 105,000,
105,000 and 75,000 shares, respectively. The dollar amounts and the share
numbers have been adjusted to take into account the 300-for-one exchange
effected in the Warrior Capital Corporation merger of Warrior Capital
Corporation into the Corporation in September 1998.

On February 12, 1999, Emerald Coast Bancshares, Inc. was merged with and
into the Corporation. As a result of the merger, K. Earl Durden and Terry
DuBose, who became directors of the Corporation on December 15, 1998, received
203,534 and 85,483 shares of Corporation common stock.

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<PAGE> 122

PRINCIPAL STOCKHOLDERS OF THE CORPORATION

The following table sets forth certain information regarding beneficial
stock ownership of the Corporation as of March 31, 1999: (1) each director and
named executive officer of the Corporation, (2) all directors and executive
officers as a group, and (3) each stockholder known by the Corporation to be the
beneficial owner of more than 5% of the outstanding Corporation common stock.
Except as otherwise indicated, each person or entity listed below has sole
voting and investment power with respect to all shares shown to be beneficially
owned by him or it except to the extent such power is shared by a spouse under
applicable law.

<TABLE>
<CAPTION>
NUMBER OF SHARES OF PERCENTAGE
THE CORPORATION OF COMMON
NAME POSITION HELD COMMON STOCK STOCK OWNED
- ---- ------------- ------------------- -----------
<S> <C> <C> <C>
James A. Taylor........... Chairman of the Board, Chief 603,400(3)(4) 4.94%
Executive Officer and President
Terry DuBose.............. Vice Chairman 252,204(5)(6) 2.06
James Mailon Kent, Jr..... Vice Chairman 212,000(7) 1.73
Larry D. Striplin, Jr..... Vice Chairman 226,000(7)(8) 1.85
David R. Carter........... Executive Vice President, Chief 15,000(5) *
Financial Officer and Director
James A. Taylor, Jr....... Executive Vice President, General 145,000(5) 1.18
Counsel, Secretary and Director
James R. Andrews, M.D..... Director 296,000(5) 2.43
Charles Barkley........... Director 211,000(9) 1.73
Neal R. Berte, Ed.D....... Director 11,000(9) *
W. T. Campbell, Jr........ Director 421,469(9)(10) 3.45
Peter N. Dichiara......... Director 211,000(9)(11) 1.73
K. Earl Durden............ Director 204,534(9) 1.68
Steven C. Hays............ Director 75,096(9)(12) *
Larry R. House............ Director 104,800(9) *
Thomas E. Jernigan........ Director Emeritus(13) 417,600 3.42
Thomas E. Jernigan, Jr.... Director 19,000(7) *
Randall E. Jones.......... Director 48,867(9) *
Mayer Mitchell............ Director 1,000(9) *
Ronald W. Orso, M.D....... Director 221,000(9)(14) 1.81
Harold W. Ripps........... Director 211,000(9) 1.73
Richard M. Scrushy........ Director 226,000(9) 1.85
Michael E. Stephens....... Director 216,000(9) 1.77
Marie Swift............... Director 53,500(9)(11) *
T. Mandell Tillman........ Director 55,172(9)(15) *
Johnny Wallis............. Director 106,000(9) *
--------- -----
All executive officers and
directors as a group (24
persons)................ 4,563,642(16) 37.39%
========= =====
</TABLE>

- ---------------

* Less than one percent.
(1) Under Section 13(d) of the Exchange Act, a person is deemed to be a
beneficial owner of any security owned by certain family members and any
security with respect to which that person has the right to acquire
beneficial ownership within 60 days, including, without limitation, shares
of Corporation common stock subject to currently exercisable options.
(2) Percentage for each named individual is calculated by treating any shares
subject to options that are held by the named individual and that are
exercisable within the next 60 days as if outstanding, but treating such
option shares held by others and treating shares subject to options held by
the named individual but not exercisable within 60 days as not outstanding.

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<PAGE> 123

(3) Does not include 32,100 shares owned by his wife, or 30,000 shares owned by
his son, Brett Taylor with respect to which he disclaims ownership.
(4) Includes 25,000 shares subject to options.
(5) Includes 10,000 shares subject to options.
(6) Includes 156,721 shares as Trustee of the Emerald Coast Bank Profit Sharing
Plan, of which he maintains voting control, and 14,247 shares owned by his
wife.
(7) Includes 2,000 shares subject to options.
(8) Includes 6,000 shares as custodian.
(9) Includes 1,000 shares subject to options.
(10) Includes 39,132 shares held as custodian, and 17,143 shares held by his
wife.
(11) Includes 210,000 shares owned by City Wholesale Grocery Co., Inc. of which
he is the President.
(12) Includes 4,021 shares as custodian for his children.
(13) Director Emeritus is a non-voting position.
(14) Includes 210,000 shares as Trustee of Birmingham OB/GYN, P.A. Pension Plan.
(15) Includes 4,670 shares held as custodian and 2,802 shares owned by his wife.
(16) Includes 78,000 shares subject to options.

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<PAGE> 124

SELECTED FINANCIAL DATA -- C&L BANKING CORPORATION

The following table sets forth selected financial data for C&L derived from
C&L consolidated statements and should be read in conjunction with the related
consolidated financial statements and notes thereto.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
SELECTED STATEMENT OF FINANCIAL CONDITION DATA:
Total assets..................................... $48,937 $41,059 $36,213 $31,397 $28,247
Loans, net of unearned income.................... 34,894 31,435 27,100 22,716 19,684
Investment securities............................ 7,446 3,531 3,881 4,817 4,397
Deposits......................................... 43,425 35,909 31,914 27,890 25,438
Stockholders' equity............................. 4,885 4,371 3,708 3,242 2,654
SELECTED STATEMENT OF INCOME DATA:
Interest income.................................. 4,102 3,609 3,134 2,705 2,198
Interest expense................................. 1,948 1,579 1,354 1,101 860
------- ------- ------- ------- -------
Net interest income.................... 2,154 2,030 1,780 1,604 1,338
Provision for loan losses........................ 440 113 78 73 42
Noninterest income............................... 501 379 355 323 273
Minority Interest................................ 10 13 12 11 8
Other noninterest expense........................ 1,306 1,211 1,135 1,089 1,066
------- ------- ------- ------- -------
Income before tax................................ 899 1,072 910 754 495
Income tax expense............................... 323 373 316 246 133
------- ------- ------- ------- -------
Net income............................. $ 576 $ 699 $ 594 $ 508 $ 362
======= ======= ======= ======= =======
PER SHARE DATA:
Net income -- basic and diluted.................. $ 35.39 $ 42.98 $ 36.51 $ 31.75 $ 22.63
Book value....................................... 300.17 268.57 227.85 202.63 165.88
Dividends........................................ 3.07 3.07 2.05 2.00 2.00
PERFORMANCE RATIOS:
Return on average assets......................... 1.30% 1.81% 1.76% 1.70% 1.29%
Return on average equity......................... 11.91 17.00 16.92 17.23 13.94
ASSET QUALITY RATIOS:
Allowance for loan losses to nonperforming
loans.......................................... 317.2 1,093.0 3,258.3 294.4 127.2
Allowance for loan losses to loans, net of
unearned income................................ 2.44 1.50 1.44 1.61 1.78
Nonperforming loans to loans, net of unearned
income......................................... .77 .14 .04 .55 1.40
Net loan charge-offs to average loans............ .18 .12 .21 .28 .31
</TABLE>

107
<PAGE> 125

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS -- C&L

BASIS OF PRESENTATION

The following provides a narrative discussion and analysis of significant
changes in C&L Banking Corporation's results of operations and financial
condition. This discussion should be read in conjunction with the consolidated
financial statements and selected financial data of C&L included elsewhere in
this document. C&L owns 98.1% of its subsidiary Bank of Bristol. Bank of Bristol
was organized in May 1975 under the laws of Florida and is headquartered in
Bristol, Florida. The one bank holding company, C&L was organized in June 1988.
In January 1987, the same majority owners and directors organized a second bank,
Bank of Blountstown, located in Blountstown, Florida. Due to the laws at that
time, another charter was necessary to establish this location. In June 1996,
Bank of Blountstown established a branch location in Altha, Florida.

This discussion contains information and forward looking statements that
are based on C&L's belief as well as certain assumptions made by, and
information currently available to, C&L with respect to the adequacy of the
allowance for loans losses, financial condition as a result of operations and
liquidity, Year 2000 compliance issues and market risk disclosures, as well as
other information. The risks and uncertainties that may affect operations,
performance, growth projections and the results of C&L's business include, but
are not limited to, fluctuations in the economy, the relative strength and
weakness in the commercial and consumer sector and in the real estate market,
the actions taken by the Federal Reserve for the purpose of managing the
economy, interest rate movements, the impact of competitive products, services
and pricing, timely development by C&L of technology enhancements for its
products and operating systems, legislation and similar matters. Although
management of C&L believes that the expectations reflected in such
forward-looking statements are reasonable, it can give no assurance that such
expectations will prove to be correct. Such forward-looking statements are
subject to certain risks, uncertainties and assumptions which may prove to be
significantly different, therefore causing actual results to vary materially
from those anticipated, estimated, projected or expected. See "Forward Looking
Statements."

YEAR 2000 READINESS DISCLOSURE

The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of C&L's computer
programs or hardware that have date-sensitive software or embedded chips may
recognize a date using "00" as the year 1900 rather than the year 2000. This
could cause a system failure or miscalculations resulting in disruptions of
operations, including among other things, a temporary inability to process
transactions, send statements or engage in similar normal business activities.

C&L has a five-step plan to resolve the Year 2000 Issue:

- Establishing awareness of and educating key personnel with respect to the
Year 2000 issues and C&L's plan to address those potential problems;
- Identifying significant systems and assessing potential Year 2000 issues
relating to those systems;
- Renovating and repairing non-compliant systems;
- Testing and validating solutions; and
- Implementing those solutions.

To date, C&L has completed the first three steps and is well into the
fourth step. C&L has determined that it must upgrade a significant portion of
its software and hardware so that those systems will properly utilize dates
beyond December 31, 1999. C&L presently believes that with these upgrades of its
existing software and hardware, potential Year 2000 issues can be mitigated.

C&L is utilizing both internal and external resources to re-program,
replace and test software and other components of its systems for Year 2000
modifications. Modifications have been scheduled to ensure that mission-critical
systems are completed in time to allow for extensive testing.

C&L does not make use of any internally developed system but relies on
those provided by external vendors. The Year 2000 releases provided by vendors
have already been installed on the majority of the
108
<PAGE> 126

systems. C&L completed century date testing on February 8, 1999 and validation
of core business systems on February 10, 1999. For the remainder of the
externally maintained systems, C&L has received written confirmation from its
vendors that each system will be made Year 2000 compliant in 1999. C&L will
continue to assess, with its vendors, the status of their year 2000 compliance
and install any necessary additional releases through 1999.

The majority of C&L's software is supplied by third parties affecting most
significant systems of C&L. C&L had begun formal communications with all of its
significant suppliers and large customers to determine the extent to which C&L
is vulnerable to those third parties' failure to remediate their own Year 2000
issues. C&L is applying the majority of its resources that are allocated to the
Year 2000 issue to installing and testing vendor releases. To date, C&L is not
aware of any external agent with a Year 2000 issue that would have a material
adverse affect on C&L's financial condition or results of operations.

C&L has approved an unlimited budget for the Year 2000 project. It is
estimated that the majority of the funds spent will be for purpose of upgrading
systems, training personnel and educating customers.

C&L believes it has an effective program in place to resolve the Year 2000
issue in a timely manner. However, disruptions in the economy that are beyond
C&L's control resulting from Year 2000 issues could materially adversely affect
C&L. Furthermore, C&L has no means of ensuring that third parties that it does
not control will be Year 2000 compliant. C&L believes that failure of third
parties to address their Year 2000 problems in a timely fashion presents the
greatest likelihood of C&L not being Year 2000 compliant. Such a failure could
materially adversely impact C&L's operations, the estimated costs of the Year
2000 project and the target dates for completion. The effect of non-compliance
by third parties is not determinable at this time. C&L could be subject to
litigation for computer systems product failure, including equipment shutdown or
failure to properly date business records. The amount of potential liability, if
any, and lost revenue cannot be reasonably estimated at this time.

C&L has developed contingency plans in the event that efforts to renovate
C&L's systems are not fully successful or are not completed in accordance with
current expectations. The contingency plans address all pertinent Year 2000
issues including long term down time and business resumption.

RESULTS OF OPERATIONS

Year ended December 31, 1998, compared with years ended December 31, 1997 and
1996

C&L's net income decreased $123,000, or 17.66%, to $576,000 in 1998 from
$699,000 in 1997, which was an increase of $105,000, or 17.72%, from $594,000 in
1996. Return on average assets in 1998 was 1.30%, compared to 1.81% in 1997 and
1.76% in 1996. Return on average equity was 11.91% in 1998, compared to 16.99%
in 1997 and 16.92% in 1996.

Net interest income increased $124,000, or 6.12% to $2,154,000 in 1998 from
$2,030,000 in 1997, which in turn increased $249,000, or 13.95% from $1,781,000
in 1996. The increase in net interest income was due to an increase of 15.36% in
average earning assets to $41,805,000 in 1998 from $36,240,000 in 1997, which
increased 14.65% from $31,608,000 in 1996.

The provision for loan losses was $440,000 in 1998, compared to $112,500 in
1997 and $77,500 in 1996. C&L's allowance for loan losses as a percentage of its
loans was 2.4% at December 31, 1998, compared to 1.5% at December 31, 1997, and
1.4% at December 31, 1996. The allowance for loan losses as a percentage of year
end non-performing loans was 317.2% at December 31, 1998, compared to 1093.0% at
December 31, 1997 and 3258.3% at December 31, 1996. C&L had net charge-offs of
$60,100 in 1998, resulting in a ratio of net charge-offs to average loans of
.18%. This compares to $33,700 or .12% in 1997 and $51,700 or .21% in 1996.

Noninterest income increased $122,000, or 32.1%, to $501,000 in 1998 from
$379,000 in 1997, which increased $24,000, or 6.8%, from $355,000 in 1996.

Noninterest expense increased $95,000 or 7.8% to $1,306,000 in 1998 from
$1,211,000 in 1997, which increased $76,000, or 6.7%, from $1,135,000 in 1996.

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<PAGE> 127

NET INTEREST INCOME

The largest component of C&L's net income is its net interest income, which
is the difference between the income earned on interest earning assets and
interest paid on deposits and borrowings used in support of such assets. Net
interest income is determined by the rates earned on C&L's interest earning
assets and the rates paid on its interest-bearing liabilities, the relative
amounts of interest earning assets and interest-bearing liabilities, and the
degree of mismatch in the maturity and repricing characteristics of its
interest-earning assets and interest-bearing liabilities. Net interest income
divided by average interest-earning assets represents C&L's net interest margin.

Average Balances, Income, Expenses and Rates. The following tables depict
certain information related to C&L's average balance sheet and its average
yields on assets and average costs of liabilities. Such yields are derived by
dividing income or expense by the average balance of the corresponding assets or
liabilities. Average balances have been derived from annual averages.

CONSOLIDATED AVERAGE BALANCES, INTEREST/INCOME/EXPENSE AND
YIELD/RATES TAXABLE EQUIVALENT BASIS

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31 YEAR ENDED DECEMBER 31 YEAR ENDED DECEMBER 31
-------------------------- -------------------------- --------------------------
1998 1997 1996
-------------------------- -------------------------- --------------------------
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
------- ------- ------ ------- ------- ------ ------- ------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earning assets:
Loans, net of unearned
Income (1)............................... $33,070 $3,588 10.85% $29,267 $3,232 11.04% $24,908 $2,751 11.04%
Investment securities
Taxable................................ 2,056 152 7.39 2,241 140 6.25 2,969 164 5.52
Tax-exempt............................. 1,418 72 5.08 1,370 70 5.11 1,333 73 5.48
------- ------ ------- ------ ------- ------
Total investment Securities........ 3,474 224 6.45 3,611 210 5.82 4,302 237 5.51
Federal funds sold....................... 4,371 236 5.40 2,427 117 4.82 1,561 94 6.02
Other investments........................ 890 54 6.07 935 50 5.35 837 52 6.21
------- ------ ------- ------ ------- ------
Total interest-earning Assets...... 41,805 4,102 9.81 36,240 3,609 9.96 31,608 3,134 9.92
------ ------ ------
Non interest-bearing assets:
Cash and due from banks.................. 2,091 1,845 1,662
Premises and equipment................... 362 376 391
Accrued interest and other assets........ 748 605 543
Allowance for loan losses................ (549) (430) (378)
------- ------- -------
Total assets....................... $44,457 $38,636 $33,826
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Demand deposits.......................... $ 4,992 $ 132 2.64% $ 4,852 $ 120 2.47% $ 4,572 $ 113 2.47%
Savings deposits......................... 2,060 61 2.96 2,038 60 2.94 2,130 63 2.96
Time deposits............................ 27,152 1,755 6.46 22,277 1,400 6.28 18,777 1,177 6.27
------- ------ ------- ------ ------- ------
Total
interest-bearing/liabilities....... 34,204 1,948 5.70 29,167 1,580 5.42 25,479 1,353 5.31
------ ------ ------
Non-interest bearing liabilities
Demand deposits.......................... 5,553 4,746 4,242
Accrued interest and other Liabilities... 314 609 595
Shareholders' equity..................... 4,836 4,114 3,510
------- ------- -------
Total liabilities and shareholders'
equity........................... $44,907 $38,636 $33,826
======= ======= =======
Net interest income/net interest spread.... 2,154 4.11% 2,029 4.54% 1,781 4.61%
------ ===== ------ ===== ------ =====
Net yield on earning assets................ 5.15% 5.60% 5.63%
===== ===== =====
Net interest income........................ $2,154 $2,029 $1,781
====== ====== ======
</TABLE>

- ---------------

(1) Nonaccrual loans are included in loans net of unearned income.

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<PAGE> 128

Analysis of Changes in Net Interest Income. The following table sets forth
the effect which the varying levels of earning assets and interest-bearing
liabilities and the applicable rates have had on changes in net income for the
years ended December 31, 1998, 1997 and 1996.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31(1)
1998 VS. 1997 1997 VS. 1996
--------------------------- ----------------------------
CHANGES DUE TO CHANGES DUE TO
INCREASE -------------- INCREASE ---------------
(DECREASE) RATE VOLUME (DECREASE) RATE VOLUME
---------- ----- ------ ---------- ----- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease)
Income from earning assets:
Interest and fees on loans............. $356 $ (73) $429 $481 $ 1 $480
Interest on securities:
Taxable.............................. 12 (6) 18 (24) 17 (41)
Tax-exempt........................... 2 -- 2 (3) (5) 2
Interest on federal funds.............. 119 19 100 23 (12) 35
Interest on other investments.......... 4 -- 4 (2) -- (2)
---- ----- ---- ---- ---- ----
Total interest income............. 493 (60) 553 475 1 474
---- ----- ---- ---- ---- ----
Expense from interest-bearing liabilities:
Interest on demand deposits............... 12 (20) 32 7 16 (9)
Interest on savings deposits.............. 1 (6) 7 (3) 3 (6)
Interest on time deposits................. 355 (137) 492 223 (75) 298
---- ----- ---- ---- ---- ----
Total interest expense............ 368 (163) 531 227 (56) 283
---- ----- ---- ---- ---- ----
Net interest income............... $125 $ 103 $ 22 $248 $ 57 $191
==== ===== ==== ==== ==== ====
</TABLE>

- ---------------

(1) The change in interest has been allocated to volume in proportion to the
relationship of the absolute dollar amounts of the changes in volume.
Remaining change has been allocated to rate.

Interest Sensitivity. C&L monitors and manages the pricing and maturity of
its assets and liabilities in order to diminish the potential adverse impact
that changes in interest rates could have on net interest income. The principal
monitoring technique employed by C&L is the measurement of C&L's interest rate
sensitivity "gap," which is the positive or negative dollar difference between
assets and liabilities that are subject to interest rate repricing within a
given period of time. The objective of C&L's Asset/Liability Management (ALM)
function is to maintain a consistent level of net interest income in a rising,
falling or static interest rate environment. ALM monitors the pricing of both
interest earning assets and interest bearing liabilities and the maturities of
each. Interest rate sensitivity can be managed by repricing assets or
liabilities, selling securities available for sale, replacing an asset or
liability at maturity or by adjusting the interest rates during the life of an
asset or liability.

C&L evaluates interest rate sensitivity risk and then formulates guidelines
regarding asset generation and repricing, funding sources and pricing and
off-balance sheet commitments in order to decrease interest rate sensitivity
risk. C&L uses computer simulations to measure the net income effect of various
interest rate scenarios. The modeling reflects interest rate changes and the
related impact on net income over specified periods of time.

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<PAGE> 129

PROVISION AND ALLOWANCE FOR LOAN LOSSES

C&L has developed policies and procedures for evaluating the overall
quality of its credit portfolio and the timely identification of potential
problem credits. C&L reviews the appropriate level of allowance for loan losses
based on results of the internal monitoring and reporting system, analysis of
economic conditions in its markets and a review of historical statistical data
for both C&L and other financial institutions. C&L's judgment as to the adequacy
of the allowance is based on a number of assumptions about future events, which
it believes to be reasonable but which may or may not be valid. Thus, there can
be no assurance that charge-offs in future periods will not exceed the allowance
for loan losses or that additional increases in the allowance for loan losses
will not be required. The adequacy of the allowance for loan losses and the
effectiveness of C&L's monitoring and analysis system are also reviewed
periodically by the banking regulators.

Additions to the allowance for loan losses, which are expensed as the
provision for loan losses on C&L's income statement, are made periodically to
maintain the allowance at an appropriate level based on management's analysis of
the potential risk in the loan portfolio. Loan losses and recoveries are charged
or credited directly to the allowance. The amount of the provision is a function
of the levels of loans outstanding, the level of nonperforming loans, historical
loan loss experience, the amount of loan losses actually charged against the
reserve during a given period and current and anticipated economic conditions.
Total loans net of unearned income increased 11.1% for the year ended December
31, 1998 from 31.4 million at December 31, 1997 to $34.9 million. Additionally,
net charge-offs increased 76.50% over the same period from $34,000 at December
31, 1997 to $60,000, and changes in the distribution of loans by category
resulted in an increase of 18.5% in combined industrial and agricultural loans
from $13.0 million at December 31, 1997 to $15.4 million at December 31, 1998.
In light of these factors and the increased demand for loans, C&L increased its
allowance for loan losses to $.9 million at December 31, 1998 from $.5 million
at December 31, 1997.

The following table summarizes certain information with respect to C&L's
allowance for loan losses and the composition of charge-offs and recoveries for
the periods indicated.

SUMMARY OF LOAN LOSS EXPERIENCE

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Allowance for loan losses at beginning of
period..................................... $ 470 $ 391 $ 365 $ 351 $ 368
------- ------- ------- ------- -------
Charge-offs:
Commercial, industrial and agricultural.... 50 13 47 34 10
Real estate................................ 6 20 10 37 40
Consumer................................... 14 9 2 7 19
------- ------- ------- ------- -------
Total charge-offs.................. 70 42 59 78 69
------- ------- ------- ------- -------
Recoveries:
Commercial, industrial and agricultural.... 5 2 2 10 --
Real estate................................ -- -- -- 4 --
Consumer................................... 5 6 5 5 10
------- ------- ------- ------- -------
Total recoveries................... 10 8 7 19 10
------- ------- ------- ------- -------
Net charge-offs.............................. 60 34 52 59 59
Provision for loan losses.................... 440 113 78 73 42
------- ------- ------- ------- -------
Allowance for loan losses at end of period... $ 850 $ 470 $ 391 $ 365 $ 351
======= ======= ======= ======= =======
</TABLE>

112
<PAGE> 130

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Loans at end of period, net of unearned
income..................................... $34,895 $31,435 $27,100 $22,716 $19,684
Ratio of ending allowance to ending loans.... 2.44% 1.50% 1.44% 1.61% 1.78%
Average loans, net of unearned income........ $33,070 $29,267 $24,908 $21,200 $18,986
Ratio of net charge-offs to average loans.... .18% .12% .21% .28% .31%
Net charge-offs as a percentage of:
Provision for loan losses.................. 13.6 30.1 66.7 80.8 140.5
Allowance for loan losses.................. 7.06 7.2 13.3 16.2 16.8
Allowance for loan losses as a percentage of
non-performing loans....................... 317.2 1093.0 3258.3 294.4 127.2
</TABLE>

Allocation of Allowance. C&L historically has allocated its allowance for
loan losses to specific loan categories. Although the allowance is allocated, it
is available to absorb losses in the entire loan portfolio.

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---------------- ---------------- ---------------- ---------------- ----------------
PERCENT PERCENT PERCENT PERCENT PERCENT
OF OF OF OF OF
AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL
------ ------- ------ ------- ------ ------- ------ ------- ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Domestic
Commercial, industrial and
agricultural................... $480 56% $232 49% $203 52% $183 50% $171 49%
Real estate --
Mortgage....................... 347 41 223 48 176 45 171 47 169 48
Consumer other................... 23 3 15 3 12 3 11 3 11 3
---- --- ---- --- ---- --- ---- -- ---- ----
$850 100% $470 100% $391 100% $365 50% $351 100%
==== === ==== === ==== === ==== == ==== ====
</TABLE>

Non-performing Assets: The following table represents C&L's non-performing
assets for the dates indicated.

NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS

<TABLE>
<CAPTION>
DECEMBER 31
--------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Nonaccrual.................................................. $268 $43 $ 9 $124 $276
Past Due (contractually past due 90 days or more)........... -- -- 3 -- --
Restructured................................................ -- -- -- -- --
---- --- --- ---- ----
Total............................................. $268 $43 $12 $124 $276
==== === === ==== ====
</TABLE>

113
<PAGE> 131

EARNING ASSETS

Loans. Loans are the largest category of earning assets and typically
provide higher yields than the other types of earning assets. Associated with
the higher loan yields are the inherent credit and liquidity risks which
management attempts to control and counterbalance. At December 31, 1998, total
loans net of unearned income were $34.9 million, an increase of $3.5 million
from $31.4 million at December 31, 1997. Average loans increased $3.8 million
for the same period. Loans averaged $33.1 million in 1998 compared to $29.3
million in 1997 and $25.0 million in 1996.

DISTRIBUTION OF LOANS BY CATEGORY

<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Commercial, industrial and agricultural.......... $15,415 $13,013 $17,143 $10,135 $ 6,428
Real estate -- mortgage.......................... 18,035 16,668 8,207 10,868 10,818
Consumer......................................... 1,725 2,095 2,084 2,030 2,701
------- ------- ------- ------- -------
Total loans............................ 35,175 31,776 27,434 23,033 19,947
Unearned income.................................. (280) (341) (334) (317) (263)
Allowance for loan losses........................ (850) (470) (391) (365) (351)
------- ------- ------- ------- -------
Net loans.............................. $34,045 $30,965 $26,709 $22,351 $19,333
======= ======= ======= ======= =======
</TABLE>

The repayment of loans in the loan portfolio as they mature is also a
source of liquidity for C&L. The following table sets forth C&L's loans maturing
within specified intervals at December 31, 1998.

SELECTED LOAN MATURITY AND INTEREST RATE SENSITIVITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
MATURITY RATE STRUCTURE FOR LOANS
- ------------------------------------------ MATURING OVER ONE YEAR
OVER ONE ---------------------------
YEAR FLOATING OR
ONE YEAR THROUGH OVER FIVE PREDETERMINED ADJUSTABLE
OR LESS FIVE YEARS YEARS TOTAL INTEREST RATE RATE
- -------- ---------- --------- ------- ------------- -----------
<S> <C> <C> <C> <C> <C>
$12,425 $11,592 $11,158 $35,175 $8,451 $14,299
======= ======= ======= ======= ====== =======
</TABLE>

Investment Securities. The investment securities portfolio is a
significant component of C&L's total earning assets. Total securities averaged
$3.9 million in 1998, compared to $3.6 million in 1997 and $4.3 million in 1996.
At December 31, 1998, the total securities portfolio was $7.4 million.

The following table sets forth the book value of the securities held by C&L
at the dates indicated.

INVESTMENT PORTFOLIO

<TABLE>
<CAPTION>
DECEMBER 31
---------------
1998 1997
------ ------
(IN THOUSANDS)
<S> <C> <C>
U.S. Treasury and U.S. Government agencies.................. $6,035 $2,005
State and political subdivisions............................ 1,416 1,419
Other investments........................................... -- 95
------ ------
Total investment securities....................... $7,451 $3,519
====== ======
</TABLE>

114
<PAGE> 132

The following table shows the scheduled maturities and average yields of
securities held at December 31, 1998.

MATURITY DISTRIBUTION OF INVESTMENT SECURITIES

<TABLE>
<CAPTION>
MATURING
----------------------------------------------------------------------------------
AFTER ONE AFTER FIVE
BUT BUT
WITHIN ONE WITHIN FIVE WITHIN TEN WITHIN TEN
YEAR YEARS YEARS YEARS TOTAL
-------------- -------------- -------------- -------------- --------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Securities available-for-sale:
U.S. Treasury and Government
Agencies............................. $702 4.77% $3,104 5.49% $1,000 6.02% $1,114 6.63% $5,920 5.71%
==== ==== ====== ==== ====== ==== ====== ==== ====== ====
Securities held to maturity:
U.S. Treasury and Government
Agencies............................. $ 43 6.66% $ -- --% $ -- --% $ 73 7.82% $ 116 7.38%
State and political Subdivision........ 175 5.91 1,076 4.93 165 4.80 -- -- 1,415 5.04
---- ---- ------ ---- ------ ---- ------ ---- ------ ----
Total securities Held to
maturity....................... $218 6.06% $1,076 4.93% $ 165 4.80% $ 73 7.82% $1,531 5.22%
==== ==== ====== ==== ====== ==== ====== ==== ====== ====
</TABLE>

Short-Term Investments. Short-term investments, which consist primarily of
federal funds sold, averaged $2.8 million in 1998, compared to $2.4 million in
1997 and $1.6 million in 1996. These funds are a primary source of C&L's
liquidity and are generally invested on an overnight basis.

DEPOSITS AND OTHER INTEREST-BEARING LIABILITIES

Deposits. Average total deposits increased $5.9 million, or 17% to $39.8
million during 1998 from $33.9 million in 1997. Average total deposits increased
$4.2 million or 14% to $33.9 million during 1997, from $29.7 million in 1996.

The following table sets forth the deposits of C&L by category at the dates
indicated.

AVERAGE DEPOSITS

<TABLE>
<CAPTION>
AVERAGE FOR THE YEAR
---------------------------------------------------------------------
1998 1997 1996
--------------------- --------------------- ---------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
AMOUNT RATE AMOUNT RATE AMOUNT RATE
OUTSTANDING PAID OUTSTANDING PAID OUTSTANDING PAID
----------- ------- ----------- ------- ----------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Non-interest bearing demand
deposits........................... $ 5,553 --% $ 4,746 --% $ 4,242 --%
Interest bearing demand deposits..... 4,992 2.64 4,852 2.47 4,572 2.47
Savings deposits..................... 2,060 2.96 2,038 2.94 2,130 2.96
Time deposits........................ 27,152 6.46 22,277 6.28 18,777 6.27
------- ------- -------
Total average deposits..... $39,757 $33,913 $29,721
======= ======= =======
</TABLE>

Deposits, and particularly core deposits, have historically been C&L's
primary source of funding and have enabled C&L to meet successfully both its
short-term and long-term liquidity needs. C&L anticipates that such deposits
will continue to be its primary source of funding in the future. C&L's loan to
deposit ratio was 78.4% at December 31, 1998, compared to 86.2% at December 31,
1997. The maturity distribution of C&L's time deposits of $100,000 or more at
December 31, 1998 is shown in the following table.

MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE

<TABLE>
<CAPTION>
AT DECEMBER 31, 1998
- -----------------------------------------------------
UNDER 3 OVER 12
MONTHS 3-6 MONTHS 6-12 MONTHS MONTHS TOTAL
- ------- ---------- ----------- ------- -------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
$5,179 $2,196 $6,306 $1,938 $15,619
======= ====== ====== ====== =======
</TABLE>

115
<PAGE> 133

Approximately 33.2% of C&L's time deposits of $100,000 or more had
scheduled maturities within three months. C&L believes that large denomination
certificate of deposit customers tend to be extremely sensitive to interest rate
levels, making these deposits less reliable sources of funding for liquidity
planning purposes than core deposits. While some financial institutions
partially fund their balance sheets using large certificates of deposits
obtained through brokers, these broker deposits are generally expensive and are
unreliable as long-term funding sources. Accordingly, C&L does not actively
solicit brokered deposits.

REGULATORY CAPITAL TABLE

The table below represents C&L's actual regulatory and minimum regulatory
capital requirements at December 31, 1998:

IMPACT OF INFLATION

Unlike most industrial companies, the assets and liabilities of financial
institutions such as C&L and Bank of Bristol are primarily monetary in nature.
Therefore, interest rates have a more significant effect on C&L's performance
than do the effect of changes in the general rate of inflation and changes in
prices. In addition, interest rates do not necessarily move in the same
direction or in the same magnitude as the prices of goods and services.
Management seeks to manage the relationships between interest sensitive assets
and liabilities in order to protect against wide interest rate fluctuations,
including any resulting from inflation. See "-- Net Interest Income: Interest
Sensitivity."

116
<PAGE> 134

BUSINESS OF C&L AND BANK OF BRISTOL

C&L is a bank holding company organized under the laws of the state of
Florida with its principal executive office located in Bristol, Florida. C&L
operates principally through Bank of Bristol, which is a state-chartered
commercial bank and which provides a range of consumer and commercial banking
services through one office in Liberty County, Florida. At March 31, 1999, C&L
had assets of approximately $48.9 million, loans and approximately $34.9
million, deposits of approximately $43.4 million, and stockholders' equity of
approximately $4.9 million. C&L's principal executive office is located at
Highway 20 and Baker Street, Bristol, Florida 32321, and its telephone number at
such address is (850) 643-2221.

BUSINESS AND PROPERTIES

Banking Services. Bank of Bristol has operated a commercial banking
business since 1975. Bank of Bristol offers many banking services, including
checking accounts, savings accounts, certificates of deposit, money market
accounts, money orders, travelers' checks, safe deposit boxes, night depository,
installment loans, commercial loans, mortgage loans and mortgage collections.
Bank of Bristol does not have trust powers.

Bank of Bristol's commercial loan department serves a variety of
professionals and local businesses, including many small, family owned
enterprises. The department offers a full range of business credit services
including lines of credit, term loans, revolving loans, equipment financing and
mortgages loans. Bank of Bristol's consumer loan services include consumer
credit common to most full-service commercial banks. These services include
automobile loans, home improvement loans, home equity lines of credit and other
personal loans.

C&L was incorporated in June 1988 to be a one-bank holding company for the
Bank of Bristol. C&L was originally formed to acquire the Bank of Bristol common
stock from a former Bank of Bristol director.

Employees. As of March 31, 1999, Bank of Bristol had 22 employees.
Management of Bank of Bristol believes that its employee relations have been and
continue to be good. No employees are represented by any union or similar group,
and Bank of Bristol has never experienced any strike or labor dispute.

Properties. Bank of Bristol's main office is located in a one-story 4,500
square foot building located at Highway 20 and Baker Street, Bristol, Florida.
The building was erected in 1979 and additional space was added in 1985. The
facility includes three (3) drive-in lanes and is owned by Bank of Bristol.

COMPETITION

C&L encounters vigorous competition in its market areas for the provision
of depository institution financial services from a number of sources, including
bank holding companies and commercial banks and savings and loan associations
that are domiciled in or operate in Liberty and Calhoun Counties, where most of
the Bank of Bristol's customers reside. Regional interstate banking laws and
other recent federal and state laws have resulted in increased competition from
both conventional banking institutions and other businesses offering financial
services and products. Bank of Bristol also competes for interest-bearing funds
with a number of other financial intermediaries and nontraditional consumer
investment alternatives, including brokerage firms, consumer finance companies,
commercial finance companies, credit unions, money market funds, and federal,
state, and municipal issuers of short-term obligations. Many of these
competitors have greater financial resources than Bank of Bristol. At March 31,
1999, there were approximately two commercial banks and one credit union
competing with Bank of Bristol in Liberty and Calhoun Counties.

LEGAL PROCEEDINGS

C&L and Bank of Bristol are not parties to any material legal proceedings
other than ordinary routine litigation incidental to their business.

117
<PAGE> 135

MANAGEMENT

The directors and executive officers of C&L and Bank of Bristol, their ages
and positions and the number of shares of C&L common stock beneficially owned by
them at March 31, 1999 are indicated below. Except as otherwise indicated, the
person named has sole investment and voting power.

<TABLE>
<CAPTION>
NUMBER AND PERCENT
OF SHARES
POSITION BENEFICIALLY OWNED
--------------------------------------------------------- -------------------
NAME AGE C&L BANK OF BRISTOL NUMBER PERCENT
- ---- --- --------------------------- ---------------------------- ------- --------
<S> <C> <C> <C> <C> <C>
Gerald Cayson............ 73 Director Director 1,985(1) 12.2
Douglas R. Davis, Jr..... 63 Director Director 2,342 14.4
Sylvia Gates............. 52 Secretary and Treasurer Executive Vice President and 0 N/A
Cashier
Jed M. Hiers............. 37 President, CEO and Director President, CEO and Director 0 N/A
Malone Peddie............ 68 Director Director 1,066(2) 6.5
Gordon Revell............ 67 Chairman and Director Chairman and Director 2,672(3) 16.4
Jerry M. Smith........... 59 Director Director 1,346 8.3
J.W. Weaver, Jr.......... 58 Director Director 2,200 13.5
</TABLE>

- ---------------

(1) Includes 933 shares in the name of Betty Ann Cayson.
(2) Includes 655 shares held in the name of Malone or Darleen Peddie and 70
shares held by Darleen Peddie.
(3) Includes 1,337 shares held by Willie Frances Revell

All executive officers and directors of C&L and the Bank of Bristol are
elected for one year terms.

Jerry M. Smith, who will become a member of the Board of Directors of the
Corporation upon consummation of the C&L merger and related transactions, has
served as a member of the Board of Directors of Bank of Bristol since 1975, as a
member of the Board of Directors of Bank of Blountstown since 1987 and as a
member of the Board of Directors of C&L since its formation in 1988. Mr. Smith
has, since 1971, been Chairman and President of First National Bank of Alachua,
Alachua, Florida.

SUMMARY OF EMPLOYMENT CONTRACT OF JED M. HIERS

Jed M. Hiers has entered into an employment contract with C&L and Bank of
Bristol, whereby Mr. Hiers serves as President and CEO of C&L and Bank of
Bristol. The original term of such employment contract ended on November 27,
1997 and is renewed from year to year, unless either party to the contract sends
written notice to the other of its intention not to renew at least thirty (30)
days prior to the annual expiration date. The contract is also extended for an
additional three (3) years if C&L and Bank of Bristol are acquired by another
corporation. The contract also gives Mr. Hiers an option to serve as President
of both Bank of Bristol and Bank of Blountstown if the banks ever consummate a
merger. The contract further provides that, in the event that Bank of Bristol is
acquired by another corporation, Mr. Hiers' past years of service with C&L and
Bank of Bristol will be negotiated as qualifying years of retirement with the
acquiring corporation.

MARKET FOR THE C&L COMMON STOCK

C&L's authorized capital stock consists of 20,000 shares of common stock,
par value $10.00 per share, of which 16,274 shares were issued and outstanding
as of the record date. There are presently approximately 82 shareholders of
record of C&L. C&L acts as its own transfer agent and registrar. There is no
established public market for the C&L common stock, nor are there any published
quotations for such shares. C&L's management has no knowledge of any trades of
C&L common stock in 1997, 1998 or thus far in 1999.

Because of the absence of an established public trading market for the C&L
common stock, the exchange ratio for the C&L common stock in connection with the
C&L merger was determined by arm's-length negotiations with the Corporation, and
the price was based on a number of factors, including, among other things, the
growth rate and earnings of C&L and book value of the C&L common stock, the
industry, the capital structure of C&L, the market in which C&L operates, the
capital needs of C&L and judgments as to C&L's future prospects. The exchange
ratio, which is supported by the fairness opinion, may not be indicative

118
<PAGE> 136

of the market or actual value of the C&L common stock. See the fairness opinion
attached hereto as Annex F and the C&L Financial Statements and related notes
included elsewhere in this Prospectus-Joint Proxy Statement.

Mr. Jerry Smith, a director of each of C&L, Bank of Bristol and Bank of
Blountstown intends to sell approximately 63 shares of his C&L common stock and
approximately 586 shares of his Bank of Blountstown common stock in a private
transaction, the aggregate amount of which will not exceed $100,000.

MARKET FOR THE BANK OF BRISTOL COMMON STOCK

Bank of Bristol's authorized capital stock consists of 20,000 shares of
common stock, par value $10.00 per share, of which 20,000 shares were issued and
outstanding as of the record date. There are presently approximately 8
stockholders of record of Bank of Bristol. Bank of Bristol acts as its own
transfer agent and registrar. There is no established public market for the Bank
of Bristol common stock, nor are there any published quotations for such shares.

Bank of Bristol's management has knowledge of only two trades of Bank of
Bristol common stock in 1997, 1998 or thus far in 1999. In first quarter 1997,
seven shares of Bank of Bristol common stock were traded at a price of $189.12
per share, and in fourth quarter 1997, twenty-five shares of Bank of Bristol
common stock were traded at a price of $215.93 per share. These prices represent
actual trades but may not include all trades that occurred during the reported
periods. The prices given are the result of limited trading and may not be
representative of the actual fair market value of the Bank of Bristol common
stock.

Because of the absence of an established public trading market for the Bank
of Bristol common stock, the exchange ratio for the Bank of Bristol common stock
in connection with the share exchange and the Bank of Blountstown merger was
determined by arm's-length negotiations with the Corporation, and the price was
based on a number of factors, including, among other things, the growth rate and
earnings of Bank of Bristol and book value of the Bank of Bristol common stock,
the industry, the capital structure of Bank of Bristol, the market in which Bank
of Bristol operates, the capital needs of Bank of Bristol and judgments as to
Bank of Bristol's future prospects. The exchange ratio, which is supported by
the fairness opinion, may not be indicative of the market or actual value of the
Bank of Bristol common stock. See the fairness opinion attached hereto as Annex
G and the Financial Statements and related notes included elsewhere in this
Prospectus-Joint Proxy Statement.

119
<PAGE> 137

SELECTED FINANCIAL DATA--BANK OF BLOUNTSTOWN

The following table sets forth selected financial data for Bank of
Blountstown derived from Bank of Blountstown financial statements and should be
read in conjunction with the related financial statements and notes thereto.

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)
<S> <C> <C> <C> <C> <C>
SELECTED STATEMENT OF FINANCIAL CONDITION DATA:
Total assets..................................... $56,788 $57,217 $50,945 $46,663 $38,512
Loans, net of unearned income.................... 31,657 34,637 33,359 28,240 20,245
Investment securities............................ 13,320 12,914 11,971 13,010 12,377
Deposits......................................... 52,279 52,528 46,716 42,818 35,500
Stockholders' equity............................. 3,871 3,848 3,819 3,494 2,846
SELECTED STATEMENT OF INCOME DATA:
Interest income.................................. 4,361 4,391 4,099 3,527 2,628
Interest expense................................. 2,340 2,261 2,107 1,706 1,130
------- ------- ------- ------- -------
Net interest income.................... 2,021 2,130 1,992 1,821 1,498
Provision for loan losses........................ 784 723 192 76 48
Noninterest income............................... 359 318 325 302 210
Other noninterest expense........................ 1,589 1,701 1,428 1,203 1,048
------- ------- ------- ------- -------
Income before tax................................ 7 24 697 844 612
Income tax (benefit) expense..................... (69) 5 211 269 196
------- ------- ------- ------- -------
Net income............................. $ 76 $ 19 $ 486 $ 575 $ 416
======= ======= ======= ======= =======
PER SHARE DATA:
Net income-basic and diluted..................... $ .76 $ .19 $ 4.86 5.75 $ 4.16
Book value....................................... 38.71 38.48 38.19 35.01 28.46
Dividends........................................ .60 .60 .60 .50 .40
PERFORMANCE RATIOS:
Return of average assets......................... .13% .04% 1.00% 1.35% 1.12%
Return on average equity......................... 1.97 .50 13.29 18.14 15.39
ASSET QUALITY RATIOS:
Allowance for loan losses to nonperforming
loans.......................................... 372.16% 399.47% 189.29% --% --%
Allowance for loan losses to loans, net of
unearned income................................ 3.42 2.18 1.11 .81 .91
Nonperforming loans to loans, net of unearned
income......................................... .92 .55 .59 -- --
Net loan charge-offs to average loans............ 1.38 1.00 .17 .12 .24
</TABLE>

120
<PAGE> 138

MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS-
C&L BANK OF BLOUNTSTOWN

BASIS OF PRESENTATION

The following provides a narrative discussion and analysis of significant
changes in C&L Bank of Blountstown's results of operations and financial
condition. This discussion should be read in conjunction with the financial
statements and selected financial data of Bank of Blountstown included elsewhere
in this document. Bank of Blountstown was organized in January 1987 under the
laws of Florida and is headquartered in Blountstown, Florida. In June 1996, Bank
of Blountstown established a branch location in Altha, Florida.

This discussion contains information and forward looking statements that
are based on Bank of Blountstown's belief as well as certain assumptions made
by, and information currently available to, Bank of Blountstown with respect to
the adequacy of the allowance for loans losses, financial condition as a result
of operations and liquidity, Year 2000 compliance issues and market risk
disclosures, as well as other information. The risks and uncertainties that may
affect operations, performance, growth projections and the results of Bank of
Blountstown's business include, but are not limited to, fluctuations in the
economy, the relative strength and weakness in the commercial and consumer
sector and in the real estate market, the actions taken by the Federal Reserve
for the purpose of managing the economy, interest rate movements, the impact of
competitive products, services and pricing, timely development by Bank of
Blountstown of technology enhancements for its products and operating systems,
legislation and similar matters. Although management of Bank of Blountstown
believes that the expectations reflected in such forward-looking statements are
reasonable, it can give no assurance that such expectations will prove to be
correct. Such forward-looking statements are subject to certain risks,
uncertainties and assumptions which may prove to be significantly different,
thereby causing actual results to vary materially from those anticipated,
estimated, projected or expected. See "Forward Looking Statements."

YEAR 2000 READINESS DISCLOSURE

The Year 2000 issue is the result of computer programs being written using
two digits rather than four to define the applicable year. Any of Bank of
Blountstown's computer programs or hardware that have date-sensitive software or
embedded chips may recognize a date using "00" as the year 1900 rather than the
year 2000. This could cause a system failure or miscalculations resulting in
disruptions of operations, including among other things, a temporary inability
to process transactions, send statements or engage in similar normal business
activities.

Bank of Blountstown has a five-step plan to resolve the Year 2000 Issue:

- Establishing awareness of and educating key personnel with respect to the
Year 2000 issues and Bank of Blountstown's plan to address those
potential problems;
- Identifying significant systems and assessing potential Year 2000 issues
relating to those systems;
- Renovating and repairing non-compliant systems;
- Testing and validating solutions; and
- Implementing those solutions.

To date, Bank of Blountstown has completed the first three steps and is
well into the fourth step. Bank of Blountstown has determined that it must
upgrade a significant portion of its software and hardware so that those systems
will properly utilize dates beyond December 31, 1999. Bank of Blountstown
presently believes that with these upgrades of its existing software and
hardware, potential Year 2000 issues can be mitigated.

Bank of Blountstown is utilizing both internal and external resources to
re-program, replace and test software and other components of its systems for
Year 2000 modifications. Modifications have been scheduled to ensure that
mission-critical systems are completed in time to allow for extensive testing.

Bank of Blountstown does not make use of any internally developed system
but relies on those provided by external vendors. The Year 2000 releases
provided by vendors have already been installed on the majority
121
<PAGE> 139

of the systems. Bank of Blountstown completed century date testing on February
26, 1999 and validation of core business systems on March 1, 1999. For the
remainder of the externally maintained systems, Bank of Blountstown has received
written confirmation from its vendors that each system will be made Year 2000
compliant in 1999. Bank of Blountstown will continue to assess, with its
vendors, the status of their year 2000 compliance and install any necessary
additional releases through 1999.

The majority of Bank of Blountstown's software affecting its most
significant systems is supplied by third parties. Bank of Blountstown had begun
formal communications with all of its significant suppliers and large customers
to determine the extent to which Bank of Blountstown is vulnerable to those
third parties' failure to remediate their own Year 2000 issues. Bank of
Blountstown is applying the majority of its resources that are allocated to the
Year 2000 issue to installing and testing vendor releases. To date, Bank of
Blountstown is not aware of any external agent with a Year 2000 issue that would
have a material adverse affect on Bank of Blountstown's financial condition or
results of operations.

Bank of Blountstown has approved an unlimited budget for the Year 2000
project. It is estimated that the majority of the funds spent will be for
purpose of upgrading systems, training personnel and educating customers.

Bank of Blountstown believes it has an effective program in place to
resolve the Year 2000 issue in a timely manner. However, disruptions in the
economy that are beyond Bank of Blountstown's control resulting from Year 2000
issues could materially adversely affect Bank of Blountstown. Furthermore, Bank
of Blountstown has no means of ensuring that third parties that it does not
control will be Year 2000 compliant. Bank of Blountstown believes that failure
of third parties to address their Year 2000 problems in a timely fashion
presents the greatest likelihood of Bank of Blountstown not being Year 2000
compliant. Such a failure could materially adversely impact Bank of
Blountstown's operations, the estimated costs of the Year 2000 project and the
target dates for completion. The effect of non-compliance by third parties is
not determinable at this time. Bank of Blountstown could be subject to
litigation for computer systems product failure, including equipment shutdown or
failure to properly date business records. The amount of potential liability, if
any, and lost revenue cannot be reasonably estimated at this time.

Bank of Blountstown has developed contingency plans in the event that
efforts to renovate Bank of Blountstown's systems are not fully successful or
are not completed in accordance with current expectations. The contingency plans
address all pertinent Year 2000 issues including long term down time and
business resumption.

RESULTS OF OPERATIONS

Year ended December 31, 1998, compared with years ended December 31, 1997 and
1996

Bank of Blountstown's net income increased $57,000, or 293.5%, to $76,000
in 1998 from $19,000 in 1997, which in turn decreased $467,000, or 96%, from
$486,000 in 1996. Return on average assets in 1998 was .13%, compared to .04% in
1997 and 1.00% in 1996. Return on average equity was 1.97% in 1998, compared to
.50% in 1997 and 13.28% in 1996.

Net interest income decreased $109,000, or 5.1% to $2,021,000 in 1998 for
$2,129,000 in 1997, which in turn increased $137,000, or 6.9% from $1,992,000 in
1996. The decrease in net interest income in 1998 was due primarily to a 2.5%
decrease in average loans and a 4.9% increase in average deposits compared to
1997. The increase in net interest income in 1997 was due primarily to an 11.5%
increase in average earning assets over 1996.

The provision for loan losses was $784,000 in 1998, compared to $723,000 in
1997 and $192,000 in 1996. Bank of Blountstown's allowance for loan losses as a
percentage of its loans was 3.4% at December 31, 1998, compared to 2.2% at
December 31, 1997, and 1.1% at December 31, 1996. The allowance for loan losses
as a percentage of year end non-performing loans was 372.2% at December 31,
1998, compared to 399.5% at December 31, 1997 and 189.3% at December 31, 1996.
Bank of Blountstown had net charge-offs of $456,000 in 1998, resulting in a
ratio of net charge-offs to average loans of 1.4%. This compares to $339,000 and
1.0% in 1997 and $51,000 and .2% in 1996.

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<PAGE> 140

Noninterest income increased $40,000, or 12.5%, to $359,000 in 1998 from
$319,000 in 1997, which decreased $6,000, or 1.8%, from $325,000 in 1996.

Noninterest expense decreased $112,000 or 7% to $1,589,000 in 1998 from
$1,701,000 in 1997, which increased $273,000 or 19.1% from $1,428,000 in 1996.

NET INTEREST INCOME

The largest component of Bank of Blountstown's net income is its net
interest income, which is the difference between the income earned on interest
earning assets and interest paid on deposits and borrowings used in support of
such assets. Net interest income is determined by the rates earned on Bank of
Blountstown's interest earning assets and the rates paid on its interest-bearing
liabilities, the relative amounts of interest earning assets and
interest-bearing liabilities, and the degree of mismatch in the maturity and
repricing characteristics of its interest-earning assets and interest-bearing
liabilities. Net interest income divided by average interest-earning assets
represents Bank of Blountstown's net interest margin.

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<PAGE> 141

Average Balances, Income, Expenses and Rates. The following table depicts
certain information related to Bank of Blountstown's average balance sheet and
its average yields on assets and average costs of liabilities. Such yields are
derived by dividing income or expense by the average balance of the
corresponding assets or liabilities. Average balances have been derived from
annual averages.

CONSOLIDATED AVERAGE BALANCES, INTEREST/INCOME/EXPENSE AND YIELD/RATES TAXABLE
EQUIVALENT BASIS

<TABLE>
<CAPTION>
YEAR ENDED YEAR ENDED YEAR ENDED
DECEMBER 31, 1998 DECEMBER 31, 1997 DECEMBER 31, 1996
-------------------------- -------------------------- --------------------------
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE EXPENSE RATE BALANCE EXPENSE RATE
------- ------- ------ ------- ------- ------ ------- ------- ------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Earning assets:
Loans, net of unearned Income (1)....... $33,147 $3,292 9.93% $33,998 $3,479 10.23% $30,800 $3,232 10.49%
Investment securities
Taxable............................... 10,225 616 6.02 9,727 617 6.34 10,286 624 6.07
Tax-exempt............................ 2,892 138 4.77 2,715 133 4.90 2,204 117 5.31
------- ------ ------- ------ ------- ------
Total investment securities....... 13,117 754 5.75 12,442 750 6.03 12,490 741 5.93
Federal funds sold...................... 6,961 315 4.53 3,586 162 4.52 1,566 126 8.05
------- ------ ------- ------ ------- ------
Total interest-earning assets..... 53,225 4,361 8.19 50,026 4,391 8.78 44,856 4,099 9.14
------ ------ ------
Non interest-bearing assets:
Cash and due from banks................. 2,867 2,854 2,740
Premises and equipment.................. 831 862 790
Accrued interest and other assets....... 998 901 718
Allowance for loan losses............... (919) (563) (301)
------- ------- -------
Total assets...................... $57,002 $54,080 $48,803
======= ======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Interest-bearing liabilities
Demand deposits......................... $11,425 $ 367 3.21% $10,384 $ 323 3.12% $ 8,554 $ 268 3.13%
Savings deposits........................ 2,693 85 3.16 2,729 86 3.15 2,743 84 3.06
Time deposits........................... 31,803 1,888 5.94 30,677 1,852 6.03 28,460 1,755 6.17
------- ------ ------- ------ ------- ------
Total interest-bearing
liabilities..................... 45,921 2,340 5.10 43,790 2,261 5.16 39,757 2,107 5.30
------ ------ ------
Non-interest bearing liabilities
Demand deposits......................... 6,482 5,832 5,009
Accrued interest and other
liabilities........................... 739 625 380
Shareholders' equity.................... 3,860 3,833 3,657
------- ------- -------
Total liabilities and
shareholders' equity............ $57,002 $54,080 $48,803
======= ======= =======
Net interest income/net interest spread... 2,021 3.09% 2,130 3.62% 1,992 3.84%
------ ==== ------ ===== ------ =====
Net yield on earning assets............... 3.80% 4.26% 4.44%
==== ===== =====
Net interest income....................... $2,021 $2,130 $1,992
====== ====== ======
</TABLE>

- ---------------

(1) Nonaccrual loans are included in loans net of unearned income.

124
<PAGE> 142

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31(1)
---------------------------------------------------------
1998 VS. 1997 1997 VS. 1996
--------------------------- ---------------------------
CHANGES DUE TO CHANGES DUE TO
INCREASE -------------- INCREASE --------------
(DECREASE) RATE VOLUME (DECREASE) RATE VOLUME
---------- ---- ------- ---------- ---- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Increase (Decrease):
Income from earning assets:
Interest and fees on loans............ $(187) $84 $(271) $247 $ 29 $218
Interest on securities:
Taxable............................. (1) 47 (48) (7) (48) 41
Tax-exempt.......................... 5 12 (7) 16 (6) 22
Interest on federal funds............. 153 8 145 36 (18) 54
----- --- ----- ---- ---- ----
Total interest income............ (30) 151 (181) 292 (43) 335
----- --- ----- ---- ---- ----
Expense from interest-bearing
liabilities:
Interest on demand deposits........... 43 50 (7) 56 20 36
Interest on savings deposits.......... (1) 1 (2) 2 (9) 11
Interest on time deposits............. 36 35 1 97 6 91
----- --- ----- ---- ---- ----
Total interest expense........... 78 86 (8) 155 17 138
----- --- ----- ---- ---- ----
Net interest income.............. $(108) $65 $(173) $137 $(60) $197
===== === ===== ==== ==== ====
</TABLE>

- ---------------

(1) The change in interest has been allocated to volume in proportion to the
relationship of the absolute dollar amounts of the changes in volume.
Remaining change has been allocated to rate.

Interest Sensitivity. Bank of Blountstown monitors and manages the pricing
and maturity of its assets and liabilities in order to diminish the potential
adverse impact that changes in interest rates could have on net interest income.
The principal monitoring technique employed by Bank of Blountstown is the
measurement of Bank of Blountstown's interest rate sensitivity "gap," which is
the positive or negative dollar difference between assets and liabilities that
are subject to interest rate repricing within a given period of time. The
objective of Bank of Blountstown's Asset/Liability Management (ALM) function is
to maintain a consistent level of net interest income in a rising, falling or
static interest rate environment. ALM monitors the pricing of both interest
earning assets and interest bearing liabilities and the maturities of each.
Interest rate sensitivity can be managed by repricing assets or liabilities,
selling securities available for sale, replacing an asset or liability at
maturity or by adjusting the interest rates during the life of an asset or
liability.

Bank of Blountstown evaluates interest rate sensitivity risk and then
formulates guidelines regarding asset generation and repricing, funding sources
and pricing and off-balance sheet commitments in order to decrease interest rate
sensitivity risk. Bank of Blountstown uses computer simulations to measure the
net income effect of various interest rate scenarios. The modeling reflects
interest rate changes and the related impact on net income over specified
periods of time.

PROVISION AND ALLOWANCE FOR LOAN LOSSES

Bank of Blountstown has developed policies and procedures for evaluating
the overall quality of its credit portfolio and the timely identification of
potential problem credits. Bank of Blountstown reviews the

125
<PAGE> 143

appropriate level of allowance for loan losses based on results of the internal
monitoring and reporting system, analysis of economic conditions in its markets
and a review of historical statistical data for both Bank of Blountstown and
other financial institutions. Bank of Blountstown's judgment as to the adequacy
of the allowance is based on a number of assumptions about future events, which
it believes to be reasonable but which may or may not be valid. Thus, there can
be no assurance that charge-offs in future periods will not exceed the allowance
for loan losses or that additional increases in the allowance for loan losses
will not be required. The adequacy of the allowance for loan losses and the
effectiveness of Bank of Blountstown's monitoring and analysis system are also
reviewed periodically by the banking regulators.

Additions to the allowance for loan losses, which are expensed as the
provision for loan losses on Bank of Blountstown's income statement, are made
periodically to maintain the allowance at an appropriate level based on
management's analysis of the potential risk in the loan portfolio. Loan losses
and recoveries are charged or credited directly to the allowance. The amount of
the provision is a function of the levels of loans outstanding, the level of
nonperforming loans, historical loan loss experience, the amount of loan losses
actually charged against the reserve during a given period and current and
anticipated economic conditions. Net charge-offs increased 34.5% from $339,000
at December 31, 1997 to $456,000 and non-performing loans increased 54.0% from
$189,000 at December 31, 1997 to $291,000 at December 31, 1998. In light of
these factors, Bank of Blountstown increased its allowance for loan losses to
$1.1 million at December 31, 1998 from $755,000 at December 31, 1997.

The following table summarizes certain information with respect to Bank of
Blountstown's allowance for loan losses and the composition of charge-offs and
recoveries for the periods indicated.

SUMMARY OF LOAN LOSS EXPERIENCE

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
-----------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Allowance for loan losses at beginning of
period..................................... $ 755 $ 371 $ 230 $ 184 $ 181
------- ------- ------- ------- -------
Charge-offs:
Commercial, industrial and agricultural.... 388 245 -- -- 40
Real estate................................ 42 4 -- -- --
Consumer................................... 52 95 56 36 9
------- ------- ------- ------- -------
Total charge-offs.................. 482 344 56 36 49
------- ------- ------- ------- -------
Recoveries:
Commercial, industrial and agricultural.... 9 -- -- 3 --
Real estate................................ 5 -- -- -- --
Consumer................................... 12 5 5 3 4
------- ------- ------- ------- -------
Total recoveries................... 26 5 5 6 4
------- ------- ------- ------- -------
Net charge-offs.............................. 456 339 51 30 45
Provision for loan losses.................... 784 723 192 76 48
------- ------- ------- ------- -------
Allowance for loan losses at end of period... $ 1,083 $ 755 $ 371 $ 230 $ 184
======= ======= ======= ======= =======
Loans at end of period, net of unearned
income..................................... $31,657 $34,637 $33,359 $28,240 $20,245
Ratio of ending allowance to ending loans.... 3.42% 2.18% 1.11% .81% .91%
Average loans, net of unearned income........ $33,147 $33,998 $30,800 $24,243 $18,590
Ratio of net charge-offs to average loans.... 1.38% 1.00% .17% .12% .24%
Net charge-offs as a percentage of:
Provision for loan losses.................. 58.16 46.89 26.56 39.47 93.75
Allowance for loan losses.................. 42.11 44.90 13.75 13.04 24.46
Allowance for loan losses as a percentage of
non-performing loans....................... 372.16 399.47 189.29 -- --
</TABLE>

126
<PAGE> 144

Allocation of Allowance. Bank of Blountstown historically has allocated
its allowance for loan losses to specific loan categories. Although the
allowance is allocated, it is available to absorb losses in the entire loan
portfolio.

ALLOCATION OF THE ALLOWANCE FOR LOAN LOSSES

<TABLE>
<CAPTION>
1998 1997 1996 1995 1994
---------------- ---------------- ---------------- ---------------- ----------------
PERCENT PERCENT PERCENT PERCENT PERCENT
OF OF OF OF OF
AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL AMOUNT TOTAL
------ ------- ------ ------- ------ ------- ------ ------- ------ -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Domestic
Commercial, industrial and
agricultural............. $ 780 72% $546 72% $270 73% $161 70% $129 70%
Real estate -- mortgage.... 207 19 142 19 74 20 51 22 40 22
Consumer other............. 96 9 67 9 27 7 18 8 15 8
------ --- ---- --- ---- --- ---- --- ---- ---
$1,083 100% $755 100% $371 100% $230 100% $184 100%
====== === ==== === ==== === ==== === ==== ===
</TABLE>

Non-performing Assets: The following table represents Bank of
Blountstown's non-performing assets for the dates indicated.

NONACCRUAL, PAST DUE AND RESTRUCTURED LOANS

<TABLE>
<CAPTION>
DECEMBER 31
--------------------------------
1998 1997 1996 1995 1994
---- ---- ---- ---- ----
(IN THOUSANDS)
<S> <C> <C> <C> <C> <C>
Nonaccrual.................................................. $282 $ 97 $ 75 $ -- $ --
Past Due (contractually past due 90 days or more)........... 9 92 121 -- --
Restructured................................................ -- -- -- -- --
---- ---- ---- ---- ----
Total.............................................. $291 $189 $196 $ -- $ --
==== ==== ==== ==== ====
</TABLE>

127
<PAGE> 145

EARNING ASSETS

Loans. Loans are the largest category of earning assets and typically
provide higher yields than the other types of earning assets. Associated with
the higher loan yields are the inherent credit and liquidity risks which
management attempts to control and counterbalance. At December 31, 1998, total
loans net of unearned income were $31.7 million, a decrease of $2.9 million from
$34.6 million at December 31, 1997. Average loans decreased $.9 million for the
same period. Loans averaged $33.1 million in 1998 compared to $34.0 million in
1997 and $30.8 million in 1996.

DISTRIBUTION OF LOANS BY CATEGORY
(IN THOUSANDS)

<TABLE>
<CAPTION>
DECEMBER 31
-----------------------------------------------
1998 1997 1996 1995 1994
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Commercial, industrial and agricultural.......... $10,242 $11,684 $11,446 $ 8,860 $ 7,304
Real estate -- mortgage.......................... 20,417 21,051 19,459 16,789 10,882
Consumer......................................... 1,174 2,189 2,886 3,136 2,274
------- ------- ------- ------- -------
Total loans............................ 31,833 34,924 33,791 28,785 20,460
Unearned income.................................. (176) (287) (432) (545) (215)
Allowance for loan losses........................ (1,083) (755) (371) (230) (184)
------- ------- ------- ------- -------
Net loans.............................. $30,574 $33,882 $32,988 $28,010 $20,061
======= ======= ======= ======= =======
</TABLE>

The repayment of loans in the loan portfolio as they mature is also a
source of liquidity for Bank of Blountstown. The following table sets forth Bank
of Blountstown's loans maturing within specified intervals at December 31, 1998.

SELECTED LOAN MATURITY AND INTEREST RATE SENSITIVITY
(IN THOUSANDS)

<TABLE>
<CAPTION>
RATE STRUCTURE FOR LOANS
MATURITY MATURING OVER ONE YEAR
----------------------------------------------- ---------------------------
OVER ONE YEAR FLOATING OR
ONE YEAR THROUGH OVER PREDETERMINED ADJUSTABLE
OR LESS FIVE YEARS FIVE YEARS TOTAL INTEREST RATE RATE
-------- ------------- ---------- ------- ------------- -----------
<S> <C> <C> <C> <C> <C>
$7,557 $12,606 $11,670 $31,833 $9,512 $14,764
======== ============= ========== ======= ============= ===========
</TABLE>

Investment Securities. The investment securities portfolio is a
significant component of Bank of Blountstown's total earning assets. Total
securities averaged $13.1 million, in 1998, compared to $12.4 million in 1997
and $12.5 million in 1996. At December 31, 1998, the total securities portfolio
was $13.3 million.

The following table sets forth the book value of the securities held by
Bank of Blountstown at the dates indicated.

INVESTMENT PORTFOLIO

<TABLE>
<CAPTION>
DECEMBER 31
-----------------
1998 1997
------- -------
(IN THOUSANDS)
<S> <C> <C>
U.S. Treasury and U.S. Government agencies.................. $10,477 $ 9,917
State and political subdivisions............................ 2,807 2,972
------- -------
Total investment securities....................... $13,284 $12,889
======= =======
</TABLE>

128
<PAGE> 146

The following table shows the scheduled maturities and average yields of
securities held at December 31, 1998.

MATURITY DISTRIBUTION OF INVESTMENT SECURITIES

<TABLE>
<CAPTION>
MATURING
----------------------------------------------------------------------------------
AFTER ONE BUT AFTER FIVE BUT
WITHIN ONE WITHIN FIVE WITHIN TEN WITHIN TEN
YEAR YEARS YEARS YEARS TOTAL
-------------- -------------- -------------- -------------- --------------
AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD AMOUNT YIELD
------ ----- ------ ----- ------ ----- ------ ----- ------ -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Securities available-for-sale:
U.S. Treasury and Government
agencies............................. $ -- --% $2,364 5.88% $3,885 5.72% $1,742 7.03% $7,991 6.05%
Other securities....................... -- -- 100 4.76 -- -- -- -- 100 4.76
---- ---- ------ ---- ------ ---- ------ ---- ------ ----
Total securities
available-for-sale............. $ -- -- $2,464 5.82% $3,885 5.72% $1,742 7.03% $8,091 6.03%
==== ==== ====== ==== ====== ==== ====== ==== ====== ====
Securities held to maturity:
U.S. Treasury and Government
agencies............................. $ -- --% $ 668 6.08% $ 189 7.07% $1,629 6.87% $2,486 6.65%
State and political subdivision........ 235 4.16 2,083 4.88 389 4.98 -- -- 2,707 4.83
---- ---- ------ ---- ------ ---- ------ ---- ------ ----
Total securities held to
maturity....................... $235 4.16% $2,751 5.17% $ 578 5.65% $1,629 6.87% $5,193 5.70%
==== ==== ====== ==== ====== ==== ====== ==== ====== ====
</TABLE>

Short-Term Investments. Short-term investments, which consist primarily of
federal funds sold, averaged $7.0 million in 1998, compared to $3.6 million in
1997 and $1.6 million in 1996. These funds are a primary source of Bank of
Blountstown's liquidity and are generally invested on an overnight basis.

DEPOSITS AND OTHER INTEREST-BEARING LIABILITIES

Deposits. Average total deposits increased $2.8 million, or 5.6% to $52.4
million during 1998 from $49.6 million in 1997. Average total deposits increased
$4.8 million, or 10.7% to $49.6 million during 1997, from $44.8 million in 1996.

The following table sets forth the deposits of Bank of Blountstown by
category at the dates indicated.

<TABLE>
<CAPTION>
AVERAGE FOR THE YEAR
---------------------------------------------------------------------
1998 1997 1996
--------------------- --------------------- ---------------------
AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE AVERAGE
AMOUNT RATE AMOUNT RATE AMOUNT RATE
OUTSTANDING PAID OUTSTANDING PAID OUTSTANDING PAID
----------- ------- ----------- ------- ----------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
Non-interest bearing demand deposits..... $ 6,482 --% $ 5,832 --% $ 5,009 --%
Interest bearing demand deposits......... 11,425 3.22 10,384 3.13 8,554 3.14
Savings deposits......................... 2,693 3.15 2,729 3.14 2,743 3.05
Time deposits............................ 31,803 5.93 30,677 6.03 28,460 6.17
------- ------- -------
Total average deposits......... $52,403 $49,622 $44,766
======= ======= =======
</TABLE>

Deposits, and particularly core deposits, have historically been Bank of
Blountstown's primary source of funding and have enabled Bank of Blountstown to
meet successfully both its short-term and long-term liquidity needs. Bank of
Blountstown anticipates that such deposits will continue to be its primary
source of funding in the future. Bank of Blountstown's loan to deposit ratio was
58.5% at December 31, 1998, compared to 64.5% at December 31, 1997. The maturity
distribution of Bank of Blountstown's time deposits of $100,000 or more at
December 31, 1998 is shown in the following table.

MATURITIES OF TIME DEPOSITS OF $100,000 OR MORE

<TABLE>
<CAPTION>
AT DECEMBER 31, 1998
- -----------------------------------------------------
UNDER 3 OVER 12
MONTHS 3-6 MONTHS 6-12 MONTHS MONTHS TOTAL
- ------- ---------- ----------- ------- ------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
$3,130... $2,327 $1,721 $2,179 $9,357
====== ====== ====== ====== ======
</TABLE>

129
<PAGE> 147

Approximately 33.5% of Bank of Blountstown's time deposits of $100,000 or
more had scheduled maturities within three months. Bank of Blountstown believes
that large denomination certificate of deposit customers tend to be extremely
sensitive to interest rate levels, making these deposits less reliable sources
of funding for liquidity planning purposes than core deposits. While some
financial institutions partially fund their balance sheets using large
certificates of deposits obtained through brokers, these broker deposits are
generally expensive and are unreliable as long-term funding sources.
Accordingly, Bank of Blountstown does not actively solicit brokered deposits.

REGULATORY CAPITAL TABLE

The table below represents Bank of Blountstown's actual regulatory and
minimum regulatory capital requirements at December 31, 1998:

IMPACT OF INFLATION

Unlike most industrial companies, the assets and liabilities of financial
institutions such as Bank of Blountstown are primarily monetary in nature.
Therefore, interest rates have a more significant effect on Bank of
Blountstown's performance than do the effect of changes in the general rate of
inflation and changes in prices. In addition, interest rates do not necessarily
move in the same direction or in the same magnitude as the prices of goods and
services. Management seeks to manage the relationships between interest
sensitive assets and liabilities in order to protect against wide interest rate
fluctuations, including any resulting from inflation. See "-- Net Interest
Income: Interest Sensitivity."

130
<PAGE> 148

BUSINESS OF BANK OF BLOUNTSTOWN

Bank of Blountstown is a state-chartered commercial bank which provides a
range of consumer and commercial banking services through two offices in Calhoun
County, Florida. At March 31, 1999, Bank of Blountstown had assets of
approximately $56.8 million, loans of approximately $31.7 million, deposits of
approximately $52.3 million, and stockholders' equity of approximately $3.9
million. Bank of Blountstown's principal executive office is located at 307 W.
Central Avenue, Blountstown, Florida 32424-1903, and its telephone number at
such address is (850) 674-5900.

BUSINESS AND PROPERTIES

Banking Services. Bank of Blountstown has operated a commercial banking
business since 1987. Bank of Blountstown offers many banking services, including
checking accounts, savings accounts, certificates of deposit, money market
accounts, money orders, travelers' checks, safe deposit boxes, night depository,
installment loans, commercial loans, mortgage loans and mortgage collections.
Bank of Blountstown does not have trust powers.

Bank of Blountstown's commercial loan department serves a variety of
professionals and local businesses, including many small, family owned
enterprises. The department offers a full range of business credit services
including lines of credit, term loans, revolving loans, equipment financing and
mortgages loans. Bank of Blountstown's consumer loan services include consumer
credit common to most full-service commercial banks. These services include
automobile loans, home improvement loans, home equity lines of credit and other
personal loans.

Employees. As of March 31, 1999, Bank of Blountstown had 27 employees.
Management of Bank of Blountstown believes that its employee relations have been
and continue to be good. No employees are represented by any union or similar
group, and Bank of Blountstown has never experienced any strike or labor
dispute.

Properties. Bank of Blountstown's main office is located in a one-story
4,600 square foot building located at 307 W. Central Avenue, Blountstown,
Florida. The building was erected in 1987 and includes four (4) drive-in lanes.
This facility is owned by Bank of Blountstown. Bank of Blountstown also leases a
modular unit for its branch in Altha, Florida which opened in 1997. The branch
is located at Highway 71 N. at Look and Tremble Road, Altha, Florida 32421 and
includes one drive-in lane.

COMPETITION

Bank of Blountstown encounters vigorous competition in its market areas for
the provision of depository institution financial services from a number of
sources, including bank holding companies and commercial banks and savings and
loan associations that are domiciled in or operate in Calhoun County, where most
of Bank of Blountstown's customers reside. Regional interstate banking laws and
other recent federal and state laws have resulted in increased competition from
both conventional banking institutions and other businesses offering financial
services and products. Bank of Blountstown also competes for interest-bearing
funds with a number of other financial intermediaries and nontraditional
consumer investment alternatives, including brokerage firms, consumer finance
companies, commercial finance companies, credit unions, money market funds, and
federal, state, and municipal issuers of short-term obligations. Many of these
competitors have greater financial resources than Bank of Blountstown. At March
31, 1999, there were approximately two commercial banks and one credit union
competing with Bank of Blountstown in Calhoun County.

LEGAL PROCEEDINGS

Bank of Blountstown is not a party to any material legal proceedings other
than ordinary routine litigation incidental to its business.

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MANAGEMENT

The directors and executive officers of the Bank of Blountstown, their ages
and positions and the number of shares of the Bank of Blountstown common stock
beneficially owned by them at March 31, 1999 are indicated below. Except as
otherwise indicated, the person named has sole investment and voting power.

<TABLE>
<CAPTION>
NUMBER AND PERCENT
OF SHARES
BENEFICIALLY OWNED
------------------
NAME AGE BANK OF BLOUNTSTOWN NUMBER PERCENT
- ---- --- ------------------- ------ -------
<S> <C> <C> <C> <C>
Gerald Cayson............................... 73 Chairman and Director 10,685(1) 10.6
Douglas R. Davis, Jr........................ 63 Director 8,000 8.0
President and
Jed M. Hiers................................ 37 Director 0 N/A
Gordon Revell............................... 67 Director 12,330(2) 12.3
Jerry M. Smith.............................. 59 Director 9,750(3) 9.7
J.W. Weaver, Jr............................. 58 Director 11,294 11.2
Terry Waldron............................... 29 Cashier 0 N/A
Clay Whitehead.............................. 49 CEO and Director 0 N/A
</TABLE>

- ---------------

(1) Includes 5,422 shares held in the name Betty Ann Cayson.
(2) Includes 6,164 shares in the name of Willie Frances Revell.
(3) Held in the name Jerry M. Smith or Laura G. Smith.

All executive officers and directors of the Bank of Blountstown are elected
for one year terms.

MARKET FOR THE BANK OF BLOUNTSTOWN COMMON STOCK

Bank of Blountstown's authorized capital stock consists of 100,000 shares
of common stock, par value $12.00 per share, of which 100,000 shares were issued
and outstanding as of the record date. There are presently approximately 110
stockholders of record of Bank of Blountstown. Bank of Blountstown acts as its
own transfer agent and registrar. There is no established public market for the
Bank of Blountstown common stock, nor are there any published quotations for
such shares.

Bank of Blountstown's management has knowledge of only two trades of Bank
of Blountstown common stock in 1997, 1998 or thus far in 1999. In the third
quarter of 1997, 575 shares of Bank of Blountstown common stock were traded at a
price of $62.50 per share, and in the third quarter of 1998, 50 shares of Bank
of Blountstown common stock were traded at a price of $40.00 per share. These
prices represent actual trades but may not include all trades that occurred
during the reported periods. The prices given are the result of limited trading
and may not be representative of the actual fair market value of the Bank of
Blountstown common stock.

Because of the absence of an established public trading market for the Bank
of Blountstown common stock, the exchange ratio for the Bank of Blountstown
common stock in connection with the Bank of Blountstown merger was determined by
arm's-length negotiations with the Corporation, and the price was based on a
number of factors, including, among other things, the growth rate and earnings
of Bank of Blountstown and book value of the Bank of Blountstown common stock,
the industry, the capital structure of Bank of Blountstown, the market in which
Bank of Blountstown operates, the capital needs of Bank of Blountstown and
judgments as to Bank of Blountstown's future prospects. The exchange ratio,
which is supported by the fairness opinion, may not be indicative of the market
or actual value of the Bank of Blountstown common stock. See the fairness
opinion attached hereto as Annex H and the Bank of Blountstown Financial
Statements and related notes included elsewhere in this Prospectus-Joint Proxy
Statement.

Jerry M. Smith, a director of each of C&L, Bank of Bristol and Bank of
Blountstown, intends to sell approximately 63 shares of his C&L common stock and
approximately 586 shares of his Bank of Blountstown common stock in a private
transaction, the aggregate amount of which will not exceed $100,000.

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COMPARISON OF RIGHTS OF C&L STOCKHOLDERS, BANK OF BRISTOL
STOCKHOLDERS, BANK OF BLOUNTSTOWN STOCKHOLDERS
AND CORPORATION STOCKHOLDERS

C&L, Bank of Bristol and Bank of Blountstown are incorporated in Florida,
and the Corporation is incorporated in Delaware. After the mergers and the share
exchange, the former C&L, Bank of Bristol and Bank of Blountstown stockholders
will have their rights and obligations as Corporation stockholders governed by
Delaware law. A summary comparison of the material rights of a Corporation
stockholder under the Corporation Restated Certificate and the Corporation
Bylaws, the rights of a C&L stockholder under the C&L's Articles of
Incorporation and Bylaws, the rights of a Bank of Bristol stockholder under the
Bank of Bristol's Articles of Incorporation and Bylaws and the rights of a Bank
of Blountstown stockholder under Bank of Blountstown's Articles of Incorporation
and Bylaws, is described below. The information set forth below is qualified in
its entirety by reference to the Corporation Restated Certificate, the
Corporation Bylaws and to the Articles of Incorporation and the Bylaws of each
of C&L, Bank of Bristol and Bank of Blountstown.

CLASSES AND SERIES OF CAPITAL STOCK

C&L. Pursuant to the C&L Articles, C&L is authorized to issue 20,000
shares of common stock, par value $10.00 per share. There are no other classes
of stock authorized under the Articles. As of March 31, 1999, there were 16,274
shares of C&L common stock issued and outstanding.

Bank of Bristol. The Bank of Bristol is authorized to issue up to 20,000
shares of common stock, par value $10.00 per share. There are no other classes
of stock authorized under the Bank of Bristol Articles. As of March 31, 1999,
20,000 shares were issued and outstanding.

Bank of Blountstown. The Bank of Blountstown Articles authorize the
issuance of up to 100,000 shares of Blountstown common stock, par value $12.00,
of which 100,000 were issued and outstanding as of March 31, 1999. There are no
other classes of stock authorized.

The Corporation. The Corporation is authorized by the Corporation Restated
Certificate to issue up to 30,000,000 shares of capital stock, of which
25,000,000 shares are designated common stock, par value $.001 per share, and
5,000,000 shares are designated preferred stock, par value $.001 per share. As
of March 31, 1999, there were 12,204,562 shares of Corporation common stock
outstanding. In addition, 1,000,000 shares of Corporation common stock have been
reserved for future option grants under the Corporation's stock option plans.
The Board of Directors of the Corporation has the authority to issue Corporation
preferred stock in one or more series and fix the rights, preferences,
privileges and restrictions for each such series, without any further vote or
action by the stockholders. As of March 31, 1999, there were no shares of
Corporation preferred stock issued and outstanding, and the Board of Directors
of the Corporation does not currently intend to issue shares of Corporation
preferred stock.

Therefore, as a consequence of and following the mergers and the share
exchange, the holders of C&L, Bank of Bristol and Bank of Blountstown common
stock exchanged for Corporation common stock will be subject to the Corporation
Restated Certificate which authorizes substantially more shares of common stock,
as well as the issuance of preferred stock.

SIZE AND ELECTION OF THE BOARD OF DIRECTORS

C&L. The Amended and Restated Bylaws of C&L (the "C&L Bylaws") provide
that the C&L Board of Directors shall consist of not more than fifteen but not
less than three members. The terms of directors of C&L expire at the next annual
stockholders' meeting following their election. The C&L Board of Directors shall
fix the size of the board by resolution. The C&L Board of Directors are elected
by a plurality vote at the annual meeting of stockholders.

Bank of Bristol. The Bank of Bristol Articles provide that the number of
directors shall be no less than five and no more than twenty-five who shall be
elected by the stockholders at their annual meeting. If authorized by a majority
of the stockholders, a majority of the full board of directors may increase the
number

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of directors and appoint persons to fill the resulting vacancies, but not more
than two such additional directors may be so authorized and appointed in any one
year.

Bank of Blountstown. The Bank of Blountstown Board of Directors shall be
not fewer than five members, nor more than twenty-five members. The exact number
of directors may be fixed by the stockholders at any stockholders meeting,
provided that the Bank of Blountstown Board of Directors may not increase the
number of directors to a number which exceeds by more than two the number of
directors last elected by stockholders where such number was fifteen or less, or
which exceeds by more than four the number of directors last elected by
stockholders where such number was sixteen or more.

The Corporation. The Corporation Restated Certificate divides the Board of
Directors of the Corporation into three classes as nearly equal in number as is
reasonably possible, with staggered terms. With a classified board of directors,
at least two annual meetings of stockholders, instead of one, will be required
to effect a change in the majority of the Board of Directors of the Corporation.
The Corporation Bylaws provide that the Board of Directors of the Corporation
shall consist of not more than 30 directors, nor less than three directors. The
Board of Directors of the Corporation shall fix the size of the board by the
resolution. Directors of the Corporation are elected by a plurality of votes
cast at the annual meeting of stockholders.

Therefore, as a consequence of and following the mergers and the share
exchange, the holders of C&L, Bank of Bristol and Bank of Blountstown common
stock exchanged for Corporation common stock with respect to the size and
composition of the Board of Directors of the Corporation will be governed by the
Corporation Restated Certificate described in the preceeding paragraph.

REMOVAL OF DIRECTORS

C&L. The C&L Bylaws provide that the stockholders may remove one or more
directors with or without cause pursuant to the provisions of Section 607.0808
of the Florida Business Corporation Act. Cumulative voting is not authorized in
C&L's Articles.

Bank of Bristol. The Bank of Bristol stockholders may remove one or more
directors with or without cause pursuant to the provisions of the Florida
Business Corporation Act. Cumulative voting is not authorized in the Bank of
Bristol Articles.

Bank of Blountstown. The Bank of Blountstown stockholders may remove one
or more directors with or without cause pursuant to the provisions of the
Florida Business Corporation Act. Cumulative voting is not authorized in the
Bank of Blountstown Articles.

The Corporation. The Corporation Bylaws provide that a director may be
removed with or without cause by the vote of the holders of a majority of the
shares of Corporation common stock entitled to vote at an election of directors,
except as otherwise provided by applicable law.

Therefore, as a consequence of and following the mergers and the share
exchange, the holders of C&L, Bank of Bristol and Bank of Blountstown common
stock exchanged for Corporation common stock will be able to remove a director
from the Board of Directors of the Corporation only by a vote of the holders of
a majority of the shares of Corporation common stock entitled to vote at an
election of directors, except as otherwise provided by applicable law.

DIVIDENDS

C&L. Pursuant to the Florida Business Corporation Act, a board of
directors may from time to time make distributions to its stockholders, subject
to restrictions in its articles of incorporation, provided that no distribution
may be made if, after giving it effect, (1) the corporation would not be able to
pay its debts as they become due in the usual course of business, or (2) the
corporation's total assets would be less than the sum of its total liabilities
plus (unless the articles of incorporation permit otherwise) the amount that
would be needed, if the corporation were to be dissolved at the time of the
distribution, to satisfy the preferential rights upon dissolution of
stockholders whose preferential rights are superior to those receiving the
distribution.

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Bank of Bristol. The Florida Banking Code provides that, after charging
off bad debts, depreciation and other worthless assets, if any, and after making
provision for reasonably anticipated future losses on loans and other assets,
the board of directors of a state bank may declare (1) quarterly, semi-annually
or annually a dividend out of the aggregate of the net profits of that period
combine with its retained net profits of the preceding two years and (2) with
the prior approval of the Florida Banking Department, a dividend from retained
net profits which accrued prior to the preceding two years; provided, however,
that (x) no dividend may be declared on the bank's common stock until the bank
carries 20% of its net profits for such preceding period as is covered by the
dividend to its surplus fund, until the surplus fund equals at least the amount
of its common and preferred stock then issued and outstanding; and that (y) no
dividend may be declared if the bank's net income from the current year combined
with the retained net income from the preceding two years is a loss or would
cause the capital accounts of the bank to fall below the minimum amount required
by law, regulation, order or any written agreement with the Florida Banking
Department or a state or federal regulatory agency. Under the Florida Banking
Code, a stock split or dividend on shares of capital stock of a bank which
results in a greater number of shares without increasing or decreasing the
capital accounts of the bank does not constitute a dividend.

Bank of Blountstown. The Florida Banking Code provides that, after
charging off bad debts, depreciation and other worthless assets, if any, and
after making provision for reasonably anticipated future losses on loans and
other assets, the board of directors of a state bank may declare (1) quarterly,
semi-annually or annually a dividend out of the aggregate of the net profits of
that period combine with its retained net profits of the preceding two years and
(2) with the prior approval of the Florida Banking Department, a dividend from
retained net profits which accrued prior to the preceding two years; provided,
however, that (x) no dividend may be declared on the bank's common stock until
the bank carries 20% of its net profits for such preceding period as is covered
by the dividend to its surplus fund, until the surplus fund equals at least the
amount of its common and preferred stock then issued and outstanding; and that
(y) no dividend may be declared if the bank's net income from the current year
combined with the retained net income from the preceding two years is a loss or
would cause the capital accounts of the bank to fall below the minimum amount
required by law, regulation, order or any written agreement with the Florida
Banking Department or a state or federal regulatory agency. Under the Florida
Banking Code, a stock split or dividend on shares of capital stock of a bank
which results in a greater number of shares without increasing or decreasing the
capital accounts of the bank does not constitute a dividend.

The Corporation. The Corporation Restated Certificate authorizes the Board
of Directors of the Corporation to declare a dividend to distribute to the
stockholders, without a vote of the stockholders, any portion of the assets of
the Corporation which are available under Delaware law for distribution.

CONVERSION AND DISSOLUTION

C&L. The C&L common stock cannot be converted into any other type of
stock. The C&L Articles do not authorize the issuance of preferred stock.

Bank of Bristol. The Bank of Bristol common stock cannot be converted into
any other type of stock. The Bank of Bristol Articles do not authorize the
issuance of preferred stock.

Bank of Blountstown. The Bank of Blountstown common stock cannot be
converted into any other type of stock. The Bank of Blountstown Articles do not
authorize the issuance of preferred stock.

The Corporation. The Corporation common stock cannot be converted into any
other type of stock of the Corporation. The Corporation Restated Certificate
authorizes the issuance of 5,000,000 shares of preferred stock, par value $.001
per share, and provides that shares of Corporation preferred stock may have the
voting powers, preferences and other special rights (including, without
limitation, the right to convert the shares of

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Corporation preferred stock into shares of Corporation common stock) as
described in the Corporation Restated Certificate or resolutions providing for
the issuance of Corporation preferred stock. If the Board of Directors of the
Corporation designated a series of Corporation preferred stock, such Corporation
preferred stock could be entitled to preferential payments in the event of
dissolution of the Corporation.

Therefore, as a consequence of and following the mergers and the share
exchange, the rights and obligations of holders of C&L, Bank of Bristol and Bank
of Blountstown common stock exchanged for Corporation common stock with respect
to conversion and dissolution will be subject to subordination to any
Corporation preferred stock designated by the Board of Directors of the
Corporation to be entitled to preferential payments in the event of dissolution
of the Corporation.

AMENDMENT OR REPEAL OF THE CERTIFICATE OF INCORPORATION AND BYLAWS

C&L. The Florida Business Corporation Act generally provides that a
Florida corporation's articles of incorporation may be amended in certain minor
respects without stockholder action, but the Florida Business Corporation Act
requires most amendments to be adopted by the affirmative vote of a majority of
the shares entitled to vote thereon upon recommendation of the board of
directors. Unless the Florida Business Corporation Act requires a greater vote,
amendments may be adopted by a majority of the votes cast, a quorum being
present. The Florida Business Corporation Act also permits a board of directors
to amend or repeal the bylaws unless the Florida Business Corporation Act or the
stockholders provide otherwise. The stockholders entitled to vote have
concurrent power to amend or repeal the bylaws.

Bank of Bristol. Under the Florida Banking Code, amendments to the Bank of
Bristol Articles must receive the prior written approval of the Florida Banking
Department. Pursuant to the Florida Business Corporation Act, except in limited
circumstances, amendments to the Bank of Bristol Articles of Incorporation must
also be recommended by the Bank of Bristol Board of Directors and approved by a
majority of votes entitled to be cast by each voting group entitled to vote on
the amendment. Under the Florida Banking Code and the Bank of Bristol Bylaws,
the Bank of Bristol Board of Directors may amend the Bank of Bristol Bylaws.

Bank of Blountstown. Under the Florida Banking Code, amendments to the
Bank of Blountstown Articles must receive the prior written approval of the
Florida Banking Department. Pursuant to the Florida Business Corporation Act,
except in limited circumstances, amendments to the Bank of Blountstown Articles
also must be recommended by the Bank of Blountstown Board of Directors and
approved by a majority of votes entitled to be cast by each voting group
entitled to vote on the amendment. Under the Florida Banking Code and the Bank
of Blountstown Bylaws, the Bank of Blountstown Board of Directors may amend the
Bank of Blountstown Bylaws.

The Corporation. Under Delaware law, unless its certificate of
incorporation or bylaws require a greater vote, amendment of a corporation's
certificate of incorporation generally requires the approval of the holders of a
majority of the outstanding stock entitled to vote thereon. If the amendment
would increase or decrease the number of authorized shares of any class or
series or the par value of such shares or would adversely affect the shares of
such class or series, the approval of the holders of a majority of the
outstanding stock of such class or series is required to amend the certificate
of incorporation. The Corporation's Restated Certificate and Bylaws impose no
greater voting requirement.

The Corporation Restated Certificate and Bylaws provide that the
Corporation Bylaws may be altered, amended or repealed by a vote of a majority
of the entire Board of Directors of the Corporation, or by a majority of the
outstanding stock entitled to vote thereon.

Therefore, as a consequence of and following the mergers and the share
exchange, the rights and obligations of holders of C&L, Bank of Bristol and Bank
of Blountstown common stock exchanged for Corporation common stock with respect
to amendment or repeal of the Corporation Restated Certificate or Corporation
Bylaws will be governed by the provisions described in the preceding paragraphs.

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SPECIAL MEETINGS OF STOCKHOLDERS

C&L. C&L's Bylaws provide that special meetings may be called by the
President, the C&L Board of Directors or stockholders holding at least ten
percent of the outstanding shares of capital stock of C&L.

Bank of Bristol. The Bank of Bristol Bylaws provide that, unless
specifically provided by statute, special meetings of the Bank of Bristol
stockholders may be called for any purpose at any time by the Bank of Bristol
Board of Directors or by any three or more stockholders owning, in the
aggregate, not less than twenty-five percent of the Bank of Bristol common
stock.

Bank of Blountstown. The Bank of Blountstown Bylaws provide that, unless
specifically provided by statute, special meetings of the Bank of Blountstown
stockholders may be called for any purpose at any time by the Bank of
Blountstown Board of Directors or by any three or more stockholders owning, in
the aggregate, not less than twenty-five percent of the Bank of Blountstown
common stock.

The Corporation. The Corporation Bylaws provide that a special meeting of
the Corporation stockholders, unless otherwise prescribed by law, may be called
at any time by the Chairman of the Board, President or by order of the Board of
Directors of the Corporation. Special meetings of stockholders prescribed by law
for the election of directors shall be called by the Board of Directors of the
Corporation, the Chairman of the Board, the President or the Secretary whenever
"required" to do so by applicable law.

Therefore, as a consequence of and following the mergers and the share
exchange, the rights and obligations of holders of C&L, Bank of Bristol and Bank
of Blountstown common stock exchanged for Corporation common stock with respect
to the calling of special meetings of stockholders will be governed by the
Corporation Bylaws.

LIABILITY OF DIRECTORS

C&L. The Florida Business Corporation Act generally provides that a
director is not personally liable for monetary damages to the corporation or any
other person for any statement, vote, decision or failure to act regarding
corporate management or policy, unless: (i) the director breached or failed to
perform his duties as a director and (ii) the director's breach of or failure to
perform those duties constitutes: (1) a violation of the criminal law, unless
the director had reasonable cause to believe his conduct was lawful or had no
reasonable cause to believe his conduct was unlawful; (2) a transaction from
which the director derived an improper personal benefit, either directly or
indirectly; (3) an unlawful distribution; (4) conscious disregard for the best
interest of the corporation, or willful misconduct; or (5) recklessness or an
act or omission which was committed in bad faith or with malicious purpose or in
a manner exhibiting wanton and willful disregard of human rights, safety or
property. This provision would absolve directors of C&L of personal liability
for negligence in the performance of their duties, including gross negligence.
It would not permit a director to be exculpated, however, from liability for
actions involving conflicts of interest or breaches of the traditional "duty of
loyalty" to C&L and its stockholders, and it would not affect the availability
of injunctive or other equitable relief as a remedy.

Bank of Bristol. The Florida Business Corporation Act generally provides
that a director is not personally liable for monetary damages to the corporation
or any other person for any statement, vote, decision or failure to act
regarding corporate management or policy, unless: (i) the director breached or
failed to perform his duties as a director and (ii) the director's breach of or
failure to perform those duties constitutes: (1) a violation of the criminal
law, unless the director had reasonable cause to believe his conduct was lawful
or had no reasonable cause to believe his conduct was unlawful; (2) a
transaction from which the director derived an improper personal benefit, either
directly or indirectly; (3) an unlawful distribution; (4) conscious disregard
for the best interest of the corporation, or willful misconduct; or (5)
recklessness or an act or omission which was committed in bad faith or with
malicious purpose or in a manner exhibiting wanton and willful disregard of
human rights, safety or property. This provision would absolve directors of Bank
of Bristol of personal liability for negligence in the performance of their
duties, including gross negligence. It would not permit a director to be
exculpated, however, from liability for actions involving conflicts of interest
or breaches

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<PAGE> 155

of the traditional "duty of loyalty" to Bank of Bristol and its stockholders,
and it would not affect the availability of injunctive or other equitable relief
as a remedy.

Bank of Blountstown. The Florida Business Corporation Act generally
provides that a director is not personally liable for monetary damages to the
corporation or any other person for any statement, vote, decision or failure to
act regarding corporate management or policy, unless: (i) the director breached
or failed to perform his duties as a director and (ii) the director's breach of
or failure to perform those duties constitutes: (1) a violation of the criminal
law, unless the director had reasonable cause to believe his conduct was lawful
or had no reasonable cause to believe his conduct was unlawful; (2) a
transaction from which the director derived an improper personal benefit, either
directly or indirectly; (3) an unlawful distribution; (4) conscious disregard
for the best interest of the corporation, or willful misconduct; or (5)
recklessness or an act or omission which was committed in bad faith or with
malicious purpose or in a manner exhibiting wanton and willful disregard of
human rights, safety or property. This provision would absolve directors of Bank
of Blountstown of personal liability for negligence in the performance of their
duties, including gross negligence. It would not permit a director to be
exculpated, however, from liability for actions involving conflicts of interest
or breaches of the traditional "duty of loyalty" to Bank of Blountstown and its
stockholders, and it would not affect the availability of injunctive or other
equitable relief as a remedy.

The Corporation. Delaware law permits a corporation to include a provision
in its certificate of incorporation eliminating or limiting the personal
liability of a director or officer to a corporation or its stockholders for
damages for breach of the director's fiduciary duty, subject to certain
limitations. The Corporation Restated Certificate includes such a provision
which, as described below, limits the liability to the fullest extent permitted
under applicable law.

The Corporation Restated Certificate provides that a director will not be
personally liable to the corporation or its stockholders for monetary damages
for breach of fiduciary duty as a director, except for liability:

- for any breach of the director's duty of loyalty to the corporation or
its stockholders;

- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law;

- under Section 174 of Delaware law, which concerns unlawful payments of
dividends or expenditures of funds for unlawful stock purchases or
redemptions; or

- for any transaction from which the director derived an improper personal
benefit.

While these provisions provide directors with protection from awards of
monetary damages for breaches of their duty of care, they do not eliminate such
duty. Accordingly, these provisions will have no effect on the availability of
equitable remedies such as an injunction or rescission based on a director's
breach of his or her duty of care. The provisions described above apply to an
officer of the Corporation only if he or she is a director of the corporation
and is acting in his or her capacity as director, and do not apply to officers
of the corporation who are not directors.

Therefore, as a consequence of and following the mergers and the share
exchange, the holders of C&L, Bank of Bristol and Bank of Blountstown common
stock exchanged for Corporation common stock with respect to the liability of
directors will be governed by the provisions of the Corporation Restated
Certificate described above.

DESCRIPTION OF CAPITAL STOCK OF THE CORPORATION

AUTHORIZED CAPITAL STOCK

The Corporation Restated Certificate provides that the Corporation may
issue 5,000,000 shares of Corporation preferred stock, par value $.001 per
share, and 25,000,000 shares of Corporation common stock, par value $.001 per
share.

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CORPORATION COMMON STOCK

Holders of Corporation common stock are entitled to one vote for each share
held of record on all matters to be submitted to a vote of the stockholders and
do not have pre-emptive rights. Cumulative voting is not permitted. This means
that the holders of shares entitled to exercise more than 50 percent of the
voting rights in the election of directors, for example, will be able to elect
all the Corporation's directors.

The holders of Corporation common stock are entitled to dividends and other
distributions as and if declared by the Board of Directors of the Corporation
out of funds legally available. See "Summary of Prospectus -- Joint Proxy
Statement -- Market and Market Prices." All outstanding shares of Corporation
common stock are, and the shares to be issued in the mergers and share exchange
will be, when issued pursuant to the applicable agreement, fully paid and
nonassessable. Upon the liquidation, dissolution or winding up of the
Corporation, the holders of Corporation common stock would be entitled to share
pro rata in the distribution of all assets, if any, of the Corporation remaining
after payment or provision for payment of all the Corporation's debts and
obligations and preferred liquidation payments, if any, to holders of any
outstanding shares of Corporation preferred stock. Shares of the Corporation
common stock are not subject to any redemption provisions and are not
convertible into any other security or other property of the Corporation. No
share of Corporation common stock is subject to any call or assessment.

CORPORATION PREFERRED STOCK

The Board of Directors of the Corporation, without further stockholder
authorization, is authorized to issue shares of Corporation preferred stock in
one or more series. The Board of Directors of the Corporation shall determine
and fix the rights, preferences and privileges of each series, including
dividend rights and preferences over dividends on Corporation common stock and
one or more series of Corporation preferred stock, conversion rights, voting
rights (in addition to those provided by law), redemption rights and the terms
of any sinking fund therefore, and rights upon liquidation, dissolution or
winding up, including preferences over Corporation common stock and one or more
series of Corporation preferred stock. Although the Corporation has no present
plans to issue any shares of Corporation preferred stock, the issuance of shares
of Corporation preferred stock, or the issuance of rights to purchase such
shares, may have the effect of delaying, deferring or preventing a change in
control of the Corporation or an unsolicited acquisition proposal.

CERTAIN PROVISIONS OF THE CORPORATION CERTIFICATE AND DELAWARE LAW

Classified Board of Directors. The Corporation Restated Certificate and
the Corporation Bylaws provide for the Board of Directors of the Corporation to
be divided into three classes of directors, as nearly equal in number as is
reasonably possible, with staggered terms. One class of directors is elected
every year. The directors' terms expire either at the 1999, 2000 or 2001 annual
meeting of stockholders of the Corporation, and every three years thereafter as
to each class. See "The Corporation's Management -- Classified Board of
Directors."

The Corporation believes that classification of the Board of Directors into
three classes will help to assure the continuity and stability of the Board of
Directors of the Corporation and the Corporation's business strategies and
policies as determined by the Board of Directors, since, generally, a majority
of the directors at any given time will have had prior experience as directors
of the Corporation. The Corporation believes that this, in turn, will permit the
Board of Directors to more effectively represent the interests of stockholders.

With three classes, at least two annual meetings of stockholders, instead
of one, will generally be required to effect a change in the majority of the
Board of Directors of the Corporation. This classification may discourage proxy
contests for the election of directors or purchases of a substantial block of
Corporation common stock because classification tends to prevent a change in
control in a relatively short period of time. This classification could also
have the effect of discouraging a third party from making a tender offer or
otherwise attempting to obtain control of the Corporation. Under Delaware law,
unless the certificate of incorporation otherwise provides, a director on a
classified board may be removed by the stockholders of the corporation only for
cause. The Corporation's Restated Certificate does not provide otherwise.

139
<PAGE> 157

Advance Notice Provisions for Stockholder Proposals and Stockholder
Nominations of Directors. The Corporation's Restated Certificate provides that
at an annual meeting of stockholders, only such business shall be conducted as
shall have been properly brought before the meeting. To be properly brought
before an annual meeting business must be (a) specified in the notice of posting
(or any supplement thereof, given by or at the direction of the Board of
Directors of the Corporation, (b) otherwise properly brought before the meeting
by or at the direction of the Board of Directors of the Corporation, or (c)
otherwise properly brought before the meeting by a stockholder. For business to
be properly brought before an annual meeting by a stockholder, the stockholder
must have given timely notice thereof in writing to the Secretary of the
Corporation.

Delaware Takeover Statute. The Corporation is subject to Section 203 of
Delaware law which, subject to certain exceptions, prohibits a Delaware
corporation from engaging in any of a broad range of business combinations with
any "interested stockholder" for a period of three years following the date that
such stockholder became an interested stockholder, unless:

- before that date, the board of directors of the corporation approved
either the business combination or the transaction which resulted in the
stockholder becoming an interested stockholder;

- upon consummation of the transaction which resulted in the stockholder
becoming an interested stockholder, the interested stockholder owned at
least 85% of the voting stock of the corporation outstanding at the time
the transaction commenced, excluding for purposes of determining the
number of shares outstanding those shares owned;

- by persons who are directors and also officers; and

- by employee stock plans in which employee participants do not have the
right to determine confidentially whether shares held subject to the plan
will be tendered in a tender or exchange offer; or

- on or after such date, the business combination is approved by the board
of directors and authorized at an annual or special meeting of
stockholders, and not by written consent, by the affirmative vote of at
least 66 2/3% of the outstanding voting stock which is not owned by the
interested stockholder. An "interested stockholder" is defined as any
person that is (a) the owner of 15% or more of the outstanding voting
stock of the corporation or (b) an affiliate or associate of the
corporation and was the owner of 15% or more of the outstanding voting
stock of the corporation at any time within the three-year period
immediately prior to the date on which it is sought to be determined
whether such person is an interested stockholder.

LIMITATIONS ON LIABILITY OF OFFICERS AND DIRECTORS

The Corporation Restated Certificate contains a provision eliminating or
limiting director liability to the Corporation and its stockholders for monetary
damages arising from acts or omissions in the director's capacity as a director.
The provision does not, however, eliminate or limit the personal liability of a
director:

- for any breach of such director's duty of loyalty to the Corporation or
its stockholders.

- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law.

- under the Delaware statutory provision making directors personally
liable, under a negligence standard, for unlawful dividends or unlawful
stock purchases or redemptions.

- for any transaction from which the director derived an improper personal
benefit.

This provision offers persons who serve on the Board of Directors of the
Corporation protection against awards of monetary damages resulting from
breaches of their duty of care except as indicated above. As a result of this
provision, the ability of the Corporation or a stockholder of the Corporation to
successfully prosecute an action against a director for a breach of his duty of
care is limited. However, the provision does not affect the availability of
equitable remedies such as an injunction or rescission based upon a director's
breach of his duty of care. The SEC has taken the position that the provision
will have no effect on claims arising under the federal securities laws.
140
<PAGE> 158

In addition, the Corporation Restated Certificate and the Corporation
Bylaws provide for mandatory indemnification rights, subject to limited
exceptions, to any director, officer, employee or agent of the Corporation who
by reason of the fact that he or she is a director, officer, employee or agent
of the Corporation, is involved in a legal proceeding of any nature. Such
indemnification rights include reimbursement for expenses incurred by such
director, officer, employee or agent in advance of the final disposition of such
proceeding in accordance with the applicable provisions of Delaware law.

TRANSFER AGENT AND REGISTRAR

The transfer agent and registrar for the Corporation common stock is
SunTrust Bank.

EXPERTS

The supplemental consolidated financial statements of The Banc Corporation
appearing in this Prospectus and Registration Statement have been audited by
Ernst & Young LLP, independent auditors, to the extent indicated in their report
thereon also appearing elsewhere herein. Such supplemental consolidated
financial statements have been included herein in reliance upon such report
given on the authority of such firm as experts in accounting and auditing.

Williams Cox Weidner and Cox, independent public accountants, serve as the
independent accountants for C&L and Bank of Bristol.

Williams Cox Weidner and Cox, independent public accountants, serve as the
independent accountants for Bank of Blountstown.

LEGAL MATTERS

The validity of the shares of Corporation common stock to be issued to the
stockholders of C&L, Bank of Bristol and Bank of Blountstown pursuant to the
mergers and the share exchange will be passed upon by Haskell Slaughter & Young,
L.L.C., Birmingham, Alabama. As of March 31, 1999, representatives of Haskell
Slaughter & Young, L.L.C., beneficially own 24,150 shares of Corporation common
stock.

ADDITIONAL INFORMATION

OTHER BUSINESS

The Board of Directors of C&L, Bank of Bristol and Bank of Blountstown are
not aware of any business to be acted upon at the special meetings other than as
described herein. If, however, other matters are properly brought before any
special meeting, or any adjournments or postponements thereof, the persons
appointed as proxies will have discretion to vote or act thereon according to
their best judgment and applicable SEC rules.

141
<PAGE> 159

INDEX TO FINANCIAL STATEMENTS

<TABLE>
<CAPTION>
PAGE
----
<S> <C>
THE BANC CORPORATION AND SUBSIDIARIES
Report of Independent Auditors.............................. F-3
Independent Auditor's Report................................ F-4
Supplemental Consolidated Statements of Financial
Condition................................................. F-5
Supplemental Consolidated Statements of Operations.......... F-6
Supplemental Consolidated Statements of Cash Flows.......... F-7
Supplemental Consolidated Statements of Changes in
Stockholders' Equity...................................... F-8
Notes to Supplemental Consolidated Financial Statements..... F-9
C & L BANKING CORPORATION AND SUBSIDIARIES
Independent Auditors' Report................................ F-34
Financial Statements
Balance Sheets............................................ F-35
Statements of Income and Comprehensive Income............. F-36
Statements of Changes in Stockholders' Equity............. F-37
Consolidated Statements of Cash Flows..................... F-38
Notes to Financial Statements............................... F-39
C & L BANK OF BLOUNTSTOWN
Independent Auditors' Report................................ F-51
Financial Statements
Balance Sheets............................................ F-52
Statements of Income and Comprehensive Income............. F-53
Statements of Changes in Stockholders' Equity............. F-54
Statements of Cash Flows.................................. F-55
Notes to Financial Statements............................. F-56
</TABLE>

F-1
<PAGE> 160

REPORT OF INDEPENDENT AUDITORS

Board of Directors

The Banc Corporation

We have audited the accompanying supplemental consolidated statements of
financial condition of The Banc Corporation and Subsidiaries as of December 31,
1998 and 1997 and the related supplemental consolidated statements of
operations, changes in stockholders' equity, and cash flows for each of the
three years in the period ended December 31, 1998. The supplemental consolidated
financial statements give retroactive effect to the merger of The Banc
Corporation and Emerald Coast Bancshares, Inc. on February 12, 1999 which has
been accounted for using the pooling of interests method as described in the
notes to the supplemental consolidated financial statements. These financial
statements are the responsibility of the management of The Banc Corporation. Our
responsibility is to express an opinion on these supplemental financial
statements based on our audits. We did not audit the financial statements of
Emerald Coast Bancshares, Inc., which statements reflect total assets
constituting 16% in 1998 and 15% in 1997, and net interest income constituting
17% in 1998, 11% in 1997, and 2% in 1996 of the related consolidated totals.
Those statements were audited by other auditors whose report has been furnished
to us, and our opinion, insofar as it relates to data included for Emerald Coast
Bancshares, Inc., is based solely on the report of the other auditors.

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 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 and the report of other auditors provide a reasonable
basis for our opinion.

In our opinion, based on our audits and the report of other auditors, the
supplemental financial statements referred to above present fairly, in all
material respects, the consolidated financial position of The Banc Corporation
and Subsidiaries at December 31, 1998 and 1997, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998, after giving retroactive effect to the merger of
Emerald Coast Bancshares, Inc. as described in the notes to the supplemental
consolidated financial statements in conformity with generally accepted
accounting principles.

/s/ Ernst & Young LLP

Birmingham, Alabama
March 19, 1999

F-2
<PAGE> 161

INDEPENDENT AUDITOR'S REPORT

Board of Directors

The Banc Corporation

We have audited and reported on the consolidated statements of financial
condition of Emerald Coast Bancshares, Inc. and Subsidiary as of December 31,
1998 and 1997 and the consolidated statements of operations, changes in
stockholders' equity, and cash flows for the years ended December 31, 1998 and
1997, and for the four months ended December 31, 1996 prior to their inclusion
in the supplemental consolidated financial position of The Banc Corporation and
Subsidiaries as of December 31, 1998 and 1997, and the consolidated results of
their operations and their cash flows for each of the three years in the period
ended December 31, 1998. These consolidated financial statements are the
responsibility of the management of Emerald Coast Bancshares, Inc. and
Subsidiary. Our responsibility is to express an opinion on these financial
statements based on our audits. The contribution to the assets of the
supplemental consolidated financial statements of The Banc Corporation by
Emerald Coast Bancshares, Inc. and Subsidiary represented 16% in 1998 and 15% in
1997, and to net interest income 17% in 1998, 11% in 1997, and 2% in 1996 of the
related consolidated totals.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the consolidated financial position of Emerald Coast
Bancshares, Inc. and Subsidiary as of December 31, 1998 and 1997, and the
consolidated results of their operations and their cash flows for the years
ended December 31, 1998 and 1997 and for the four months ended December 31, 1996
in conformity with generally accepted accounting principles.

/s/ Saltmarsh, Cleaveland & Gund

Pensacola, Florida
March 19, 1999

F-3
<PAGE> 162

THE BANC CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
DECEMBER 31,
-------------------
1998 1997
-------- --------
<S> <C> <C>
ASSETS
Cash and due from banks..................................... $ 25,595 $ 15,020
Interest bearing deposits in other banks.................... 158 200
Federal funds sold.......................................... 14,435 27,605
Securities available for sale............................... 77,442 56,142
Securities held-to-maturity (fair value of $26,309 in
1997)..................................................... -- 26,298
Mortgage loans held for sale................................ 4,899 --
Loans....................................................... 366,167 218,069
Unearned income............................................. (788) (1,239)
-------- --------
Loans, net of unearned income............................... 365,379 216,830
Less allowance for loan losses.............................. (4,533) (2,516)
-------- --------
Net loans......................................... 360,846 214,314
Premises and equipment, net................................. 28,515 17,291
Accrued interest receivable................................. 3,791 3,194
Stock in FHLB and Federal Reserve Bank...................... 1,760 649
Other assets................................................ 6,953 2,997
-------- --------
$524,394 $363,710
======== ========
LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits:
Non-interest bearing demand............................... $ 67,963 $ 39,864
Interest-bearing demand................................... 124,761 65,172
Savings................................................... 25,609 23,501
Time deposits $100,000 and over........................... 66,779 61,406
Other time................................................ 150,254 116,842
-------- --------
Total deposits.................................... 435,366 306,785
Advances from FHLB.......................................... 23,160 --
Other borrowed funds........................................ 3,700 8,229
Accrued expenses and other liabilities...................... 4,957 3,199
-------- --------
Total liabilities........................................... 467,183 318,213
Stockholders' equity:
Preferred stock, par value $.001 per share; shares
authorized 5,000,000; shares issued -0-................ -- --
Common stock, par value $.001 per share; shares authorized
25,000,000; shares issued 11,973,180 in 1998 and
10,374,242 in 1997..................................... 12 10
Surplus................................................... 42,888 30,481
Retained earnings......................................... 14,233 14,770
Accumulated other comprehensive income.................... 78 236
-------- --------
Total stockholders' equity.................................. 57,211 45,497
-------- --------
$524,394 $363,710
======== ========
</TABLE>

See notes to supplemental consolidated financial statements.

F-4
<PAGE> 163

THE BANC CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF OPERATIONS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1998 1997 1996
------- ------- -------
<S> <C> <C> <C>
Interest income:
Interest and fees on loans................................ $27,430 $19,378 $12,698
Interest on taxable securities............................ 4,725 4,795 3,613
Interest on tax exempt securities......................... 715 493 596
Interest on federal funds sold............................ 941 955 1,002
Interest and dividends on other investments............... 198 83 65
------- ------- -------
Total interest income............................. 34,009 25,704 17,974
Interest expense:
Interest on deposits...................................... 15,328 11,823 7,997
Interest expense on advances from FHLB and other borrowed
funds.................................................. 590 129 28
------- ------- -------
Total interest expense............................ 15,918 11,952 8,025
------- ------- -------
Net interest income......................................... 18,091 13,752 9,949
Provision for loan losses................................... 3,433 1,849 966
------- ------- -------
Net interest income after provision for loan losses......... 14,658 11,903 8,983
Noninterest income:
Service charges and fees.................................. 2,251 1,862 1,622
Gain on sale of loans..................................... 232 25 --
Securities gains.......................................... 272 217 52
Other..................................................... 466 216 292
------- ------- -------
Total noninterest income.......................... 3,221 2,320 1,966
Noninterest expense:
Salaries and employee benefits............................ 9,276 6,493 5,068
Occupancy and equipment................................... 2,908 1,951 1,507
Merger related costs...................................... 1,466 -- --
Other..................................................... 5,574 3,405 2,881
------- ------- -------
Total noninterest expenses........................ 19,224 11,849 9,456
------- ------- -------
(Loss) income before income taxes........................... (1,345) 2,374 1,493
Income tax (benefit) expense................................ (978) 696 390
------- ------- -------
Net (loss) income........................................... (367) 1,678 1,103
------- ------- -------
Average common shares outstanding........................... 11,011 8,449 7,217
Average common shares outstanding, assuming dilution........ 11,011 8,568 7,314
Basic and diluted net (loss) income per common share........ (.03) .20 .15
Dividends per common share.................................. -- .09 .08
</TABLE>

See notes to supplemental consolidated financial statements.

F-5
<PAGE> 164

THE BANC CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CASH FLOWS
(AMOUNTS IN THOUSANDS, EXCEPT PER SHARE DATA)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------------
1998 1997 1996
--------- -------- --------
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net (loss) income........................................... $ (367) $ 1,678 $ 1,103
Adjustments to reconcile net (loss) income to net cash
(used) provided by operations:
Depreciation.............................................. 1,634 965 698
Net amortization (accretion) of securities................ 293 (265) (75)
Gain on sale of securities available for sale............. (272) (217) (52)
Provision for loan losses................................. 3,433 1,849 966
Increase in mortgage loans held for sale.................. (4,899) -- --
Increase in accrued interest receivable................... (234) (541) (443)
Deferred income tax benefit............................... (1,697) (5) (378)
Other changes, net........................................ 1,702 24 172
--------- -------- --------
Net cash (used) provided by operating activities............ (407) 3,488 1,991
INVESTING ACTIVITIES
Proceeds from maturity of interest bearing deposits......... 241 -- 202
Decrease (increase) in federal funds sold................... 21,420 (14,135) 3,890
Proceeds from sales of securities available for sale........ 61,109 28,185 9,107
Proceeds from maturities of securities available for sale... 39,509 8,951 10,071
Proceeds from maturities of securities held to maturity..... 15,028 12,137 10,178
Purchase of securities available for sale................... (69,468) (38,661) (30,744)
Purchase of securities held to maturity..................... (23,520) (14,568) (11,330)
Net increase in loans....................................... (137,017) (64,847) (52,531)
Net cash paid in business combination....................... (5,786) -- --
Purchase of premises and equipment.......................... (14,670) (4,851) (4,610)
Proceeds from sale of bank premises......................... 3,795 -- --
Other investing activities, net............................. (3,429) (404) (226)
--------- -------- --------
Net cash used in investing activities....................... (112,788) (88,193) (65,993)
FINANCING ACTIVITIES
Net increase in demand and savings deposits................. 66,339 29,477 48,488
Net increase in time deposits............................... 26,642 42,425 13,837
Increase (decrease) in FHLB advances........................ 23,160 (1,600) 1,600
Payment on assumed debt..................................... -- (1,513) --
(Payments) advances of other borrowed funds................. (4,529) 7,980 (1,005)
Proceeds from issuance and reissuance of common stock....... 12,279 17,890 7,764
Repurchase of common stock.................................. -- (9,496) (16)
Dividends paid by pooled subsidiary......................... (121) (389) (364)
--------- -------- --------
Net cash provided by financing activities................... 123,770 84,774 70,304
--------- -------- --------
Increase in cash and due from banks......................... 10,575 69 6,302
Cash and due from banks at beginning of year................ 15,020 14,951 8,649
--------- -------- --------
Cash and due from banks at end of year...................... $ 25,595 $ 15,020 $ 14,951
========= ======== ========
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest................................................ $ 15,433 $ 11,710 $ 7,703
Income taxes............................................ 455 889 796
Noncash transactions:
Assets acquired in business combination................. $ 43,413 $ -- --
Liabilities assumed in business combination............. 36,113 -- --
Real estate acquired by assuming related liability and
issuing common stock.................................. -- 4,534 --
Minority interest in subsidiary acquired by issuing
common stock.......................................... 130 -- --
</TABLE>

See notes to supplemental consolidated financial statements.

F-6
<PAGE> 165

THE BANC CORPORATION AND SUBSIDIARIES

SUPPLEMENTAL CONSOLIDATED STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(AMOUNTS IN THOUSANDS EXCEPT SHARE DATA)

<TABLE>
<CAPTION>
ACCUMULATED
OTHER
COMPREHENSIVE TOTAL
COMMON RETAINED INCOME TREASURY STOCKHOLDERS'
STOCK SURPLUS EARNINGS (LOSS) STOCK EQUITY
------ ------- -------- ------------- -------- -------------
<S> <C> <C> <C> <C> <C> <C>
Balance at January 1, 1996............... $ 7 $12,083 $12,795 $ 261 $ -- $25,146
Comprehensive income:
Net income............................. -- -- 1,103 -- -- 1,103
Other comprehensive (loss), net of
taxes of $149:
Unrealized losses on securities
available for sale, net of
reclassification adjustment........ -- -- -- (286) -- (286)
-------
Comprehensive income................... 817
Dividends declared by pooled
subsidiary............................. -- -- (364) -- -- (364)
Issuance of 1,508,461 shares of common
stock, net of direct costs............. 1 7,714 -- -- -- 7,715
Stock options exercised.................. -- 50 -- -- -- 50
Purchase of 7,454 shares of treasury
stock.................................. -- -- -- -- (16) (16)
Retirement of 7,454 shares of treasury
stock.................................. -- -- (16) -- 16 --
--- ------- ------- ----- ------- -------
Balance at December 31, 1996............. 8 19,847 13,518 (25) -- 33,348
Comprehensive income:
Net income............................. -- -- 1,678 -- -- 1,678
Other comprehensive income, net of
taxes of $136:
Unrealized gains on securities
available for sale, net of
reclassification adjustment........ -- -- -- 261 -- 261
-------
Comprehensive income................... 1,939
Dividends declared by pooled
subsidiary............................. -- -- (389) -- -- (389)
Issuance of 1,778,215 shares of common
stock, net of direct costs............. 2 8,429 -- -- -- 8,431
Acquisition of building through issuance
of 460,500 shares of common stock...... -- 2,205 -- -- -- 2,205
Purchase of 1,990,908 shares of treasury
stock.................................. -- -- -- -- (9,496) (9,496)
Reissuance of treasury stock............. -- -- -- -- 9,459 9,459
Retirement of 14,908 shares of treasury
stock.................................. -- -- (37) -- 37 --
--- ------- ------- ----- ------- -------
Balance at December 31, 1997............. 10 30,481 14,770 236 -- 45,497
Comprehensive loss:
Net loss............................... -- -- (367) -- -- (367)
Other comprehensive (loss) net of taxes
of $108:
Unrealized losses on securities
available for sale, arising during
the period, net of reclassification
adjustment......................... -- -- -- (158) -- (158)
-------
Comprehensive loss..................... (525)
Issuance of 1,526,054 shares of common
stock, net of direct costs............. 2 12,116 -- -- -- 12,118
Stock options exercised.................. -- 177 -- -- -- 177
Restricted shares issued by pooled
subsidiary............................. -- 114 -- -- -- 114
Redemption of common stock by pooled
subsidiary............................. -- -- (49) -- -- (49)
Dividends paid by pooled subsidiary...... -- -- (121) -- -- (121)
--- ------- ------- ----- ------- -------
Balance at December 31, 1998............. $12 $42,888 $14,233 $ 78 $ -- $57,211
=== ======= ======= ===== ======= =======
</TABLE>

See notes to supplemental consolidated financial statements.

F-7
<PAGE> 166

THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Banc Corporation (Corporation) is a bank holding company incorporated
under the laws of Delaware in April 1998 and headquartered in Birmingham,
Alabama. The Corporation was established so that Warrior Capital Corporation
(Warrior) could merge into the Corporation and thereby change its name to "The
Banc Corporation" and its domicile from Alabama to Delaware. Warrior merged with
the Corporation on September 24, 1998. During the fourth quarter of 1998, the
Corporation acquired four financial institutions: Commercial Bancshares of
Roanoke, Inc. and its subsidiary, the Commercial Bank of Roanoke (Roanoke), on
October 16, 1998; City National Corporation and its subsidiary, City National
Bank of Sylacauga (City National), on October 30, 1998; First Citizens Bancorp,
Inc. and First Citizens Bank of Monroe County (First Citizens), on October 30,
1998; and Commerce Bank of Alabama (Commerce), on November 6, 1998. Each of the
acquired banks and their branches have been merged with and into The Bank
resulting in a single bank with 17 branch offices in Alabama.

On February 12, 1999, the Corporation acquired Emerald Coast Bancshares,
Inc. and its subsidiary, Emerald Coast Bank (Emerald). Emerald Coast Bank was
formed on August 30, 1996. Emerald Coast Bancshares, Inc. was incorporated on
August 16, 1997, at which time it acquired all of the outstanding shares of
Emerald Coast Bank. Emerald Coast Bancshares, Inc. was merged into the
Corporation on February 12, 1999. Emerald Coast Bank is a separate subsidiary of
the Corporation with four branch offices in Northwest Florida. In February 1999,
Emerald Coast Bank changed its charter from a state bank to a federal thrift.

BASIS OF PRESENTATION

The supplemental consolidated financial statements of the Corporation give
retroactive effect to the mergers with Warrior, City National, First Citizens,
Commerce and Emerald, which have been accounted for using the pooling of
interests method as described in Note 13. The merger with Roanoke was accounted
for as a purchase. The Corporation's supplemental consolidated statements of
operations include the results of operations of Roanoke from October 16, 1998,
its date of acquisition. All significant intercompany accounts and transactions
have been eliminated.

USE OF ESTIMATES

The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates and
assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

INVESTMENT SECURITIES

Investment securities are classified as either held-to-maturity, available
for sale or trading at the time of purchase. The Corporation defines
held-to-maturity securities as debt securities which management has the positive
intent and ability to hold to maturity.

Held-to-maturity securities are reported at cost, adjusted for amortization
of premiums and accretion of discounts which are recognized in interest income
using the effective yield method.

Securities available for sale are reported at fair value and consist of
bonds, notes, debentures, and certain equity securities not classified as
trading securities nor as securities to be held to maturity. Unrealized holding
gains and losses, net of deferred taxes, on securities available for sale are
reported as a separate component of stockholders' equity until realized.

F-8
<PAGE> 167
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Gains and losses on the sale of securities available for sale are
determined using the specific-identification method.

LOANS AND ALLOWANCE FOR LOAN LOSSES

Loans are stated at the amount of unpaid principal, reduced by unearned
discount and an allowance for loan losses. Interest income with respect to loans
is accrued on the principal amount outstanding, except for interest on certain
consumer loans, which is recognized over the term of the loan using a method
which approximates a level yield.

Accrual of interest is discontinued on a loan when management believes,
after considering economic and business conditions and collection efforts, that
the loan is impaired. Any unpaid interest previously accrued on those loans is
reversed from income. Interest income generally is not recognized on specific
impaired loans unless the likelihood of further loss is remote. Interest
payments received on such loans are applied as a reduction of the loan principal
balance. Interest income on other nonaccrual loans is recognized only to the
extent of interest payments received.

Impaired loans are specifically reviewed loans for which it is probable
that the Corporation will be unable to collect all amounts due according to the
terms of the loan agreement. Impairment is measured by comparing the recorded
investment in the loan with the present value of expected future cash flows
discounted at the loan's effective interest rate, at the loans observable market
price, or the fair value of the collateral if the loan is collateral dependent.
A valuation allowance is provided to the extent that the measure of the impaired
loans is less than the recorded investment. A loan is not considered impaired
during a period of delay in payment if the ultimate collectibility of all
amounts due is expected. Larger groups of homogenous loans such as consumer
installment and residential real estate mortgage loans are collectively
evaluated for impairment. Payments received on impaired loans for which the
ultimate collectibility of principal is uncertain are generally applied first as
principal reductions.

The allowance for loan loss is established through a provision for loan
losses charged to expense. Loans are charged against the allowance for loan
losses when management believes the collectibility of principal is unlikely. The
allowance is the amount that management believes will be adequate to absorb
possible losses on existing loans which may become uncollectible, based on
evaluation of the collectibility of loans and prior loan loss experience. The
evaluations take 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.

MORTGAGE LOANS HELD FOR SALE

Mortgage loans held for sale are carried at the lower of cost or market,
determined on a net aggregate basis. Differences between the carrying amount of
mortgage loans held for sale and the amounts received upon sale are credited or
charged to income at the time the proceeds of the sale are collected. The fair
values are based on quoted market prices of similar loans sold in conjunction
with securitization transactions, adjusted for differences in loan
characteristics.

PREMISES AND EQUIPMENT

Premises and equipment are stated at cost less accumulated depreciation and
amortization. Depreciation is computed over the estimated service lives of the
assets using certain straight-line and accelerated methods, generally using five
to fifty years for premises and five to ten years for furniture and equipment.

F-9
<PAGE> 168
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
Expenditures for maintenance and repairs are charged to operations as
incurred; expenditures for renewals and betterments are capitalized and written
off by depreciation charges. Property retired or sold is removed from the asset
and related accumulated depreciation accounts and any profit or loss resulting
therefrom is reflected in the statement of operations.

INTANGIBLE ASSETS

Intangible assets, primarily goodwill, are included in other assets, net of
amortization calculated on a straight-line basis over a fifteen-year period.

The Corporation reviews on a regular basis the carrying value of goodwill
to determine if any impairment has occurred or if the period of recoverability
has changed. If this review indicates that goodwill will not be recoverable, as
determined based on the undiscounted cash flows of the entity acquired over the
remaining amortization period, the carrying value of the goodwill will be
reduced by the estimated shortfall of such cash flows. At December 31, 1998 and
1997 goodwill, net of accumulated amortization totaled $867,000 and $414,000,
respectively.

OTHER REAL ESTATE

Other real estate, acquired through partial or total satisfaction of loans,
is carried at the lower of cost or net realized value in other assets. At the
date of acquisition, losses are charged to the allowance for loan losses. Gain
or loss from the sale of other real estate is included in other expense.

INCOME TAXES

The supplemental consolidated financial statements are prepared on the
accrual basis. The Corporation accounts for income taxes using the liability
method pursuant to Statement of Financial Accounting Standards (SFAS) No. 109,
Accounting for Income Taxes. Under this method, deferred tax assets and
liabilities are determined based on differences between financial reporting and
tax bases of assets and liabilities and are measured using the enacted tax rates
expected to apply to taxable income in the years in which those temporary
differences are expected to reverse.

OFF BALANCE SHEET FINANCIAL INSTRUMENTS

In the ordinary course of business the Corporation has entered into off
balance sheet financial instruments consisting of commitments to extend credit,
commitments under credit card arrangements and commercial letters of credit and
standby letters of credit. Such financial instruments are recorded in the
financial statements when they become payable.

PER SHARE AMOUNTS

Earnings per share computations are based on the weighted average number of
shares outstanding during the periods presented.

Diluted earnings per share computations are based on the weighted average
number of shares outstanding during the period, plus the dilutive effect of
stock options. All per share amounts reflect the adoption of SFAS No. 128,
Earnings per Share.

STOCK-BASED COMPENSATION

SFAS No. 123, Accounting for Stock-Based Compensation (Statement 123)
establishes a "fair value" based method of accounting for stock-based
compensation plans and allows entities to adopt that method of
F-10
<PAGE> 169
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
accounting for their employee stock compensation plans. However, it also allows
an entity to continue to measure compensation cost for those plans using the
intrinsic value based method of accounting prescribed by the Accounting
Principles Board ("APB") Opinion No. 25, Accounting for Stock Issued to
Employees (Opinion 25). The Corporation has elected to follow Opinion 25 and
related interpretations in accounting for its employee stock options. Under
Opinion 25, because the exercise price of the Corporation's employee stock
options equals the market price of the underlying stock on the date of grant, no
compensation expense is recognized.

Statement 123 requires the disclosure of pro forma net income and earnings
per share determined as if the Corporation had accounted for its employee stock
options under the fair value method of that statement. The fair value for these
options was estimated at the date of grant using a Black-Scholes option pricing
model. Option valuation models require the input of subjective assumptions.
Because these assumptions are subjective, the effects of applying Statement 123
for pro forma disclosures are not likely to be representative of the effects on
reported net income for future years.

RECENT ACCOUNTING PRONOUNCEMENTS

On January 1, 1998, the Corporation adopted SFAS No. 130, Reporting
Comprehensive Income (Statement 130). This statement establishes standards for
reporting the components of comprehensive income and requires that all items
that are required to be recognized under accounting standards as components of
comprehensive income be included in a financial statement that is displayed with
the same prominence as other financial statements. Comprehensive income includes
net income as well as certain items that are reported directly within a separate
component of stockholders' equity and bypass net income. The adoption of
Statement 130 had no impact on the Corporation's financial condition or results
of operations.

On December 31, 1998, the Corporation adopted SFAS No. 131, Disclosures
About Segments of an Enterprise and Related Information (Statement 131). This
statement changes the reporting of segment information in annual financial
statements and requires public companies to report selected segment information
in interim financial reports to shareholders. Under the Statement's "management
approach," public companies are to report financial and descriptive information
about their operating segments. Operating segments are revenue-producing
components of an enterprise for which separate financial information is produced
internally and are subject to evaluation by the chief operating decision maker
in deciding how to allocate resources to segments. The disclosure requirements
of Statement 131 had no impact on the Corporation's financial condition or
results of operations.

On December 31, 1998, the Corporation adopted SFAS No. 132, Employer's
Disclosures about Pensions and Other Postretirement Benefits (Statement 132).
This statement revises employers' 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. The adoption of Statement 132 had no
impact on the Corporation's financial condition or results of operation.

In June of 1998, the Financial Accounting Standards Board issued SFAS No.
133, Accounting for Derivative Instruments and Hedging Activities (Statement
133). This statement established accounting and reporting standards for
derivatives and for hedging activities. It requires that an entity recognize all
derivatives as either assets or liabilities in the statement of financial
condition and measure those instruments at fair value. The statement continues
to allow derivative instruments to be used to hedge various risks and sets forth
specific criteria to be used to determine when hedge accounting can be used. It
also establishes special accounting treatment for fair value hedges, cash flow
hedges and foreign currency hedges. The accounting for

F-11
<PAGE> 170
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES -- (CONTINUED)
qualifying hedges results in recognizing offsetting changes in value or cash
flows of both the hedge and the hedged item in earnings in the same period.
Changes in the fair value of derivatives that do not meet the criteria of a
qualifying hedge or that represent the ineffective portion of a hedge are
required to be recognized in earnings in the period of change. The provisions of
this statement become effective for quarterly and annual reporting beginning
January 1, 2000. The impact of adopting Statement 133 on the Corporation's
financial condition or results of operations has not been determined at this
time.

2. INVESTMENT SECURITIES

The amounts at which investment securities are carried and their
approximate fair values at December 31, 1998 are as follows:

The amounts at which investment securities are carried and their
approximate fair values at December 31, 1997 are as follows:

<TABLE>
<CAPTION>
GROSS GROSS ESTIMATED
AMORTIZED UNREALIZED UNREALIZED FAIR
COST GAINS LOSSES VALUE
--------- ---------- ---------- ---------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Investment securities available for sale:
Equity securities............................ $ 261 $ -- $ 38 $ 223
U.S. Treasury and agency securities.......... 31,829 68 54 31,843
State, county and municipal securities....... 7,699 353 -- 8,052
Mortgage-backed securities................... 12,867 101 29 12,939
Corporate debt............................... 3,067 18 -- 3,085
------- ---- ---- -------
Total................................ $55,723 $540 $121 $56,142
======= ==== ==== =======
Investment securities held to maturity:
U.S. Treasury and agency securities.......... $16,444 $ 21 $ 56 $16,409
State, county and municipal securities....... 3,545 61 13 3,593
Mortgage-backed securities................... 6,109 25 38 6,096
Corporate debt............................... 200 11 -- 211
------- ---- ---- -------
Total................................ $26,298 $118 $107 $26,309
======= ==== ==== =======
</TABLE>

Securities with an amortized cost of $40,151,000 and $35,066,000 at
December 31, 1998 and 1997, respectively, were pledged to secure United States
government deposits and other public funds and for other purposes as required or
permitted by law.

F-12
<PAGE> 171
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

2. INVESTMENT SECURITIES -- (CONTINUED)
The amortized cost and estimated fair values of investment securities at
December 31, 1998, by contractual maturity, are shown below. Expected maturities
will differ from contractual maturities because borrowers may have the right to
call or prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
SECURITIES AVAILABLE FOR SALE
------------------------------
ESTIMATED
AMORTIZED COST FAIR VALUE
--------------- -----------
(IN THOUSANDS)
<S> <C> <C>
Due in one year or less..................................... $ 1,470 $ 1,469
Due after one year through five years....................... 7,035 7,159
Due after five years through ten years...................... 6,921 7,138
Due after ten years......................................... 12,799 12,955
Mortgage-backed securities.................................. 48,894 48,576
Equity securities........................................... 170 145
------- -------
$77,289 $77,442
======= =======
</TABLE>

Gross realized gains on sales of investment securities available for sale
in 1998, 1997 and 1996 were $384,000, $245,000 and $82,000, respectively, and
gross realized losses for the same periods were $112,000, $28,000 and $30,000,
respectively.

During 1998 the Corporation transferred securities with a carrying value of
$34,790,000 and fair value of $34,988,000 from the held to maturity category to
available for sale. The unrealized gain of $198,000 at the date of transfer has
been recognized in other comprehensive income net of deferred income taxes of
$79,000. The securities were transferred in order to provide liquidity to the
Corporation to meet the increasing loan demand being generated from its
Birmingham branch which opened on July 1, 1998.

The components of other comprehensive loss for the year ended December 31,
1998 are as follows:

<TABLE>
<CAPTION>
INCOME TAX NET OF
PRE-TAX (BENEFIT) INCOME
AMOUNT EXPENSE TAX
------- ---------- ------
<S> <C> <C> <C>
Unrealized gain on available for sale securities........... $ 6 $ -- $ 6
Less: reclassification adjustment for gains realized in net
loss..................................................... 272 108 164
----- ----- -----
Net unrealized loss.............................. $(266) $(108) $(158)
===== ===== =====
</TABLE>

3. LOANS

At December 31, 1998 and 1997 the composition of the loan portfolio was as
follows:

<TABLE>
<CAPTION>
1998 1997
-------- --------
(IN THOUSANDS)
<S> <C> <C>
Commercial and industrial................................... $138,190 $ 72,086
Real estate -- construction................................. 35,647 17,730
Real estate -- mortgage..................................... 115,894 78,071
Consumer.................................................... 67,968 47,187
All other loans............................................. 8,468 2,995
-------- --------
Total loans................................................. $366,167 $218,069
======== ========
</TABLE>

At December 31, 1998 and 1997 the Corporation's recorded investment in
loans considered to be impaired under SFAS No. 114 was $894,000 and $300,000,
respectively. There was approximately $134,000 and $29,000 at December 31, 1998
and 1997, respectively, in the allowance for loan losses specifically

F-13
<PAGE> 172
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

3. LOANS -- (CONTINUED)
allocated to impaired loans. The average recorded investment in impaired loans
during 1998, 1997 and 1996 was approximately $598,000, $258,000 and $215,000,
respectively. No material amount of interest income was recognized on impaired
loans for the years ended December 31, 1998, 1997 and 1996.

The Corporation has no commitments to loan additional funds to the
borrowers whose loans are on nonaccrual.

4. ALLOWANCE FOR LOAN LOSSES

A summary of the allowance for loan losses for the years ended December 31,
1998, 1997 and 1996 follows:

<TABLE>
<CAPTION>
1998 1997 1996
------- ------- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Balance at beginning of year............................... $ 2,516 $ 1,760 $1,477
Allowance of acquired bank................................. 368 -- --
Provision for loan losses.................................. 3,433 1,849 966
Loan charge-offs........................................... (2,354) (1,373) (844)
Recoveries................................................. 570 280 161
------- ------- ------
Balance at end of year..................................... $ 4,533 $ 2,516 $1,760
======= ======= ======
</TABLE>

5. PREMISES AND EQUIPMENT AND LEASES

Components of premises and equipment at December 31, 1998 and 1997 are as
follows:

<TABLE>
<CAPTION>
1998 1997
------- -------
(IN THOUSANDS)
<S> <C> <C>
Land........................................................ $ 3,534 $ 3,137
Premises.................................................... 20,141 7,064
Furniture and equipment..................................... 9,440 6,885
------- -------
33,115 17,086
Less accumulated depreciation and amortization.............. (5,227) (4,473)
------- -------
Net book value of premises and equipment in service......... 27,888 12,613
Real estate under renovation................................ 627 4,678
------- -------
Total....................................................... $28,515 $17,291
======= =======
</TABLE>

Depreciation expense for the years ended December 31, 1998, 1997 and 1996
was $1,634,000, $965,000 and $698,000, respectively.

Emerald Coast Bank leases all of its branch buildings under operating
leases expiring through 2003. The leases require payment of taxes, insurance and
maintenance costs in addition to rental payments. In addition, three of the four
building leases have two five-year renewal options.

F-14
<PAGE> 173
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

5. PREMISES AND EQUIPMENT AND LEASES -- (CONTINUED)
Future minimum lease payments under operating leases for the years
indicated below are summarized as follows (in thousands):

<TABLE>
<S> <C>
1999........................................................ $ 415
2000........................................................ 403
2001........................................................ 392
2002........................................................ 392
2003........................................................ 200
------
Total............................................. $1,802
======
</TABLE>

Rental expense relating to operating leases amounted to approximately
$201,000, $52,000, and $45,000 for the years ended December 31, 1998, 1997 and
1996, respectively.

6. DEPOSITS

The following schedule details interest expense on deposits:

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
--------------------------
1998 1997 1996
------- ------- ------
(IN THOUSANDS)
<S> <C> <C> <C>
Interest-bearing demand.................................... $ 3,030 $ 1,859 $1,045
Savings.................................................... 743 791 796
Time deposits $100,000 and over............................ 3,371 2,811 2,123
Other time................................................. 8,184 6,362 4,033
------- ------- ------
Total............................................ $15,328 $11,823 $7,997
======= ======= ======
</TABLE>

At December 31, 1998, the scheduled maturities of time deposits are as
follows (in thousands):

<TABLE>
<S> <C>
1999........................................................ $151,400
2000........................................................ 40,969
2001........................................................ 6,502
2002........................................................ 4,124
2003 and thereafter......................................... 14,038
--------
$217,033
========
</TABLE>

7. ADVANCES FROM FEDERAL HOME LOAN BANK (FHLB) AND OTHER BORROWED FUNDS

The following is a summary of advances from the FHLB as of December 31,
1998 (in thousands):

<TABLE>
<CAPTION>
MATURITY DATE INTEREST RATE AMOUNT
- ------------- ------------- -------
<S> <C> <C>
July 10, 2008............................................... 4.99% $ 3,000
June 23, 2008............................................... 5.51 1,500
March 26, 2008.............................................. 5.51 1,000
April 2, 2003............................................... 5.52 2,000
February 6, 2003............................................ 4.99 15,660
-------
$23,160
=======
</TABLE>

The advances are secured by FHLB stock and a blanket lien on certain
residential real estate loans with a carrying value of approximately $61,822,000
at December 31, 1998.

F-15
<PAGE> 174
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

7. ADVANCES FROM FEDERAL HOME LOAN BANK (FHLB) AND OTHER BORROWED
FUNDS -- (CONTINUED)
The Corporation had federal funds purchased outstanding of $3,150,000 and
$7,670,000 at December 31, 1998 and 1997, respectively.

8. STOCK OPTION PLANS AND RESTRICTED STOCK

The Corporation has established a stock option plan for directors and
certain key employees that provide for the granting of incentive and
nonqualified options to purchase up to 1,000,000 shares of the Corporation's
common stock. The terms of the options granted are determined by the
compensation committee of the Board of Directors. All options granted have a
maximum term of ten years, and the option price per share of options granted
cannot be less than the fair market value of the Corporation's common stock on
the grant date. All options granted during 1998 under this plan vest 20% on the
grant date immediately and an additional 20% annually on the anniversary of the
grant date.

In addition, the Corporation assumed the Commerce Bank of Alabama Incentive
Stock Compensation Plan concurrent with the Commerce merger. Options to purchase
82,396 shares of the Corporation's common stock have been granted under this
plan. No additional options may be granted under this plan.

Emerald, which merged with the Corporation on February 12, 1999, granted to
officers options to purchase 10,177 shares in 1998, 10,177 shares in 1997 and
61,060 shares in 1996, on an equivalent Corporation shares basis. These options
were issued at a price approximating fair value at the date of the grant. These
options vested immediately and had no expiration date. All of these options were
exercised one day prior to the merger.

For purposes of the following disclosures, the number and exercise prices
for options granted by entities which merged with the Corporation during 1998
and options granted by Emerald, have been converted to equivalent amounts for
the Corporation based on the exchange ratios in the mergers.

<TABLE>
<CAPTION>
DECEMBER 31,
------------------------------------------------------------------
1998 1997 1996
-------------------- -------------------- --------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE EXERCISE EXERCISE
NUMBER PRICE NUMBER PRICE NUMBER PRICE
-------- --------- -------- --------- -------- ---------
<S> <C> <C> <C> <C> <C> <C>
Under option, beginning of year..... 202,589 $ 4.70 186,575 $ 4.64 64,213 $4.28
Granted........................... 466,677 10.87 16,014 5.40 134,038 4.79
Exercised......................... 48,460 3.65 -- -- 11,675 4.28
-------- -------- --------
Under option, end of year........... 620,806 9.52 202,589 4.71 186,576 4.64
======== ======== ========
Exercisable at end of year.......... 255,606 196,751 178,402
======== ======== ========
Weighted-average fair value per
option of options granted during
the year.......................... $ 5.49 $ 1.22 $ 1.20
======== ======== ========
</TABLE>

F-16
<PAGE> 175
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

8. STOCK OPTION PLANS AND RESTRICTED STOCK -- (CONTINUED)
A further summary about options outstanding at December 31, 1998 is as
follows:

<TABLE>
<CAPTION>
OPTIONS OUTSTANDING OPTIONS EXERCISABLE
------------------------------ -----------------------------------
WEIGHTED- WEIGHTED- WEIGHTED-
AVERAGE AVERAGE AVERAGE
EXERCISE NUMBER CONTRACTUAL EXERCISE NUMBER EXERCISE
PRICE OUTSTANDING LIFE IN YEARS(1) PRICE OUTSTANDING PRICE
- -------- ----------- ---------------- --------- ----------- ---------
<C> <S> <C> <C> <C> <C> <C>
$ 4.30................................... 46,700 6.5 $ 4.30 46,700 $ 4.30
4.91................................... 81,413 -- 4.91 81,413 4.91
6.24................................... 36,193 7.6 6.24 36,193 6.24
11.00................................... 456,500 10.0 11.00 91,300 11.00
------- -------
620,806 9.5 9.42 255,606 7.16
======= =======
</TABLE>

- ---------------

(1) Excludes options granted by Emerald, which did not expire.

The Corporation recognizes compensation cost for stock-based employee
compensation awards in accordance with APB Opinion No. 25, Accounting for Stock
Issued to Employees. The Corporation recognized no compensation cost for
stock-based employee compensation awards for the years ended December 31, 1998,
1997 and 1996. If the Corporation had recognized compensation cost in accordance
with SFAS No. 123, net income and earnings per share would have been reduced as
follows (amounts in thousands, except per share data):

<TABLE>
<CAPTION>
DECEMBER 31
-------------------------
1998 1997 1996
------- ------ ------
<S> <C> <C> <C>
Net (loss) income:
As reported............................................... $ (367) $1,678 $1,103
Pro forma................................................. (1,981) 1,666 998
Basic net (loss) income per share:
As reported............................................... $ (.03) $ .20 $ .15
Pro forma................................................. (.18) .20 .14
Diluted net (loss) income per share:
As reported............................................... $ (.03) $ .20 $ .15
Pro forma................................................. (.18) .19 .14
</TABLE>

The fair value of the options granted in 1998 was based upon the
Black-Scholes pricing model using the following assumptions:

<TABLE>
<S> <C>
Risk-free interest rate..................................... 6.44%
Expected life of the options................................ 6 years
Expected dividends (as a percent of the fair value of the
stock).................................................... 0.00%
Expected volatility......................................... .424%
</TABLE>

Emerald issued 24,424 shares (on an equivalent Corporation shares basis)
under the terms of a Restricted Stock Award Agreement between Emerald and its
Chairman and Chief Executive Officer. All restricted shares vested in 1998 as a
result of the pending merger with the Corporation. Compensation expense of
$114,000 has been recognized in 1998 relating to these shares.

9. RETIREMENT PLANS

Warrior, which merged with the Corporation on September 24, 1998, sponsors
a defined benefit plan ("Plan") that provides retirement, disability and death
benefits. All employees of Warrior over age 21 are

F-17
<PAGE> 176
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

9. RETIREMENT PLANS -- (CONTINUED)
eligible to participate in the plan after the completion of one year of service.
The Corporation contributes amounts to the pension funds sufficient to satisfy
funding requirements of the Employee Retirement Income Security Act. The net
periodic pension costs and the prepaid pension costs related to the Plan are not
material to the Corporation's financial condition and results of operations.

The Corporation sponsors a profit-sharing plan which permits participants
to make contributions by salary reduction pursuant to Section 401(k) of the
Internal Revenue Code. This plan covers substantially all employees who meet
certain age and length of service requirements. The Corporation matches
contributions at its discretion. The Corporation's contributions to the plan
were $179,000, $170,000 and $147,000 in 1998, 1997 and 1996, respectively.

10. INCOME TAXES

The components of the income tax (benefit) expense are as follows (in
thousands):

<TABLE>
<CAPTION>
1998 1997 1996
------- ----- -----
<S> <C> <C> <C>
Current:
Federal................................................... $ 427 $ 730 $ 671
State..................................................... 38 133 97
Benefit of net operating loss carryforwards (NOL)......... (153) (162) --
------- ----- -----
Total current expense....................................... 312 701 768
Deferred tax benefit expense................................ (1,290) (5) (378)
------- ----- -----
Total income tax (benefit) expense.......................... $ (978) $ 696 $ 390
======= ===== =====
</TABLE>

Significant components of the Corporation's deferred tax assets and
liabilities as of December 31, 1998 and 1997 are as follows (in thousands):

<TABLE>
<CAPTION>
1998 1997
------ ------
<S> <C> <C>
Deferred tax assets:
Rehabilitation tax credit................................. $1,737 $ --
Provision for loan losses................................. 1,565 797
NOL carryover............................................. 235 397
Alternative minimum tax credit carryover.................. 47 95
Other..................................................... 127 193
------ ------
Total deferred assets before valuation allowance............ 3,711 1,482
Valuation allowance......................................... (200) --
------ ------
Total deferred tax assets after valuation allowance......... 3,511 1,482
Deferred tax liabilities:
Difference in book and tax basis of premises and
equipment.............................................. 1,445 816
Purchase accounting adjustments........................... 318 --
Depreciation.............................................. 265 305
Cash to accrual basis adjustment.......................... 81 138
Unrealized gain on securities............................. 77 184
Other..................................................... 7 182
------ ------
Total deferred tax liabilities.............................. 2,193 1,625
------ ------
Net deferred tax asset (liability).......................... $1,318 $ (143)
====== ======
</TABLE>

F-18
<PAGE> 177
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

10. INCOME TAXES -- (CONTINUED)
The effective tax rate differs from the expected tax using statutory rate
of 34%. Reconciliation between the expected tax and the actual income tax
(benefit) expense follows (in thousands):

<TABLE>
<CAPTION>
1998 1997 1996
------- ----- -----
<S> <C> <C> <C>
Expected (benefit) tax at 34% of income before taxes........ $ (458) $ 807 $ 507
Add (deduct):
Rehabilitation tax credit................................. (1,737) -- --
State income taxes, net of federal tax benefit............ (12) 65 53
Effect of interest income exempt from Federal income
taxes.................................................. (254) (185) (219)
Nondeductible merger costs................................ 447 -- --
Basis reduction........................................... 590 -- --
Valuation Allowance....................................... 200 -- --
Other items -- net........................................ 246 9 49
------- ----- -----
Income tax (benefit) expense................................ $ (978) $ 696 $ 390
======= ===== =====
</TABLE>

The Corporation has generated a rehabilitation tax credit of $1,737,000
during 1998 which can be carried forward and utilized through 2019. This credit
was established as a result of the restoration and enhancement of the John A.
Hand building, which is designated as a Historical Structure and serves as the
corporate headquarters for the Corporation. This credit is equal to 20% of
certain qualified expenditures incurred by the Corporation prior to December 31,
1998.

At December 31, 1998, the Corporation had net operating loss carryforwards
for federal tax purposes of $595,000, which will expire in 2011 and 2012.

Income taxes paid were $455,000, $889,000 and $796,000 for the years ended
December 31, 1998, 1997 and 1996, respectively. Applicable income tax expense of
$108,000, $87,000 and $21,000 on securities gains for the years ended December
31, 1998, 1997 and 1996, respectively, is included in income taxes.

11. RELATED PARTY TRANSACTIONS

The Corporation has entered into transactions with its directors, executive
officers, significant stockholders and their affiliates (related parties). Such
transactions were made in the ordinary course of business on substantially the
same terms and conditions, including interest rates and collateral, as those
prevailing at the same time for comparable transactions with other customers,
and did not, in the opinion of management, involve more than normal credit risk
or present other unfavorable features. The aggregate amount of loans to such
related parties at December 31, 1998 and 1997 were $19,036,000 and $9,575,000,
respectively.

Activity during the year ended December 31, 1998 is summarized as follows
(in thousands):

<TABLE>
<CAPTION>
BALANCE BALANCE
DECEMBER 31, DECEMBER 31,
1997 ADVANCES REPAYMENTS RECLASSIFICATION 1998
- ------------ -------- ---------- ---------------- ------------
<S> <C> <C> <C> <C>
$9,575 $25,193 $(10,930) $(4,802) $19,036
====== ======= ======== ======= =======
</TABLE>

At December 31, 1998, the outstanding deposits of such related parties
amounted to approximately $25,814,000.

During 1997 the Corporation, through its predecessor Warrior, purchased a
twenty-one story building in downtown Birmingham from Taylor Acquisition
Corporation, a corporation owned by James A. Taylor, Sr., Chairman and Chief
Executive Officer of the Corporation and certain family members. The building
was purchased through the issuance of 1,535 shares of Warrior common stock
(equivalent to 460,500 shares of the

F-19
<PAGE> 178
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

11. RELATED PARTY TRANSACTIONS -- (CONTINUED)
Corporation) and, in addition, the Corporation assumed $1,513,000 in outstanding
debt on the property. The building and related equipment have been capitalized
at the appraised fair value of $3,718,000.

In July 1998, Emerald sold the land and building of its main office
building and two branch offices to an entity under the control of certain
members of Emerald's Board of Directors for their fair value of approximately
$3,795,000. The sales were accounted for under a sale-leaseback arrangement. The
total deferred gain on the sales of $87,000 is being amortized into income over
the lease terms. At December 31, 1998, the remaining deferred gain was $79,000.
Terms of the leases are described in Note 5. Rental expense under these
operating leases amounted to approximately $163,000 in 1998.

12. COMMITMENTS AND CONTINGENCIES

The supplemental consolidated financial statements do not reflect the
Corporation's various commitments and contingent liabilities which arise in the
normal course of business and which involve elements of credit risk, interest
rate risk and liquidity risk. These commitments and contingent liabilities are
commitments to extend credit and standby letters of credit. The following is a
summary of the Corporation's maximum exposure to credit loss for loan
commitments and standby letters of credit (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1998 1997
------- -------
<S> <C> <C>
Commitments to extend credit................................ $47,670 $20,764
Standby letters of credit................................... 2,341 1,131
</TABLE>

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

The Corporation is party to litigation and claims arising in the normal
course of business. Management, after consultation with legal counsel, believes
that the liabilities, if any, arising from such litigation and claims will not
be material to the supplemental consolidated financial statements.

F-20
<PAGE> 179
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. BUSINESS COMBINATIONS AND MERGER RELATED COSTS

The Corporation has completed the following business combinations during
1998:

<TABLE>
<CAPTION>
ACCOUNTING
DATE INSTITUTION TOTAL ASSETS CONSIDERATION TREATMENT
- ---- ----------- ------------ ------------------- ----------
(DOLLARS IN
MILLIONS)
<S> <C> <C> <C> <C>
September 24................ Warrior Capital Corporation $ 84 5,448,000 shares of Pooling
common stock
October 16.................. Commercial Bancshares of 42 $7,300,000 cash Purchase
Roanoke, Inc.
October 30.................. City National Corporation 84 2,026,579 shares of Pooling
common stock
October 30.................. First Citizens Bancorp, Inc. 35 652,859 shares of Pooling
common stock
November 6.................. Commerce Bank of Alabama 105 1,547,198 shares of Pooling
common stock
</TABLE>

The following table presents financial information contributed by the
pooled companies during 1998 prior to the consummation of the mergers (in
thousands):

<TABLE>
<CAPTION>
NET INTEREST INCOME NET INCOME (LOSS)
------------------- -----------------
<S> <C> <C>
Net interest income
Warrior............................................ $2,908 $ 387
Commerce........................................... 3,714 (404)
First Citizens..................................... 1,706 175
City National...................................... 3,231 (209)
</TABLE>

On February 12, 1999, the Corporation consummated the merger with Emerald.
On a supplemental consolidated basis, Emerald contributed $3,149,000 of net
interest income and $72,000 of net income ($.06 per equivalent share of
Corporation common stock) during 1998.

F-21
<PAGE> 180
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. BUSINESS COMBINATIONS AND MERGER RELATED COSTS -- (CONTINUED)
The following table presents net interest income, net income and net income
per common share of the combining entities on a historical and a historical
combined basis, and on a supplemental combined basis (amounts in thousands,
except per share data):

<TABLE>
<CAPTION>
1997 1996
------- ------
<S> <C> <C>
Net interest income:
Warrior................................................... $ 3,152 $2,826
Commerce.................................................. 3,485 1,886
First Citizens............................................ 1,742 1,429
City National............................................. 3,810 3,566
------- ------
Historical combined......................................... 12,189 9,707
Emerald................................................... 1,563 242
------- ------
Supplemental combined....................................... $13,752 $9,949
======= ======
Net income (loss):
Warrior................................................... $ 798 $ 790
Commerce.................................................. 228 (293)
First Citizens............................................ 423 400
City National............................................. 625 560
------- ------
Historical combined......................................... 2,074 1,457
Emerald................................................... (396) (354)
------- ------
Supplemental combined....................................... $ 1,678 $1,103
======= ======
Net income (loss) per equivalent share of Corporation:
Warrior................................................... $ .26 $ .29
Commerce.................................................. .15 (.20)
First Citizens............................................ .68 .64
City National............................................. .31 .28
Historical combined....................................... .29 .21
Emerald................................................... (.31) (.28)(1)
Supplemental combined..................................... .20 .15
</TABLE>

- ---------------

(1) For the four month period ended December 31, 1996. Emerald Coast Bank was
formed August 30, 1996.

F-22
<PAGE> 181
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

13. BUSINESS COMBINATIONS AND MERGER RELATED COSTS -- (CONTINUED)
The Corporation's supplemental consolidated financial statements include
the results of operations of Roanoke only from October 16, 1998, its date of
acquisition. The following unaudited summary information presents the
supplemental consolidated results of operations of the Corporation on a pro
forma basis, as if Commercial Bancshares of Roanoke, had been acquired on
January 1, 1997. The pro forma summary information does not necessarily reflect
the results of operations that would have occurred, if the acquisition had
occurred as of the beginning of the periods presented, or of results that may
occur in the future.

<TABLE>
<CAPTION>
1998 1997
------- -------
<S> <C> <C>
Interest income............................................. $36,324 $28,818
Interest expense............................................ 16,996 13,259
------- -------
Net interest income............................... 19,328 15,559
Provision for loan losses................................... 3,776 2,250
Noninterest income.......................................... 4,010 3,300
Noninterest expense......................................... 20,760 13,858
------- -------
(Loss) income before income taxes................. (1,198) 2,751
Income tax (benefit) expense................................ (941) 765
------- -------
Net (loss) income........................................... $ (257) $ 1,986
======= =======
Basic and diluted net (loss) income per common share........ $ (.03) $ .20
======= =======
</TABLE>

Total intangible assets recorded in connection with this transaction of
approximately $483,000 are being amortized on a straight-line basis over 15
years.

In 1998, the Corporation incurred and recognized a pre-tax, non-recurring
merger and consolidation charge of $1,466,000 related to the mergers with
Warrior, Commerce, First Citizens, and City National. The charge consisted of
professional and other fees associated with the mergers ($1,314,000) and
obsolete equipment write-offs ($152,000).

The Corporation recorded $152,000 of write-offs related primarily to
computer equipment and software impaired as a result of the Corporation's
consolidation of certain back-office and branch operations, and instituting
efficiencies through alteration and elimination of activities of the combining
enterprises.

The Corporation's other business combinations pending as of December 31,
1998, or announced thereafter, are as follows (unaudited):

<TABLE>
<CAPTION>
ANTICIPATED
ASSET SIZE ACCOUNTING
INSTITUTION (IN MILLIONS)(1) CONSIDERATION TREATMENT
- ----------- ----------------- ------------------------ -----------
<S> <C> <C> <C>
C&L Banking Corporation........... $49 Corporation Common Stock Pooling
C&L Bank of Blountstown........... 57 Corporation Common Stock Pooling
BankersTrust of Alabama, Inc...... 45 Corporation Common Stock Purchase
</TABLE>

- ---------------

(1) As of September 30, 1998 for BankersTrust of Alabama, Inc.; all others as of
December 31, 1998.

14. REGULATORY RESTRICTIONS

The Corporation's subsidiaries are required to maintain reserve balances
with the Federal Reserve Bank. The amount of reserve balances maintained as of
December 31, 1998 was $1,447,000.

The primary source of funds available to the Corporation is the payment of
dividends by its subsidiary. Banking regulations limit the amount of dividends
that may be paid without prior approval of the subsidiaries

F-23
<PAGE> 182
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. REGULATORY RESTRICTIONS -- (CONTINUED)
regulatory agency. Approximately $486,000 in retained earnings are available to
be paid as dividends by the subsidiaries at December 31, 1998.

The Corporation and its subsidiaries are subject to various regulatory
capital requirements administered by the federal banking agencies. Failure to
meet minimum capital requirements can initiate certain mandatory, and possibly
additional discretionary, actions by regulators that, if undertaken, could have
a direct material effect on the Corporation's financial statements. Under
capital adequacy guidelines and the regulatory framework for prompt corrective
action, the Corporation and its subsidiaries must meet specific capital
guidelines that involve quantitative measures of the Corporation's and its
subsidiaries' assets, liabilities, and certain off-balance sheet items as
calculated under regulatory accounting practices. The Corporation's and its
subsidiaries' 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 Corporation and its subsidiaries 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 (as
defined) to average assets (as defined). Management believes, as of December 31,
1998 and 1997 that the Corporation and its subsidiaries meet all capital
adequacy requirements to which it is subject.

As of December 31, 1998 and 1997, the most recent notification from the
FDIC categorized the subsidiaries as well capitalized under the regulatory
framework for prompt corrective action. To be categorized as well capitalized
the Corporation and its subsidiaries 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 notification that management believes have
changed the institution's category.

F-24
<PAGE> 183
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

14. REGULATORY RESTRICTIONS -- (CONTINUED)
The Corporation and its subsidiaries actual capital amounts and ratios are
also presented in the table (dollars in thousands).

<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED UNDER
FOR CAPITAL PROMPT CORRECTIVE
ADEQUACY ACTION
ACTUAL PURPOSES PROVISIONS
--------------- --------------- -----------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
------- ----- ------- ----- -------- ------
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1998:
Total Capital (to Risk Weighted Assets):
Corporation............................... $60,923 14.99% $32,519 8.00% $40,649 10.00%
The Bank.................................. 38,485 11.85 25,971 8.00 32,464 10.00
Emerald Coast Bank........................ 6,283 9.50 5,293 8.00 6,618 10.00
Tier I Capital (to Risk Weighted Assets):
Corporation............................... 56,393 13.87 16,260 4.00 24,389 6.00
The Bank.................................. 34,626 10.67 12,985 4.00 19,478 6.00
Emerald Coast Bank........................ 5,609 8.48 2,646 4.00 3,969 6.00
Tier I Capital (to Average Assets):
Corporation............................... 56,393 11.01 20,482 4.00 25,603 5.00
The Bank.................................. 34,626 8.32 16,646 4.00 20,808 5.00
Emerald Coast Bank........................ 5,609 6.92 3,244 4.00 4,055 5.00
As of December 31, 1997:
Total Capital (to Risk Weighted Assets):
Corporation............................... 47,364 19.31 19,624 8.00 24,530 10.00
The Bank.................................. 30,350 15.46 15,705 8.00 19,631 10.00
Emerald Coast Bank........................ 5,870 13.50 3,479 8.00 4,349 10.00
Tier I Capital (to Risk Weighted Assets):
Corporation............................... 44,847 18.28 9,812 4.00 14,718 6.00
The Bank.................................. 28,221 14.37 7,856 4.00 11,783 6.00
Emerald Coast Bank........................ 5,482 12.60 1,740 4.00 2,610 6.00
Tier I Capital (to Average Assets):
Corporation............................... 44,847 13.59 13,917 4.00 16,497 5.00
The Bank.................................. 28,221 10.08 11,199 4.00 13,999 5.00
Emerald Coast Bank........................ 5,482 10.47 2,093 4.00 2,617 5.00
</TABLE>

In February, 1999, Emerald Coast Bank changed its charter from a state bank
to a federal thrift. The minimum requirements for capital adequacy purposes for
a thrift are a total capital to risk weighted assets ratio of 8%, a tier 1
capital to adjusted total assets ratio of 3%, and a tangible capital to adjusted
total assets ratio of 1.5%. Management believes Emerald Coast Bank will meet
these minimum capital requirements during 1999.

15. FAIR VALUES OF FINANCIAL INSTRUMENTS

The following methods and assumptions were used by the Corporation in
estimating fair values of financial instruments as disclosed herein:

Cash and short-term instruments. The carrying amounts of cash and
short-term instruments approximate their fair value.

F-25
<PAGE> 184
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. FAIR VALUES OF FINANCIAL INSTRUMENTS -- (CONTINUED)
Securities available-for-sale and securities held-to maturity. Fair
values for securities are based on quoted market prices. The carrying
values of restricted equity securities approximate fair values.

Mortgage loans held for sale. The carrying amounts of mortgage loans
held for sale approximate their fair value.

Net loans. Fair values for variable-rate loans that reprice
frequently and have no significant change in credit risk are based on
carrying values. Fair values for certain mortgage loans (for example,
one-to-four family residential), and other consumer loans are based on
quoted market prices of similar loans sold in conjunction with
securitization transactions, adjusted for differences in loan
characteristics. Fair values for commercial real estate and commercial
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. Fair values for impaired loans are estimated using
discounted cash flow analyses or underlying collateral values, where
applicable.

Accrued interest receivable. The carrying amounts of accrued interest
receivable approximate their fair values.

Deposits. The fair values disclosed for demand deposits are, by
definition, equal to the amount payable on demand at the reporting date
(that is, their carrying amounts). The carrying amounts of variable-rate,
fixed-term money market accounts and certificates of deposit ("CDs")
approximate their fair values at the reporting date. Fair values for
fixed-rate CDs are estimated using a discounted cash flow calculation that
applies interest rates currently being offered on certificates to a
schedule of aggregated expected monthly maturities on time deposits.

Advances from FHLB. Rates currently available to the Corporation for
debt with similar terms and remaining maturities are used to estimate fair
value of existing debt.

Other borrowed funds. The carrying amounts of other borrowed funds
approximate their fair values.

Off-balance sheet items. The fair values of commitments to extend
credit and standby letters of credit are not material to the Corporation's
financial condition.

Limitations. Fair value estimates are made at a specific point of
time and are based on relevant market information which is continuously
changing. Because no quoted market prices exist for a significant portion
of the Corporation's financial instruments, fair values for such
instruments are based on management's assumptions with respect to future
economic conditions, estimated discount rates, estimates of the amount and
timing of future cash flows, expected loss experience, and other factors.
These estimates are subjective in nature involving uncertainties and
matters of significant judgment; therefore, they cannot be determined with
precision. Changes in the assumptions could significantly affect the
estimates.

F-26
<PAGE> 185
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

15. FAIR VALUES OF FINANCIAL INSTRUMENTS -- (CONTINUED)
The estimated fair values of the Corporation's financial instruments are as
follows:

<TABLE>
<CAPTION>
DECEMBER 31, 1998 DECEMBER 31, 1997
------------------- -------------------
CARRYING FAIR CARRYING FAIR
AMOUNT VALUE AMOUNT VALUE
-------- -------- -------- --------
(IN THOUSANDS)
<S> <C> <C> <C> <C>
Financial assets:
Cash and due from banks............................. $ 25,595 $ 25,595 $ 15,020 $ 15,020
Interest bearing deposits in other banks............ 158 158 200 200
Federal funds sold.................................. 14,435 14,435 27,605 27,605
Securities available for sale....................... 77,442 77,442 56,142 56,142
Securities held-to-maturity......................... -- -- 26,298 26,309
Mortgage loans held for sale........................ 4,898 4,898 -- --
Net loans........................................... 360,846 365,167 214,314 216,703
Accrued interest receivable......................... 3,791 3,791 3,194 3,194
Financial liabilities:
Deposits............................................ 435,366 437,119 306,785 304,176
Advances from FHLB.................................. 23,160 23,166 -- --
Other borrowed funds................................ 3,700 3,700 8,229 8,229
</TABLE>

16. OTHER NONINTEREST EXPENSE

Other noninterest expense consisted of the following (in thousands):

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31
------------------------
1998 1997 1996
------ ------ ------
<S> <C> <C> <C>
Professional fees........................................... $1,031 $ 522 $ 347
Directors fees.............................................. 560 293 249
Insurance and assessments................................... 311 209 172
Postage, stationery and supplies............................ 729 417 426
Advertising................................................. 358 259 189
Other operating expense..................................... 2,585 1,705 1,478
------ ------ ------
Total............................................. $5,574 $3,405 $2,861
====== ====== ======
</TABLE>

17. CONCENTRATIONS OF CREDIT RISK

All of the Corporation's loans, commitments and standby letters of credit
have been granted to customers in the Corporation's market area. The
concentrations of credit by type of loan or commitment are set forth in Notes 3
and 12, respectively.

The Corporation maintains cash balances and federal funds sold at several
financial institutions in Alabama and Florida. Cash balances at each institution
are insured by the Federal Deposit Insurance Corporation (the "FDIC") up to
$100,000. At various times throughout the year cash balances held at these
institutions will exceed federally insured limits. The Bank's management
monitors these institutions on a quarterly basis in order to determine that the
institutions meet "well-capitalized" guidelines as established by the FDIC.

F-27
<PAGE> 186
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

18. NET (LOSS) INCOME PER SHARE

The following table sets forth the computation of basic net (loss) income
per common share and diluted net (loss) income per common share (in thousands,
except per share amounts):

<TABLE>
<CAPTION>
1998 1997 1996
------- ------ ------
<S> <C> <C> <C>
Numerator:
For basic and diluted, net (loss) income.................. $ (367) $1,678 $1,103
======= ====== ======
Denominator:
For basic, weighted average common shares outstanding..... 11,011 8,449 7,217
Effect of dilutive stock options.......................... -- 119 97
------- ------ ------
Average diluted common shares outstanding................. 11,011 8,568 7,314
======= ====== ======
Basic and diluted net (loss) income per common share........ $ (.03) $ .20 $ .15
======= ====== ======
</TABLE>

19. PARENT COMPANY

The condensed financial information for The Banc Corporation (Parent
Company only) is presented as follows (in thousands):

<TABLE>
<CAPTION>
DECEMBER 31,
-----------------
1998 1997
------- -------
<S> <C> <C>
STATEMENTS OF FINANCIAL CONDITION
Assets:
Cash...................................................... $ 2,536 $ 6,783
Investment in subsidiaries................................ 40,674 34,312
Intangibles, net.......................................... 444 415
Premises and equipment -- net............................. 15,012 4,822
Other assets.............................................. 674 279
------- -------
$59,340 $46,611
======= =======
Liabilities:
Accounts payable and deferred taxes....................... $ 965 $ 816
Dividends payable......................................... -- 40
Accrued expenses and other liabilities.................... 1,164 258
Stockholders' equity........................................ 57,211 45,497
------- -------
$59,340 $46,611
======= =======
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1998 1997 1996
------- ------ ------
<S> <C> <C> <C>
STATEMENTS OF OPERATIONS
Income:
Dividends from subsidiaries............................... $ 2,370 $ 269 $ 401
Interest.................................................. 199 67 2
Other income.............................................. 515 95 124
------- ------ ------
3,084 431 527
</TABLE>

F-28
<PAGE> 187
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

19. PARENT COMPANY -- (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
-------------------------
1998 1997 1996
------- ------ ------
<S> <C> <C> <C>
Expense:
Directors' fees........................................... $ 194 $ 136 $ 98
Salaries and benefits..................................... 529 94 77
Occupancy expense......................................... 250 -- --
Interest expense.......................................... 81 -- --
Other..................................................... 1,117 70 46
------- ------ ------
2,171 300 221
------- ------ ------
Income before income taxes and equity in undistributed
earnings of subsidiaries.................................. 913 131 306
Income tax benefit (expense)................................ 1,321 48 (27)
------- ------ ------
Income before equity in undistributed earnings of
subsidiaries.............................................. 2,234 179 279
Equity in undistributed (loss) earnings of subsidiaries..... (2,601) 1,499 824
------- ------ ------
Net (loss) income........................................... $ (367) $1,678 $1,103
======= ====== ======
</TABLE>

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1998 1997 1996
-------- ------- ------
<S> <C> <C> <C>
STATEMENTS OF CASH FLOWS
Cash flows from operating activities
Net (loss) income......................................... $ (367) $ 1,678 $1,103
Adjustments to reconcile net (loss) income to net cash
provided by operating activities:
Amortization and depreciation expense................... 171 25 21
Equity in undistributed loss (earnings) of subsidiary... 2,601 (1,499) (824)
Increase (decrease) in other liabilities................ 786 62 (139)
(Increase) decrease in other assets..................... (1,181) (194) 70
-------- ------- ------
Net cash provided by operating activities................. 2,010 72 231
Net cash used in investing activities
Purchases of premises and equipment....................... (9,102) (141) --
Net cash paid in acquisition.............................. (5,390) -- --
Maturity of investment securities available for sale...... 500 -- --
Sale of investment securities available for sale.......... 246 -- --
Proceeds from other receivables........................... 329 30 --
Capital contribution to subsidiary........................ (5,000) -- --
-------- ------- ------
Net cash used in investing activities..................... (18,417) (111) --
Cash used in financing activities
Dividends paid by pooled subsidiary....................... (121) (389) (364)
Proceeds from issuance of common stock.................... 12,281 17,878 --
Repurchase of common stock................................ -- (9,496) (16)
Decrease in notes payable................................. -- -- (30)
Payment on assumed debt................................... -- (1,513) --
-------- ------- ------
</TABLE>

F-29
<PAGE> 188
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

19. PARENT COMPANY -- (CONTINUED)

<TABLE>
<CAPTION>
YEAR ENDED DECEMBER 31,
---------------------------
1998 1997 1996
-------- ------- ------
<S> <C> <C> <C>
Net cash provided (used) by financing activities.......... $ 12,160 $ 6,480 $ (410)
Net (decrease) increase in cash........................... (4,247) 6,441 (179)
Cash at beginning of year................................. 6,783 342 521
-------- ------- ------
Cash at end of year....................................... $ 2,536 $ 6,783 $ 342
======== ======= ======
</TABLE>

20. SELECTED QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

A summary of the unaudited results of operations for each quarter of 1998
and 1997 follows (in thousands, except per share data):

<TABLE>
<CAPTION>
FIRST SECOND THIRD FOURTH
QUARTER QUARTER QUARTER QUARTER
------- ------- ------- -------
<S> <C> <C> <C> <C>
1998
Total interest income................................. $7,309 $7,738 $9,031 $9,931
Total interest expense................................ 3,508 3,529 4,158 4,723
Net interest income................................... 3,801 4,209 4,873 5,208
Provision for loan losses............................. 410 623 2,190 210
Securities gains...................................... -- 62 148 62
Merger related costs.................................. -- -- -- 1,466
Income (loss) before income taxes..................... 883 669 (2,283) (614)
Net income (loss)..................................... 652 695 (1,324) (390)
Basic and diluted net income (loss) per share......... .06 .07 (0.13) (0.03)
1997
Total interest income................................. $5,686 $6,207 $6,652 $7,159
Total interest expense................................ 2,616 2,886 3,143 3,307
Net interest income................................... 3,070 3,321 3,509 3,852
Provision for loan losses............................. 431 324 336 758
Securities (losses) gains............................. -- (1) 98 120
Income before income taxes............................ 518 633 868 355
Net income............................................ 376 448 464 390
Basic and diluted net income per share................ .05 .05 .06 .04
</TABLE>

21. SEGMENT REPORTING

The Corporation has two reportable segments, the Alabama Region and the
Florida Region. The Alabama Region consists of operations located throughout the
state of Alabama. The Florida Region consists of operations located in the
panhandle of Florida. The Corporation's reportable segments are managed as
separate business units because they are located in different geographic areas.
Both segments derive revenues from the delivery of financial services. These
services include commercial loan, mortgage loans, consumer loans, deposit
accounts, and other financial services.

F-30
<PAGE> 189
THE BANC CORPORATION AND SUBSIDIARIES

NOTES TO SUPPLEMENTAL CONSOLIDATED FINANCIAL STATEMENTS -- (CONTINUED)

21. SEGMENT REPORTING -- (CONTINUED)
The Corporation evaluates performance and allocates resources based on
profit or loss from operations. There are no material intersegment sales or
transfers. Net interest revenue is used as the basis for performance evaluation
rather than its components, total interest revenue and total interest expense.
The accounting policies used by each reportable segment are the same as those
discussed in Note 1. All costs have been allocated to the reportable segments.
Therefore, combined segment amounts agree to the consolidated totals.

<TABLE>
<CAPTION>
ALABAMA FLORIDA
REGION REGION COMBINED
-------- ------- --------
<S> <C> <C> <C>
1998
Net interest income......................................... $ 14,942 $ 3,149 $ 18,091
Provision for loan loss..................................... 3,094 339 3,433
Non-interest income......................................... 2,617 604 3,221
Non-interest expense........................................ 15,926 3,298 19,224
Income tax (benefit) expense................................ (1,022) 44 (978)
Net (loss) income................................. (439) 72 (367)
Total assets................................................ 440,845 83,549 524,394
1997
Net interest income......................................... $ 12,189 $ 1,563 $ 13,752
Provision for loan loss..................................... 1,516 333 1,849
Non-interest income......................................... 2,205 115 2,320
Non-interest expense........................................ 9,913 1,936 11,849
Income tax expense (benefit)................................ 891 (195) 696
Net income (loss)................................. 2,074 (396) 1,678
Total assets................................................ 307,713 55,997 363,710
1996
Net interest income......................................... $ 9,707 $ 242 $ 9,949
Provision for loan loss..................................... 896 70 966
Non-interest income......................................... 1,956 10 1,966
Non-interest expense........................................ 8,663 793 9,456
Income tax expense (benefit)................................ 647 (257) 390
Net income (loss)................................. 1,457 (354) 1,103
Total assets................................................ 250,955 21,217 272,172
</TABLE>

22. SUBSEQUENT EVENT

In January 1999, the underwriters of the Corporation's public offering
exercised their option to purchase an additional 150,000 shares of the
Corporation's $.001 par value common stock at $11.00 per share, providing
$1,534,500 which was used for working capital.

In December 1998, Emerald Coast Bank received approval from the Office of
Thrift Supervision to change its charter to a federal thrift from a state bank.
The change to a federal thrift charter was completed in February 1999.

F-31
<PAGE> 190

INDEPENDENT AUDITORS' REPORT

Board of Directors
C & L Banking Corporation and Subsidiary
Bristol, Florida

We have audited the accompanying balance sheets of C & L Banking
Corporation and Subsidiary as of December 31, 1998, 1997 and 1996 and the
related statements of income and comprehensive income, changes in stockholders'
equity, and cash flows for the years then ended. These financial statements are
the responsibility of the Bank's management. Our responsibility is to express an
opinion on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of C & L Banking Corporation
and Subsidiary as of December 31, 1998, 1997 and 1996, and the results of its
operations and its cash flows for the years then ended in conformity with
generally accepted accounting principles.

Williams, Cox, Weidner and Cox

March 3, 1999

F-32
<PAGE> 191

C & L BANKING CORPORATION AND SUBSIDIARY

BALANCE SHEETS
DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Cash and Due from Banks................................. $ 2,694,689 $ 1,618,358 $ 2,072,183
Interest-bearing Deposits with Banks.................... 889,963 889,963 790,000
Federal Funds Sold...................................... 2,582,000 3,001,000 1,853,000
Investment Securities................................... 7,446,376 3,531,060 3,881,417
Loans Receivable -- Net................................. 34,044,724 30,964,805 26,708,775
Bank Premises and Equipment -- Net...................... 351,678 373,360 379,473
Accrued Interest Receivable............................. 564,180 451,854 363,259
Deferred Income Taxes................................... 265,448 136,076 101,694
Other Real Estate Owned................................. 54,669 36,846 14,000
Other Assets............................................ 42,555 55,210 49,656
----------- ----------- -----------
Total Assets.................................. $48,936,282 $41,058,532 $36,213,457
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand................................................ $ 5,272,733 $ 5,078,719 $ 4,408,816
Savings and NOW Accounts.............................. 7,840,042 6,634,699 7,145,671
Time Deposits Over $100,000........................... 14,421,192 8,877,705 6,801,721
Time Deposits - Other................................. 15,890,614 15,317,805 13,558,273
----------- ----------- -----------
Total Deposits................................ 43,424,581 35,908,928 31,914,481
Accrued Interest and Other Liabilities.................. 504,721 665,699 488,145
Deferred Income Taxes................................... 27,521 28,788 25,400
----------- ----------- -----------
Total Liabilities............................. 43,956,823 36,603,415 32,428,026
----------- ----------- -----------
MINORITY INTERESTS...................................... 94,401 84,494 77,781
----------- ----------- -----------
STOCKHOLDERS' EQUITY
Common Stock -- $10 Par Value, 20,000
Shares Authorized, 16,274 Issued and Outstanding........ 162,740 162,740 162,740
Capital Surplus......................................... 492,276 492,276 492,276
Accumulated Other Comprehensive Income.................. (3,405) 8,108 (5,424)
Undivided Profits....................................... 4,233,447 3,707,499 3,058,058
----------- ----------- -----------
Total Stockholders' Equity.................... 4,885,058 4,370,623 3,707,650
----------- ----------- -----------
Total Liabilities and Stockholders' Equity.... $48,936,282 $41,058,532 $36,213,457
=========== =========== ===========
</TABLE>

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

F-33
<PAGE> 192

C & L BANKING CORPORATION AND SUBSIDIARY

STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
INTEREST INCOME
Interest and Fees on Loans................................. $3,587,846 $3,231,895 $2,750,921
Interest on Investment Securities:
Taxable.................................................. 152,396 140,371 163,420
Exempt from Federal Income Tax........................... 71,580 69,599 73,352
Interest on Federal Funds Sold............................. 235,564 117,440 93,965
Interest on Deposits with Banks............................ 54,312 50,011 52,374
---------- ---------- ----------
Total Interest Income............................ 4,101,698 3,609,316 3,134,032
INTEREST EXPENSE ON DEPOSITS............................... 1,947,821 1,579,690 1,353,829
---------- ---------- ----------
Net Interest Income.............................. 2,153,877 2,029,626 1,780,203
PROVISION FOR LOAN LOSSES.................................. 440,000 112,500 77,500
---------- ---------- ----------
Net Interest Income after Provision For Loan Losses...... 1,713,877 1,917,126 1,702,703
---------- ---------- ----------
OTHER INCOME
Service Charges............................................ 473,692 342,783 306,749
Gain on Sale of Securities................................. -- 2,972 21,885
Other...................................................... 27,228 33,565 26,486
---------- ---------- ----------
Total Other Income............................... 500,920 379,320 355,120
---------- ---------- ----------
OTHER EXPENSE
Salaries and Employee Benefits............................. 650,665 586,955 527,698
Occupancy Expense.......................................... 218,865 209,861 193,598
Other...................................................... 436,577 414,045 414,178
---------- ---------- ----------
Total Other Expense.............................. 1,306,107 1,210,861 1,135,474
---------- ---------- ----------
MINORITY INTEREST.......................................... (9,908) (13,436) (12,593)
---------- ---------- ----------
INCOME BEFORE INCOME TAXES................................. 898,782 1,072,149 909,756
INCOME TAX EXPENSE......................................... 322,872 372,709 315,599
---------- ---------- ----------
NET INCOME................................................. 575,910 699,440 594,157
---------- ---------- ----------
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Change in Unrealized Gains (Losses) on Available-for-Sale
Securities............................................ $ (11,513) $ 13,532 $ 14,607
---------- ---------- ----------
COMPREHENSIVE INCOME....................................... $ 564,397 $ 712,972 $ 608,764
========== ========== ==========
NET INCOME PER SHARE OF COMMON STOCK....................... $ 35.39 $ 42.98 $ 36.51
========== ========== ==========
</TABLE>

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

F-34
<PAGE> 193

C & L BANKING CORPORATION AND SUBSIDIARY PAGE 1 OF 2

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
ACCUMULATED
OTHER
COMPREHENSIVE COMMON CAPITAL UNDIVIDED
INCOME STOCK SURPLUS PROFITS
------------- -------- -------- ----------
<S> <C> <C> <C> <C>
BALANCE -- DECEMBER 31, 1995..................... $(20,031) $162,740 $492,276 $2,497,340
Net Income..................................... -- -- -- 594,157
Cash Dividends Declared, $2.25 per share....... -- -- -- (33,439)
Other Comprehensive Income:
Net Change in Unrealized Gains (Losses) on
Available-for-Sale Securities............. 14,607 -- -- --
-------- -------- -------- ----------
BALANCE -- DECEMBER 31, 1996..................... (5,424) 162,740 492,276 3,058,058
Net Income..................................... -- -- -- 699,440
Cash Dividends Declared, $3.00 per share....... -- -- -- (49,999)
Other Comprehensive Income:
Net Change in Unrealized Gains (Losses) on
Available-for-Sale Securities............. 13,532 -- -- --
-------- -------- -------- ----------
BALANCE -- DECEMBER 31, 1997..................... 8,108 162,740 492,276 3,707,499
Net Income..................................... -- -- -- 575,910
Cash Dividends Declared, $3.00 per share....... -- -- -- (49,962)
Other Comprehensive Income:
Net Change in Unrealized Gains (Losses) on
Available-for-Sale Securities............. (11,513) -- --
-------- -------- -------- ----------
BALANCE -- DECEMBER 31, 1998..................... $ (3,405) $162,740 $492,276 $4,233,447
======== ======== ======== ==========
</TABLE>

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

F-35
<PAGE> 194

C & L BANKING CORPORATION AND SUBSIDIARY

CONSOLIDATED STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997, AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income.............................................. $ 575,910 $ 699,440 $ 594,157
Adjustments to Reconcile Net Income to Net Cash Provided
by Operating Activities:
Depreciation.......................................... 58,671 64,888 55,437
Accretion/Amortization of Discounts/Premium........... 6,332 2,507 21,261
Gain on Sale of Securities............................ -- (2,972) (21,885)
Provision for Loan Losses............................. 440,000 112,500 77,500
Minority Interests.................................... 9,908 13,436 12,593
(Increase) Decrease in:
Accrued Interest Receivable........................ (112,327) (88,589) (14,934)
Deferred Income Taxes.............................. (130,885) (34,382) 5,461
Other Assets....................................... 12,575 (5,554) (17,065)
Increase (Decrease) in:
Accrued Interest and Other Liabilities............. (160,978) 177,553 (161,551)
Deferred Income Taxes.............................. (1,267) 3,388 2,362
----------- ----------- -----------
Net Cash Provided by Operating Activities..... 697,939 942,215 553,336
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Purchases of Interest-bearing Deposits with Banks....... -- (593,963) (391,000)
Proceeds from Maturities of Interest-bearing Deposits
with Banks............................................ 95,000 494,000 294,794
Net Decrease (Increase) in Federal Funds Sold........... 419,000 (1,148,000) (584,000)
Purchases of Held to Maturity Investment Securities..... -- (99,797) (136,375)
Proceeds from Sales/Maturities of Held to Maturity
Investment Securities................................. 75,337 58,017 394,309
Purchases of Available-for-Sale Investment Securities... (5,381,359) (493,281) (585,172)
Proceeds from Sales/Maturities of Available-for-Sale
Investment Securities................................. 1,289,454 899,415 1,380,707
Net Increase in Loans................................... (3,519,919) (4,368,536) (4,435,452)
Purchase of Bank Premises and Equipment................. (36,989) (58,775) (32,566)
Net (Increase) in Other Real Estate..................... (17,823) (22,846) 50,753
----------- ----------- -----------
Net Cash Used for Investing Activities........ (7,077,299) (5,333,766) (4,044,002)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net Increase in Demand Deposits, NOW Accounts and
Savings Accounts...................................... 1,399,357 158,931 1,220,290
Net Increase in Time Deposits........................... 6,106,296 3,835,516 3,165,198
Dividends Paid.......................................... (49,962) (49,999) (33,439)
Purchase of C & L Bank Stock............................ -- (6,722) (4,633)
Principal Payment on Debt............................... -- -- (35,472)
----------- ----------- -----------
Net Cash Provided by Financing Activities............... 7,455,691 3,937,726 4,311,944
----------- ----------- -----------
NET (DECREASE) INCREASE IN CASH AND DUE FROM BANKS...... 1,076,331 (453,825) 821,278
BEGINNING CASH AND DUE FROM BANKS....................... 1,618,358 2,072,183 1,250,905
----------- ----------- -----------
ENDING CASH AND DUE FROM BANKS.......................... $ 2,694,689 $ 1,618,358 $ 2,072,183
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash Paid during the year for:
Income Taxes....................................... $ 521,282 $ 449,527 $ 310,806
=========== =========== ===========
Interest........................................... $ 1,952,208 $ 1,582,601 $ 1,362,389
=========== =========== ===========
</TABLE>

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

F-36
<PAGE> 195

C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996

NOTE 1 -- ORGANIZATION

C & L Banking Corporation (the "Company") is a bank holding company
organized under the laws of the State of Florida. The Company owns 98.1% of C &
L Bank of Bristol, a state bank in Bristol, Florida offering a full range of
banking activities including loans. Note 2 contains a description of the
Company's significant accounting and reporting policies.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Principles of Consolidation. The consolidated financial statements include
the accounts of the Company and its subsidiary, C & L Bank of Bristol (the
"Bank"). All material intercompany balances and transactions have been
eliminated in consolidation.

Investment Securities. The Bank's investments in securities are classified
in two categories and accounted for as follows:

- Securities to be Held to Maturity: Bonds, notes and debentures for which
the Bank has a positive intent and ability to hold to maturity are
reported at cost, adjusted for amortization of premiums and accretion of
discounts, which are recognized in interest income using the interest
method over the period to maturity.

- Securities Available-for-Sale: Securities available-for-sale consist of
bonds, notes, and debentures not classified as securities to be held to
maturity. These securities are reported at market value, with unrealized
holding gains or losses reported as a separate component of stockholders'
equity until realized.

Gains and losses on sale of securities available-for-sale are determined
using specific-identification method.

Loans Receivable. Loans receivable that management has the intent and
ability to hold for the foreseeable future or until maturity or pay-off are
reported at their outstanding principal adjusted for any charge-offs, the
allowance for loan losses, and any deferred fees or costs on originated loans
and unamortized premiums or discounts on purchased loans.

Loan Origination Fees and Costs. Loan origination fees and certain direct
origination costs are capitalized and recognized as an adjustment of the yield
on the related loan.

Impaired Loans. The accrual of interest on impaired 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. Interest income is subsequently recognized only to the
extent cash payments are received.

Loans and Allowance for Loan Losses. Loans are stated at the amount of
unpaid principal, reduced by unearned discount and an allowance for loan losses.
Unearned discount on installment loans is recognized as income over the terms of
the loans by the interest method. Interest on other loans is calculated by using
the simple interest method on daily balances of the principal amount
outstanding. The allowance for loan losses is established through a provision
for loan losses charged to expense. Loans are charged against the allowance for
loan losses when management believes that the collectibility of the principal is
unlikely. The allowance is an amount that management believes will be adequate
to absorb possible losses on existing loans that may become uncollectible, based
on evaluations of the collectibility of loans and prior loan loss experience.
The evaluations take 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

F-37
<PAGE> 196
C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

borrowers' ability to pay. Accrual of interest is generally discontinued when a
loan becomes 90 days past due as to either interest or principal.

Bank Premises and Equipment. Bank premises and equipment are stated at
cost less accumulated depreciation. Depreciation expense is computed on the
declining balance and straight-line methods over the estimated useful lives of
the assets.

Maintenance and repairs are charged to expense as incurred. Improvements
which materially prolong the useful lives of assets are capitalized. Upon sale
or retirement, the cost and accumulated depreciation are removed from the
accounts, and any resulting gain or loss is reflected in operations.

Income Taxes. The Company and its subsidiary file consolidated income tax
returns. Provisions for income taxes are based on taxes payable or refundable
for the current year (after exclusion of non-taxable income such as interest on
state and municipal securities) and deferred taxes on temporary differences
between the amount of taxable income and pretax financial income and between the
tax bases of assets and liabilities and their reported amounts in the financial
statements. Deferred tax assets and liabilities are included in the financial
statements at currently enacted income tax rates applicable to the period in
which the deferred tax assets and liabilities are expected to be realized or
settled as prescribed in Financial Accounting Standards Board Statement No. 109,
Accounting for Income Taxes. As changes in tax laws or rates are enacted,
deferred tax assets and liabilities are adjusted through the provision for
income taxes.

Net Income Per Share of Common Stock. Net income per share of common stock
is computed by dividing net income by the weighted average number of shares of
common stock outstanding during the year.

Foreclosed Real Estate. Real estate properties acquired through, or in
lieu of, loan foreclosure are to be sold and are initially recorded at fair
value at the date of foreclosure establishing a new cost basis. After
foreclosure, valuations are periodically performed by management and the real
estate is carried at the lower of carrying amount or fair value less cost to
sell. Revenue and expenses from operations and changes in the valuation
allowance are included in loss on foreclosed real estate.

Off-Balance-Sheet Financial Instruments. In the ordinary course of
business, the Bank has entered into off-balance-sheet financial instruments
consisting of commitments to extend credit. Such financial instruments are
recorded in the financial statements when they become payable.

Cash and Cash Equivalents. For the purpose of presentation in the
Statement of Cash Flows, cash and cash equivalents are defined as those amounts
included in the balance sheet caption "Cash and Due From Banks".

Estimates. The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities and
disclosure of contingent assets and liabilities at the date of the financial
statements and the reported amounts of revenues and expenses during the
reporting period. Actual results could differ from those estimates.

Advertising. Advertising costs are expensed as incurred. Advertising
expense for the years ended December 31, 1998, 1997 and 1996 was $30,621,
$29,049 and $37,220, respectively.

F-38
<PAGE> 197
C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 3 -- INVESTMENT SECURITIES

Par value, carrying value, and market value of investment securities are as
follows:

<TABLE>
<CAPTION>
PAR CARRYING MARKET
VALUE VALUE VALUE
---------- ---------- ----------
<S> <C> <C> <C>
DECEMBER 31, 1998
U. S. Government Agencies.................................. $6,034,318 $6,030,168 $6,034,163
Obligations of State and Political Subdivisions............ 1,410,000 1,416,208 1,457,993
---------- ---------- ----------
Total............................................ $7,444,318 $7,446,376 $7,492,156
========== ========== ==========
DECEMBER 31, 1997
U. S. Government Agencies.................................. $2,018,531 $2,017,298 $2,025,188
Obligations of State and Political Subdivisions............ 1,410,000 1,418,762 1,449,252
---------- ---------- ----------
Total............................................ $3,428,531 $3,436,060 $3,474,440
========== ========== ==========
DECEMBER 31, 1996
U. S. Government Agencies.................................. $2,464,154 $2,464,995 $2,472,601
Obligations of State and Political Subdivisions............ 1,310,000 1,321,422 1,326,328
---------- ---------- ----------
Total............................................ $3,774,154 $3,786,417 $3,798,929
========== ========== ==========
</TABLE>

Investment securities with a carrying value of $1,116,207, $1,384,728 and
$1,420,386 at December 31, 1998, 1997 and 1996, respectively, were pledged to
secure public and trust deposits and for other purposes as required or permitted
by law. Market values for these securities were $1,152,868, $1,407,802 and
$1,424,104 at December 31, 1998, 1997 and 1996, respectively.

<TABLE>
<CAPTION>
MARKET AMORTIZED UNREALIZED UNREALIZED
VALUE COST (LOSS) GAIN
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1998
SECURITIES HELD TO MATURITY
U.S. Government Securities......................... $ 120,107 $ 116,112 $ -- $ 3,995
Obligations of State and Political Subdivisions.... 1,457,993 1,416,208 -- 41,785
---------- ---------- -------- -------
Total.................................... 1,578,100 1,532,320 -- 45,780
---------- ---------- -------- -------
SECURITIES AVAILABLE-FOR-SALE
U.S. Government Securities......................... 5,914,056 5,919,215 (5,159) --
---------- ---------- -------- -------
Total.................................... 5,914,056 5,919,215 (5,159) --
---------- ---------- -------- -------
Total Securities......................... $7,492,156 $7,451,535 $ (5,159) $45,780
========== ========== ======== =======
DECEMBER 31, 1997
SECURITIES HELD TO MATURITY
U.S. Government Securities......................... $ 199,330 $ 191,440 $ -- $ 7,890
Obligations of State and Political Subdivisions.... 1,449,252 1,418,762 -- 30,490
---------- ---------- -------- -------
Total.................................... 1,648,582 1,610,202 -- 38,380
---------- ---------- -------- -------
SECURITIES AVAILABLE-FOR-SALE
U.S. Government Securities......................... 1,825,858 1,813,573 (7,485) 19,770
---------- ---------- -------- -------
Total.................................... 1,825,858 1,813,573 (7,485) 19,770
---------- ---------- -------- -------
Total Securities......................... $3,474,440 $3,423,775 $ (7,485) $58,150
========== ========== ======== =======
</TABLE>

F-39
<PAGE> 198
C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
MARKET AMORTIZED UNREALIZED UNREALIZED
VALUE COST (LOSS) GAIN
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
DECEMBER 31, 1996
SECURITIES HELD TO MATURITY
U.S. Government Securities......................... $ 257,056 $ 249,450 $ -- $ 7,606
Obligations of State and Political Subdivisions.... 1,326,328 1,321,422 (2,354) 7,260
---------- ---------- -------- -------
Total.................................... 1,583,384 1,570,872 (2,354) 14,866
---------- ---------- -------- -------
SECURITIES AVAILABLE-FOR-SALE
U.S. Government Securities......................... 2,215,545 2,223,763 (16,832) 8,614
---------- ---------- -------- -------
Total.................................... 2,215,545 2,223,763 (16,832) 8,614
---------- ---------- -------- -------
Total Securities......................... $3,798,929 $3,794,635 $(19,186) $23,480
========== ========== ======== =======
</TABLE>

Change in net unrealized holding gains (losses) on non-current marketable
debt securities included in total stockholders' equity at December 31, 1998 were
as follows:

<TABLE>
<S> <C>
Balance, December 31, 1997.................................. $ 12,285
Balance, December 31, 1998.................................. (5,159)
--------
Current Period Change....................................... (17,444)
Less: Tax Effect............................................ 5,913
--------
Net Change, Current Period.................................. $(11,531)
========
</TABLE>

Realized gains and losses on securities sold during the year were as
follows:

<TABLE>
<CAPTION>
SALES BOOK REALIZED REALIZED
PRICE VALUE GAINS LOSSES
-------- -------- -------- --------
<S> <C> <C> <C> <C>
DECEMBER 31, 1998
U.S. Government Securities.............................. $ -- $ -- $ -- $ --
-------- -------- ------- ----
Totals........................................ $ -- $ -- $ -- $ --
======== ======== ======= ====
DECEMBER 31, 1997
U.S. Government Securities.............................. $503,992 $501,020 $ 2,972 $ --
-------- -------- ------- ----
Totals........................................ $503,992 $501,020 $ 2,972 $ --
======== ======== ======= ====
DECEMBER 31, 1996
U.S. Government Securities.............................. $566,604 $566,955 $ -- $351
Obligations of State and Political Subdivisions......... 180,423 158,187 22,236 --
-------- -------- ------- ----
Totals........................................ $747,027 $725,142 $22,236 $351
======== ======== ======= ====
</TABLE>

The maturities of investment securities were as follows:

<TABLE>
<CAPTION>
AMORTIZED MARKET
COST BASIS VALUE
---------- ----------
<S> <C> <C>
DECEMBER 31, 1998
Due in one year or less..................................... $ 919,699 $ 933,589
Due from one to five years.................................. 4,179,799 4,187,595
Due from five to ten years.................................. 1,165,000 1,172,725
Due after ten years......................................... 1,187,037 1,198,247
---------- ----------
$7,451,535 $7,492,156
========== ==========
</TABLE>

F-40
<PAGE> 199
C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
AMORTIZED MARKET
COST BASIS VALUE
---------- ----------
<S> <C> <C>
DECEMBER 31, 1997
Due in one year or less..................................... $ -- $ --
Due from one to five years.................................. 1,797,820 1,818,415
Due from five to ten years.................................. 1,136,343 1,151,918
Due after ten years......................................... 489,612 504,107
---------- ----------
$3,423,775 $3,474,440
========== ==========
DECEMBER 31, 1996
Due in one year or less..................................... $ 146,723 $ 146,880
Due from one to five years.................................. 1,566,686 1,572,102
Due from five to ten years.................................. 1,497,574 1,493,494
Due after ten years......................................... 583,652 586,453
---------- ----------
$3,794,635 $3,798,929
========== ==========
</TABLE>

NOTE 4 -- LOANS

Loans outstanding, by classification, at December 31 are summarized as
follows:

<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Commercial.............................................. $15,414,382 $13,013,179 $17,143,037
Real Estate............................................. 18,035,076 16,667,808 8,206,635
Installment............................................. 1,725,333 2,094,821 2,083,994
----------- ----------- -----------
35,174,791 31,775,808 27,433,666
Unearned Discount....................................... (197,708) (263,967) (259,780)
Unamortized Loan Fees................................... (82,648) (77,185) (74,097)
Allowance for Loan Losses............................... (849,711) (469,851) (391,020)
----------- ----------- -----------
Loans, net.................................... $34,044,724 $30,964,805 $26,708,769
=========== =========== ===========
</TABLE>

No loans were held for sale at December 31, 1998 or 1997. Loans held for
sale are reported at the lower of cost or market value. The method used to
determine these amounts is the individual loan method.

The amount of loans being serviced by the Bank for the benefit of others
was $6,022,870 and $8,750,888 for December 31, 1998 and 1997, respectively.

Changes in the allowance for loan losses were as follows:

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Balance, beginning of year............................. $469,851 $391,020 $365,184
Provision charged to operations........................ 440,000 112,500 77,500
Loans charged off...................................... (70,102) (41,657) (58,835)
Recoveries on loans charged off........................ 9,962 7,988 7,171
-------- -------- --------
Balance, end of year................................... $849,711 $469,851 $391,020
======== ======== ========
</TABLE>

F-41
<PAGE> 200
C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The following are maturities of loans receivable as of December 31, 1998:

<TABLE>
<CAPTION>
FIXED RATE ADJUSTABLE RATE
- -------------------------------------------- --------------------------------------------
TERM TO MATURITY BOOK VALUE TERM TO MATURITY BOOK VALUE
- ---------------- ----------- ---------------- -----------
<S> <C> <C> <C>
Less Than 1 Year............... $ 9,232,088 Less Than 1 Year............... $ 3,192,731
1 Year - 3 Years............... 4,857,919 1 Year - 3 Years............... 948,454
3 Years - Five Years........... 3,488,574 3 Years - Five Years........... 2,296,920
Greater Than Five Years........ 104,845 Greater Than Five Years........ 11,053,260
----------- -----------
$17,683,426 $17,491,365
=========== ===========
</TABLE>

The following are maturities of loans receivable as of December 31, 1997:

<TABLE>
<CAPTION>
FIXED RATE ADJUSTABLE RATE
- -------------------------------------------- --------------------------------------------
TERM TO MATURITY BOOK VALUE TERM TO MATURITY BOOK VALUE
- ---------------- ----------- ---------------- -----------
<S> <C> <C> <C>
Less Than 1 Year............... $ 7,533,390 Less Than 1 Year............... $ 1,769,052
1 Year - 3 Years............... 5,478,628 1 Year - 3 Years............... 1,275,018
3 Years - Five Years........... 4,456,926 3 Years - Five Years........... 2,055,614
Greater Than Five Years........ 324,485 Greater Than Five Years........ 8,882,695
----------- -----------
$17,793,429 $13,982,379
=========== ===========
</TABLE>

The following are maturities of loans receivable as of December 31, 1996:

<TABLE>
<CAPTION>
FIXED RATE ADJUSTABLE RATE
- -------------------------------------------- --------------------------------------------
TERM TO MATURITY BOOK VALUE TERM TO MATURITY BOOK VALUE
- ---------------- ----------- ---------------- -----------
<S> <C> <C> <C>
Less Than 1 Year............... $ 7,151,440 Less Than 1 Year............... $ 2,652,557
1 Year - 3 Years............... 3,476,788 1 Year - 3 Years............... 474,689
3 Years - Five Years........... 3,480,342 3 Years - Five Years........... 1,437,765
Greater Than Five Years........ 465,858 Greater Than Five Years........ 8,294,227
----------- -----------
$14,574,428 $12,859,238
=========== ===========
</TABLE>

The adjustable rate loans have interest rate adjustment limitations and are
generally indexed to the New York prime rate.

NOTE 5 -- BANK PREMISES AND EQUIPMENT -- NET

A summary of bank premises and equipment at December 31:

<TABLE>
<CAPTION>
ESTIMATED
LIFE YEARS 1998 1997 1996
---------- --------- --------- ---------
<S> <C> <C> <C> <C>
Land....................................... -- $ 45,148 $ 45,148 $ 45,148
Building................................... 5-40 342,346 342,346 342,346
Furniture, fixtures and equipment.......... 5-40 429,059 405,852 450,430
Land improvements.......................... 5-7 35,465 35,465 43,947
--------- --------- ---------
852,018 828,811 881,871
Accumulated depreciation................... (500,340) (455,451) (502,398)
--------- --------- ---------
Bank Premises and Equipment -- Net......... $ 351,678 $ 373,360 $ 379,473
========= ========= =========
</TABLE>

Depreciation and amortization expense amounted to $58,671, $64,888 and
$55,437 for the period ended December 31, 1998, 1997 and 1996, respectively.

F-42
<PAGE> 201
C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 6 -- DEPOSITS

The aggregate amount of certificates of deposit with amounts of $100,000
and above at December 31, 1998 was approximately $15,619,291.

At December 31, 1998, the scheduled maturities of certificate of deposits
are as follows:

<TABLE>
<S> <C>
1999........................................................ $26,805,157
2000........................................................ 1,705,331
2001........................................................ 481,226
2002........................................................ 340,449
2003 and thereafter......................................... 979,643
</TABLE>

NOTE 7 -- OPERATING LEASE

C & L Bank of Bristol has an agreement with AT&T Credit Corporation for
data processing equipment used to process its day to day transactions. The lease
is treated as an operating lease under generally accepted accounting principles.
The rental expense was $45,120, $43,801 and $48,930 for December 31, 1998, 1997
and 1996, respectively.

Minimum future rental payments under the non-cancelable operating lease
having a remaining term in excess of 1 year as of December 31, 1998 for each of
the next 5 years and in the aggregate are:

<TABLE>
<S> <C>
1999........................................................ $ 49,068
2000........................................................ 49,068
2001........................................................ 49,068
2002........................................................ 49,068
2003 and thereafter......................................... 20,445
--------
Total Minimum future rental payments........................ $216,717
========
</TABLE>

NOTE 8 -- INCOME TAXES

The Company's tax year ends on December 31, and state and federal income
tax expense in these financial statements are based on results of operations for
the year ended December 31. The Company files a consolidated return with C & L
Bank (See Note 10). All income tax expense for the consolidated entity is
allocated to the Bank.

The effective tax rate differs from the expected tax using the statutory
rate of 34%. Reconciliation between the expected tax and the actual provision
for income taxes follows:

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Expected tax at 34% of income before taxes............. $311,374 $369,098 $315,152
Add (Deduct):
State income taxes, net of federal tax benefit......... 31,980 30,699 22,066
Effect of interest income exempt from federal income
taxes................................................ (25,915) (25,502) (26,663)
Unallowable interest deduction......................... 4,165 3,929 3,786
Other items -- Net..................................... 1,268 (5,515) 1,258
-------- -------- --------
Income Tax Expense..................................... $322,872 $372,709 $315,599
======== ======== ========
</TABLE>

F-43
<PAGE> 202
C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Components of income tax expense are as follows:

<TABLE>
<CAPTION>
1998 1997 1996
--------- -------- --------
<S> <C> <C> <C>
Current:
Federal............................................. $ 399,125 $364,160 $273,608
State............................................... 48,455 46,514 34,504
Deferred:
Federal............................................. (124,708) (37,965) 7,487
--------- -------- --------
Total Income Tax Expense............................ $ 322,872 $372,709 $315,599
========= ======== ========
</TABLE>

Deferred tax assets and liabilities included in the balance sheets at
December 31 consist of the following:

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Deferred Tax Assets:
Allowance for Loan Losses............................ $261,994 $136,076 $ 98,900
Net Unrealized Loss on Available-For-Sale
Securities........................................ 1,754 -- 2,794
Reduction in Value of Repossessed Assets............. 1,700 -- --
-------- -------- --------
$265,448 $136,076 $101,694
======== ======== ========
Deferred Tax Liability:
Net Unrealized Gain on Available-for-Sale
Securities........................................ $ -- $ 4,177 $ --
Accumulated Depreciation............................. 27,521 24,611 25,400
-------- -------- --------
$ 27,521 $ 28,788 $ 25,400
======== ======== ========
</TABLE>

All deferred tax assets at December 31, 1998, 1997 and 1996 are considered
current assets. The deferred tax liabilities at December 31, 1998, 1997 and 1996
are considered long-term.

NOTE 9 -- COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
BEFORE-TAX TAX (EXPENSE) NET-OF-TAX
AMOUNT OR BENEFIT AMOUNT
---------- ------------- ----------
<S> <C> <C> <C>
Unrealized Losses on Securities At December 31, 1998........ $17,444 $5,931 $11,513
======= ====== =======
</TABLE>

NOTE 10 -- RELATED PARTIES

C & L Banking Corporation is a one-bank holding company which owns 98.1% of
the stock of C & L Bank of Bristol.

C & L Bank of Bristol is affiliated with C & L Bank of Blountstown by
virtue of common board of directors. Loan participations are purchased and sold
between the two institutions. See Note 11.

Loans to directors and officers of the Bank amounted to approximately
$1,340,959, $1,166,397 and $1,107,277 at December 31, 1998, 1997 and 1996. These
loans were made on substantially the same terms, including interest and
collateral, as those prevailing at the time for comparable transactions with
other customers.

Bank certificates of deposit held by related parties amounted to
approximately $2,437,209 and $424,000 at December 31, 1998 and 1997,
respectively.

F-44
<PAGE> 203
C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 11 -- PARTICIPATION LOANS

The Bank has purchased participations in certain loans from various
financial institutions. At December 31, 1998, 1997 and 1996, $-0-, $729,374 and
$411,420, respectively, in participations had been purchased.

The Bank has originated certain loans and subsequently sold them to
participating financial institutions. At December 31, 1998, 1997 and 1996,
$6,022,870, $8,750,888 and $7,548,539, respectively, in loans had been
participated.

Participation loans totaling $2,669,361, $1,997,316, and $1,386,367 at
December 31, 1998, 1997 and 1996, respectively, had been sold to C & L Bank of
Blountstown, an affiliated bank under control of the same Board of Directors as
the Bank.

NOTE 12 -- PENSION PLAN

The Bank has a 401K plan covering all full-time employees who have
completed six months of service prior to the entry date of January 1. The
employees may contribute up to 10% of their salary. The Bank will match 50% of
the employees' contribution and funds this amount monthly. Pension expense was
$12,783, $12,423 and $14,938 for the years ended December 31, 1998, 1997 and
1996, respectively.

NOTE 13 -- COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Bank makes various commitments to
extend credit which involve elements of credit risk, interest rate risk, and
liquidity risk that are not presented in the financial statements. Commitments
to extend credit were approximately $265,330, $954,000 and $1,183,000 at
December 31, 1998, 1997 and 1996. There were no commercial letters of credit
outstanding at year end. The commitments are both unsecured and collateralized
by real estate, time deposits, and equipment. These commitments include exposure
to some credit loss in the event of nonperformance by the customer.

The Bank uses the same credit policies and procedures in making commitments
and conditional obligations as it does for extension of credit recorded on the
balance sheet. Because many of these instruments have fixed maturity dates, and
because many of them expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash and liquidity requirements to
the Bank. The Bank does not anticipate any material loss as a result of the
commitments.

The Bank is subject to various litigations and claims during the normal
course of banking procedures and foreclosures. Management, after consultation
with legal counsel, believes that any liabilities, if any, arising from such
litigation and claims will not be material to the Bank's financial position.

In order to qualify as a depository for public funds, the Bank entered into
an agreement pursuant to the Florida Security for Public Deposits Act. In
connection therewith, the Bank agreed to collectively share in any loss to
public depositors caused by default or insolvency of other qualified public
depositories.

NOTE 14 -- CONCENTRATIONS OF CREDIT RISK

Substantially all of the Bank's loans and commitments have been granted to
customers in the Bank's market area. The majority of the customers are
depositors of the Bank, approximately 40% are associated with the timber
industry. The concentrations of credit by type of loan are set forth in Note 4.
A large portion of loans are made to individuals and businesses in the logging
sector which has experienced difficulties which could affect their ability to
pay. The Bank, as a matter of policy and state statute, does not extend credit
to any single borrowers or group of related borrowers in excess of $1,108,883
unless a portion is participated or secured by certificates of deposits. Cash
and Due from Banks includes $1,043,571 in excess of federally insured limits at
December 31, 1998.

F-45
<PAGE> 204
C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 15 -- REGULATORY MATTERS

The 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 quantitative 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 (as defined) to average
assets (as defined). Management believes, as of December 31, 1998, 1997 and 1996
that the Bank meets all capital adequacy requirements to which it is subject.

As of December 31, the most recent notification from the Federal Deposit
Insurance Corporation 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,
and Tier I leverage ratios as set forth in the table. There are no conditions or
events since that notification that management believes have changed the
institution's category. The Bank's actual capital amounts and ratios are also
presented in the table.

<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED UNDER
FOR CAPITAL PROMPT CORRECTIVE
ACTUAL ADEQUACY PURPOSES ACTION PROVISIONS:
------------------ ------------------ -------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
---------- ----- ---------- ----- ---------- ------
<S> <C> <C> <C> <C> <C> <C>
As of December 31, 1998
Total Capital (to Risk Weighted Assets).... $5,390,858 16.3% $2,645,120 >=8.0% $3,306,400 >=10.0%
Tier I Capital (to Risk Weighted Assets)... 4,971,858 15.0 1,322,560 >=4.0 1,983,840 >=6.0
Tier I Capital (to Average Assets)......... 4,971,858 10.2 1,467,810 >=3.0 2,446,350 >=5.0
As of December 31, 1997
Total Capital (to Risk Weighted Assets).... 4,808,924 16.2 2,368,000 >=8.0 2,960,000 >=10.0
Tier I Capital (to Risk Weighted Assets)... 4,438,924 15.0 1,184,000 >=4.0 1,776,000 >=6.0
Tier I Capital (to Average Assets)......... 4,438,924 11.0 1,211,430 >=3.0 2,019,500 >=5.0
As of December 31, 1996
Total Capital (to Risk Weighted Assets).... 4,104,048 16.2 2,030,320 >=8.0 2,537,900 >=10.0
Tier I Capital (to Risk Weighted Assets)... 3,786,048 14.9 1,015,160 >=4.0 1,522,740 >=6.0
Tier I Capital (to Average Assets)......... 3,786,048 10.7 1,054,830 >=3.0 1,758,050 >=5.0
</TABLE>

NOTE 16 -- YEAR 2000

The year 2000 issue is the result of shortcomings in many electronics
data-processing systems and other equipment that may affect operations in the
year 1999 and beyond. C & L Bank of Bristol has taken steps to ensure that
computer systems and other electronic equipment critical to conducting
operations are year 2000 compliant. The Bank has formed a task force composed of
employees from critical areas who have identified and assessed critical computer
and electronic equipment systems. According to management, the Bank has
completed their testing of critical systems and equipment.

F-46
<PAGE> 205
C & L BANKING CORPORATION AND SUBSIDIARY

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 17 -- SUBSEQUENT EVENTS

C & L Banking Corporation and C & L Bank of Bristol signed a letter of
intent on January 25, 1999 to merge with The Banc Corporation in Birmingham,
Alabama. A definitive agreement was signed on February 23, 1999. According to
management, this merger should take place close to the end of May, pending State
and Federal approval. It is intended that the merger be accounted for as a
"pooling of interest," and to qualify as a tax-free reorganization. The
agreement will be void if the transaction has not been completed by September
30, 1999.

F-47
<PAGE> 206

INDEPENDENT AUDITORS' REPORT

Board of Directors
C & L Bank of Blountstown
Blountstown, Florida

We have audited the accompanying balance sheets of C & L Bank of
Blountstown as of December 31, 1998, 1997 and 1996, and the related statements
of income, changes in stockholders' equity, and cash flows for the years then
ended. These financial statements are the responsibility of the Bank's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audits provide a reasonable basis for our opinion.

In our opinion, the financial statements referred to above present fairly,
in all material respects, the financial position of C & L Bank of Blountstown as
of December 31, 1998, 1997 and 1996, and the results of its operations and its
cash flows for the years then ended in conformity with generally accepted
accounting principles.

Williams, Cox, Weidner and Cox

March 3, 1999

F-48
<PAGE> 207

C & L BANK OF BLOUNTSTOWN

BALANCE SHEETS
DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
ASSETS
Cash and Due from Banks................................. $ 3,016,748 $ 2,620,794 $ 2,890,715
Interest-bearing Deposits with Banks.................... -- 99,000 99,000
Federal Funds Sold...................................... 8,028,000 5,894,000 1,279,000
Investment Securities Available-for-Sale................ 8,126,148 6,889,393 5,702,431
Investment Securities Held to Maturity.................. 5,193,598 6,024,569 6,268,263
Loans Receivable -- Net................................. 30,573,921 33,881,611 32,988,080
Bank Premises and Equipment -- Net...................... 798,957 862,384 862,500
Accrued Interest Receivable............................. 456,994 476,755 560,154
Deferred Income Tax Asset............................... 266,776 148,317 94,516
Other Real Estate Owned................................. 217,792 215,645 112,368
Other Assets............................................ 109,126 104,326 87,677
----------- ----------- -----------
Total Assets.................................. $56,788,060 $57,216,794 $50,944,704
=========== =========== ===========
LIABILITIES AND STOCKHOLDERS' EQUITY
LIABILITIES
Deposits:
Demand................................................ $ 6,753,757 $ 6,209,342 $ 5,454,135
Savings and NOW Accounts.............................. 13,561,565 14,675,924 11,550,877
Time Deposits Over $100,000........................... 9,356,984 9,332,372 9,119,204
Time Deposits -- Other................................ 22,606,208 22,310,569 20,591,420
----------- ----------- -----------
Total Deposits................................ 52,278,514 52,528,207 46,715,636
Accrued Interest and Other Liabilities................ 638,115 840,517 410,374
----------- ----------- -----------
Total Liabilities............................. 52,916,629 53,368,724 47,126,010
----------- ----------- -----------
STOCKHOLDERS' EQUITY
Common Stock -- $12 Par Value, 100,000
Shares Authorized, Issued and Outstanding............... 1,200,000 1,200,000 1,200,000
Capital Surplus......................................... 751,003 671,003 608,003
Accumulated Other Comprehensive Income.................. 23,986 16,489 (53,607)
Undivided Profits....................................... 1,896,442 1,960,578 2,064,298
----------- ----------- -----------
Total Stockholders' Equity.................... 3,871,431 3,848,070 3,818,694
----------- ----------- -----------
Total Liabilities and Stockholders' Equity.... $56,788,060 $57,216,794 $50,944,704
=========== =========== ===========
</TABLE>

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

F-49
<PAGE> 208

C & L BANK OF BLOUNTSTOWN

STATEMENTS OF INCOME AND COMPREHENSIVE INCOME
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
---------- ---------- ----------
<S> <C> <C> <C>
INTEREST INCOME
Interest and Fees on Loans................................. $3,291,646 $3,479,102 $3,231,896
Interest on Investment Securities:
Taxable.................................................. 616,303 617,123 623,597
Exempt from Federal Income Tax........................... 138,018 132,632 117,672
Interest on Federal Funds Sold............................. 314,524 161,930 126,162
---------- ---------- ----------
Total Interest Income............................ 4,360,491 4,390,787 4,099,327
INTEREST EXPENSE ON DEPOSITS............................... 2,339,692 2,261,278 2,107,503
---------- ---------- ----------
Net Interest Income...................................... 2,020,799 2,129,509 1,991,824
PROVISION FOR LOAN LOSSES.................................. 784,000 723,000 192,000
---------- ---------- ----------
Net Interest Income after Provision for Loan Losses...... 1,236,799 1,406,509 1,799,824
---------- ---------- ----------
OTHER INCOME
Service Charges............................................ 281,595 258,043 250,656
Net Investment Securities Gains/(Losses)................... 6,589 (650) 26,088
Other...................................................... 70,780 61,115 48,289
---------- ---------- ----------
Total Other Income............................... 358,964 318,508 325,033
---------- ---------- ----------
OTHER EXPENSE
Salaries and Employee Benefits............................. 703,279 812,809 711,756
Occupancy Expense.......................................... 304,711 309,667 258,759
Other...................................................... 571,573 525,230 457,513
Loss on Foreclosed Real Estate............................. 9,134 53,600 --
---------- ---------- ----------
Total Other Expense.............................. 1,588,697 1,701,306 1,428,028
---------- ---------- ----------
INCOME BEFORE INCOME TAXES................................. 7,066 23,711 696,829
INCOME TAX (BENEFIT) EXPENSE............................... (68,798) 4,431 211,070
---------- ---------- ----------
NET INCOME................................................. 75,864 19,280 485,759
---------- ---------- ----------
OTHER COMPREHENSIVE INCOME, NET OF TAX:
Change in Unrealized Gains (Losses) on Available-for-Sale
Securities............................................... 7,497 70,096 (53,054)
---------- ---------- ----------
COMPREHENSIVE INCOME....................................... $ 83,361 $ 89,376 $ 432,705
========== ========== ==========
NET INCOME PER SHARE....................................... $ .76 $ .19 $ 4.86
========== ========== ==========
</TABLE>

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

F-50
<PAGE> 209

C & L BANK OF BLOUNTSTOWN

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
ACCUMULATED
OTHER
COMPREHENSIVE COMMON CAPITAL UNDIVIDED
INCOME STOCK SURPLUS PROFITS
------------- ---------- -------- ----------
<S> <C> <C> <C> <C>
BALANCE -- DECEMBER 31, 1995.................... $ (553) $1,200,000 $505,000 $1,741,542
Net Income.................................... -- -- -- 485,759
Transfers..................................... -- -- 103,003 (103,003)
Cash Dividends Declared, $.60 per share....... -- -- -- (60,000)
Other Comprehensive Income:
Net Change in Unrealized Gains (Losses) on
Available-for-Sale Securities............ (53,054) -- -- --
-------- ---------- -------- ----------
BALANCE -- DECEMBER 31, 1996.................... (53,607) 1,200,000 608,003 2,064,298
Net Income.................................... -- -- -- 19,280
Transfers..................................... -- -- 63,000 (63,000)
Cash Dividends Declared, $.60 per share....... -- -- -- (60,000)
Other Comprehensive Income:
Net Change in Unrealized Gains (Losses) on
Available-for-Sale Securities............ 70,096 -- -- --
-------- ---------- -------- ----------
BALANCE -- DECEMBER 31, 1997.................... 16,489 1,200,000 671,003 1,960,578
Net Income.................................... -- -- -- 75,864
Transfers..................................... -- -- 80,000 (80,000)
Cash Dividends Declared, $.60 per share....... -- -- -- (60,000)
Other Comprehensive Income:
Net Change in Unrealized Gains (Losses) on
Available-for-Sale Securities............ 7,497 -- -- --
-------- ---------- -------- ----------
BALANCE -- DECEMBER 31, 1998.................... $ 23,986 $1,200,000 $751,003 $1,896,442
======== ========== ======== ==========
</TABLE>

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

F-51
<PAGE> 210

C & L BANK OF BLOUNTSTOWN

STATEMENTS OF CASH FLOWS
YEARS ENDED DECEMBER 31, 1998, 1997 AND 1996

<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Net Income.............................................. $ 75,864 $ 19,280 $ 485,759
Adjustments to Reconcile Net Income to Net Cash Provided
by Operating Activities:
Depreciation.......................................... 92,499 90,920 78,775
Accretion/Amortization of Discount/Premium on
Investment Securities.............................. 1,625 21,302 42,995
Provision for Losses on Loans and Foreclosed Real
Estate................................................ 784,000 776,600 192,000
Loss on Disposition of Fixed Assets..................... 3,632 -- --
Net Realized (Gains) Losses on Available-for-Sale
Securities............................................ (6,589) 650 (26,088)
(Increase) Decrease in:
Accrued Interest Receivable........................... 19,761 83,399 (126,516)
Deferred Income Tax Asset............................. (118,459) (25,684) (20,248)
Other Real Estate..................................... (2,147) (103,277) (112,368)
Other Assets.......................................... (4,800) (16,649) (2,652)
Increase (Decrease) in:
Accrued Interest and Other Liabilities................ (175,117) 430,143 (62,883)
Deferred Income Tax Liability......................... (30,070) (64,877) 4,017
----------- ----------- -----------
Net Cash Provided by Operating Activities..... 640,199 1,211,807 452,791
----------- ----------- -----------
CASH FLOWS FROM INVESTING ACTIVITIES
Net Increase in Federal Funds Sold...................... (2,134,000) (4,615,000) 574,000
Purchases of Investment Securities Available-for-Sale... (3,984,345) (2,591,586) (3,923,658)
Proceeds from Sales/Maturities of Investment Securities
Available-for-Sale.................................... 2,770,617 1,508,264 3,894,495
Purchases of Investment Securities Held to Maturity..... -- (513,449) (959,646)
Proceeds from Maturities of Investment Securities Held
to Maturity........................................... 823,190 738,409 1,931,306
Net Decrease (Increase) in Loans........................ 2,523,690 (1,670,131) (5,170,343)
Purchase of Bank Premises and Equipment................. (32,704) (90,804) (223,717)
Proceeds from Maturities of Interest -- Bearing Deposits
with Banks............................................ 99,000 -- --
----------- ----------- -----------
Net Cash Provided by (Used in) Investing
Activities.................................. 65,448 (7,234,297) (3,877,563)
----------- ----------- -----------
CASH FLOWS FROM FINANCING ACTIVITIES
Net (Decrease) Increase in Demand Deposits, Savings and
NOW Accounts.......................................... (569,944) 3,880,253 1,482,204
Net Increase in Time Deposits........................... 320,251 1,932,316 2,501,418
Dividends Paid.......................................... (60,000) (60,000) (60,000)
----------- ----------- -----------
Net Cash (Used in) Provided by Financing Activities..... (309,693) 5,752,569 3,923,622
----------- ----------- -----------
NET INCREASE (DECREASE) IN CASH AND DUE FROM BANKS...... 395,954 (269,921) 498,850
CASH AND DUE FROM BANKS AT BEGINNING OF YEAR............ 2,620,794 2,890,715 2,391,865
----------- ----------- -----------
CASH AND DUE FROM BANKS AT END OF YEAR.................. $ 3,016,748 $ 2,620,794 $ 2,890,715
=========== =========== ===========
SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION:
Cash paid during the year for:
Interest........................................... $ 2,325,172 $ 2,260,869 $ 1,872,922
=========== =========== ===========
Income Taxes....................................... $ 65,600 $ 142,270 $ 376,597
=========== =========== ===========
</TABLE>

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

F-52
<PAGE> 211

C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1998, 1997 AND 1996

NOTE 1 -- ORGANIZATION

C & L Bank of Blountstown (the Bank) was incorporated in Florida on June 1,
1987, for the purpose of collecting deposits and making loans. The bank opened
for business on August 31, 1987. The bank offers a full range of banking
activities, including making loans and offering checking, savings, and time
deposit accounts. The following is a description of the Bank's significant
accounting and reporting policies.

NOTE 2 -- SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Investment Securities. The Bank's investments in securities are classified
in two categories and accounted for as follows:

* Securities to be Held to Maturity: Bonds, notes and debentures for which
the Bank has a positive intent and ability to hold to maturity are
reported at cost, adjusted for amortization of premiums and accretion of
discounts which are recognized in interest income using the interest
method over the period to maturity.

* Securities Available-for-Sale: Securities available-for-sale consist of
bonds, notes, and debentures not classified as securities to be held to
maturity.

Unrealized holding gains and losses, net of tax, on securities
available-for-sale are reported as a net amount in a separate component of
stockholders' equity until realized.

Gains and losses on sale of securities available-for-sale are determined
using the specific-identification method.

Premiums and discounts are recognized in interest income using the interest
method over the period to maturity.

Declines in the fair value of individual held-to-maturity and
available-for-sale securities below their cost that are other than temporary
result in write-downs of the individual securities to their fair value. The
related write-downs are included in earnings as realized losses.

Loan Origination Fees and Costs. Loan origination fees and certain direct
origination costs are capitalized and recognized as an adjustment of the yield
on the related loan.

Bank Premises and Equipment. Bank premises and equipment are stated at
cost less accumulated depreciation. Depreciation expense is computed on the
straight-line and declining balance methods over the estimated useful lives of
the assets.

F-53
<PAGE> 212
C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Income Taxes. Provisions for income taxes are based on taxes payable or
refundable for the current year, deferred taxes on temporary differences between
the amount of taxable income and pretax financial income, and between the tax
bases of assets and liabilities and their reported amounts in the financial
statements. Deferred tax assets and liabilities are included in the financial
statements at currently enacted income tax rates applicable to the period in
which the deferred tax assets and liabilities are expected to be realized or
settled as prescribed in Financial Accounting Standards Board Statement No. 109,
Accounting for Income Taxes. As changes in tax laws or rates are enacted,
deferred tax assets and liabilities are adjusted through the provision for
income taxes.

Net Income Per Share of Common Stock. Net income per share of common stock
is computed by dividing net income by the weighted average number of shares of
common stock outstanding during the year.

Other Real Estate. Other real estate, acquired through partial or total
satisfaction of loans, is carried at the lower of cost or fair market value. At
the date of acquisition, any losses are charged to the allowance for loan
losses. If it is later determined that the cost of the property cannot be
recovered through sale, additional loss is recognized immediately by a charge to
income with a corresponding writedown of the asset. Costs incurred to get
property in a condition for sale upon foreclosure are capitalized. Foreclosure
costs and subsequent holding costs are expensed as incurred.

Off-Balance-Sheet Financial Instruments. In the ordinary course of
business, the Bank has entered into off-balance-sheet financial instruments
consisting of commitments to extend credit and commercial letters of credit.
Such financial instruments are recorded in the financial statements when they
become payable.

Advertising. Advertising costs are expensed as incurred. Advertising
expense for the years ended December 31, 1998, 1997 and 1996 was $31,086,
$45,973 and $62,863, respectively.

NOTE 3 -- INVESTMENT SECURITIES

Par value, carrying value, and market value of investment securities are as
follows:

<TABLE>
<CAPTION>
PAR CARRYING MARKET
VALUE VALUE VALUE
----------- ----------- -----------
<S> <C> <C> <C>
DECEMBER 31, 1998
U. S. Government Agencies....................... $10,460,402 $10,508,311 $10,456,032
Obligations of State and Political
Subdivisions.................................. 2,805,000 2,811,435 2,866,697
----------- ----------- -----------
Total................................. $13,265,402 $13,319,746 $13,322,729
=========== =========== ===========
</TABLE>

F-54
<PAGE> 213
C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
PAR CARRYING MARKET
VALUE VALUE VALUE
----------- ----------- -----------
<S> <C> <C> <C>
DECEMBER 31, 1997
U. S. Government Agencies....................... $ 9,879,316 $ 9,941,738 $ 9,935,254
Obligations of State and Political
Subdivisions.................................. 2,970,000 2,972,224 3,037,735
----------- ----------- -----------
Total................................. $12,849,316 $12,913,962 $12,972,989
=========== =========== ===========
DECEMBER 31, 1996
U. S. Government Agencies....................... $ 9,524,922 $ 9,511,807 $ 9,452,211
Obligations of State and Political
Subdivisions.................................. 2,455,000 2,458,887 2,470,374
----------- ----------- -----------
Total................................. $11,979,922 $11,970,694 $11,922,585
=========== =========== ===========
</TABLE>

Investment securities with a book value of $3,417,168, $2,084,018 and
$1,750,985 at December 31, 1998, 1997 and 1996, respectively, were pledged to
secure public and trust deposits and for other purposes as required or permitted
by law. Market values for these securities were $3,384,476, $2,070,547 and
$1,728,877 at December 31, 1998, 1997 and 1996, respectively.

Realized gains and losses on securities sold during the years ended were as
follows:

<TABLE>
<CAPTION>
SALES BOOK REALIZED REALIZED
PRICE VALUE GAINS (LOSSES)
---------- ---------- -------- --------
<S> <C> <C> <C> <C>
DECEMBER 31, 1998
U.S. Government Securities................... $3,439,126 $3,432,537 $ 6,589 $ --
========== ========== ======= =======
DECEMBER 31, 1997
U.S. Government Securities................... $ 669,553 $ 670,203 $ 577 $(1,227)
========== ========== ======= =======
DECEMBER 31, 1996
U.S. Government Securities................... $2,613,429 $2,587,341 $29,732 $(3,644)
========== ========== ======= =======
</TABLE>

The scheduled maturities of investment securities were as follows:

<TABLE>
<CAPTION>
MARKET AMORTIZED
DECEMBER 31, 1998 VALUE COST
- ----------------- ---------- ----------
<S> <C> <C>
SECURITIES HELD TO MATURITY
Less than one year.......................................... $ 236,570 $ 234,957
One to five years........................................... 2,816,972 2,751,481
Five to ten years........................................... 601,419 578,051
Over ten years.............................................. 1,541,620 1,629,109
---------- ----------
Total............................................. $5,196,581 $5,193,598
========== ==========
SECURITIES AVAILABLE-FOR-SALE
Less than one year.......................................... $ -- $ --
One to five years........................................... 2,459,912 2,464,060
Five to ten years........................................... 3,892,506 3,884,923
Over ten years.............................................. 1,773,730 1,741,861
---------- ----------
Total............................................. $8,126,148 $8,090,844
========== ==========
</TABLE>

F-55
<PAGE> 214
C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

<TABLE>
<CAPTION>
MARKET AMORTIZED
DECEMBER 31, 1997 VALUE COST
- ----------------- ---------- ----------
<S> <C> <C>
SECURITIES HELD TO MATURITY
Less than one year.......................................... $ 379,100 $ 381,423
One to five years........................................... 2,711,637 2,255,058
Five to ten years........................................... 928,256 898,216
Over ten years.............................................. 2,064,603 2,489,872
---------- ----------
Total............................................. $6,083,596 $6,024,569
========== ==========
SECURITIES AVAILABLE-FOR-SALE
Less than one year.......................................... $ -- $ --
One to five years........................................... 1,852,893 1,849,373
Five to ten years........................................... 2,792,426 2,790,141
Over ten years.............................................. 2,244,074 2,224,895
---------- ----------
Total............................................. $6,889,393 $6,864,409
========== ==========
</TABLE>

<TABLE>
<CAPTION>
MARKET AMORTIZED
DECEMBER 31, 1996 VALUE COST
- ----------------- ---------- ----------
<S> <C> <C>
SECURITIES HELD TO MATURITY
Less than one year.......................................... $ 25,359 $ 24,866
One to five years........................................... 2,315,500 2,336,085
Five to ten years........................................... 1,138,975 1,128,125
Over ten years.............................................. 2,740,320 2,779,187
---------- ----------
Total............................................. $6,220,154 $6,268,263
========== ==========
SECURITIES AVAILABLE-FOR-SALE
Less than one year.......................................... $ 305,220 $ 296,709
One to five years........................................... -- --
Five to ten years........................................... 1,911,040 1,953,956
Over ten years.............................................. 3,486,171 3,532,989
---------- ----------
Total............................................. $5,702,431 $5,783,654
========== ==========
</TABLE>

The carrying amount of investment securities and their approximate fair
values are as follows:

<TABLE>
<CAPTION>
MARKET AMORTIZED UNREALIZED UNREALIZED
DECEMBER 31, 1998 VALUE COST GAIN (LOSS)
- ----------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
SECURITIES HELD TO MATURITY
U.S. Government Agencies................ $ 2,433,679 $ 2,485,958 $ 43,311 $ (95,590)
Obligations of State and Political
Subdivisions.......................... 2,762,902 2,707,640 55,262 --
----------- ----------- -------- ---------
Total......................... 5,196,581 5,193,598 98,573 (95,590)
----------- ----------- -------- ---------
SECURITIES AVAILABLE-FOR-SALE
U.S. Government Agencies................ 8,022,353 7,991,283 60,576 (29,506)
Obligations of State and Political
Subdivisions.......................... 103,795 99,561 4,234 --
----------- ----------- -------- ---------
Total......................... 8,126,148 8,090,844 64,810 (29,506)
----------- ----------- -------- ---------
Total Securities.............. $13,322,729 $13,284,442 $163,383 $(125,096)
=========== =========== ======== =========
</TABLE>

F-56
<PAGE> 215
C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

The carrying amount of investment securities and their approximate fair
values are as follows:

<TABLE>
<CAPTION>
MARKET AMORTIZED UNREALIZED UNREALIZED
DECEMBER 31, 1997 VALUE COST GAIN (LOSS)
- ----------------- ----------- ----------- ---------- ----------
<S> <C> <C> <C> <C>
SECURITIES HELD TO MATURITY
U.S. Government Agencies........................ $ 3,148,205 $ 3,151,831 $ 28,121 $ (31,747)
Obligations of State and Political
Subdivisions.................................. 2,935,391 2,872,738 62,653 --
----------- ----------- -------- ---------
Total................................. 6,083,596 6,024,569 90,774 (31,747)
----------- ----------- -------- ---------
SECURITIES AVAILABLE-FOR-SALE
U.S. Government Agencies........................ 6,787,049 6,764,924 51,919 (29,794)
Obligations of State and Political
Subdivisions.................................. 102,344 99,485 2,859 --
----------- ----------- -------- ---------
Total................................. 6,889,393 6,864,409 54,778 (29,794)
----------- ----------- -------- ---------
Total Securities...................... $12,972,989 $12,888,978 $145,552 $ (61,541)
=========== =========== ======== =========
DECEMBER 31, 1996
SECURITIES HELD TO MATURITY
U.S. Government Agencies........................ $ 3,849,307 $ 3,908,787 $ 5,513 $ (64,993)
Obligations of State and Political
Subdivisions............................... 2,370,847 2,359,476 18,083 (6,712)
----------- ----------- -------- ---------
Total................................. 6,220,154 6,268,263 23,596 (71,705)
----------- ----------- -------- ---------
SECURITIES AVAILABLE-FOR-SALE
U.S. Government Agencies........................ 5,602,904 5,684,242 20,712 (102,050)
Obligations of State and Political
Subdivisions............................... 99,527 99,412 115 --
----------- ----------- -------- ---------
Total................................. 5,702,431 5,783,654 20,827 (102,050)
----------- ----------- -------- ---------
Total Securities...................... $11,922,585 $12,051,917 $ 44,423 $(173,755)
=========== =========== ======== =========
</TABLE>

Change in net unrealized holding gains (losses) on non-current marketable
debt securities included in total stockholders' equity at December 31 were as
follows:

<TABLE>
<CAPTION>
1998 1997 1996
------- -------- --------
<S> <C> <C> <C>
Balance, Beginning of Year.............................. $24,983 $(81,223) $ (838)
Balance, End of Year.................................... 35,244 24,983 (81,223)
------- -------- --------
Current Year Change..................................... 10,261 106,206 (80,385)
Less: Tax Effect........................................ (2,764) (36,110) 27,331
------- -------- --------
Net Change, Current Period.............................. $ 7,497 $ 70,096 $(53,054)
======= ======== ========
</TABLE>

NOTE 4 -- LOANS

Loans outstanding, by classification, are summarized as follows at December
31:

<TABLE>
<CAPTION>
1998 1997 1996
----------- ----------- -----------
<S> <C> <C> <C>
Commercial...................................... $10,242,213 $11,684,037 $11,446,255
Real Estate..................................... 20,417,265 21,051,086 19,458,980
Installment..................................... 1,173,941 2,189,043 2,886,140
----------- ----------- -----------
31,833,419 34,924,166 33,791,375
Unearned Discount............................... (113,069) (237,892) (372,970)
Unamortized Loan Fees........................... (63,232) (49,745) (59,602)
Allowance for Loan Losses....................... (1,083,197) (754,918) (370,723)
----------- ----------- -----------
Loans, net............................ $30,573,921 $33,881,611 $32,988,080
=========== =========== ===========
</TABLE>

F-57
<PAGE> 216
C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Loans on which the accrual of interest has been discontinued or reduced
amounted to $362,006, $172,401 and $71,139 at December 31, 1998, 1997 and 1996,
respectively. Forfeited interest on these loans totaled $43,956, $32,782 and
$7,018 as of December 31, 1998, 1997 and 1996, respectively.

Changes in the allowance for loan losses were as follows:

<TABLE>
<CAPTION>
1998 1997 1996
---------- -------- --------
<S> <C> <C> <C>
Balance, beginning of year............................ $ 754,918 $370,723 $230,516
Provision charged to operations....................... 784,000 723,000 192,000
Loans charged off..................................... (482,208) (343,941) (56,292)
Recoveries on loans charged off....................... 26,487 5,136 4,499
---------- -------- --------
Balance, end of year.................................. $1,083,197 $754,918 $370,723
========== ======== ========
</TABLE>

The following are maturities of loans receivable as of December 31, 1998:

<TABLE>
<CAPTION>
FIXED RATE ADJUSTABLE RATE
- ---------------------------------------------- ----------------------------------------------
TERM TO MATURITY BOOK VALUE TERM TO MATURITY BOOK VALUE
---------------- ----------- ---------------- -----------
<S> <C> <C> <C>
Less Than 1 Year................. $ 3,817,629 Less Than 1 Year................. $ 3,739,870
1 Year - 3 Years................. 5,721,422 1 Year - 3 Years................. 2,658,550
3 Years - Five Years............. 2,540,047 3 Years - Five Years............. 1,685,924
Greater Than Five Years.......... 1,250,030 Greater Than Five Years.......... 10,419,947
----------- -----------
$13,329,128 $18,504,291
=========== ===========
</TABLE>

The following are maturities of loans receivable as of December 31, 1997:

<TABLE>
<CAPTION>
FIXED RATE ADJUSTABLE RATE
- ---------------------------------------------- ----------------------------------------------
TERM TO MATURITY BOOK VALUE TERM TO MATURITY BOOK VALUE
---------------- ----------- ---------------- -----------
<S> <C> <C> <C>
Less Than 1 Year................. $ 3,971,346 Less Than 1 Year................. $17,272,328
1 Year - 3 Years................. 6,662,424 1 Year - 3 Years................. 111,575
3 Years - Five Years............. 5,013,821 3 Years - Five Years............. --
Greater Than Five Years.......... 1,605,035 Greater Than Five Years.......... --
----------- -----------
$17,252,626 $17,383,903
=========== ===========
</TABLE>

The following are maturities of loans receivable as of December 31, 1996:

<TABLE>
<CAPTION>
FIXED RATE ADJUSTABLE RATE
- ---------------------------------------------- ----------------------------------------------
TERM TO MATURITY BOOK VALUE TERM TO MATURITY BOOK VALUE
---------------- ----------- ---------------- -----------
<S> <C> <C> <C>
Less Than 1 Year................. $ 5,991,109 Less Than 1 Year................. $17,237,994
1 Year - 3 Years................. 3,633,484 1 Year - 3 Years................. 77,502
3 Years - Five Years............. 5,327,658 3 Years - Five Years............. --
Greater Than Five Years.......... 1,523,628 Greater Than Five Years.......... --
----------- -----------
$16,475,879 $17,315,496
=========== ===========
</TABLE>

The adjustable rate loans have interest rate adjustment limitations and are
generally indexed to the New York prime rate.

F-58
<PAGE> 217
C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 5 -- BANK PREMISES AND EQUIPMENT -- NET

A summary of bank premises and equipment at December 31:

<TABLE>
<CAPTION>
ESTIMATED
LIFE YEARS 1998 1997 1996
---------- ---------- ---------- ----------
<S> <C> <C> <C> <C>
Land...................................... -- $ 206,663 $ 206,663 $ 206,663
Building.................................. 5 - 40 521,569 521,569 521,569
Furniture, fixtures and equipment......... 5 - 40 659,671 657,126 600,276
Land improvements......................... 5 - 7 101,144 101,144 67,190
------ ---------- ---------- ----------
1,489,047 1,486,502 1,395,698
Accumulated depreciation.................. (690,090) (624,118) (533,198)
---------- ---------- ----------
Bank Premises and Equipment -- Net...... $ 798,957 $ 862,384 $ 862,500
========== ========== ==========
</TABLE>

Depreciation expense amounted to $92,499, $90,920 and $78,775 for the years
ended December 31, 1998, 1997 and 1996, respectively.

NOTE 6 -- INCOME TAXES

Components of income tax expense are as follows:

<TABLE>
<CAPTION>
1998 1997 1996
--------- -------- --------
<S> <C> <C> <C>
Current:
Federal............................................. $ 33,035 $ 53,103 $144,610
State............................................... 4,544 5,129 10,229
Deferred:
Federal............................................. (106,377) (53,801) 56,231
State............................................... -- -- --
--------- -------- --------
Total Income Tax (Benefit) Expense.......... $ (68,798) $ 4,431 $211,070
========= ======== ========
</TABLE>

The effective tax rate differs from the expected tax using the statutory
rates due to certain permanent differences between book and taxable income.
Reconciliation between the expected tax and the actual provision for income
taxes follows:

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Expected tax at statutory rates applied to income
before taxes......................................... $ 1,060 $ 3,557 $236,921
Add (Deduct):
State income taxes, net of federal tax benefit......... 390 1,029 25,113
Effect of interest income exempt from federal income
taxes................................................ (57,569) (56,730) (55,776)
Unallowable interest deduction......................... 9,912 9,720 8,330
Other items -- Net..................................... (22,591) 46,855 (3,518)
-------- -------- --------
Income Tax (Benefit) Expense........................... $(68,798) $ 4,431 $211,070
======== ======== ========
</TABLE>

F-59
<PAGE> 218
C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Deferred Income Taxes included on the balance sheet at December 31, consist
of the following:

<TABLE>
<CAPTION>
1998 1997 1996
-------- -------- --------
<S> <C> <C> <C>
Deferred Tax Assets:
Allowance for Loan Losses............................ $266,776 $179,444 $ 95,017
Net Unrealized Loss on AFS Securities................ -- -- 27,616
-------- -------- --------
$266,776 $179,444 $122,633
======== ======== ========
Deferred Tax Liability:
Accumulated Depreciation............................. $ 27,392 $ 31,127 $ 28,117
Net Unrealized Gain of AFS Securities................ 11,278 8,494 --
-------- -------- --------
$ 38,670 $ 39,621 $ 28,117
======== ======== ========
</TABLE>

NOTE 7 -- DEPOSITS

The aggregate amount of certificates of deposit with amounts of $100,000
and above at December 31, 1998 was approximately $9,356,984.

At December 31, 1998, the scheduled maturities of certificate of deposits
are as follows:

<TABLE>
<S> <C>
1999 $25,108,624
2000 3,863,841
2001 981,999
2002 593,268
2003 and thereafter 1,415,460
</TABLE>

NOTE 8 -- RELATED PARTIES

C & L Bank of Blountstown is affiliated with C & L Bank of Bristol by
virtue of common Board of Directors. Loan participations are purchased and sold
between the two institutions. See Note 9.

Loans to directors and officers of the Bank amounted to approximately
$803,038, $953,230 and $783,585 at December 31, 1998, 1997 and 1996. These loans
were made on substantially the same terms, including interest and collateral, as
those prevailing at the time for comparable transactions with other customers.

The aggregate amount of time deposits held by the Bank from directors
totaled $161,228, $275,426 and $290,350 at December 31, 1998, 1997 and 1996,
respectively.

NOTE 9 -- PARTICIPATION LOANS

The Bank has originated certain loans and subsequently sold them to
participating financial institutions. At December 31, 1998, 1997 and 1996,
respectively, $963,365, $1,407,856 and $439,939 in loans had been participated.
Of this amount, $0, $423,687 and $19,605 were sold to C & L Bank of Bristol, an
affiliated bank, at December 31, 1998, 1997 and 1996, respectively.

The Bank has also purchased certain loans from participating financial
institutions, totaling $2,958,552, $2,303,004 and $1,708,804 at December 31,
1998, 1997 and 1996, respectively.

NOTE 10 -- PENSION PLAN

The Bank has a 401K plan covering all full-time employees who have
completed six months of service prior to the entry of date of January 1. The
employees may contribute up to 10% of their salary. The Bank will match 50% of
the employees' contribution and funds this amount monthly. Pension expense was
$7,458, $8,636 and $8,081 for the years ended December 31, 1998, 1997 and 1996,
respectively.
F-60
<PAGE> 219
C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 11 -- COMMITMENTS AND CONTINGENCIES

In the normal course of business, the Bank makes various commitments to
extend credit which involve elements of credit risk, interest rate risk, and
liquidity risk that are not presented in the financial statements. These consist
of commitments to extend credit (lines of credit) and commercial letters of
credit. Commitments to extend credit amounted to $2,203,845, $2,066,881 and
$1,740,553 and commercial letters of credit amounted to $115,247, $120,000 and
$184,541 at December 31, 1998, 1997 and 1996, respectively. These commitments
and letters of credit are both unsecured and secured by real estate, time
deposits, and equipment. These commitments and letters of credit include
exposure to some credit loss in the event of nonperformance of the customer. The
Bank uses the same credit policies and procedures in making commitments and
conditional obligations as it does for extension of credit recorded on the
balance sheet. Because many of these instruments have fixed maturity dates, and
because many of them expire without being drawn upon, the total commitment
amounts do not necessarily represent future cash and liquidity requirements to
the Bank. The Bank does not anticipate any material loss as a result of the
commitments.

The Bank is subject to various litigation and claims during the normal
course of banking procedures and foreclosures. Management believes that
liabilities, if any, arising from such litigation and claims will not be
material to the Bank's financial position.

NOTE 12 -- CONCENTRATIONS OF CREDIT RISK

Substantially all of the Bank's loans and commitments have been granted to
customers in the Bank's market area. The majority of the customers are
depositors of the Bank, less than 10% are associated with any particular
industry. The concentrations of credit by type of loan are set forth in Note 4.
The Bank, as a matter of policy and state statute, does not extend credit to any
single borrowers or group of related borrowers in excess of $957,895 unless a
portion is participated or secured by certificates of deposits. Cash and due
from banks includes $1,120,419 in excess of federally insured limits at December
31, 1998.

NOTE 13 -- COMPREHENSIVE INCOME

<TABLE>
<CAPTION>
BEFORE-TAX TAX (EXPENSE) NET-OF-TAX
AMOUNT OR BENEFIT AMOUNT
---------- ------------- ----------
<S> <C> <C> <C>
Unrealized Gains (Losses) on Securities at December 31,
1998...................................................... $10,260 $(2,763) $7,497
======= ======= ======
</TABLE>

NOTE 14 -- LEASES

The Bank leases data processing equipment used to process its day to day
transactions. The lease contains a purchase option at the end of the lease for
fair value of the equipment. Future minimum rental commitments under this lease
is as follows:

<TABLE>
<CAPTION>
YEAR ENDED AMOUNT
- ---------- --------
<S> <C>
1999........................................................ $ 36,041
2000........................................................ 36,041
2001........................................................ 36,041
2002........................................................ 36,041
2003 and thereafter......................................... 12,014
--------
$156,178
========
</TABLE>

F-61
<PAGE> 220
C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

Rental expense was $52,710, $39,056 and $34,492 for the years ended
December 31, 1998, 1997 and 1996, respectively.

NOTE 15 -- REGULATORY MATTERS

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 (as defined) to average
assets (as defined). Management believes, as of December 31, 1998, 1997 and
1996, that the Bank meets all capital adequacy requirements to which it is
subject.

<TABLE>
<CAPTION>
TO BE WELL
CAPITALIZED UNDER
FOR CAPITAL PROMPT CORRECTIVE
ACTUAL ADEQUACY PURPOSES ACTION PROVISIONS:
------------------ ------------------- --------------------
AMOUNT RATIO AMOUNT RATIO AMOUNT RATIO
---------- ----- ---------- ------ ---------- -------
<S> <C> <C> <C> <C> <C> <C>
AS OF DECEMBER 31, 1998
Total Capital (to Risk
Weighted Assets)........ $4,245,431 14.5% $2,336,240 >=8.0% $2,920,300 >=10.0%
Tier I Capital (to Risk
Weighted Assets)........ 3,871,431 13.3 1,168,120 4.0 1,752,180 6.0
Tier I Capital (to Average
Assets)................. 3,871,431 7.0 2,212,960 4.0 2,766,200 5.0
AS OF DECEMBER 31, 1997
Total Capital (to Risk
Weighted Assets)........ 4,587,000 14.1 2,611,000 8.0 3,263,000 10.0
Tier I Capital (to Risk
Weighted Assets)........ 3,832,000 11.7 1,305,000 4.0 1,958,000 6.0
Tier I Capital (to Average
Assets)................. 3,832,000 6.9 1,305,000 4.0 2,787,000 5.0
</TABLE>

F-62
<PAGE> 221
C & L BANK OF BLOUNTSTOWN

NOTES TO FINANCIAL STATEMENTS -- (CONTINUED)

NOTE 16 -- YEAR 2000

The year 2000 issue is the result of shortcomings in many electronic
data-processing systems and other equipment that may affect operations in the
year 1999 and beyond. C & L Bank of Blountstown has taken steps to ensure that
computer systems and other electronic equipment critical to conducting
operations are year 2000 compliant. The Bank has formed a task force composed of
employees from critical areas who have identified and assessed critical computer
and electronic equipment systems. According to the Bank's management, the Bank
has completed their testing of critical systems and equipment.

NOTE 17 -- SUBSEQUENT EVENTS

C & L Bank of Blountstown signed a letter of intent on January 25, 1999 to
merge with The Banc Corporation in Birmingham, Alabama. A definitive agreement
was signed on February 23, 1999. According to management, this merger should
take place close to the end of May, pending State and Federal approval. It is
intended that the merger be accounted for as a "pooling of interest," and to
qualify as a tax-free reorganization. The agreement will be void if the
transaction has not been completed by September 30, 1999.

F-63
<PAGE> 222

ANNEX A

PLAN AND AGREEMENT OF MERGER

This Plan and Agreement of Merger ("Plan of Merger") is entered into this
25th day of February, 1999, by and between The Banc Corporation, a Delaware
corporation ("TBC"), and C&L Banking Corporation, a Florida corporation (the
"Company").

RECITALS:

WHEREAS, TBC is a bank holding company existing under the laws of the State
of Delaware, with its principal office at 17 North 20th Street, Birmingham,
Alabama 35203, and is a registered bank holding company through ownership of
99.75% of the outstanding shares of The Bank, a bank chartered under the laws of
the State of Alabama ("The Bank");

WHEREAS, the Company is a bank holding company existing under the laws of
the State of Florida, with its principal office at Highway 20 and Baker Street,
Bristol, Florida 32321, and is a registered bank holding company through
ownership of 98.10% of the issued and outstanding shares of C&L Bank of Bristol,
a bank chartered under the laws of the State of Florida (the "Subsidiary");

WHEREAS, TBC and the Company have entered into that certain Plan and
Agreement of Merger, dated as of February 25, 1999, by and between TBC,
Subsidiary and C&L Bank of Blountstown, a Florida banking corporation, pursuant
to which C&L Bank of Blountstown will be acquired by TBC simultaneously with
TBC's acquisition of the Company;

WHEREAS, TBC, the Company, Bristol Acquisition Corporation and the
Subsidiary have entered into that certain Share Exchange Agreement, dated as of
February 25, 1999 (the "Share Exchange Agreement"), pursuant to which the
outstanding shares of the common stock of the Subsidiary will be exchanged for
TBC Common Stock (the "Share Exchange");

WHEREAS, the Boards of Directors of TBC and the Company have determined
that it is in the best interests of TBC and the Company respectively and in the
best interests of their respective stockholders and shareholders that TBC and
the Company merge in accordance with, and subject to, the terms and conditions
hereinafter set forth;

WHEREAS, the respective Boards of Directors of TBC and the Company have
unanimously approved and authorized the execution and delivery of this Plan of
Merger and the merger of the Company with and into TBC (the "Merger") in
accordance with, and subject to, the terms and conditions set forth herein, and
the Board of Directors of the Company has unanimously voted to recommend to its
shareholders that this Plan of Merger and the Merger be approved;

WHEREAS, TBC and the Company desire to merge in a transaction intended to
qualify as a tax-free reorganization under the provisions of Sections
368(a)(1)(A) of the Internal Revenue Code of 1986, as amended (the "Code");

WHEREAS, the parties intend that this Plan of Merger shall constitute a
plan of reorganization as that term is used in Sections 354 and 361 of the Code;
and

WHEREAS, for accounting purposes, it is intended that the Merger be
accounted for as a "pooling of interests;"

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<PAGE> 223

NOW THEREFORE, in consideration of the mutual covenants, promises,
agreements and provisions contained herein and subject to the satisfaction of
the terms and conditions set forth herein, and intending to be legally bound
hereby, TBC and the Company do hereby agree as follows:

SECTION 1. THE MERGER.

1.1 The Merger. At the Effective Time, in accordance with, and subject to,
the terms and conditions of this Plan of Merger, including the receipt of all
requisite governmental and shareholder approvals, and in accordance with, and
subject to, the General Corporation Law of the State of Delaware (the "DGCL")
and the Florida Business Corporation Act (the "FBCA"): (i) the Company shall
merge with and into TBC; (ii) the separate existence of the Company shall cease,
and TBC shall continue as the surviving entity under the name "The Banc
Corporation" (TBC, in its capacity as the corporation surviving the Merger, is
hereinafter sometimes referred to as the "Surviving Corporation"); and (iii) the
Subsidiary will become a wholly-owned subsidiary of TBC.

1.2 The Closing. The closing of the Merger (the "Closing") shall take
place at 10:00 a.m. Central Time on a date to be specified by the parties (the
"Closing Date") which (subject to the satisfaction or waiver of the conditions
specified in Sections 7.2 and 7.3) shall be no later than the second business
day after satisfaction or waiver of the conditions set forth in Section 7.1 at
the office of Haskell Slaughter & Young, L.L.C., Birmingham, Alabama, or at such
other place as the parties hereto may agree. The Closing Date may be extended
from time to time by the mutual agreement of the parties hereto. At the Closing,
the parties hereto shall exchange the various agreements, certificates,
instruments and documents to be delivered pursuant to the terms of this Plan of
Merger.

1.3 Effective Time. Subject to the provisions of this Plan of Merger,
Articles of Merger and a Certificate of Merger, substantially in the form
attached as Exhibits 1.3(a) and 1.3(b) hereto, shall be duly executed and, on
the Closing Date (as defined in section 1.2 hereof) or as soon thereafter as
reasonably practicable, filed with the Secretary of State of the State of
Florida (the "Florida Secretary of State") and the Secretary of State of the
State of Delaware (the "Delaware Secretary of State") in accordance with the
FBCA and the DGCL. The Merger shall become effective upon the filing of the
Articles of Merger with the Florida Secretary of State and the Certificate of
Merger with the Delaware Secretary of State (the "Effective Time").

1.4 Effect of the Merger. The Merger shall have the effect provided in
Section 259 of the DGCL and Section 607.1106 of the FBCA.

SECTION 2. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATION; EXCHANGE OF CERTIFICATES.

2.1 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of any holder of Company Common Stock:

(a) Cancellation of Treasury Stock. Each share of Company Common
Stock, par value $10.00 per share ("Company Common Stock"), that is owned
by the Company or by any subsidiary of the Company shall automatically be
canceled and retired and shall cease to exist, and none of the Common
Stock, par value $.001 per share, of TBC ("TBC Common Stock"), cash or
other consideration shall be delivered in exchange therefor.

(b) Conversion of Company Common Stock. In the Merger, at the
Effective Time, each issued and outstanding share of Company Common Stock
(other than Dissenting Shares) shall be converted into the right to receive
on a pro rata basis that number of shares of TBC Common Stock equal to the
Merger Consideration (as defined herein). All such shares of TBC Common
Stock to be issued shall be duly and validly issued, fully paid and
nonassessable, issued pursuant to an effective Registration Statement (as
defined herein) under the Securities Act (as defined herein) and listed on
the Nasdaq National Market ("Nasdaq") and are hereinafter sometimes
referred to as the "TBC Shares". Upon such conversion, all such shares of
Company Common Stock shall be canceled and cease to exist, and

A-2
<PAGE> 224

each holder thereof shall cease to have any rights with respect thereto
other than the right to receive TBC Shares issued in exchange therefor or
to dissent from the Merger on the terms provided herein and cash payments
required pursuant to Sections 2.2(c) and 2.2(e).

"Merger Consideration" means that number of TBC Shares (rounded to the
nearest whole share) equal to approximately $12,866,857.42 (plus the
Additional Merger Consideration if applicable) divided by the Closing Date
Trading Price of TBC Common Stock. In the event the Closing Date Trading
Price is in excess of $14.00 per share, then for purposes of the
calculation of the Merger Consideration set forth in this Section 2.1,
$14.00 shall be used as the Closing Date Trading Price. If the Effective
Time has not occurred as of July 31, 1999, the Merger Consideration shall
be increased, but not decreased, on a dollar for dollar basis, by the
earnings of the Company from August 1, 1999, through the most reasonable
practicable day of determination (but no more than three business days)
immediately prior to the Special Meeting of Company Shareholders described
in Section 6.4 (the "Additional Merger Consideration"). "Closing Date
Trading Price" means the average last sale prices for shares of TBC Common
Stock for the twenty consecutive trading days on which such shares are
actually traded (as reported to TBC by Nasdaq or as reported in The Wall
Street Journal, Eastern Edition, or if not reported thereby, any other
authoritative source) ending at the close of trading on the third trading
day immediately preceding the date on which the shareholders of the Company
meet to consider this Plan of Merger.

(c) Exchange Ratio. The number of shares of TBC Common Stock that
will be exchanged for each share of the Company Common Stock outstanding
immediately prior to the Effective Time (except for those shares of the
Company Common Stock with respect to which dissenters' rights of appraisal
are effectively perfected) shall be a ratio (the "Exchange Ratio")
determined by dividing the number of shares of TBC Common Stock comprising
the Merger Consideration (plus the Additional Merger Consideration if
applicable) by the number of shares of the Company Common Stock outstanding
immediately prior to the Effective Time (without regard to any exercise of
dissenters' rights of appraisal).

(d) Anti-Dilution Provisions. If after the date hereof and prior to
the Effective Time, TBC shall have declared a stock split (including a
reverse split) of TBC Common Stock or a dividend payable in TBC Common
Stock, or any other distribution of securities or dividend (in cash or
otherwise) to holders of TBC Common Stock with respect to their TBC Common
Stock (including without limitation such a distribution or dividend made in
connection with a recapitalization, reclassification, merger,
consolidation, reorganization or similar transaction) then the Exchange
Ratio shall be appropriately adjusted to reflect such stock split or
dividend or other distribution of securities and if such stock split,
dividend or distribution has a record date during or after the ten trading
day period set forth in Section 2.1(b) and prior to the Effective Time,
then the number of shares of TBC Common Stock to be issued upon conversion
of a share of Company Common Stock pursuant to Section 2.1(b) shall be
appropriately adjusted to reflect such stock split, dividend or other
distribution of securities.

(e) Dissenting Shares. Notwithstanding anything in this Plan of
Merger to the contrary, the shares of Company Common Stock outstanding
immediately prior to the Effective Time of the Merger held by a holder (if
any) who is entitled to dissent, and who properly dissents, in accordance
with Sections 607.1301 through 607.1320 of the FBCA ("Dissenting Shares")
shall be entitled to receive only the fair value of his shares as defined
under Section 607.1301 of the FBCA. Such Dissenting Shares shall not be
converted into a right to receive the Merger Consideration and any cash in
lieu of fractional shares of TBC Common Stock unless such holder fails to
perfect or otherwise loses such holder's right to appraisal. If, after the
Effective Time of the Merger, such holder fails to perfect or loses any
such right to appraisal, such shares, as of the time of such failure or
loss, shall no longer be deemed Dissenting Shares, and such holder shall be
entitled to receive from the Surviving Corporation the number of TBC Shares
that any participating Company shareholder is entitled to receive under
Section 2.1(c) and the cash in lieu of fractional shares of TBC Common
Stock specified in Section 2.2(e).

2.2 Exchange of Certificates.

acceptable to the Company, which shall provide that TBC shall deposit with
the Exchange Agent as of the Effective Time, for the benefit of the holders
of the Company Common Stock, for exchange in accordance with this Section
2, through the Exchange Agent, certificates representing the shares of TBC
Common Stock (such shares of TBC Common Stock, together with any dividends
or distributions with respect thereto with a record date after the
Effective Time but prior to their exchange, being hereinafter referred to
as the "Exchange Fund") issuable pursuant to Section 2.1 in exchange for
outstanding shares of the Company Common Stock.

(b) Exchange Procedures. As soon as reasonably practicable after the
Effective Time, the Surviving Corporation shall cause the Exchange Agent to
mail to each holder of record of a certificate or certificates which
immediately prior to the Effective Time represented outstanding shares of
the Company Common Stock (the "Certificates") whose shares were converted
into the right to receive the Merger Consideration pursuant to Section 2.1,
(i) a letter of transmittal (which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass, only
upon delivery of the Certificates to the Exchange Agent and shall be in
such form and have such other provisions as TBC may reasonably specify) and
(ii) instructions for use in effecting the surrender of the Certificates in
exchange for certificates representing shares of TBC Common Stock. Upon
surrender of a Certificate for cancellation to the Exchange Agent or to
such other agent or agents as may be appointed by TBC, together with such
letter of transmittal, duly executed, and such other documents as may
reasonably be required by the Exchange Agent, the holder of such
Certificate shall be entitled to receive in exchange therefor a certificate
representing that number of whole shares of TBC Common Stock and cash in
lieu of any fractional share of TBC Common Stock which such holder has the
right to receive pursuant to the provisions of this Section 2, and the
Certificate so surrendered shall forthwith be canceled. In the event of a
transfer of ownership of shares of the Company Common Stock which is not
registered in the transfer records of the Company, a certificate
representing the proper number of shares of TBC Common Stock may be issued
to a person other than the person in whose name the Certificate so
surrendered is registered, if such Certificate shall be properly endorsed
or otherwise be in proper form for transfer and the person requesting such
payment shall pay any transfer or other taxes required by reason of the
issuance of shares of TBC Common Stock to a person other than the
registered holder of such Certificate or establish to the satisfaction of
TBC that such tax has been paid or is not applicable. Until surrendered as
contemplated by this Section 2.2, each Certificate shall be deemed at any
time after the Effective Time to represent only the right to receive upon
such surrender the certificate representing shares of TBC Common Stock,
cash in lieu of any fractional share of TBC Common Stock as contemplated by
this Section 2.2. No interest will be paid or will accrue on any cash
payable in lieu of any fractional shares of TBC Common Stock. To the extent
permitted by law, former shareholders of record of the Company shall be
entitled to vote after the Effective Time at any meeting of TBC's
stockholders the number of whole shares of TBC Common Stock into which
their respective shares of the Company Common Stock are converted,
regardless of whether such holders have exchanged their Certificates for
certificates representing TBC Common Stock in accordance with this Section
2.2. Those persons who are entitled to receive, in accordance with this
Section 2.2, certificates representing shares of TBC Common Stock in
exchange for surrendered Certificates are hereinafter referred to as "the
Company Shareholders."

(c) Distributions with Respect to the Unexchanged Shares. No
dividends or other distributions with respect to TBC Common Stock with a
record date after the Effective Time shall be paid to the holder of any
unsurrendered Certificate with respect to the shares of TBC Common Stock
represented thereby and no cash payment in lieu of any fractional share
shall be paid to any such holder pursuant to Section 2.2(e) until the
surrender of such Certificate in accordance with this Section 2. Subject to
the effect of applicable laws, following surrender of any such Certificate,
there shall be paid to the holder of the certificate representing whole
shares of TBC Common Stock issued in exchange therefor, without interest,
(i) at the time of such surrender, the amount of any cash payable in lieu
of a fractional share of TBC Common Stock to which such holder is entitled
pursuant to Section 2.2(e) and the amount of dividends or other
distributions with a record date after the Effective Time theretofore paid
with respect to such whole shares of TBC Common Stock, and (ii) at the
appropriate payment date, the amount of dividends or other distributions
with a record date after the Effective Time but prior to such surrender
A-4
<PAGE> 226

and with a payment date subsequent to such surrender payable with respect
to such whole shares of TBC Common Stock.

(d) No Further Ownership Rights in the Company Common Stock. All
shares of TBC Common Stock issued upon the surrender for exchange of
Certificates in accordance with the terms of this Section 2 (including any
cash paid pursuant to Section 2.2(c) or 2.2(e)) shall be deemed to have
been issued (and paid) in full satisfaction of all rights pertaining to the
Company Common Stock theretofore represented by such Certificates. If,
after the Effective Time, Certificates are presented to the Surviving
Corporation or the Exchange Agent for any reason, they shall be canceled
and exchanged as provided in this Section 2, except as otherwise provided
by law.

(e) No Fractional Shares. No certificates or scrip representing
fractional shares of TBC Common Stock shall be issued upon the surrender
for exchange of Certificates, and such fractional share interests will not
entitle the owner thereof to vote or to any rights of a stockholder of TBC.
Notwithstanding any other provision of this Plan of Merger, each holder of
the Company Common Stock exchanged pursuant to the Merger who would
otherwise have been entitled to receive a fraction of a share of TBC Common
Stock (after taking into account all Certificates delivered by such holder)
shall receive, in lieu thereof, cash (without interest) in an amount equal
to such fractional part of a share of TBC Common Stock multiplied by the
Closing Date Trading Price.

(f) Termination of Exchange Fund. Any portion of the Exchange Fund
which remains undistributed to the holders of the Certificates for six
months after the Effective Time shall be delivered to TBC, upon demand, and
any holders of the Certificates who have not theretofore complied with this
Section 2 shall thereafter look only to TBC for payment of TBC Common
Stock, any cash in lieu of fractional shares of TBC Common Stock and any
dividends or distributions with respect to TBC Common Stock.

(g) No Liability. None of TBC, the Company or the Exchange Agent
shall be liable to any person in respect of any shares of TBC Common Stock
(or dividends or distributions with respect thereto) or cash from the
Exchange Fund delivered to a public official pursuant to any applicable
abandoned property, escheat or similar law. If any Certificates shall not
have been surrendered prior to seven years after the Effective Time (or
immediately prior to such earlier date on which any shares of TBC Common
Stock, any cash in lieu of fractional shares of TBC Common Stock or any
dividends or distributions with respect to TBC Common Stock in respect of
such Certificates would otherwise escheat to or become the property of any
governmental entity), any such shares, cash, dividends or distributions in
respect of such Certificates shall, to the extent permitted by applicable
law, become the property of the Surviving Corporation, free and clear of
all claims or interest of any person previously entitled thereto.

(h) Investment of Exchange Fund. The Exchange Agent shall invest any
cash included in the Exchange Fund in deposit accounts or short-term money
market instruments, as directed by TBC, on a daily basis. Any interest and
other income resulting from such investments shall be paid to TBC.

2.3 Certificate of Incorporation of the Surviving Corporation. The
certificate of incorporation of TBC in effect immediately prior to the Effective
Time shall remain the certificate of incorporation of the Surviving Corporation
from and after the Effective Time until amended or repealed in accordance with
its provisions and applicable law.

2.4 Bylaws of the Surviving Corporation. The bylaws of TBC in effect
immediately prior to the Effective Time shall remain the bylaws of the Surviving
Corporation from and after the Effective Time until amended or repealed in
accordance with their provisions and applicable law.

2.5 Capitalization of the Surviving Corporation. The combined
capitalization of the Company and TBC immediately prior to the Effective Time
shall be the capitalization of the Surviving Corporation until changed by
resolution of the Board of Directors of the Surviving Corporation or by action
of the stockholders of the Surviving Corporation.

2.6 Directors and Officers of the Surviving Corporation. Except as
provided in Sections 6.18 and 6.19, the directors and officers of TBC
immediately prior to the Effective Time shall be the directors and officers of
A-5
<PAGE> 227

the Surviving Corporation to serve until their successors have been elected or
qualified or until their resignation or removal according to applicable law and
the bylaws of the Surviving Corporation.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

Except as set forth in the Disclosure Schedule delivered to TBC by the
Company (the "Company Disclosure Schedule") as set forth in Section 6.25 hereof,
the Company hereby represents and warrants to TBC, as of the date hereof and up
to and including the Closing Date as follows (to the extent applicable, all
representations and warranties by the Company include its subsidiaries):

3.1 Organization, Existence and Good Standing. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida, with full corporate power and authority to, and
possesses all material governmental, regulatory and other permits, licenses and
authorizations necessary to, carry on its business as now conducted and to own
and operate the properties and assets it owns or operates, to enter into this
Plan of Merger and the Merger and to perform its obligations hereunder and
thereunder. The Company is duly qualified or licensed to transact business as a
foreign corporation in good standing in the states and foreign jurisdictions
where the character of its assets or the nature or conduct of the business
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a material adverse effect on the
business, operations, properties or assets, or the condition, financial or
otherwise, of the Company. The deposit accounts of the Subsidiary are insured by
the Federal Deposit Insurance Corporation (the "FDIC") to the full extent
permitted under applicable law and the rules and regulations of the FDIC.

3.2 The Company Capital Stock.

(a) The Company's authorized capital stock consists of 20,000 shares
of common stock, $10.00 par value per share, of which 16,274 shares are
outstanding, all of which are validly issued and outstanding.

(b) Other than the Subsidiary or as set forth on Schedule 3.2(b) to
the Company Disclosure Schedule, the Company does not own directly,
beneficially or of record, more than five percent of the outstanding stock
of any other corporation and does not otherwise control any company or
bank. Other than the Subsidiary, the Company does not have any direct or
indirect subsidiaries and does not have any interest in any partnership,
firm, association, corporation or joint venture other than investment
securities purchased and loans made in the regular and usual course of its
business.

(c) The Company has no outstanding securities convertible into shares
of capital stock or existing options, warrants, calls, commitments or other
rights of any character granted or entered into by the Company relating to
its authorized, issued or unissued capital stock, and no such rights will
be granted or entered into.

(d) There are no outstanding or unsatisfied preemptive rights or
rights of first refusal with respect to the Company's capital stock.

(e) No shares of the Company's capital stock will be issued between
the date hereof and the Effective Time.

(f) Attached to the Company Disclosure Schedule are copies of the
Company's articles of incorporation and bylaws as in effect on the date
this Plan of Merger is executed and delivered, both certified to be
complete and correct by the Secretary of the Company, the same to remain
unchanged up to the Effective Time.

3.3 The Subsidiary Capital Stock.

(a) The Subsidiary's authorized capital stock consists of 20,000
shares of common stock, $10.00 par value per share (the "Subsidiary Common
Stock"), of which 20,000 shares are outstanding, all of which are validly
issued and outstanding. All of the issued and outstanding shares of the
Subsidiary Common Stock are owned by the persons and entities as reflected
in Schedule 3.3(a) to the Company Disclosure Schedule.

A-6
<PAGE> 228

(b) Other than as set forth on Schedule 3.3(b) to the Company
Disclosure Schedule, the Subsidiary does not own directly, beneficially or
of record, more than five percent of the outstanding stock of any other
corporation and does not otherwise control any company or bank.

(c) The Subsidiary has no outstanding securities convertible into
shares of capital stock or existing options, warrants, calls, commitments
or other rights of any character granted or entered into by the Subsidiary
relating to its authorized, issued or unissued capital stock, and no such
rights will be granted or entered into.

(d) There are no outstanding or unsatisfied preemptive rights or
rights of first refusal with respect to the Subsidiary's capital stock.

(e) No shares of the Subsidiary's capital stock will be issued between
the date hereof and the Effective Time.

(f) Attached to the Company Disclosure Schedule are copies of the
Subsidiary's articles of incorporation and bylaws as in effect on the date
this Plan of Merger is executed and delivered, both certified to be
complete and correct by the Cashier or Secretary of the Subsidiary, the
same to remain unchanged up to the Effective Time.

3.4 Organization, Existence and Good Standing of Subsidiaries and
Assets. The Subsidiary is a corporation duly organized, validly existing and in
good standing under the laws of the State of Florida. The Subsidiary has all
necessary corporate power to own its properties and assets and to carry on its
business as presently conducted.

3.5 Power and Authority. Subject to the satisfaction of the conditions
precedent set forth herein, the Company has the corporate power to execute,
deliver and perform this Plan of Merger and all agreements and other documents
executed and delivered or to be executed and delivered by it pursuant to this
Plan of Merger, and, subject to the satisfaction of the conditions precedent set
forth herein, has taken all action required by its articles of incorporation,
bylaws or otherwise, to authorize the execution, delivery and performance of
this Plan of Merger and such related documents. The execution and delivery of
this Plan of Merger does not and, subject to the receipt of required stockholder
and regulatory approvals and any other required third-party consents or
approvals, the consummation of the Merger will not violate any provisions of any
statute or other law, any rule or regulation of any governmental agency or
authority, the articles of incorporation of the Company or any provisions of, or
result in the acceleration of any obligation under, any mortgage, lien, lease,
agreement, instrument, order, arbitration award, judgment or decree, to which
the Company or the Subsidiary is a party, or by which it is bound, or violate
any restrictions of any kind to which it is subject which, if violated or
accelerated, would have a material adverse effect on the Company. The execution
and delivery of this Plan of Merger has been approved by the Board of Directors
of the Company. This Plan of Merger has been duly executed and delivered by the
Company and, assuming this Plan of Merger constitutes a valid and binding
obligation of TBC, constitutes a valid and binding obligation of the Company,
enforceable against the Company in accordance with its terms except as such
enforceability may be limited by applicable bankruptcy, reorganization,
insolvency, moratorium or other similar laws affecting creditors' rights
generally and principles of equity.

3.6 Financial Statements. The Company has delivered to TBC balance sheets
of the Company as of December 31, 1998, the related statements of operations,
changes in shareholders' equity and changes in financial position or statements
of cash flows for the periods then ended, and the related notes and related
opinions thereon as applicable (the "Company Financial Statements"). The Company
Financial Statements, as and when prepared, (i) with the exception of the
statement for and as of the period ended December 31, 1998, have been audited,
(ii) present fairly the financial condition of the Company as of the respective
dates indicated and the results of operations, the changes in shareholders'
equity, the changes in financial position and cash flows for the respective
periods indicated; (iii) have been prepared in accordance with generally
accepted accounting principles ("GAAP") and regulatory accounting principles
("RAP") (to the extent GAAP and RAP are the same, and GAAP in case of any
differences between the two) as to audited statements and in a manner consistent
with past practice as to unaudited statements; (iv) contain and reflect

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reserves for all material accrued liabilities; and (v) are based on the books
and records of the Company and the Subsidiary.

3.7 Absence of Undisclosed Liabilities. Except as and to the extent
reflected or reserved against in the Company Financial Statements or disclosed
in Schedule 3.7 to the Company Disclosure Schedule, the Company has no material
liabilities or obligations whether accrued, absolute, contingent or otherwise,
including governmental charges or lawsuits, or any tax liabilities due or to
become due and whether (i) incurred in respect of or measured by the income of
the Company for any period up to the close of business on the respective dates
of the Company Financial Statements, or (ii) arising out of transactions entered
into, or any state of facts existing, thereafter.

3.8 Absence of Certain Changes or Events. Except as set forth on Schedule
3.8 to the Company Disclosure Schedule, since the date of the Company Financial
Statements, there has not been:

(a) any material adverse change in the condition (financial or
otherwise), assets, liabilities or business of the Company;

(b) any material adverse change in the character of the assets or
liabilities of the Company;

(c) any capital improvements, except for ordinary maintenance and
repairs, or any purchase of property by the Company at a cost in excess of
$25,000 other than supplies in the ordinary course of business;

(d) any physical damage, destruction or loss not covered by insurance
affecting in a material and adverse way the property or assets of the
Company;

(e) any material change in the accounting methods or practices of the
Company unless required by law, regulation, GAAP or RAP, as the case may
be;

(f) any material change in the capital structure of the Company;

(g) any loss incurred or accrued for by the Company as a result of
environmental problems which has or would be expected to have a material
adverse effect on the financial position of the Company; or

(h) any increase in the compensation payable or to become payable by
the Company to any officer or employee or any bonus, except bonuses accrued
and reflected on the Company Financial Statements, percentage compensation,
service award or other like benefit, granted, made or accrued or credited
to any officer or employee or any pension, retirement or deferred
compensation payment agreed to, other than in accordance with preexisting
plans or normal and customary annual salary reviews and adjustments and
promotional increases.

3.9 Tax Matters. The Company has filed all federal, state, municipal and
local income, excise, property, special district, sales, transfer and other tax
returns and reports of information statements that are required to be filed and
has paid all taxes that have become due pursuant to such returns or pursuant to
any assessment that has become payable. The returns filed by the Company have
been and will be accurately and properly prepared in all material respects. To
the extent that any tax liability or assessment has accrued, but has not yet
become payable or has been proposed for assessment or determination but remains
unpaid, the same has been reflected (if it is required to be so reflected under
GAAP) as a liability on the books and records of the Company and the Company
Financial Statements subject to normal year-end adjustments. Since the date of
the Company Financial Statements, the Company has not incurred any liability
with respect to any such taxes except for normal taxes incurred in the ordinary
and regular course of its business. The Company has not executed or filed with
the Internal Revenue Service or any other taxing authority any agreement
extending the period for the assessment or collection of any income taxes. There
are no examinations, reviews, audits or investigations of any tax return or
report of the Company that are presently pending or, to the Company's knowledge,
threatened, and the Company is not a party to any pending action or proceeding
by any governmental authority for assessment or collection of income taxes.

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3.10 Title to Properties; Absence of Liens and Encumbrances; Enforceability
of Leases.

(a) Except as to property indicated on Schedule 3.10 to the Company
Disclosure Schedule as being leased or mortgaged, the Company has good and
marketable title to its assets, real and personal (including those
reflected in the Company Financial Statements, except for loans and
investments thereafter sold or otherwise disposed of in the ordinary course
of business for adequate consideration), free and clear of all material
mortgages, pledges, liens, charges and encumbrances, except (A) investment
securities that are pledged to secure the deposit of public monies, FHLB
advances or monies under the control of any court, (B) the lien of taxes
not yet due and payable or being contested in good faith by appropriate
proceedings, and (C) such imperfections of title and encumbrances, if any,
and such liens, if any, incidental to the conduct of the Company's business
or the ownership of its assets as are not material in amount and do not
affect the value of, or interfere with the present use of, the Company's
assets or otherwise materially impair its operations.

(b) To the best knowledge of the Company, the structures and
equipment owned or used by the Company comply with applicable laws,
regulations and ordinances or if not in compliance, such noncompliance does
not give rise to a material adverse effect, and are in good operating
condition, subject to ordinary wear and tear.

(c) The real property, if any, leased by the Company is held by it
under valid and enforceable leases. The Company is not in material default
under any such leases.

3.11 Legal Proceedings. Except as set forth on Schedule 3.11 to the
Company Disclosure Statement, there are no material claims, actions, suits,
proceedings or investigations pending, or to the best knowledge of the Company,
threatened by or against or otherwise affecting the Company or its assets,
business or properties, or the transactions contemplated by the Plan of Merger,
or its directors, officers or employees in reference to actions taken by them in
such capacity at law or in equity, or before or by any federal, state, municipal
or other government department, commission, board, agency, instrumentality or
authority, nor to the Company's knowledge is there any valid basis for any such
action, proceeding or investigation, other than (i) claims by the Company in the
ordinary course of its business for the recovery of loans or protection of its
interest as a secured or unsecured creditor, and (ii) claims fully covered by
insurance. To the best knowledge of the Company, it is in compliance in all
respects with laws, ordinances, rules, regulations, orders, licenses and permits
that are applicable to its business as now conducted, or if not in compliance,
such noncompliance does not give rise to a material adverse effect.

3.12 No Untrue Representations. The documents furnished by the Company to
TBC (the "Company Documents"), including but not limited to the Company
Disclosure Schedule and the Company Financial Statements, are true and complete
copies of such documents and do not contain any untrue statement of a material
fact. The Company Disclosure Schedule does not omit to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. There is no fact that
the Company has not disclosed in the Company Disclosure Schedule or otherwise to
TBC in writing which materially and adversely affects the properties, business,
profits or condition (financial or otherwise) of the Company or the ability of
the Company to perform this Plan of Merger, except that the Company makes no
representation or warranty as to the effect of general economic conditions, the
condition of the financial markets, future legislation, future regulatory action
or any other event or circumstance that affects financial institutions
generally.

3.13 Employee Benefit Plans.

(a) Except as described in the Company Documents or set forth on
Schedule 3.13(a) to the Company Disclosure Schedule, the Company has
neither established nor maintains nor is obligated to make contributions to
or under or otherwise participate in (i) any bonus or other type of
incentive compensation plan, program, agreement, policy, commitment,
contract or arrangement (whether or not set forth in a written document),
(ii) any pension, profit-sharing, retirement or other plan, program or
arrangement, or (iii) any other employee benefit plan, fund or program,
including, but not limited to, those described in Section 3(3) of ERISA.
All such plans (individually, a "Plan" and collectively, the

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"Plans") have been operated and administered in all material respects in
accordance with, as applicable, ERISA, the Code, Title VII of the Civil
Rights Act of 1964, as amended, the Equal Pay Act of 1967, as amended, the
Age Discrimination in Employment Act of 1967, as amended, and the related
rules and regulations adopted by those federal agencies responsible for the
administration of such laws. No act or failure to act by the Company has
resulted in a "prohibited transaction" (as defined in ERISA) with respect
to the Plans that is not subject to a statutory or regulatory exception. No
"reportable event" (as defined in ERISA) has occurred with respect to any
of the Plans which is subject to Title IV of ERISA. The Company has not
previously made, is not currently making, and is not obligated in any way
to make, any contributions to any multi-employer plan within the meaning of
the Multi-Employer Pension Plan Amendments Act of 1980.

(b) Except as described in the Company Documents or set forth on
Schedule 3.13(b) to the Company Disclosure Schedule, the Company is not a
party to any oral or written (i) union, guild or collective bargaining
agreement which agreement covers employees in the United States (nor is it
aware of any union organizing activity currently being conducted in respect
to any of its employees), (ii) agreement with any executive officer or
other key employee the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction of the
nature contemplated by this Plan of Merger and which provides for the
payment of in excess of $25,000, or (iii) agreement or plan, including any
stock option plan, stock appreciation rights plan, restricted stock plan or
stock purchase plan, any of the benefits of which will be increased, or the
vesting the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Plan of Merger or the value of any
of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Plan of Merger.

3.14 Environmental Protection.

(a) None of the assets of the Company (defined for purposes of this
subsection as the real property and tangible personal property owned or
leased by the Company as of the date of this Plan of Merger and as of the
Effective Time) contain any hazardous materials, defined as any substance
whose nature and/or quantity or existence, use, manufacture or effect
render it subject to federal, state or local regulation as potentially
injurious to public health or welfare, or to the environment, including,
without limitation, friable asbestos, petroleum products or PCBs
("Hazardous Materials"), other than in such quantities which are incidental
and customary for the maintenance and operation of such assets, e.g.,
cleaning fluids ("Incidental Quantities").

(b) No notice or other communication has been received from any
governmental agency having jurisdiction over the Company or to the best
knowledge of the Company from any other person, with respect to any alleged
violation by the Company of any federal, state or local laws, rules,
regulations, ordinances and codes governing Hazardous Materials and which
are applicable to the assets of the Company.

(c) All Hazardous Materials which have been remediated from any assets
of the Company prior to or during their ownership by the Company have been
handled in compliance with all applicable laws.

(d) To the Company's best knowledge, no collateral securing any loan
made by the Company, as of the date of this Plan of Merger and as of the
Effective Time, contains any Hazardous Materials, other than in Incidental
Quantities.

3.15 Material Contract Defaults. The Company is not in default in any
material respect under the terms of any outstanding material contract,
agreement, lease or other commitment, which would have a material adverse effect
on the business, operations, properties or assets, or the condition, financial
or otherwise, of the Company or under its articles of incorporation or bylaws,
and no event has occurred which, with notice or lapse of time, or both, may be
or become a material default of any such contract, agreement, lease or other
commitment or under the articles of incorporation or bylaws of the Company.

3.16 Brokers and Finders. Except as permitted in Section 3.18, neither the
Company nor any of its officers, directors or employees have employed any broker
or finder or incurred any liability for any financial
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advisory, brokerage or finders fees or commissions and no broker or finder has
acted directly or indirectly for the Company in connection with this Plan of
Merger or the transactions contemplated hereby.

3.17 Vote Required. The affirmative vote of the holders of a majority of
the outstanding shares of the Company Common Stock entitled to vote thereon is
the only vote of the holders of any class or series of the Company capital stock
necessary to approve this Plan of Merger, the Merger and the transactions
contemplated hereby.

3.18 Opinion of Financial Advisor. The Board of Directors of the Company
has employed Alex Sheshunoff & Co. ("Sheshunoff") to provide the Board of
Directors of the Company with opinions by March 5, 1999, and as of the most
reasonably practicable date closest and prior to the mailing of the definitive
proxy materials to the effect that, as of March 5, 1999, and as of the most
reasonably practicable date closest and prior to the mailing of the definitive
proxy materials, respectively, the Merger Consideration is fair to the holders
of the Company Common Stock from a financial point of view, a written copy of
such opinion will be delivered by the Company to TBC prior to the date on which
the definitive proxy materials for the Proxy Statement (as defined in Section
6.8(a)) are filed with the SEC.

3.19 Year 2000 Compliance. Except as set forth on Schedule 3.19 to the
Company Disclosure Schedule, each item of software, hardware, firmware,
third-party software, goods with computer chips and services (i) provided by the
Company or the Subsidiary during the past four (4) years to any customer of the
Company or the Subsidiary or any other party or (ii) used by the Company or the
Subsidiary in its respective business, is and shall remain Year 2000 Compliant,
as that term is hereinafter defined, through the year 2000. For purposes of this
Agreement, "Year 2000 Compliant" means that the item:

(a) functions without interruption or human intervention with
four-digit year processing on all data, input, or output which includes an
indication date (collectively, "Date Data"), including errors or
interruptions from functions that may involve Date Data from more than one
century, leap years, or the date September 9, 1999, regardless of the date
of processing or date of Date Data;

(b) provides results from any operation accurately reflecting any Date
Data used in the operation performed, with output in any form, except
graphics, having four digit years;

(d) provides data interchange in the IS08601:1988 standard of
CCYYMMDD.

Except as set forth on Schedule 3.19 to the Company Disclosure
Schedule, to the best knowledge of the Company and the Subsidiary, each of
the Company's and the Subsidiary's vendors and customers has ensured that
each item of software, hardware, firmware, third-party software, goods with
computer chips, and services (a) provided by such vendor or customer during
the past four (4) years to any of its respective customers or any other
party or (b) used by such vendor or customer in its business, is and shall
remain Year 2000 Compliant through the Year 2000. The Company and the
Subsidiary have followed the procedures set forth in, and have taken and
will continue to take all actions required by the October 15, 1998 interim
FFIEC Interagency Guidelines Establishing Year 2000 Standards for Safety
and Soundness Guidelines Concerning the Year 2000 Business Risk and the
companion interim rule Safety and Soundness Standards and all previously
applicable regulatory standards and guidance papers regarding Year 2000
readiness (collectively, the "Year 2000 Guidelines") to ensure that all
computer software owned by or licensed to the Company or the Subsidiary is
fully compliant with the Year 2000 Guidelines. Except as set forth on
Schedule 3.19 to the Company Disclosure Schedule, neither the Company nor
the Subsidiary has received a regulatory rating of less than satisfactory
from any regulatory authority with respect to any review of its compliance
with the Year 2000 Guidelines or the adequacy of its Year 2000 planning
efforts.

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SECTION 4. REPRESENTATIONS AND WARRANTIES OF TBC.

Except as set forth in its Disclosure Schedule delivered to the Company
(the "TBC Disclosure Schedule") as set forth in Section 6.25 hereof, TBC hereby
represents and warrants to the Company as of the date hereof and up to and
including the Closing Date as follows (all representations and warranties by TBC
include its subsidiaries):

4.1 Organization, Existence and Good Standing. TBC is a corporation duly
organized, validly existing and in good standing under the laws of Delaware,
with full corporate power and authority, and possesses all material
governmental, regulatory and other permits, licenses and other authorization,
necessary to carry on its business as now conducted and to own and operate the
properties and assets it owns or operates, to enter into this Plan of Merger and
the Merger and to perform its obligations hereunder and thereunder. TBC is duly
qualified or licensed to transact business as a foreign corporation in good
standing in the states and foreign jurisdictions where the character of its
assets or the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be so
qualified or licensed is not reasonably likely to have, individually or in the
aggregate, a material adverse effect on the business, operations, properties, or
assets, or the condition, financial or otherwise, of TBC. The deposit accounts
of The Bank are insured by the FDIC to the full extent permitted under
applicable law and the rules and regulations of the FDIC.

4.2 TBC Capital Stock.

(a) The authorized capital stock of TBC consists of 25,000,000 shares
of common stock of which 12,204,594 shares of common stock are issued and
outstanding and 5,000,000 shares of preferred stock of which no shares are
issued and outstanding. TBC Common Stock issued in this Merger will be,
when issued, duly authorized, validly issued, fully paid and nonassessable.

(b) Other than as set forth on Schedule 4.2(b) to TBC Disclosure
Schedule, TBC does not own directly or indirectly, beneficially or of
record, more than five percent of the outstanding stock of any other
corporation and does not otherwise control any company or bank. Except as
set forth on Schedule 4.2(b) to TBC Disclosure Schedule, TBC does not have
any direct or indirect subsidiaries and does not have any interest in any
partnership, firm, association, corporation, or joint venture other than
investment securities purchased and loans made in the regular and usual
course of its business.

(c) Other than as set forth on Schedule 4.2(c) to TBC Disclosure
Schedule, there are no outstanding securities convertible into shares of
TBC capital stock or existing options, warrants, calls, commitments, or
other rights of any character granted or entered into by TBC relating to
its authorized, issued or unissued capital stock.

(d) There are no outstanding or unsatisfied preemptive rights or
rights of first refusal with respect to TBC Common Stock or TBC's preferred
stock.

(e) Other than as set forth on Schedule 4.2(e) to TBC Disclosure
Schedule, as of the date of this Agreement there are no outstanding
agreements, arrangements, or understandings of any kind, to which TBC is a
party, affecting or relating to the voting, issuance, purchase, redemption,
repurchase, or transfer of TBC Common Stock or any other securities of TBC.

(f) Attached to TBC Disclosure Schedule are copies of TBC's
certificate of incorporation and bylaws, certified to be complete and
correct by the Secretary of TBC, the same to remain unchanged up to the
Effective Time.

4.3 Organization, Existence and Good Standing of Subsidiaries and
Assets. Each of the subsidiaries of TBC is duly organized, validly existing and
in good standing under the laws of its respective state of incorporation. Each
subsidiary has all necessary corporate power to own its properties and assets
and to carry on its business as presently conducted.

4.4 Financial Statements. TBC has delivered to the Company balance sheets
of TBC as of December 31, 1996 and 1997 and September 30, 1998, and the related
statements of operations, changes in

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stockholders' equity, and changes in financial position or statements of cash
flows for the year then ended, and the related notes and related opinions
thereon as applicable (the "TBC Financial Statements"). TBC Financial
Statements, as and when prepared, (i) with the exception of the statement for
and as of the period ended September 30, 1998, have been audited, (ii) present
fairly the financial condition of TBC as of the date indicated and the results
of operations, the changes in stockholders' equity, the changes in financial
position and cash flows for the respective periods indicated; (iii) have been
prepared in accordance with GAAP and RAP (to the extent GAAP and RAP principles
are the same, and GAAP in the case of any difference between the two) as to
audited statements and in a manner consistent with past practice as to unaudited
statements; (iv) contain and reflect reserves for all material accrued
liabilities; and (v) are based on the books and records of TBC.

4.5 Power and Authority. Subject to the satisfaction of the conditions
precedent set forth herein, TBC has corporate power to execute, deliver and
perform the Plan of Merger and all agreements and other documents executed and
delivered, or to be executed and delivered, by it pursuant to the Plan of
Merger, and has taken all actions required by law, its certificate of
incorporation, its bylaws or otherwise, to authorize the execution and delivery
of the Plan of Merger and such related documents. The execution and delivery of
the Plan of Merger does not and, subject to the receipt of required stockholder
and regulatory approvals and other required third-party consents or approvals,
the consummation of the Merger contemplated hereby will not, violate any
provisions of the certificate of incorporation or bylaws of TBC, or any
provision of, or result in the acceleration of any obligation under, any
mortgage, lien, lease, agreement, instrument, order, arbitration award, judgment
or decree to which TBC is a party or by which it is bound, or violate any
restrictions of any kind to which TBC is subject. The execution and delivery of
this Plan of Merger has been approved by the Board of Directors of TBC. This
Plan of Merger has been duly executed and delivered by TBC and, assuming this
Plan of Merger constitutes a valid and binding obligation of the Company,
constitutes a valid and binding obligation of TBC, enforceable against TBC in
accordance with its terms except as such enforceability may be limited by
applicable bankruptcy, reorganization, insolvency, moratorium or other similar
laws affecting creditors' rights generally and principles of equity.

4.6 Absence of Undisclosed Liabilities. Except as and to the extent
reflected or reserved against in TBC Financial Statements or disclosed in
Schedule 4.6 to TBC Disclosure Schedule, TBC has no material liabilities or
obligations whether accrued, absolute, contingent or otherwise, including,
governmental charges or lawsuits, or any tax liabilities due or to become due
and whether (i) incurred in respect of or measured by the income of TBC for any
period up to the close of business on the respective dates of the TBC Financial
Statements, or (ii) arising out of transactions entered into, or any state of
facts existing, prior thereto. TBC has no liabilities or obligations, either
accrued or contingent, which are material to TBC and which have not been either
(i) reflected or disclosed in the audited financial statements of TBC for the
December 31, 1997, and provided to the Company in writing; or (ii) incurred
subsequent to September 30, 1998, in the ordinary course of business.

4.7 Absence of Certain Changes or Events. Except as set forth on Schedule
4.7 to TBC Disclosure Schedule, since September 30, 1998, there has not been:

(a) any material adverse change in the condition (financial or
otherwise), of the assets, liabilities or business of TBC;

(b) any material adverse change in the character of the assets or
liabilities of TBC;

(c) any capital improvements, except for ordinary maintenance and
repairs, or any purchase of property by TBC at a cost in excess of $25,000
other than supplies in the ordinary course of business;

(d) any physical damage, destruction or loss not covered by insurance
exceeding $25,000 in value or affecting in a material and adverse way the
property, assets, business or prospects of TBC;

(e) any material change in the accounting methods or practices of TBC
unless required by law, regulation, GAAP or RAP, as the case may be;

(f) any material change in the capital structure of TBC;

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(g) any loss incurred or determined to be probable for TBC as a result
of environmental problems which has or would be expected to have a material
adverse effect on the financial position of TBC; or

(h) any increase in the compensation payable or to become payable by
TBC to any officer or employee or any bonus, except bonuses accrued and
reflected on the TBC Financial Statements, percentage compensation, service
award or other like benefit, granted, made or accrued or credited to any
officer or employee or any pension, retirement, or deferred compensation
payment agreed to, other than in accordance with preexisting plans or
normal and customary annual salary reviews and adjustments and promotional
increases.

4.8 Tax Matters. TBC has filed all federal, state, municipal and local
income, excise, property, special district, sales, transfer and other tax
returns and reports of information statements that are required to be filed and
have paid all taxes that have become due pursuant to such returns or pursuant to
any assessment that has become payable. The returns filed by TBC have been and
will be accurately and properly prepared. To the extent that any tax liability
or assessment has accrued, but has not yet become payable or has been proposed
for assessment or determination but remains unpaid, the same has been reflected
as a liability on the books and records of TBC and TBC Financial Statements
subject to normal year-end adjustments. Since September 30, 1998, TBC has not
incurred any liability with respect to any such taxes except for normal taxes
incurred in the ordinary and regular course of its business. TBC has not
executed or filed with the Internal Revenue Service or any other taxing
authority any agreement extending the period for assessment or collection of any
income taxes. There are no examinations, reviews, audits or investigations of
any tax return or report of TBC that is presently pending or threatened, and TBC
is not a party to any pending action or proceeding by any governmental authority
for assessment or collection of income taxes.

4.9 Title to Properties; Absence of Liens and Encumbrances, Leases
Enforceable.

(a) Except as to property indicated in Schedule 4.9 to TBC Disclosure
Schedule as being leased or mortgaged, TBC has good and marketable title to
its assets, real and personal (including those reflected in TBC Financial
Statements, except for loans and investments as thereafter sold or
otherwise disposed of in the ordinary course of business and for adequate
consideration), free and clear of all material mortgages, pledges, liens,
charges and encumbrances, except (A) investment securities that are pledged
to secure the deposit of public monies, FHLB advances or monies under the
control of any court, (B) the lien of taxes not yet due and payable or
being contested in good faith by appropriate proceedings, and (C) such
imperfections of title and encumbrances, if any, and such liens, if any,
incidental to the conduct of TBC's business or the ownership of its assets
as are not material in amount and do not affect the value of, or interfere
with the present use of, TBC's assets or otherwise materially impair its
operations.

(b) To the best knowledge of TBC, the structures and equipment owned
or used by TBC comply with applicable laws, regulations and ordinances or
if not in compliance, such noncompliance does not give rise to a material
adverse effect and are in good operating condition, subject to ordinary
wear and tear.

(c) The real property, if any, leased by TBC is held by it under valid
and enforceable leases. TBC is not in material default under any such
leases.

4.10 Legal Proceedings. Except as set forth on Schedule 4.10 to TBC
Disclosure Schedule, there are no material claims, actions, suits, proceedings
or investigations pending, or to the best knowledge of TBC, threatened, by or
against, or otherwise affecting TBC or its assets, business or properties, or
the transactions contemplated by the Plan of Merger, or its directors, officers
or employees in reference to actions taken by them in such capacity at law or in
equity, or before or by any federal, state, municipal or other government
department, commission, board, agency, instrumentality or authority, nor to
TBC's knowledge is there any valid basis for any such action, proceeding or
investigation, other than (i) claims by TBC in the ordinary course of its
business for the recovery of loans or protection of its interest as a secured or
unsecured creditor, and (ii) claims fully covered by insurance. To the best
knowledge of TBC, TBC is in compliance in all respects with laws, ordinances,
rules, regulations, orders, licenses and permits that are applicable to its

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business as now conducted or if not in compliance, such noncompliance does not
give rise to a material adverse effect.

4.11 No Untrue Representations. The documents furnished by TBC to the
Company (the "TBC Documents"), including but not limited to TBC Disclosure
Schedule and TBC Financial Statements, are true and complete copies of such
documents and do not contain any untrue statement of a material fact. The TBC
Disclosure Schedule does not omit to state a material fact necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading. There is no fact that TBC has not disclosed in TBC
Documents or otherwise to the Company in writing which materially and adversely
affects the properties, business, profits or condition (financial or otherwise)
of TBC or the ability of TBC to perform this Plan of Merger, except that TBC
makes no representation or warranty as to the effect of general economic
conditions, the condition of the financial markets, future legislation, future
regulatory action or any other event or circumstance that affects financial
institutions generally.

4.12 Employee Benefit Plans.

(a) Except as described in TBC Documents or set forth on Schedule
4.12(a) to TBC Disclosure Schedule, TBC has neither established nor
maintains nor is obligated to make contributions to or under or otherwise
participate in (i) any bonus or other type of incentive compensation plan,
program, agreement, policy, commitment, contract or arrangement (whether or
not set forth in a written document), (ii) any pension, profit-sharing,
retirement or other plan, program or arrangement, or (iii) any other
employee benefit plan, fund or program, including, but not limited to,
those described in Section 3(3) of ERISA. All such Plans have been operated
and administered in all material respects in accordance with, as
applicable, ERISA, the Code, Title VII of the Civil Rights Act of 1964, as
amended, the Equal Pay Act of 1967, as amended, the Age Discrimination in
Employment Act of 1967, as amended, and the related rules and regulations
adopted by those federal agencies responsible for the administration of
such laws. No act or failure to act by TBC has resulted in a "prohibited
transaction" (as defined in ERISA) with respect to the Plans that is not
subject to a statutory or regulatory exception. No "reportable event" (as
defined in ERISA) has occurred with respect to any of the Plans which is
subject to Title IV of ERISA. TBC has not previously made, is not currently
making, and is not obligated in any way to make, any contributions to any
multi-employer plan within the meaning of the Multi-Employer Pension Plan
Amendments Act of 1980.

(b) Except as described in TBC Documents or set forth on Schedule
4.12(b) to TBC Disclosure Schedule, TBC is not a party to any oral or
written (i) union, guild or collective bargaining agreement which agreement
covers employees in the United States (nor is it aware of any union
organizing activity currently being conducted in respect to any of its
employees), (ii) agreement with any executive officer or other key employee
the benefits of which are contingent, or the terms of which are materially
altered, upon the occurrence of a transaction of the nature contemplated by
this Plan of Merger and which provides for the payment of in excess of
$25,000, or (iii) agreement or plan, including any stock option plan, stock
appreciation rights plan, restricted stock plan or stock purchase plan, any
of the benefits of which will be increased, or the vesting the benefits of
which will be accelerated, by the occurrence of any of the transactions
contemplated by this Plan of Merger or the value of any of the benefits of
which will be calculated on the basis of any of the transactions
contemplated by this Plan of Merger.

4.13 Environmental Protection.

(a) None of the assets of TBC (defined for purposes of this subsection
as the real property and tangible personal property owned or leased by TBC
as of the date of this Plan of Merger and as of the Effective Time) contain
any Hazardous Materials, other than in Incidental Quantities.

(b) No notice or other communication has been received from any
governmental agency having jurisdiction over TBC or to their best knowledge
from any other person, with respect to any alleged violation by TBC of any
federal, state or local laws, rules, regulations, ordinances and codes
governing Hazardous Materials and which are applicable to the assets of
TBC.

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(c) All Hazardous Materials which have been remediated from any assets
of TBC prior to or during their ownership by TBC have been handled in
compliance with all applicable laws.

(d) To TBC's best knowledge, no collateral securing any loan made by
TBC, as of the date of this Plan of Merger and as of the Effective Time,
contains any Hazardous Materials, other than in Incidental Quantities.

4.14 Material Contract Defaults. TBC is not in default in any material
respect under the terms of any outstanding material contract, agreement, lease
or other commitment, which would have a material adverse effect on the business,
operations, properties or assets, or the condition, financial or otherwise, of
TBC or under its certificate of incorporation or bylaws and no event has
occurred which, with notice or lapse of time, or both, may be or become a
material default of any such contract, agreement, lease or other commitment or
under the certificate of incorporation or bylaws of TBC.

4.15 Brokers and Finders. Neither TBC nor any of its officers, directors
or employees have employed any broker or finder or incurred any liability for
any financial advisory, brokerage or finders fees or commissions and no broker
or finder has acted directly or indirectly for TBC in connection with this Plan
of Merger or the transactions contemplated hereby.

4.16 Year 2000 Compliance. Except as set forth on Schedule 4.16 to the TBC
Disclosure Schedule, each item of software, hardware, firmware, third-party
software, goods with computer chips and services (i) provided by TBC or its
subsidiaries during the past four (4) years to any customer of TBC or its
subsidiaries or any other party or (ii) used by TBC or its subsidiaries in its
respective business, is and shall remain Year 2000 Compliant through the year
2000.

Except as set forth on Schedule 4.16 to the TBC Disclosure Schedule, to the
best knowledge of TBC and its subsidiaries, each of TBC's and its subsidiaries'
vendors and customers has ensured that each item of software, hardware,
firmware, third-party software, goods with computer chips, and services (a)
provided by such vendor or customer during the past four (4) years to any of its
respective customers or any other party or (b) used by such vendor or customer
in its business, is and shall remain Year 2000 Compliant through the Year 2000.
TBC and its subsidiaries have followed the procedures set forth in, and have
taken and will continue to take all actions required by the Year 2000 Guidelines
to ensure that all computer software owned by or licensed to TBC or its
subsidiaries is fully compliant with the Year 2000 Guidelines. Neither TBC nor
its subsidiaries have received a regulatory rating of less than satisfactory
from any regulatory authority with respect to any review of its compliance with
the Year 2000 Guidelines or the adequacy of its Year 2000 planning efforts.

4.17 Investment Intent. TBC is (a) experienced in the evaluation of
banking businesses similar to the Company, (b) has such knowledge and experience
in financial and business matters as to be capable of evaluating the merits and
risks of this investment, (c) has the ability to bear the economic risks of this
investment, (d) was not organized or reorganized for the specific purpose of
acquiring the shares of Company Common Stock pursuant to this Plan of Merger and
(e) has been afforded the opportunity to ask questions of, and to receive
answers from, the Company and to obtain any additional information, to the
extent the Company possesses such information or could have acquired it without
reasonable effort or expense, necessary for TBC to make an informed decision
with respect to the purchase of the shares of Company Common Stock. TBC
acknowledges that it is not acting on the basis of any representations or
warranties made by or on behalf of the Company or the Subsidiary other than
those contained in this Plan of Merger.

4.18 Consents and Approvals. Except for regulatory approvals disclosed on
Schedule 4.18 to the TBC Disclosure Schedule, no approval, consent, order or
authorization of, or registration, declaration or filing with, any governmental
authority or other third party is required on the part of TBC in connection with
the execution, delivery or performance of this Plan of Merger or the agreements
contemplated hereby or the consummation by TBC of the transactions contemplated
hereby or thereby. TBC is not aware of any matters that would prevent TBC from
obtaining all necessary approvals (including SEC approval and all required
regulatory approvals) on a timely basis.

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SECTION 5. ACCESS TO INFORMATION CONCERNING PROPERTIES AND RECORDS.

5.1 Access to Information. The Company will give to TBC and to its
counsel, accountants and other representatives ("advisors"), upon reasonable
notice, during normal business hours throughout the period prior to the Closing
Date, full access to its books, records, customer and loan files, contracts and
commitments. Any investigation conducted by TBC or its advisors pursuant to this
Section 5.1 shall be conducted in a manner that is the least disruptive to the
Company's business. For the period prior to the Effective Time, the Company
shall deliver to TBC such statements, schedules and reports concerning the
business, operations and financial condition of the Company as are regularly
provided to its Board of Directors at such times as they are regularly supplied
to its Board of Directors.

5.2 Return of Records. If the transactions contemplated hereby are not
consummated and this Plan of Merger terminates, each party agrees to promptly
return all documents, contracts, records, properties analyses, abstracts and any
related notes of the other party and all copies thereof furnished pursuant to
this Section 5 or otherwise. All information disclosed by any party or any
affiliate or representative of any party shall be deemed to be "Confidential
Information" as defined in that certain Confidentiality Agreement, dated as of
January 20, 1999, by and between TBC and the Company (the "Confidentiality
Agreement").

5.3 Effect of Access.

(a) Nothing contained in this Section 5 shall be deemed to create any
duty or responsibility on the part of either party to investigate or
evaluate the value, validity or enforceability of any contract, lease or
other asset included in the assets of the other party.

(b) With respect to matters as to which any party has made express
representations or warranties herein, the parties shall be entitled to rely
upon such express representations and warranties irrespective of any
investigations made by such parties, except to the extent that such
investigations result in actual knowledge of the inaccuracy or falsehood of
particular representations and warranties.

SECTION 6. COVENANTS.

6.1 Preservation of Business. From the date of this Agreement, the Company
will, and will cause the Subsidiary to, use its best efforts to preserve the
business organization of the Company and the Subsidiary intact, to keep
available to the Surviving Corporation the services of the present employees of
the Company and the Subsidiary, and to preserve for the Surviving Corporation
the goodwill of the suppliers, customers, depositors and others having business
relations with the Company and the Subsidiary.

6.2 Material Transactions. Until the Effective Time or the earlier
termination of this Plan of Merger, and except as contemplated by this Plan of
Merger or disclosed in the Disclosure Schedules or as consented to or otherwise
approved by TBC in writing, which consent or approval will not be unreasonably
withheld:

(a) the business of the Company and the Subsidiary shall be conducted
only in the ordinary course, and the Company will not, and will cause the
Subsidiary not to, encumber any asset or enter into any transaction or make
any contract or commitment relating to its properties, assets and
businesses, other than in the ordinary course of business or as otherwise
disclosed herein;

(b) no change shall be made in the articles of incorporation or bylaws
of the Company or the Subsidiary;

(c) except as provided in the Company's Disclosure Schedule, no change
shall be made in the number of shares of capital stock of the Company or
the Subsidiary issued and outstanding, nor shall any option, warrant, call,
convertible security, commitment or other right be granted or made by the
Company (or permitted by the Company with respect to the Subsidiary)
relating to its authorized or issued capital stock;

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entered into by or on behalf of the Company or permitted by the Company
with respect to the Subsidiary extending for more than one year or
involving payment by the Company or the Subsidiary, as the case may be, of
more than $25,000 in any one contract or related series of contracts or
otherwise materially affecting its business;

(e) no employment agreement or other agreement will be entered into
with any employee of the Company (or be permitted to be entered into by the
Subsidiary) and no employee's salary or benefits will be increased except
for normal annual increases as agreed to in writing, and no employee
benefit plan will be modified or amended except as required by law;

(f) the Company will comply, and will cause the Subsidiary to comply,
in all material respects with all laws applicable to it and to the conduct
of its business, if failure to comply could have a material adverse effect
upon its business;

(g) no dividends shall be paid, or distributions made, with respect to
the Company Common Stock;

(h) no loan in excess of $100,000 will be made by the Company (or be
permitted to be made by the Subsidiary) without providing TBC with all
relevant documents related thereto and giving TBC a reasonable opportunity
to review such loan and comment thereon;

(i) no security owned by the Company will be sold and no new
securities will be purchased, other than securities of a type and duration
as the Company has previously purchased under its investment policy,
without the approval of TBC; and

(j) the obligations under all employment, severance or other
agreements between the Company and its respective employees related to the
termination of such agreements shall not be in excess of the amounts
described in the employment agreements attached to the Company Disclosure
Schedule.

(k) the Company shall not take any action of a character as described
in Section 3.8(a) to 3.8(h), inclusive.

6.3 Confidentiality. [Intentionally Omitted]

6.4 The Company Shareholder Meeting. The Company shall take all action
necessary in accordance with applicable law and its articles of incorporation
and bylaws to call, give notice of, convene and hold a meeting of its
shareholders (the "Special Meeting") for the purpose of approving and adopting
this Plan of Merger, the Merger and the transactions contemplated thereby. In
connection therewith, the Company shall mail to all shareholders of record
entitled to vote at such meeting the Proxy Statement, as defined in Section 6.8
hereof, which shall indicate that the Board of Directors of the Company has, by
resolution, approved the Merger on the terms and subject to the conditions set
forth in this Plan of Merger and, if consistent with the fiduciary duty of the
directors to the Company and the shareholders, recommends to the shareholders
that they vote in favor of adopting and approving the Merger and the Plan of
Merger. Subject to applicable laws and the fiduciary duties of its directors,
the Company shall use reasonable efforts to solicit from its share holders
proxies in favor of such adoption and approval and shall take all other
reasonable action necessary or helpful to secure a favorable vote of its
shareholders.

6.5 Affiliate's Letters. The Company and TBC shall use their respective
best efforts to obtain and deliver to one another prior to the Special Meeting a
signed letter in the form attached hereto as Exhibit 6.5 from each of their
respective officers, directors or shareholders who may be deemed an "affiliate"
of the Company or TBC, as appropriate within the meaning of such term as used in
Rule 145 under the Securities Act.

6.6 Accounting Methods. Neither the Company nor TBC shall change, in any
material respect, its methods of accounting in effect at its most recent fiscal
year end, except as required by changes in GAAP or RAP, as the case may be, if
applicable, as concurred by such party's independent accountants.

6.7 Approvals of Regulatory Authorities. The Company will, and will cause
the Subsidiary to cooperate with TBC and TBC will cooperate with the Company and
the Subsidiary in the preparation and the filing by TBC of such applications to
the Board of Governors of the Federal Reserve System (the "Fed"), the FDIC,
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the Florida Department of Banking and Finance, and other regulatory authorities
as may be necessary to obtain all governmental approvals requisite to the
consummation of the Merger. As soon as practicable, but in no event later than
30 days after execution of the Plan of Merger, TBC shall file applications with
the proper regulatory authorities for approval of the Merger and the acquisition
of the Company by TBC and shall thereafter take all action to obtain the
approval of such regulatory authorities. All of the representations contained in
the applications filed by TBC with regulators with or on behalf of the Company
or the Subsidiary, will be, at the time they are made, accurate in all material
respects, except TBC makes no representation or warranty as to matters contained
therein that are based on information provided by the Company or the Subsidiary.
All filings, requests for approval or other submissions for any regulatory
approval, and all public notices associated with such filings, shall be made
available for review by the Company sufficiently prior to filing to enable the
Company to comment thereon.

6.8 Registration Statement.

(a) TBC shall prepare and file with the Securities and Exchange
Commission (the "SEC") and any other applicable regulatory bodies, as soon
as reasonably practicable, a Registration Statement on Form S-4 with
respect to the shares of TBC Common Stock to be issued in the Merger (the
"Registration Statement") and will otherwise proceed promptly to satisfy
the requirements of the Securities Act of 1933 (the "Securities Act")
including Rule 145 thereunder. Such Registration Statement shall contain a
proxy statement of the Company (the "Proxy Statement"), prepared by the
Company and subject to review and comments by TBC, containing information
required by the Securities Exchange Act of 1934 (the "Exchange Act"). Prior
to the filing, TBC shall provide the Company with a draft of the
Registration Statement and allow the Company sufficient time to review and
comment on the same. TBC shall take all reasonable steps necessary to cause
the Registration Statement to be declared effective and to maintain such
effectiveness until all of the shares of TBC Common Stock covered thereby
have been distributed. TBC shall promptly amend or supplement the
Registration Statement to the extent necessary in order to make the
statements therein not misleading or to correct any statements which have
become false or misleading. TBC shall use its reasonable best efforts to
have the Registration Statement declared effective by the SEC under the
provisions of the Securities Act and the Exchange Act. TBC shall provide
the Company with copies of all filings made pursuant to this Section 6.8
and shall consult with the Company on responses to any comments made by the
staff of the SEC with respect thereto.

(b) The information specifically designated as being supplied by the
Company for inclusion or incorporation by reference in the Registration
Statement shall not, at the time the Registration Statement is declared
effective, at the time the Proxy Statement is first mailed to holders of
the Company Common Stock, at the time of the Special Meeting and at the
Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein, not misleading. The information
specifically designated as being supplied by the Company for inclusion or
incorporation by reference in the Proxy Statement shall not, at the date
the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to holders of the Company Common Stock, at the time of the
Special Meeting and at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event or circumstance relating to the
Company or its officers or directors should be discovered by the Company
which should be set forth in an amendment to the Registration Statement or
a supplement to the Proxy Statement, the Company shall promptly inform TBC.
All documents, if any, that the Company is responsible for filing with the
SEC in connection with the transactions contemplated hereby will comply as
to form and substance in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the rules and
regulations thereunder.

the time of the Special Meeting and at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, not misleading. The information specifically designated as being
supplied by TBC for inclusion or incorporation by reference in the Proxy
Statement in connection with the Special Meeting shall not, at the date the
Proxy Statement (or any amendment thereof or supplement thereto) is first
mailed to holders of the Company Common Stock, at the time of the Special
Meeting or at the Effective Time, contain any untrue statement of a
material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, not
misleading. If at any time prior to the Effective Time any event or
circumstance relating to TBC or its officers or directors, should be
discovered by TBC which should be set forth in an amendment to the
Registration Statement or a supplement to the Proxy Statement, TBC should
promptly inform the Company and shall promptly file such amendment to the
Registration Statement. All documents that TBC is responsible for filing
with the SEC in connection with the transactions contemplated herein will
comply as to form and substance in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations thereunder.

(d) Prior to the Closing Date, TBC shall use its best efforts to cause
the shares of TBC Common Stock to be issued in the Merger to be registered
or qualified under all applicable securities or Blue Sky laws of each of
the states and territories of the United States, and to take any other
actions which may be necessary to enable TBC Common Stock to be issued in
the Merger to be distributed in each such jurisdiction.

(e) Prior to the Closing Date, TBC shall file a notification form for
listing of additional shares (the "Listing Form") with Nasdaq relating to
shares of TBC Common Stock to be issued in connection with the Merger, and
shall use reasonable good faith efforts to cause such shares of TBC Common
Stock to be approved for listing on Nasdaq prior to the Closing Date.

(f) The Company shall furnish all information to TBC with respect to
the Company and its subsidiaries as TBC may reasonably request for
inclusion in the Registration Statement, the Proxy Statement and the
Listing Form, and shall otherwise cooperate with TBC in the preparation and
filing of such documents.

6.9 Due Diligence. The Company and TBC shall each deliver by the Closing
Date all opinions, certificates and other documents required to be delivered by
it.

6.10 Status Reports. The Company and TBC shall advise one another from
time to time regarding the applications for regulatory approval of the Merger
and provide one another copies of all comments, correspondence and approvals to
or from regulators in connection with the applications, and give one another
copies of all regulatory approvals referred to in this Plan of Merger.

6.11 Pooling and Tax-Free Reorganization Treatment. Unless required by
law, neither the Company nor TBC shall take or cause to be taken any action,
whether on or before the Effective Time, which would disqualify the Merger as a
"pooling of interests" for accounting purposes or as a "reorganization" within
the meaning of Section 368(a) of the Code.

6.12 Other Actions. Unless required by law, neither the Company nor TBC
shall knowingly or intentionally take any action, or omit to take any action, if
such action or omission would, or reasonably might be expected to, result in any
of its representations and warranties set forth herein being or becoming untrue
in any material respect, or in any of the conditions to the Merger set forth in
this Plan of Merger not being satisfied, or (unless such action is required by
applicable law) which would materially adversely affect the ability of TBC or
the Company to obtain any consents or approvals required for the consummation of
the Merger without imposition of a condition or restriction which would have a
material adverse effect on the Surviving Corporation or which would otherwise
materially impair the ability of TBC or the Company to consummate the Merger in
accordance with the terms of the Plan of Merger or materially delay such
consummation.

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6.13 Notice of Subsequent Events. Each party hereto shall notify the other
parties of any changes, additions or events which would cause any material
change in or material addition to any schedule to the Disclosure Schedule
delivered by the notifying party under this Plan of Merger, promptly after the
occurrence of the same. If the effect of such change or addition would,
individually or in the aggregate with the effect of changes or additions
previously disclosed pursuant to this Section 6.13, constitute a material
adverse effect on the notifying party, the non-notifying party may, within ten
(10) days after receipt of such notice, elect to terminate this Plan of Merger.
If the non-notifying party does not give written notice of such termination
within such 10-day period, the non-notifying party shall be deemed to have
consented to such change and shall not be entitled to terminate this Plan of
Merger by reason thereof.

6.14 Public Disclosures. TBC and the Company will consult with each other
before issuing any press release or otherwise making any public statement with
respect to the transactions contemplated by this Plan of Merger, and shall not
issue any such press release or make any such public statement prior to such
consultation except as may be required by applicable law or requirements of
Nasdaq. The parties shall issue a joint press release or simultaneous separate
press releases, mutually acceptable to TBC and the Company, promptly upon
execution and delivery of this Plan of Merger.

6.15 No Solicitations. Neither the Company nor any of its officers and
directors will, and the Company shall direct and use its best efforts to cause
its employees, agents and representatives not to, during the period beginning on
the date hereof and ending on the first to occur of (a) the Effective Time or
(b) the termination of this Plan of Merger, (i) sell or arrange for sale of any
the Company Common Stock, other than as required by the Company employee stock
purchase or option plan; (ii) negotiate, solicit or encourage or authorize any
person to solicit from any third party any proposals relating to the merger or
consolidation of the Company, disposition of a substantial portion of the
business or assets of the Company or the acquisition of the capital stock of the
Company; or (iii) except to the extent legally required for the discharge by the
board of directors of its fiduciary duties, make any information concerning the
Company available to any person for the purpose of affecting or causing a
merger, consolidation or disposition of the Company or its assets or common
stock.

6.16 Directors of the Subsidiary. TBC shall cause the Subsidiary to
maintain the existing directors of the Subsidiary as directors of the
Subsidiary, and receive the current fees for serving as such, through at least
December 31, 1999.

6.17 Cooperation.

(a) TBC and the Company shall together, or pursuant to an allocation
of responsibility agreed to between them, (i) cooperate with one another in
determining whether any filings are required to be made or consents are
required to be obtained in any jurisdiction prior to the Effective Time in
connection with the consummation of the transactions contemplated hereby;
and cooperate in making any such filings promptly and in seeking to obtain
timely any such consents, (ii) use their respective best efforts to cause
to be lifted any injunction prohibiting the Merger, or any part thereof, or
the other transactions contemplated hereby, and (iii) furnish to one
another and to one another's counsel all such information as may be
required to effect the foregoing actions.

(b) Subject to the terms and conditions herein provided, and unless
this Plan of Merger shall have been validly terminated as provided herein,
each of TBC and the Company shall use all reasonable efforts (i) to take,
or cause to be taken, all actions necessary to comply promptly with all
legal requirements which may be imposed on such party (or any subsidiaries
or affiliates of such party) with respect to the Plan of Merger and to
consummate the transactions contemplated hereby and (ii) to obtain (and to
cooperate with the other party to obtain) any consent, authorization, order
or approval of, or any exemption by, any governmental entity and/or any
other public or private third party which is required to be obtained or
made by such party or any of its subsidiaries or affiliates in connection
with this Plan of Merger and the transactions contemplated hereby. Each of
TBC and the Company will promptly cooperate with and furnish information to
the other in connection with any such burden suffered by, or requirement
imposed upon, either of them or any of their subsidiaries or affiliates in
connection with the foregoing. The parties shall, as of and upon the
Closing Date and if earlier required by Section 6.13, prepare and deliver
to each other updated Disclosure Schedules as are necessary or appropriate
to assure
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the accuracy and completeness thereof; provided that the furnishing of any
such supplement shall not modify, limit, or otherwise affect any
representations or warranties of a party contained in this Agreement or any
right of a party to terminate this Agreement.

6.18 Officers' and Directors' Liability Insurance. The Surviving
Corporation shall maintain in effect for not less than four years after the
Effective Time the Company's current policy of directors' and officers'
liability insurance for the benefit of the individuals who, at or before the
Effective Time, were directors or officers of the Company with respect to
matters occurring prior to the Effective Time; provided, however, that (i) the
Surviving Corporation may substitute therefor policies of at least the same
coverage containing terms and conditions which are no less advantageous to the
covered officers and directors and (ii) the Surviving Corporation shall not be
required to pay an annual premium for such insurance in excess of the last
annual premium paid prior to the date hereof, but in the event such premium
shall exceed such amount shall purchase as much coverage as possible for such
amount.

6.19 Employment Agreement. TBC shall cause the Subsidiary to enter into an
employment agreement with Jed M. Hiers on substantially the same terms and
conditions as set forth in Exhibit 6.19.

6.20 Nomination and Election of Director. TBC shall take all necessary
actions to cause Jerry M. Smith to be nominated and elected as a director of TBC
at the first regularly scheduled Board of Directors meeting subsequent to the
Effective Time.

6.21 Proxies from the Directors of the Company. The directors of the
Company shall have granted proxies to TBC, substantially in the form of Exhibit
6.21(i), as of the date of this Plan of Merger, to vote the shares of the
Company owned by such directors in favor of the Merger and such proxies shall
remain valid and in effect until the Effective Time.

6.22 Due Diligence of the Company Financial Advisor. TBC shall cooperate
with Sheshunoff and provide Sheshunoff with any information reasonably necessary
in order for Sheshunoff to render an opinion regarding the fairness of the
Merger.

6.23 Section 16 Exemption. Prior to the Effective Time, the Board of
Directors, or a committee thereof, of the Company shall have approved the
disposition of Company Common Stock as being exempt under Rule 16b-3 of the
Exchange Act if the disposition occurs simultaneously with or immediately before
the Merger. The Board of Directors of TBC shall approve the Rule 16b-3 exemption
of the acquisition of TBC Common Stock in the Merger.

6.24 TBC Employees. Any employees of the Company who are employed after
the Effective Time by TBC shall be employees-at-will (except to the extent that
such employees are parties to contracts providing for other employment terms, in
which case such employees shall be retained in accordance with the terms of such
contracts) and TBC shall provide such employees with the same customary employee
benefits as TBC provides its existing employees, or reasonably equivalent
benefits. For the purposes of computing such benefits, any employee retained by
TBC shall receive credit for the time he was employed by the Company though
nothing herein shall entitle such employees to greater benefits than those
customarily given to the existing employees of TBC. Except as provided in
Section 6.19, nothing herein shall create any right to employment for the
employees of the Company.

6.25 Disclosure Schedules. TBC and the Company will deliver the TBC
Disclosure Schedule and the Company Disclosure Schedule, as the case may be, to
each other within ten (10) business days of the date of this Plan of Merger. TBC
and the Company shall then have five (5) business days to notify the other party
of any objections or exceptions taken to such other party's Disclosure Schedule.
If any reasonable objection or exception cannot be cured within ten (10)
business days of receipt of notice of objection or exception by the disclosing
party, the notifying party may elect to terminate this Plan of Merger, without
liability to either party, or its respective officers, directors, employees or
agents.

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SECTION 7. CONDITIONS.

7.1 Mutual Conditions. The respective obligations of the Company and TBC
under this Plan of Merger are subject to and conditioned upon the satisfaction,
prior to the Closing Date, of each of the following conditions except as both
the Company and TBC may waive in writing:

(a) Registration Statement. The Registration Statement shall have
been declared effective by the SEC and no stop order shall be in effect,
and all applicable federal securities or state blue sky laws shall have
been complied with or an exemption thereunder shall be available.

(b) Listing of TBC Common Stock. The shares of TBC Common Stock to be
issued in connection with the Merger shall have been approved for listing
by Nasdaq.

(c) No Litigation. No suit, action, claim or other proceeding shall
have been threatened or pending before any court, administrative or
governmental agency which, in the reasonable opinion of the Company or TBC,
presents a significant risk of restraint or prohibition of the transactions
contemplated hereby or the attainment of material damages or other relief
against the Company or its shareholders or TBC or its stockholders in
connection therewith.

(d) Shareholder Approval. The holders of a majority of the
outstanding shares of the Company Common Stock shall have approved the
adoption of the Plan of Merger and any other matters submitted to them
pursuant to Section 6.4 hereof.

(e) Approvals. Receipt of all authorizations, approvals and/or
consents of any third parties as well as the expiration of applicable
waiting periods, including federal or state governmental and/or regulatory
bodies and officials, necessary for the consummation of this Plan of Merger
and for the continuation in all material respects of the business of TBC
and the Company, without interruption after the Effective Time, in
substantially the manner in which such business is now conducted shall have
been received, and no such authorizations or approvals shall contain any
conditions or restrictions that the Company or TBC reasonably believes will
materially restrict or limit the business or activities of the Surviving
Corporation subsequent to the Merger, or have a material adverse effect on
their businesses, operations or financial conditions taken as a whole.

(f) Dissenter's Rights. Holders of not more than ten percent (10%) of
the outstanding shares of the Company Common Stock shall have voted against
approval of, and given notice in writing to the Company at or prior to the
Company shareholders' meeting that he or she dissents from, the
transactions contemplated by the Plan of Merger.

(g) Share Exchange. TBC and the Subsidiary shall have entered into
the Share Exchange Agreement providing for the Share Exchange to
immediately follow consummation of the Merger.

(h) Employment Agreement. TBC, the Subsidiary and Jed M. Hiers shall
have entered into the employment agreement as set forth in Exhibit 6.19,
providing for Mr. Hiers continued employment with the Subsidiary subsequent
to the Effective Time.

7.2 Conditions in Favor of the Company. All obligations of the Company
under this Plan of Merger are subject to and conditioned upon the satisfaction,
prior to the Closing Date, of each of the following conditions except as the
Company may waive in writing:

(a) Material Adverse Change. Since the date of this Plan of Merger,
there have been no material adverse changes, occurrences or developments in
the business of TBC that have, or would be expected to have, a material
adverse effect on the business, operations or financial condition of TBC,
and the Company shall not have discovered any fact or circumstance not
disclosed by TBC prior to the date of this Plan of Merger that has resulted
in, or could reasonably be expected to result in, a material adverse effect
on the business, operations or financial condition of TBC.

(b) Representations, Warranties and Agreements. Each representation
and warranty of TBC contained in this Plan of Merger or in any
certificates, schedules or other documents delivered pursuant hereto or in
connection with the transactions contemplated hereby, that is qualified as
to materiality shall
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be true and correct, and each representation and warranty that is not so
qualified shall be true and correct in all material respects, as of the
date of the Plan of Merger and at the Closing Date as if then made, except
to the extent that any such representation and warranty expressly relates
to an earlier date (in which case any such representation and warranty that
is qualified as to materiality shall be true and correct, and any such
representation that is not so qualified shall be true and correct in all
material respects, as of such earlier date). TBC shall have performed and
complied with all covenants, agreements and conditions required by this
Plan of Merger to be performed or complied with in all material respects by
them, or either of them, prior to or at the Closing Date.

(c) Officers' Certificate. The Company shall have received a
certificate in form and content satisfactory to the Company from the
appropriate officers of TBC, dated as of the Closing Date, to the effect
that the representations and warranties made herein by TBC on the date
hereof and on the Closing Date are true and correct as set forth in Section
4 and that TBC has performed the covenants, obligations and agreements
undertaken by it herein in all material respects.

(d) Secretary's Certificate. The Company shall have received in form
and content satisfactory to it a certificate of the Secretary or an
Assistant Secretary of TBC to the effect that all necessary approvals of
Plan of Merger and the Merger by the Board of Directors and shareholders of
TBC were obtained at meetings duly called for such purposes and as to the
incumbency of all corporate officers of TBC at all relevant times.

(e) Legal Opinion. The Company shall have received an opinion of
Haskell Slaughter & Young, L.L.C., legal counsel for TBC, substantially in
the form attached hereto as Exhibit 7.2(e). Such opinion shall be subject
to reasonable and customary qualifications. In addition, counsel may rely
on representations and certificates of officers and directors of TBC and
certificates of public officials.

(f) Federal Tax Opinion. An opinion of Jenkens & Gilchrist, P.C.
shall have been received by the Company to the effect that for federal
income tax purposes the Merger will constitute a reorganization within the
meaning of section 368(a) of the Internal Revenue Code, which opinion may
be based upon representations of officers of the Company reasonably
satisfactory in form and substance to such counsel.

(g) Accountant's Letter. The Company shall have received from Ernst &
Young LLP a letter dated as of the date of the mailing of the Proxy
Statement and the Closing Date, in form and substance reasonably
satisfactory to the Company and customary in scope and substance for
letters delivered by independent public accountants in connection with
pooling of interests transactions similar to the Merger.

(h) Proper Actions and Documentation. All actions required to be
taken by TBC in connection with the transactions contemplated by this Plan
of Merger shall have been taken, and all documents incidental thereto shall
be in a form and substance reasonably satisfactory to the Company, and the
Company shall have received copies of all documents that it may have
reasonably requested in connection with such transactions.

(i) Opinion of Financial Advisor. The Board of Directors of the
Company shall have received an opinion from Sheshunoff by March 5, 1999,
and as of the most reasonably practicable date closest and prior to the
mailing of the definitive proxy materials to the effect that, as of March
5, 1999, and as of the most reasonably practicable date closest and prior
to the mailing of the definitive proxy materials, respectively, the Merger
Consideration is fair to the holders of Company Common Stock from a
financial point of view. A written copy of such opinion shall be delivered
to the Company and TBC prior to the date on which the definitive proxy
materials are filed with the SEC.

(j) Acquisition of C&L Bank of Blountstown. The Merger shall occur
simultaneously with and be conditioned on TBC's acquisition of C&L Bank of
Blountstown.

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7.3 Conditions in Favor of TBC. All obligations of TBC under this Plan of
Merger are subject to and shall be conditioned upon the satisfaction, prior to
or on the Closing Date, of each of the following conditions except as TBC may
waive such conditions in writing:

(a) Material Adverse Change. Since the date of this Plan of Merger
there have been no material adverse changes, occurrences or developments in
the business of the Company that have, or would be expected to have, a
material adverse effect on the business, operations or financial condition
of the Company, and TBC shall not have discovered any fact or circumstance
not disclosed by the Company prior to the date of this Plan of Merger that
has resulted in, or could reasonably be expected to result in, a material
adverse effect on the business, operations or financial condition of the
Company.

(b) Representations, Warranties and Agreements. Each representation
and warranty of the Company contained in this Plan of Merger or in any
certificates, schedules or other agreements delivered pursuant hereto or in
connection with the transactions contemplated hereby, that is qualified as
to materiality shall be true and correct, and each representation and
warranty that is not so qualified shall be true and correct in all material
respects, as of the date of the Plan of Merger and at the Closing Date as
if then made, except to the extent that any such representation and
warranty expressly relates to an earlier date (in which case any such
representation and warranty that is qualified as to materiality shall be
true and correct, and any such representation that is not so qualified
shall be true and correct in all material respects, as of such earlier
date). The Company shall have performed and complied with all covenants,
agreements and conditions required by this Plan of Merger to be performed
or complied with in all material respects by it prior to or at the Closing
Date.

(c) Officer's Certificate. TBC shall have received a certificate in
form and content satisfactory to it from the appropriate officers of the
Company, dated the Closing Date, to the effect that the representations and
warranties made herein by the Company on the date hereof, and on the
Closing Date, are true and correct as set forth in Section 3, and that the
Company has performed the covenants, obligations and agreements undertaken
by it herein in all material respects.

(d) Secretary's Certificate. TBC shall have received in form and
content satisfactory to it a certificate of the Secretary or an Assistant
Secretary of the Company to the effect that all necessary approvals of the
Plan of Merger and the Merger by the Board of Directors and shareholders of
the Company were obtained at meetings duly called for such purposes and as
to the incumbency of all corporate officers of the Company at all relevant
times.

(e) Legal Opinion. TBC shall have received an opinion of Jenkens &
Gilchrist, P.C., legal counsel for the Company, substantially in the form
attached as Exhibit 7.3(e). Such opinion shall be subject to reasonable and
customary qualifications. In addition, such counsel may rely on
representations and certificates of officers and directors of the Company
and certificates of public officials.

(f) Federal Tax Opinion. An opinion of Haskell Slaughter & Young,
L.L.C. shall have been received by TBC to the effect that for federal
income tax purposes the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code, which opinion may
be based upon representations of officers of TBC reasonably satisfactory in
form and substance to such counsel.

(g) Accountant's Letter. TBC shall have received from Ernst & Young
LLP a letter dated the date of the mailing of the Proxy Statement and the
Closing Date, in form and substance reasonably satisfactory to TBC and
customary in scope and substance for letters delivered by independent
public accountants in connection with pooling of interests transactions
similar to the Merger.

(h) Proper Actions and Documentation. All actions required to be
taken by the Company by this Plan of Merger shall have been taken or
satisfied in all material respects, and all documents incidental thereto
shall be in a form and substance reasonably satisfactory to TBC and its
counsel, and TBC shall have received copies of all documents that they may
have reasonably requested in connection with such transactions.

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(i) Acquisition of C&L Bank of Blountstown. The Merger shall occur
simultaneously with and be conditioned on TBC's acquisition of C&L Bank of
Blountstown.

SECTION 8. TERMINATION.

8.1 Termination. This Plan of Merger may be terminated and the Merger
abandoned (either before or after approvals and authorizations by the
shareholders of the Company and TBC contemplated hereby and without seeking
further shareholder approval) at any time prior to the Effective Time only in
one of the following manners:

(a) Mutual Agreement. By mutual written consent of the parties
authorized by their respective Boards of Directors at any time prior to the
Effective Time.

(b) by either the Company or TBC:

(i) if, upon a vote at a duly held meeting of shareholders or any
adjournment thereof, any required approval of the holders of shares of
the Company Common Stock shall not have been obtained;

(ii) if the Merger shall not have been consummated on or before
September 30, 1999, unless the failure to consummate the Merger is the
result of a willful and material breach of this Plan of Merger by the
party seeking to terminate this Plan of Merger; provided, however, that
the passage of such period shall be tolled for any part thereof (but not
exceeding 60 days in the aggregate) during which any party shall be
subject to a nonfinal order, decree, ruling or action restraining,
enjoining or otherwise prohibiting the consummation of the Merger or the
calling or holding of a meeting of stockholders;

(iii) if any court of competent jurisdiction or other governmental
entity shall have issued an order, decree or ruling or taken any other
action permanently enjoining, restraining or otherwise prohibiting the
Merger and such order, decree, ruling or other action shall have become
final and nonappealable;

(iv) in the event of a breach by the other party of any
representation, warranty, covenant or other agreement contained in this
Plan of Merger which (A) would give rise to the failure of a condition
set forth in Section 7.2(a) or (b) or Section 7.3(a) or (b), as
applicable, and (B) cannot be or has not been cured within 30 days after
the giving of written notice to the breaching party of such breach (a
"Material Breach") (provided that the terminating party is not then in
Material Breach of any representation, warranty, covenant or other
agreement contained in this Plan of Merger);

(c) by either the Company or TBC in the event that any condition to
the obligation of such party to effect the Merger set forth in Sections 7.1
or 7.2 (in the case of the Company) or Sections 7.1 or 7.3 (in the case of
TBC) is not capable of being satisfied prior to the end of the period
referred to in Section 8.1(b)(ii);

(d) by TBC or the Company, if TBC's or the Company's Board of
Directors shall have determined, in the exercise of its fiduciary duties
under applicable law, not to recommend the Merger to the holders of TBC
Common Stock or the holders of the Company Common Stock or shall have
withdrawn such recommendation; and

(e) by TBC or the Company, if the Closing Date Trading Price of TBC
Common Stock is equal to or less than $10.00.

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covenants or other agreements set forth in this Plan of Merger. Further, in the
event of termination of this Plan of Merger, the Confidentiality Agreement shall
remain in full force and effect.

8.3 Amendment. This Plan of Merger may be amended by the parties at any
time before or after any required approval of matters presented in connection
with the Merger by the holders of shares of the Company Common Stock and TBC
Common Stock; provided, however, that after any such approval, there shall be
made no amendment that pursuant to Section 251(d) of the DGCL requires further
approval by such stockholders without the further approval of such stockholders.
This Plan of Merger may not be amended except by an instrument in writing signed
on behalf of each of the parties.

8.4 Extension; Waiver. At any time prior to the Effective Time of the
Merger, the parties may (a) extend the time for the performance of any of the
obligations or other acts of the other parties, (b) waive any inaccuracies in
the representations and warranties contained in this Plan of Merger or in any
document delivered pursuant to this Plan of Merger or (c) subject to the proviso
of Section 8.3, waive compliance with any of the agreements or conditions
contained in this Plan of Merger. Any agreement on the part of a party to any
such extension or waiver shall be valid only if set forth in an instrument in
writing signed on behalf of such party. The failure of any party to this Plan of
Merger to assert any of its rights under this Plan of Merger or otherwise shall
not constitute a waiver of such rights.

8.5 Procedure for Termination, Amendment, Extension or Waiver. A
termination of this Plan of Merger pursuant to Section 8.1, an amendment of this
Plan of Merger pursuant to Section 8.3, or an extension or waiver pursuant to
Section 8.4 shall, in order to be effective, require in the case of the Company
or TBC, action by its Board of Directors or the duly authorized designee of the
Board of Directors.

8.6 Expenses and Damages. Each party shall pay its own expenses in
connection with the Plan of Merger and the Merger. Nothing contained in Section
8.7 shall be deemed to preclude either party from seeking to recover damages
which it incurs as a result of a breach by the other party of this Plan of
Merger or to obtain other legal or equitable relief (including specific
performance).

8.7 No Liability Upon Proper Termination. Upon proper termination by
written notice as provided in Section 8.1 of this Plan of Merger, this Plan of
Merger shall be void and of no further effect, except as set forth in Section
8.2, and there shall be no liability by reason of this Plan of Merger or the
termination thereof on the part of either TBC, the Company or the directors,
officers, employees, agents or shareholders of any of them, and all such parties
shall be released from all such liability, provided that any such termination
shall not excuse a party for liability for any breach of this Agreement.

SECTION 9. MISCELLANEOUS.

9.1 Survival of Representations, Warranties and Covenants. Unless
expressly provided otherwise, none of the respective representations,
warranties, agreements and covenants of the parties in this Plan of Merger or in
any instrument delivered pursuant to this Plan of Merger shall survive the
Effective Time.

9.2 Notices. Any notice, request, instruction, legal process or other
instrument to be given or served hereunder by any party to another, shall be
deemed given or served if in writing and delivered personally or by facsimile
and overnight courier to the respective party or parties at the following
addresses or at such other address as either party may advise the other in
writing from time to time:

If to TBC:

Mr. James A. Taylor
Chairman of the Board
and Chief Executive Officer
The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203

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<PAGE> 249

With copies to:

James A. Taylor, Jr., Esq.
Executive Vice President, General Counsel
and Secretary
The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203

and

Haskell Slaughter & Young, L.L.C.
Attn: F. Hampton McFadden, Jr., Esq.
1200 AmSouth/Harbert Plaza
1901 Sixth Avenue North
Birmingham, Alabama 35203

If to the Company:

Mr. Jed M. Hiers
President and Chief Executive Officer
C & L Banking Corporation
Post Office Box 550
Bristol, Florida 32321

With copies to:

Jenkens & Gilchrist, P.C.
Attn: Peter G. Weinstock, Esq.
1445 Ross Avenue
Suite 3200
Dallas, Texas 75202-2799

All such communications shall be deemed to have been delivered on the date of
hand delivery or on the next business day following the deposit of such
communications with the overnight courier.

9.3 Employee Benefits. All employees of the Company who continue as
employees of the Surviving Corporation after the Merger shall receive service
credits for employment at the Company prior to the Effective Time for purposes
of meeting all the eligibility requirements and all vesting requirements for all
of the Surviving Corporation's benefit programs in which such employees shall
become eligible to participate on or after the Effective Time, including but not
limited to health, retirement, vacation and disability plans. The Surviving
Corporation will waive waiting periods and pre-existing conditions limitations
under its group health plan (within the meaning of Section 5000(b)(i) of the
Internal Revenue Code of 1986, as amended) for those employees of the Company
who continue as employees of the Surviving Corporation after the Merger and who
had coverage under compatible group health plans of the Company immediately
prior to the Effective Time. The Surviving Corporation shall provide the
opportunity for continuation of coverage through COBRA for any former Company
employee who participated as or who had a right to elect participation as a
COBRA continuee under the Company's group health plans immediately prior to the
Effective Time.

9.4 Further Assurances. Each party hereby agrees to perform any further
acts and to execute and deliver any documents which may be reasonably necessary
to carry out the provisions of this Plan of Merger.

"including" or the similar items or matters, but rather shall be deemed to refer
to all other items or matters that could reasonably fall within the broadcast
possible scope of the general statement, term or matter.

9.6 "Material", "material adverse change" or "material adverse
effect". "Material" means, when used in connection with one or more entities,
material to the business, prospects, assets, properties, operations, results of
operations or condition (financial or other) of such entity or entities and all
other entities with which such entity or entities are consolidated for financial
accounting purposes, taken as a whole. "Material adverse change" or "material
adverse effect" means, when used in connection with one or more entities, any
change, effect, event, circumstance or occurrence that has, or is reasonably
likely to have, individually or in the aggregate, a material adverse impact on
the business, prospects, assets, properties, operations, results of operations
or condition (financial or other) of such entity or entities and all other
entities with which such entity or entities are consolidated for financial
accounting purposes, taken as a whole; provided, however, that "material adverse
change" and "material adverse effect" shall be deemed to exclude the impact of
(i) changes in generally accepted accounting principles, (ii) the public
announcement of the Merger and compliance with the provisions of this Plan of
Merger, (iii) any changes resulting from any restructuring or other similar
charges or write-offs taken by the Company in its consolidated financial
statements with the consent of TBC, and (iv) any changes resulting from any
event or circumstance affecting financial institutions generally.

9.7 Knowledge. Whenever the term "knowledge," "best knowledge" or similar
expression is used in this Plan of Merger, it shall mean knowledge of a party's
respective directors and the executive officers listed on Schedule 9.7 of each
party's respective Disclosure Schedule and to include the assurance that such
knowledge is based upon reasonable investigation unless otherwise expressly
provided.

9.8 Waiver or Modification. Any party to this Plan of Merger may, at any
time prior to the Effective Time, by action taken by its Board of Directors or
officers thereunto duly authorized, waive any of the terms or conditions of this
Plan of Merger or agree to an amendment or modification to this Plan of Merger
by an agreement in writing executed in the same manner (but not necessarily by
the same persons) as this Plan of Merger. No amendment, modification or waiver
of this Plan of Merger shall be binding unless executed in writing by the party
to be bound thereby. No waiver of any of the provisions of this Plan of Merger
shall be deemed or shall constitute a waiver of any other provisions hereof
(whether or not similar), nor shall any waiver constitute a continuing waiver
unless expressly provided. TBC's Board of Directors may authorize the amendment
or supplementation of this Plan of Merger or waiver of any provision hereof or
thereof, either before or after the approval of TBC's shareholders (and without
seeking further shareholder approval to the extent allowed by law), so long as
such amendment, supplement or waiver does not result in the reduction of the
consideration given or result in an adverse tax or other effect to TBC's
shareholders.

9.9 Governing Law. This Plan of Merger shall be construed in accordance
with the laws of the State of Delaware, applied without giving effect to any
conflicts-of-law principles.

9.10 Integration of Exhibits. All Exhibits attached to this Plan of Merger
are integral parts of this Plan of Merger as if fully set forth herein, and all
statements appearing therein shall be deemed disclosed for all purposes and not
only in connection with the specific representation in which they are explicitly
referenced.

9.11 Entire Agreement. Other than the letter dated January 28, 1999,
regarding provisions to the loan allowance, the letters dated January 26, 1999
regarding the employment of Mr. Jed M. Hiers and the director position for Mr.
Jerry Smith and the Confidentiality Agreement which specifically covered the
Plan of Merger, all of which are hereby incorporated by reference, this Plan of
Merger contains the entire agreement between the parties hereto with respect to
the transactions contemplated hereby and thereby supersedes the Letter of
Intent, dated January 26, 1999, and all prior and contemporaneous agreements,
understandings, negotiations and discussions, whether oral or written, of the
parties, and there are no warranties, representations, covenants or other
agreements between the parties in connection with the subject matter hereof
except as specifically set forth herein.

9.12 Counterparts. This Plan of Merger may be executed in any number of
copies, each of which shall be deemed an original, and all of which together
shall be deemed one and the same instrument.

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<PAGE> 251

9.13 Binding Effect. This Plan of Merger shall be binding on, and shall
inure to the benefit of, the parties hereto, and their respective successors and
assigns, and no other person shall acquire or have any right under or by virtue
of this Plan of Merger. No party may assign any right or obligation hereunder
without the prior written consent of the other parties.

9.14 No Rule of Construction. The parties acknowledge that this Plan of
Merger was initially prepared by TBC and that all parties have read and
negotiated the language used in this Plan of Merger. The parties agree that,
because all parties participated in negotiating and drafting this Plan of
Merger, no rule of construction shall apply to this Plan of Merger which
construes ambiguous language in favor of or against any party by reason of that
party's role in drafting this Plan of Merger.

IN WITNESS WHEREOF, pursuant to authority duly given by the respective
Boards of Directors of TBC and the Company, this Plan of Merger has been signed
on behalf of said corporations by their respective duly authorized officers, all
on the date, month and year first written above.

THE BANC CORPORATION

By: /s/ JAMES A. TAYLOR
------------------------------------
James A. Taylor
Chairman of the Board
and Chief Executive Officer

C&L BANKING CORPORATION

By: /s/ JED M. HIERS
------------------------------------
Jed M. Hiers
President and
Chief Executive Officer

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ANNEX B

SHARE EXCHANGE AGREEMENT

THIS SHARE EXCHANGE AGREEMENT ("Agreement") is made and entered into as of
the 25th day of February, 1999, by and between C&L BANK OF BRISTOL, a Florida
corporation (the "Bank") and BRISTOL ACQUISITION CORPORATION ("Newco"), a
Florida corporation and wholly-owned subsidiary of THE BANC CORPORATION ("TBC"),
and joined in by C&L BANKING CORPORATION, a Florida corporation, with its
principal place of business located at Highway 20 and Baker Street, Bristol,
Florida ("C&L").

WITNESSETH:

WHEREAS, the Bank is a Florida state bank duly organized and existing under
the laws of the State of Florida having an authorized capital stock consisting
of 20,000 shares of common stock, par value $10.00 per share (the "Bank Common
Stock"), of which 20,000 shares are currently issued and outstanding; and

WHEREAS, C&L is a registered bank holding company which owns 19,620 (or
98.1%) of the issued and outstanding shares of the Bank Common Stock; and

WHEREAS, C&L has authorized capital stock consisting of 20,000 shares of
common stock (the "C&L Common Stock"), of which 16,274 shares are currently
issued and outstanding; and

WHEREAS, C&L has entered into that certain Plan and Agreement of Merger
(the "Merger Agreement"), dated as of February 25, 1999, by and between TBC and
C&L, pursuant to which the shareholders of C&L will receive shares of TBC Common
Stock for their shares of the C&L Common Stock. Capitalized terms used herein
and not otherwise defined herein have their respective meanings under the Merger
Agreement; and

WHEREAS, the Board of Directors of C&L, in negotiating the Merger
Agreement, desired to obtain the same proportionate consideration for the Bank's
shareholders other than C&L; and

WHEREAS, Board of Directors of TBC deems it to be in the best interest of
TBC for TBC to contribute shares of TBC Common Stock to Newco in order to
facilitate the transactions contemplated by this Agreement; and

WHEREAS, the Boards of Directors of the Bank and TBC deem it advisable and
to the benefit of the Bank and TBC and their respective shareholders, that the
Bank and Newco participate in a share exchange in accordance with the authority
of Section 607.1102 of the Florida Business Corporation Act (the "FBCA"), as
applicable to the Bank pursuant to Section 658.30 of the Florida Banking
Statutes, pursuant to which the shareholders of the Bank (other than TBC) will
receive shares of TBC Common Stock from Newco in exchange for their shares of
the Bank Common Stock which shall be delivered to Newco (the "Exchange") in
accordance with the terms of this Agreement.

NOW, THEREFORE, in consideration of the mutual promises, covenants, and
agreements herein contained, the Bank, Newco and TBC, joined in by C&L, agree as
follows:

ARTICLE I

THE EXCHANGE AND RELATED MATTERS

1.01 The Exchange.

(a) Acquisition of the Bank Common Stock. Subject to the terms and
conditions of this Agreement, pursuant to the provisions of Section
607.1102 of the FBCA, at the Effective Time (as such term is defined in
Section 1.03 hereof) each share of Bank Common Stock which is not currently
owned by C&L (other than Dissenting Shares, as such term is defined in
Section 1.01(b) hereof) which is

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<PAGE> 253

outstanding immediately prior to the Effective Time shall, by virtue of the
Exchange and without any action on the part of the holder thereof, be
converted into the right to receive that number of shares of TBC common
stock (rounded to the nearest whole share) equal to $249,205.19 (plus 1.9%
of the Additional Merger Consideration, if applicable) divided by the
Closing Date Trading Price.

(b) Dissenting Shares. Notwithstanding anything in this Agreement to
the contrary, shares of Bank Common Stock which are outstanding immediately
prior to the Effective Time and which are held by shareholders who shall
not have voted such shares in favor of the Exchange and who shall have
delivered to the Bank a written notice of the shareholder's intent to
demand payment of such shares in the manner provided in the provisions of
the FBCA (the "Dissenting Shares") shall be entitled to payment of the
appraised fair value of such shares in accordance with the provisions of
the FBCA; provided, in the event a holder fails to perfect, withdraws or
otherwise loses his or her right to appraisal and payment for his or her
shares of Bank Common Stock pursuant to the applicable provisions of the
FBCA, each dissenting share held by such holder shall be converted into and
represent only the right to receive the consideration specified in Section
1.01(a) hereof upon surrender of the certificate or certificates
representing the Dissenting Shares.

(c) Effect of Exchange. At the Effective Time, Newco shall become the
owner of 1.9% of the issued and outstanding shares of the Bank Common
Stock, which shares shall be immediately contributed to TBC, making the
Bank a wholly-owned subsidiary of TBC, all without any further action on
the part of the Bank, Newco or TBC, or any of their respective
shareholders. The shareholders of the Bank (other than TBC) shall have no
further rights in such shares which shall be automatically converted into
the right to receive the consideration set forth herein. The Exchange shall
have the additional effects provided by applicable law.

(d) Articles. The Articles of Incorporation of each of the Bank and
Newco, respectively, and the Certificate of Incorporation of TBC as in
effect immediately prior to the Effective Time, shall remain in effect
thereafter, unless and until amended as provided by applicable law.

(e) Bylaws. The respective Bylaws of the Bank, Newco and TBC, as in
effect immediately prior to the Effective Time, shall remain in effect
thereafter, unless and until amended or repealed as provided by the Bylaws,
the respective Articles of Incorporation or Certificate of Incorporation
and applicable law.

1.02 Surrender of Certificates. Suntrust Bank, ,
shall act as the exchange agent (the "Exchange Agent") to effect
the exchange of Bank Common Stock. Each holder of a stock certificate or
certificates representing outstanding shares of Bank Common Stock being
converted in the Exchange at the Effective Time shall, as soon after the
Effective Time as possible, surrender such certificate or certificates to the
Exchange Agent for cancellation (or, if such certificate or certificates shall
have been lost or destroyed, shall deliver to the Exchange Agent an affidavit to
such effect and, if requested by the Exchange Agent, a bond in form and amount
satisfactory to Exchange Agent), and each such holder shall be entitled upon
such surrender and cancellation (or upon such delivery) to receive from Newco,
in exchange therefore, (i) a stock certificate representing the number of shares
to which such shareholder is entitled as determined pursuant to Section 1.01(a)
and (ii) a check for the applicable amount owed to such shareholder pursuant to
any dividend declared on the TBC common stock after the Effective Time.

1.03 Effective Time. The Exchange shall become effective on the date of
filing the Articles of Share Exchange in substantially the form attached hereto
as Annex 1 with the Secretary of State of the State of Florida and the Florida
Department of Banking and Finance ("Banking Department") in accordance with the
provisions of the FBCA and the Florida Banking Statutes and at the time
specified in such Articles, which time shall be immediately after consummation
of the transactions contemplated by the Merger Agreement. The date and time when
the Exchange shall become effective is hereinafter referred to as the "Effective
Time."

1.04 Closing. The closing of the transactions contemplated by this
Agreement, including the filing of the Articles of Share Exchange described in
Section 1.03 hereof (the "Closing") shall take place at such time and place as
the parties may mutually agree on the date of the later to occur of (i) thirty
(30) days after the

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date of the approval (the "Banking Department Approval") by the Banking
Department, provided, in the event that such date is not a business day, the
closing shall occur on the first business day thereafter; (ii) the receipt of
any other approvals or consents described in Article V hereof; or (iii) such
later or earlier date as the Bank, Newco and TBC may mutually agree. The date of
closing is hereinafter referred to as the "Closing Date."

ARTICLE II

REPRESENTATIONS AND WARRANTIES OF THE BANK

The Bank hereby represents and warrants to TBC as follows:

2.01 Corporate Organization, Authorization, etc. The Bank is a Florida
corporation, duly organized, validly existing and in good standing under the
laws of the State of Florida and has full corporate power and authority to
conduct its business as it is now being conducted and to own or lease the
properties and assets it now owns or holds under lease; and is duly qualified or
licensed to do business and is in good standing in every other state of the
United States and other jurisdictions where the character of its business or the
nature of its properties makes such qualification or licensing necessary and the
failure to be so qualified, licensed and in good standing could have a material
adverse effect on the rights, property or business of the Bank. The Bank has
full corporate power and authority to enter into this Agreement and, subject to
the requisite approval of its shareholders, to consummate the transactions
contemplated herein. This Agreement has been duly executed and delivered by the
Bank and, subject to such approval, is a valid and binding agreement of the Bank
in accordance with its terms, subject to laws relating to creditors' rights
generally.

2.02 Authorized and Outstanding Stock. The authorized capital stock of the
Bank consists of 20,000 shares of common stock, par value $10.00 per share. As
of the date hereof, 20,000 shares of Bank Common Stock are issued and
outstanding. All of such issued shares are and will be validly issued, fully
paid and nonassessable. The Bank does not have outstanding, and is not bound by,
any subscriptions, options, warrants, calls, commitments or agreements to issue
any additional shares of its capital stock, including any right of conversion or
exchange under any outstanding security or other instrument, and the Bank is not
obligated to issue any shares of its capital stock for any purpose. There are no
unsatisfied preemptive rights in respect to the capital stock of the Bank.

2.03 Consents, Approvals, Filings, etc., of Governmental
Authorities. Neither the business nor operations of the Bank requires any
consent, approval or authorization of, or declaration, filing or registration
with, any governmental or regulatory authority in connection with the execution
and delivery of this Agreement and the consummation of the transactions
contemplated herein except for (i) the approval of the Exchange by the Banking
Department pursuant to Section 658.43 of the Florida Banking Statutes, and any
other state or federal bank regulatory agency; and (ii) the filing of Articles
of Share Exchange as required by the FBCA, as applicable to the Bank pursuant to
Section 658.30 of the Florida Banking Statutes.

ARTICLE III

REPRESENTATIONS AND WARRANTIES OF TBC

TBC hereby represents and warrants to the Bank that:

3.01 Organization, Authority. TBC is a duly organized corporation, validly
existing and in good standing under the laws of the State of Delaware and has
all requisite corporate power and authority to own and lease its properties, to
carry on its business as presently conducted and to carry out the transactions
contemplated hereby.

3.02 Corporate Action. TBC has full corporate power and authority to enter
into this Agreement and to consummate the transactions contemplated hereby. This
Agreement has been duly executed and delivered by TBC, and is a valid and
binding agreement of TBC, enforceable in accordance with its terms, and subject
to laws relating to creditors' rights generally.

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3.03 Newco -- Organization, Authority. Newco is a duly organized
corporation, validly existing and in good standing under the laws of the State
of Florida and has all requisite corporate power and authority to own and lease
its properties, to carry on its business as presently conducted and to carry out
the transactions contemplated hereby.

3.04 Newco -- Corporate Action. Newco has full corporate power and
authority to enter into this Agreement and to consummate the transactions
contemplated hereby. This Agreement has been duly executed and delivered by
Newco, and is a valid and binding agreement of Newco, enforceable in accordance
with its terms, and subject to laws relating to creditors' rights generally.

ARTICLE IV

OBLIGATIONS PRIOR AND SUBSEQUENT TO EFFECTIVE TIME

Prior to the Effective Time:

4.01 Filing Requirements. The Bank, Newco and TBC will promptly comply
with all other filing requirements which federal, state or local law may impose
on the Bank, Newco or TBC with respect to this Agreement.

4.02 Approval of the Bank's Shareholders. Promptly following the execution
of this Agreement, the Bank shall commence to take such actions as may be
necessary to obtain adoption and approval of this Agreement by shareholders of
the Bank, including, without limitation, the calling of such meeting and the
preparation of preliminary proxy or similar materials for a meeting of
shareholders of the Bank to be held as soon as practicable. Upon completion by
the Bank of such preliminary material, the Bank will furnish to Newco and TBC
copies of such preliminary materials which the Bank proposes to send to its
shareholders. Newco and TBC will promptly provide the Bank with comments
thereon, and such materials shall be expediently finalized by the Bank.

4.03 Further Assurances. Each party hereto agrees to execute and deliver
such instruments and take such other actions as the other parties may reasonably
require in order to carry out the intent of this Agreement. Each party shall use
its best efforts to perform and fulfill all conditions and obligations on its
part to be performed or fulfilled under this Agreement and to effect the
Exchange in accordance with the terms and conditions of this Agreement.

ARTICLE V

CONDITIONS PRECEDENT

5.01 Conditions to Newco's and TBC's Obligations. The obligations of Newco
and TBC to effect the Exchange are subject to the satisfaction of the following
conditions, unless waived by Newco and TBC:

(a) Representations and Warranties. The representations and
warranties of the Bank set forth in this Agreement shall be true and
correct in all material respects (i) as of the date of this Agreement, and
(ii) as of the Effective Time, as though made as of each such time, except
an otherwise contemplated by this Agreement. Newco and TBC shall have
received a certificate signed by a senior executive officer of the Bank to
such effect.

(b) Consummation of C&L Merger. The transactions contemplated by the
Merger Agreement shall have been consummated.

(c) Shareholder Approval. This Agreement and the transactions
contemplated hereby shall have been approved by the shareholders of the
Bank in accordance with the provisions of the FBCA, as applicable to the
Bank pursuant to Section 658.30 of the Florida Banking Statutes.

(d) Performance of Obligations of the Bank. The Bank shall have
performed all obligations and covenants required to be performed by it
under this Agreement prior to the Effective Time, and Newco and TBC shall
have received a certificate signed by a senior executive officer of the
Bank to such effect.

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(e) Approvals and Consents. All approvals of applications to public
authorities, federal, state or local, and all approvals of private persons,
the granting of which is necessary for the consummation of the Exchange,
for the preventing of the termination of any material right, privilege,
license or agreement of, or any material loss or disadvantage to, or the
withholding of which might have a material adverse effect on the business,
results of operations, prospects or financial condition of the Bank upon
the consummation of the Exchange, shall have been obtained, and all
statutory waiting periods with respect thereto shall have expired. With
respect to the Banking Department Approval, and the approval of any other
state or federal bank, bank holding company or other regulatory agency, as
described in Section 2.03 hereof, the form and substance of such
approval(s) shall be satisfactory to Newco and TBC in their sole respective
discretion.

(f) Litigation. There shall not be pending or threatened any
litigation in any court or any proceeding before or by any governmental
department, agency or instrumentality against the Bank, Newco or TBC (or
any officer or director thereof) in which it is sought to restrain or
prohibit or obtain damages in respect of the consummation of transactions
contemplated by this Agreement.

5.02 Conditions to the Bank's Obligations. The obligations of the Bank to
effect the Exchange are subject to the satisfaction of the following conditions,
unless waived by the Bank:

(a) Representations and Warranties. The representations and
warranties of Newco and TBC set forth in this Agreement shall be true and
correct in all material respects (i) as of the date of this Agreement, and
(ii) as of the Effective Time, as though made as of each such time, except
as otherwise contemplated by this Agreement, and the Bank shall have
received a certificate signed by a senior executive officer of each of
Newco and TBC to such effect.

(b) Consummation of C&L Merger. The transactions contemplated by the
Merger Agreement shall have been consummated.

(d) Performance of Obligations of Newco and TBC. Newco and TBC shall
have performed all obligations and covenants required to be performed by
them under this Agreement prior to the Effective Time, and the Bank shall
have received a certificate signed by a senior executive officer of each of
Newco and TBC to such effect.

(e) Approvals and Consents. All approvals of applications to public
authorities, federal, state or local, and any approvals of private persons,
the granting of which is necessary for the consummation of the Exchange
(except such approvals, the failure to obtain of which would not be
materially adverse to the Bank or its shareholders) shall have been
obtained, and all statutory waiting periods with respect thereto shall have
expired.

ARTICLE VI

TERMINATION AND ABANDONMENT

6.01 Methods of Termination. Notwithstanding anything herein to the
contrary, prior to the filing of this Agreement with the Secretary of State of
the State of Florida, this Agreement may be terminated and the transactions
contemplated hereby may be abandoned at any time (i) by a consent in writing of
Newco and TBC, on one hand, and the Bank, on the other hand, whether before or
after action thereon by the shareholders of the Bank, or (ii) by either party in
the event that the conditions to such party's obligations have not been met or
waived.

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6.02 Requirements and Effect of Termination. If this Agreement is
terminated pursuant to Section 6.01, the same shall be of no further force or
effect and there shall be no liability by reason of this Agreement or the
termination thereof on the part of either the Bank, Newco, TBC or the directors,
officers, employees, agents or stockholders of either of them, except as to any
liability for breach of any duty, representation, warranty or obligation arising
prior to the date of termination.

ARTICLE VII

MISCELLANEOUS PROVISIONS

7.01 Amendment and Modification. To the fullest extent provided by
applicable law, this Agreement may be amended, modified and supplemented by
mutual consent of the respective Boards of Directors of the Bank, on one hand,
and TBC, on the other hand, at any time prior to the Effective Time with respect
to any of the terms contained herein; provided, that following action thereon by
the shareholders of the Bank, no modification or amendment shall be made without
the further approval of such shareholders which (i) alters or changes the amount
or kind of consideration to be received in exchange for or on conversion of all
or part of the shares to be acquired, (ii) alters or changes any term of the
Articles of Incorporation of the Bank, or (iii) alters or changes any of the
terms of this Agreement if such alteration or change would adversely effect the
shareholders of the Bank. Any such amendment, modification or supplement shall
be in writing.

7.02 Waiver of Compliance. Any failure of the Bank, Newco or TBC to comply
with any obligation, covenant, agreement or condition herein may be expressly
waived (to the extent permitted under applicable law) in writing by the
President of the Bank, Newco or TBC, as the case may be; provided, however, such
waiver or failure to insist upon strict compliance with such obligation,
covenant, agreement or condition shall not operate as a waiver of, or estoppel
with respect to, any subsequent or other failure.

7.03 Notices. Any notice or communication required or permitted to be made
hereunder shall be in writing, and shall be deemed to have been made if
delivered personally or by a nationally recognized overnight courier service, or
by facsimile, receipt confirmed, or if mailed, by registered or certified mail,
return receipt requested, to the parties at the addresses shown below. If notice
is given by personal delivery or facsimile, the date of personal delivery or the
date of the receipt confirming the delivery of facsimile shall be the date of
giving notice; if notice is given by a nationally recognized courier service,
notice shall be deemed to have been given one (1) business day after delivery to
such courier service; and if notice is given by mail in the manner prescribed
above, notice shall be deemed to have been given three (3) business days after
the date of mailing.

<TABLE>
<S> <C>
To the Bank: C&L Bank of Bristol
Highway 20 and Baker Street
Bristol, Florida 32321
Attention: Mr. Jed Hiers, President

To TBC: The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203
Attention: Mr. James A. Taylor,
Chairman of the Board and Chief Executive Officer

With a copy to: Mr. James A. Taylor, Jr.,
Executive Vice President, General Counsel and
Secretary
The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203
</TABLE>

7.04 Severability. If any provision of this Agreement, or the application
thereof, will for any reason and to any extent be invalid or unenforceable, the
remainder of this Agreement and application of such provision to other persons
or circumstances will be interpreted so as reasonably to effect the intent of
the parties hereto. The parties further agree to replace such void or
unenforceable provision of this Agreement with a valid and

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enforceable provision that will achieve, to the extent possible, the economic,
business and other purposes of the void or unenforceable provision.

7.05 Attorneys' Fees. If any legal action, arbitration or other proceeding
is brought for the enforcement of this Agreement, or as a result of any other
dispute, in connection with any of the provisions of this Agreement, the
prevailing party shall be entitled to recover reasonable attorneys' fees and
other costs and expenses incurred in that action or proceeding, in addition to
any other relief to which it may be entitled.

7.06 Assignment. This Agreement and all of the provisions hereof shall be
binding upon and inure to the benefit of the parties hereto and their respective
successors and permitted assigns, but neither this Agreement nor any of the
rights, interests or obligations hereunder shall be assigned by the respective
parties hereto without the prior written consent of the other party; provided,
no such consent shall be required for assignment by the Bank or TBC to a
corporate affiliate, as such term in defined under the Banking Affiliates Act of
1982. No such assignment shall relieve TBC of its obligations hereunder.

7.07 GOVERNING LAW. THIS AGREEMENT AND THE LEGAL RELATIONS BETWEEN THE
PARTIES HERETO SHALL BE GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF
THE STATE OF FLORIDA, EXCEPT INSOFAR AS THE INTERNAL LAW OF ANY OTHER POLITICAL
ENTITY OR JURISDICTION SHALL SPECIFICALLY AND MANDATORILY APPLY TO ANY OF THE
TRANSACTIONS CONTEMPLATED HEREBY.

7.08 Counterparts. This Agreement may be executed simultaneously in two or
more counterparts, each of which shall be deemed an original, but all of which
together shall constitute one and the same instrument.

7.09 Headings. The headings of the Sections of this Agreement are inserted
for convenience only and shall not constitute a part hereof.

7.10 Entire Agreement. This Agreement, including the other documents
referred to herein which form a part hereof, contains the entire understanding
of the parties hereto in respect of the subject matter contained herein. There
are no restrictions, promises, representations, warranties, covenants or
undertakings, other than those expressly set forth or referred to herein. This
Agreement supersedes all prior agreements and understandings between the parties
with respect to such subject matter.

[REMAINDER OF PAGE INTENTIONALLY LEFT BLANK]

[SEE NEXT PAGE FOR SIGNATURES]

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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be
duly executed and delivered all as of the day and year first above written.

<TABLE>
<S> <C>
BANK: C&L BANK OF BRISTOL,
a Florida corporation

By: /s/ JED M. HIERS
---------------------------------------------
Jed M. Hiers,
President

NEWCO: BRISTOL ACQUISITION CORPORATION,
a Florida corporation

By: /s/ JAMES A. TAYLOR
---------------------------------------------
James A. Taylor
Chairman of the Board

TBC: THE BANC CORPORATION,
a Delaware corporation

By: /s/ JAMES A. TAYLOR
---------------------------------------------
James A. Taylor,
Chairman of the Board
and Chief Executive Officer
</TABLE>

The undersigned hereby joins in the execution of this Agreement for the
purpose of acknowledging the intent of C&L to receive the benefits to be derived
therefrom and to meet the obligations agreed to by C&L under Section 1.01 of
this Agreement.

<TABLE>
<S> <C>
C&L: C&L BANKING CORPORATION,
a Florida corporation

By: /s/ JED M. HIERS
---------------------------------------------
Jed M. Hiers,
President and Chief Executive Officer
</TABLE>

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<PAGE> 260

ANNEX 1

ARTICLES OF SHARE EXCHANGE

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ANNEX C

PLAN AND AGREEMENT OF MERGER

This Plan and Agreement of Merger ("Plan of Merger") is entered into this
25th day of February, 1999, among The Banc Corporation, a Delaware corporation
("TBC"), C&L Banking Corporation, a Florida corporation ("C&L"), C&L Bank of
Bristol, a Florida corporation (the "Subsidiary"), and C&L Bank of Blountstown,
a Florida corporation (the "Company").

RECITALS:

WHEREAS, C&L is a bank holding company existing under the laws of the State
of Florida, with its principal office at Highway 20 and Baker Street, Bristol,
Florida 32321, and has entered into that certain Plan and Agreement of Merger,
dated as of February 25, 1999, by and between TBC and C&L pursuant to which C&L
shall be merged with and into TBC with the Subsidiary becoming a subsidiary of
TBC immediately prior to TBC's acquisition of the Company;

WHEREAS, the Subsidiary, a 98.10% owned subsidiary of C&L, is a bank
chartered under the laws of Florida, with its principal office at Highway 20 &
Baker Street, Bristol, Florida 32321;

WHEREAS, the Company is a bank chartered under the laws of the State of
Florida with its principal office at 307 W. Central Avenue, Blountstown, Florida
32424;

WHEREAS, TBC, C&L, Bristol Acquisition Corporation and the Subsidiary have
entered into that certain Share Exchange Agreement, dated as of February 25,
1999 (the "Share Exchange Agreement"), pursuant to which the outstanding shares
of the common stock of the Subsidiary not owned by C&L will be exchanged for TBC
Common Stock immediately prior to the merger of the Company with and into the
Subsidiary (the "Share Exchange");

WHEREAS, the Boards of Directors of TBC, C&L, the Subsidiary and the
Company have determined that it is in the best interests of TBC, C&L, the
Subsidiary and the Company respectively and in the best interests of their
respective stockholders and shareholders that TBC, C&L, the Subsidiary and the
Company merge in accordance with, and subject to, the terms and conditions
hereinafter set forth;

WHEREAS, the respective Boards of Directors of TBC, C&L, the Subsidiary and
the Company have unanimously approved and authorized the execution and delivery
of this Plan of Merger and the merger of the Company with and into the
Subsidiary (the "Merger") in accordance with, and subject to, the terms and
conditions set forth herein, and the Board of Directors of the Company has
unanimously voted to recommend to its shareholders that this Plan of Merger and
the Merger be approved;

WHEREAS, the parties intend that this Plan of Merger shall constitute a
plan of reorganization as that term is used in Sections 354 and 361 of the Code;
and

WHEREAS, for accounting purposes, it is intended that the Merger be
accounted for as a "pooling of interests;"

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SECTION 1. THE MERGER.

1.1 The Merger. At the Effective Time, in accordance with, and subject to,
the terms and conditions of this Plan of Merger, including the receipt of all
requisite governmental and shareholder approvals, and in accordance with, and
subject to, the Florida Financial Institutions Code (the "FFIC"): (i) the
Company shall merge with and into the Subsidiary; and (ii) the separate
existence of the Company shall cease, and the Subsidiary shall continue as the
surviving entity under the name "C&L Bank" (the Subsidiary, in its capacity as
the corporation surviving the Merger, is hereinafter sometimes referred to as
the "Surviving Corporation").

1.3 Effective Time. Subject to the provisions of this Plan of Merger, the
Plan of Merger and Merger Agreement (the "Merger Agreement"), substantially in
the form attached as Exhibit 1.3 hereto, shall be duly executed and, on the
Closing Date (as defined in section 1.2 hereof) or as soon thereafter as
reasonably practicable, filed with Florida Department of Banking and Finance
(the "Florida Banking Department") in accordance with the FFIC. The Merger shall
become effective upon the issuance of a Certificate of Merger by the Florida
Banking Department and upon the filing of the Merger Agreement with the
Secretary of State of the State of Florida (the "Effective Time").

1.4 Effect of the Merger. The Merger shall have the effect provided in
Section 658.45 of the FFIC.

SECTION 2. EFFECT OF THE MERGER ON THE CAPITAL STOCK OF THE CONSTITUENT
CORPORATION; EXCHANGE OF CERTIFICATES.

2.1 Effect on Capital Stock. As of the Effective Time, by virtue of the
Merger and without any action on the part of any holder of Company Common Stock:

(a) Cancellation of Treasury Stock. Each share of Company Common
Stock, par value $12.00 per share ("Company Common Stock") that is owned by
the Company or by any subsidiary of the Company shall automatically be
canceled and retired and shall cease to exist, and none of the Common
Stock, par value $.001 per share, of TBC ("TBC Common Stock"), cash or
other consideration shall be delivered in exchange therefor.

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"Merger Consideration" means that number of TBC Shares (rounded to the
nearest whole share) equal to approximately $8,533,142.58 (plus the
Additional Merger Consideration if applicable) divided by the Closing Date
Trading Price of TBC Common Stock. In the event the Closing Date Trading
Price is in excess of $14.00 per share, then for purposes of the
calculation of the Merger Consideration set forth in this Section 2.1,
$14.00 shall be used as the Closing Date Trading Price. If the Effective
Time has not occurred as of July 31, 1999, the Merger Consideration shall
be increased, but not decreased, on a dollar for dollar basis, by the
earnings of the Company from August 1, 1999, through the most reasonable
practicable day of determination (but no more than three business days)
immediately prior to the Special Meeting of Company Shareholders described
in Section 6.4 (the "Additional Merger Consideration"). "Closing Date
Trading Price' means the average last sale prices for shares of TBC Common
Stock for the twenty consecutive trading days on which such shares are
actually traded (as reported to TBC by Nasdaq or as reported in The Wall
Street Journal, Eastern Edition, or if not reported thereby, any other
authoritative source) ending at the close of trading on the third trading
day immediately preceding the date on which the shareholders of the Company
meet to consider this Plan of Merger.

(e) Dissenting Shares. Notwithstanding anything in this Plan of
Merger to the contrary, the shares of Company Common Stock outstanding
immediately prior to the Effective Time of the Merger held by a holder (if
any) who is entitled to dissent, and who properly dissents, in accordance
with Section 658.44 of the FFIC ("Dissenting Shares") shall be entitled to
receive only the fair value of his shares as defined under Section 658.44
of the FFIC. Such Dissenting Shares shall not be converted into a right to
receive the Merger Consideration and any cash in lieu of fractional shares
of TBC Common Stock unless such holder fails to perfect or otherwise loses
such holder's right to appraisal. If, after the Effective Time of the
Merger, such holder fails to perfect or loses any such right to appraisal,
such shares, as of the time of such failure or loss, shall no longer be
deemed Dissenting Shares, and such holder shall be entitled to receive from
the Surviving Corporation the number of TBC Shares that any participating
Company shareholder is entitled to receive under Section 2.1(c) and the
cash in lieu of fractional shares of TBC Common Stock specified in Section
2.2(e).

2.2 Exchange of Certificates.

(a) Exchange Agent. Prior to the Effective Time, TBC shall enter into
an agreement with such bank or trust company as may be designated by TBC
(the "Exchange Agent"), which is reasonably acceptable to the Company,
which shall provide that TBC shall deposit with the Exchange Agent as of
the Effective Time, for the benefit of the holders of the Company Common
Stock, for exchange in accordance with this Section 2, through the Exchange
Agent, certificates representing the shares of TBC

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<PAGE> 264

Common Stock (such shares of TBC Common Stock, together with any dividends
or distributions with respect thereto with a record date after the
Effective Time but prior to their exchange, being hereinafter referred to
as the "Exchange Fund") issuable pursuant to Section 2.1 in exchange for
outstanding shares of the Company Common Stock.

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<PAGE> 265

2.3 Certificate of Incorporation of the Surviving Corporation. The
articles of incorporation of the Subsidiary, attached hereto as Exhibit 2.3, in
effect immediately prior to the Effective Time shall remain the articles of
incorporation of the Surviving Corporation from and after the Effective Time
until amended or repealed in accordance with its provisions and applicable law.

2.4 Bylaws of the Surviving Corporation. The bylaws of the Subsidiary,
attached hereto as Exhibit 2.4, in effect immediately prior to the Effective
Time shall remain the bylaws of the Surviving Corporation from and after the
Effective Time until amended or repealed in accordance with their provisions and
applicable law.

2.5 Capitalization of the Surviving Corporation. The combined
capitalization of the Company and the Subsidiary immediately prior to the
Effective Time shall be the capitalization of the Surviving Corporation until
changed by resolution of the Board of Directors of the Surviving Corporation or
by action of the shareholders of the Surviving Corporation.

2.6 Directors and Officers of the Surviving Corporation. The directors and
officers of the Subsidiary, listed on Exhibit 2.6 attached hereto, shall be the
directors and officers of the Surviving Corporation to serve until their
successors have been elected or qualified or until their resignation or removal
according to applicable law and the bylaws of the Surviving Corporation.

C-5
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2.7 Locations of the Surviving Corporation. The locations of the principal
offices and branch offices of each of the Company and the Subsidiary, attached
hereto as Exhibit 2.7, shall be the principal offices and branch offices of the
Surviving Corporation.

SECTION 3. REPRESENTATIONS AND WARRANTIES OF THE COMPANY.

Except as set forth in the Disclosure Schedule delivered to TBC by the
Company (the "Company Disclosure Schedule") as set forth in Section 6.24, the
Company hereby represents and warrants to TBC, as of the date hereof and up to
and including the Closing Date as follows (to the extent applicable, all
representations and warranties by the Company include its subsidiaries):

3.1 Organization, Existence and Good Standing. The Company is a
corporation duly organized, validly existing and in good standing under the laws
of the State of Florida, with full corporate power and authority to, and
possesses all material governmental, regulatory and other permits, licenses and
authorizations necessary to, carry on its business as now conducted and to own
and operate the properties and assets it owns or operates, to enter into this
Plan of Merger and the Merger and to perform its obligations hereunder and
thereunder. The Company is duly qualified or licensed to transact business as a
foreign corporation in good standing in the states and foreign jurisdictions
where the character of its assets or the nature or conduct of the business
requires it to be so qualified or licensed, except for such jurisdictions in
which the failure to be so qualified or licensed is not reasonably likely to
have, individually or in the aggregate, a material adverse effect on the
business, operations, properties or assets, or the condition, financial or
otherwise, of the Company. The deposit accounts of the Company are insured by
the Federal Deposit Insurance Corporation (the "FDIC") to the full extent
permitted under applicable law and the rules and regulations of the FDIC.

3.2 The Company Capital Stock.

(a) The Company's authorized capital stock consists of 100,000 shares
of common stock, $12.00 par value per share, of which 100,000 shares are
outstanding, all of which are validly issued.

(b) Other than as set forth on Schedule 3.2(b) to the Company
Disclosure Schedule, the Company does not own directly, beneficially or of
record, more than five percent of the outstanding stock of any other
corporation and does not otherwise control any company or bank. The Company
does not have any direct or indirect subsidiaries and does not have any
interest in any partnership, firm, association, corporation or joint
venture other than investment securities purchased and loans made in the
regular and usual course of its business.

(d) There are no outstanding or unsatisfied preemptive rights or
rights of first refusal with respect to the Company's capital stock.

(e) No shares of the Company's capital stock will be issued between
the date hereof and the Effective Time.

3.3 Intentionally Omitted.

3.4 Power and Authority. Subject to the satisfaction of the conditions
precedent set forth herein, the Company has the corporate power to execute,
deliver and perform this Plan of Merger and all agreements and other documents
executed and delivered or to be executed and delivered by it pursuant to this
Plan of Merger, and, subject to the satisfaction of the conditions precedent set
forth herein, has taken all action required by its

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articles of incorporation, bylaws or otherwise, to authorize the execution,
delivery and performance of this Plan of Merger and such related documents. The
execution and delivery of this Plan of Merger does not and, subject to the
receipt of required stock holder and regulatory approvals and any other required
third-party consents or approvals, the consummation of the Merger will not
violate any provisions of any statute or other law, any rule or regulation of
any governmental agency or authority, the articles of incorporation of the
Company or any provisions of, or result in the acceleration of any obligation
under, any mortgage, lien, lease, agreement, instrument, order, arbitration
award, judgment or decree, to which the Company or the Subsidiary is a party, or
by which it is bound, or violate any restrictions of any kind to which it is
subject which, if violated or accelerated, would have a material adverse effect
on the Company. The execution and delivery of this Plan of Merger has been
approved by the Board of Directors of the Company. This Plan of Merger has been
duly executed and delivered by the Company and, assuming this Plan of Merger
constitutes a valid and binding obligation of TBC, constitutes a valid and
binding obligation of the Company, enforceable against the Company in accordance
with its terms except as such enforceability may be limited by applicable
bankruptcy, reorganization, insolvency, moratorium or other similar laws
affecting creditors' rights generally and principles of equity.

3.5 Financial Statements. The Company has delivered to TBC balance sheets
of the Company as of December 31, 1998, the related statements of operations and
changes in financial position for the period then ended (the "Company Financial
Statements"). The Company Financial Statements, as and when prepared, (i) have
not been audited, (ii) present fairly the financial condition of the Company as
of the date indicated and the results of operations for the period indicated;
(iii) have been prepared in accordance with generally accepted accounting
principles ("GAAP") and regulatory accounting principles ("RAP") (to the extent
GAAP and RAP are the same, and RAP in case of any differences between the two)
and in a manner consistent with past practice; (iv) contain and reflect reserves
for all material accrued liabilities; and (v) are based on the books and records
of the Company.

3.6 Absence of Undisclosed Liabilities. Except as and to the extent
reflected or reserved against in the Company Financial Statements or disclosed
in Schedule 3.6 to the Company Disclosure Schedule, the Company has no material
liabilities or obligations whether accrued, absolute, contingent or otherwise,
including governmental charges or lawsuits, or any tax liabilities due or to
become due and whether (i) incurred in respect of or measured by the income of
the Company for any period up to the close of business on the respective dates
of the Company Financial Statements, or (ii) arising out of transactions entered
into, or any state of facts existing, thereafter.

3.7 Absence of Certain Changes or Events. Except as set forth on Schedule
3.7 to the Company Disclosure Schedule, since the date of the Company Financial
Statements, there has not been:

(a) any material adverse change in the condition (financial or
otherwise), assets, liabilities or business of the Company;

(b) any material adverse change in the character of the assets or
liabilities of the Company;

(d) any physical damage, destruction or loss not covered by insurance
affecting in a material and adverse way the property or assets of the
Company;

(e) any material change in the accounting methods or practices of the
Company unless required by law, regulation, GAAP or RAP, as the case may
be;

(f) any material change in the capital structure of the Company;

(g) any loss incurred or accrued for by the Company as a result of
environmental problems which has or would be expected to have a material
adverse effect on the financial position of the Company; or

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3.8 Tax Matters. The Company has filed all federal, state, municipal and
local income, excise, property, special district, sales, transfer and other tax
returns and reports of information statements that are required to be filed and
has paid all taxes that have become due pursuant to such returns or pursuant to
any assessment that has become payable. The returns filed by the Company have
been and will be accurately and properly prepared in all material respects. To
the extent that any tax liability or assessment has accrued, but has not yet
become payable or has been proposed for assessment or determination but remains
unpaid, the same has been reflected (if it is required to be so reflected under
RAP) as a liability on the books and records of the Company and the Company
Financial Statements. Since the date of the Company Financial Statements, the
Company has not incurred any liability with respect to any such taxes except for
normal taxes incurred in the ordinary and regular course of its business. The
Company has not executed or filed with the Internal Revenue Service or any other
taxing authority any agreement extending the period for the assessment or
collection of any income taxes. There are no examinations, reviews, audits or
investigations of any tax return or report of the Company that are presently
pending or, to the Company's knowledge, threatened, and the Company is not a
party to any pending action or proceeding by any governmental authority for
assessment or collection of income taxes.

3.9 Title to Properties; Absence of Liens and Encumbrances; Enforceability
of Leases.

(a) Except as to property indicated on Schedule 3.9 to the Company
Disclosure Schedule as being leased or mortgaged, the Company has good and
marketable title to its assets, real and personal (including those
reflected in the Company Financial Statements, except for loans and
investments thereafter sold or otherwise disposed of in the ordinary course
of business for adequate consideration), free and clear of all material
mortgages, pledges, liens, charges and encumbrances, except (A) investment
securities that are pledged to secure the deposit of public monies, FHLB
advances or monies under the control of any court, (B) the lien of taxes
not yet due and payable or being contested in good faith by appropriate
proceedings, and (C) such imperfections of title and encumbrances, if any,
and such liens, if any, incidental to the conduct of the Company's business
or the ownership of its assets as are not material in amount and do not
affect the value of, or interfere with the present use of, the Company's
assets or otherwise materially impair its operations.

(b) To the best knowledge of the Company, the structures and equipment
owned or used by the Company comply with applicable laws, regulations and
ordinances or if not in compliance, such noncompliance does not give rise
to a material adverse effect, and are in good operating condition, subject
to ordinary wear and tear.

(c) The real property, if any, leased by the Company is held by it
under valid and enforceable leases. The Company is not in material default
under any such leases.

3.10 Legal Proceedings. Except as set forth on Schedule 3.10 to the
Company Disclosure Statement, there are no material claims, actions, suits,
proceedings or investigations pending, or to the best knowledge of the Company,
threatened by or against or otherwise affecting the Company or its assets,
business or properties, or the transactions contemplated by the Plan of Merger,
or its directors, officers or employees in reference to actions taken by them in
such capacity at law or in equity, or before or by any federal, state, municipal
or other government department, commission, board, agency, instrumentality or
authority, nor to the Company's knowledge is there any valid basis for any such
action, proceeding or investigation, other than (i) claims by the Company in the
ordinary course of its business for the recovery of loans or protection of its
interest as a secured or unsecured creditor, and (ii) claims fully covered by
insurance. To the best knowledge of the Company, it is in compliance in all
respects with laws, ordinances, rules, regulations, orders, licenses and

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permits that are applicable to its business as now conducted, or if not in
compliance, such noncompliance does not give rise to a material adverse effect.

3.11 No Untrue Representations. The documents furnished by the Company to
TBC (the "Company Documents"), including but not limited to the Company
Disclosure Schedule and the Company Financial Statements, are true and complete
copies of such documents and do not contain any untrue statement of a material
fact. The Company Disclosure Schedule does not omit to state a material fact
necessary in order to make the statements made therein, in light of the
circumstances under which they were made, not misleading. There is no fact that
the Company has not disclosed in the Company Disclosure Schedule or otherwise to
TBC in writing which materially and adversely affects the properties, business,
profits or condition (financial or otherwise) of the Company or the ability of
the Company to perform this Plan of Merger, except that the Company makes no
representation or warranty as to the effect of general economic conditions, the
condition of the financial markets, future legislation, future regulatory action
or any other event or circumstance that affects financial institutions
generally.

3.12 Employee Benefit Plans.

(a) Except as described in the Company Documents or set forth on
Schedule 3.12(a) to the Company Disclosure Schedule, the Company has
neither established nor maintains nor is obligated to make contributions to
or under or otherwise participate in (i) any bonus or other type of
incentive compensation plan, program, agreement, policy, commitment,
contract or arrangement (whether or not set forth in a written document),
(ii) any pension, profit-sharing, retirement or other plan, program or
arrangement, or (iii) any other employee benefit plan, fund or program,
including, but not limited to, those described in Section 3(3) of ERISA.
All such plans (individually, a "Plan" and collectively, the "Plans") have
been operated and administered in all material respects in accordance with,
as applicable, ERISA, the Code, Title VII of the Civil Rights Act of 1964,
as amended, the Equal Pay Act of 1967, as amended, the Age Discrimination
in Employment Act of 1967, as amended, and the related rules and
regulations adopted by those federal agencies responsible for the
administration of such laws. No act or failure to act by the Company has
resulted in a "prohibited transaction" (as defined in ERISA) with respect
to the Plans that is not subject to a statutory or regulatory exception. No
"reportable event" (as defined in ERISA) has occurred with respect to any
of the Plans which is subject to Title IV of ERISA. The Company has not
previously made, is not currently making, and is not obligated in any way
to make, any contributions to any multi-employer plan within the meaning of
the Multi-Employer Pension Plan Amendments Act of 1980.

(b) Except as described in the Company Documents or set forth on
Schedule 3.12(b) to the Company Disclosure Schedule, the Company is not a
party to any oral or written (i) union, guild or collective bargaining
agreement which agreement covers employees in the United States (nor is it
aware of any union organizing activity currently being conducted in respect
to any of its employees), (ii) agreement with any executive officer or
other key employee the benefits of which are contingent, or the terms of
which are materially altered, upon the occurrence of a transaction of the
nature contemplated by this Plan of Merger and which provides for the
payment of in excess of $25,000, or (iii) agreement or plan, including any
stock option plan, stock appreciation rights plan, restricted stock plan or
stock purchase plan, any of the benefits of which will be increased, or the
vesting the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Plan of Merger or the value of any
of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Plan of Merger.

3.13 Environmental Protection.

which are incidental and customary for the maintenance and operation of
such assets, e.g., cleaning fluids ("Incidental Quantities").

(c) All Hazardous Materials which have been remediated from any assets
of the Company prior to or during their ownership by the Company have been
handled in compliance with all applicable laws.

3.14 Material Contract Defaults. The Company is not in default in any
material respect under the terms of any outstanding material contract,
agreement, lease or other commitment, which would have a material adverse effect
on the business, operations, properties or assets, or the condition, financial
or otherwise, of the Company or under its articles of incorporation or bylaws,
and no event has occurred which, with notice or lapse of time, or both, may be
or become a material default of any such contract, agreement, lease or other
commitment or under the articles of incorporation or bylaws of the Company.

3.15 Brokers and Finders. Except as permitted in Section 3.17, neither the
Company nor any of its officers, directors or employees have employed any broker
or finder or incurred any liability for any financial advisory, brokerage or
finders fees or commissions and no broker or finder has acted directly or
indirectly for the Company in connection with this Plan of Merger or the
transactions contemplated hereby.

3.16 Vote Required. The affirmative vote of the holders of a majority of
the outstanding shares of the Company Common Stock entitled to vote thereon is
the only vote of the holders of any class or series of the Company capital stock
necessary to approve this Plan of Merger, the Merger and the transactions
contemplated hereby.

3.17 Opinion of Financial Advisor. The Board of Directors of the Company
has employed Alex Sheshunoff & Co. ("Sheshunoff") to provide the Board of
Directors of the Company with opinions by March 5, 1999, and as of the most
reasonably practicable date closest and prior to the mailing of the definitive
proxy materials to the effect that, as of March 5, 1999, and as of the most
reasonably practicable date closest and prior to the mailing of the definitive
proxy materials, respectively, the Merger Consideration is fair to the holders
of the Company Common Stock from a financial point of view, a written copy of
such opinion will be delivered by the Company to TBC prior to the date on which
the definitive proxy materials for the Proxy Statement (as defined in Section
6.9(a)) are filed with the SEC.

3.18 Year 2000 Compliance. Except as set forth on Schedule 3.18 to the
Company Disclosure Schedule, each item of software, hardware, firmware,
third-party software, goods with computer chips and services (i) provided by the
Company during the past four (4) years to any customer of the Company or any
other party or (ii) used by the Company in its respective business, is and shall
remain Year 2000 Compliant, as that term is hereinafter defined, through the
year 2000. For purposes of this Agreement, "Year 2000 Compliant" means that the
item:

(b) provides results from any operation accurately reflecting any Date
Data used in the operation performed, with output in any form, except
graphics, having four digit years;

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(d) provides data interchange in the IS08601:1988 standard of
CCYYMMDD.

Except as set forth on Schedule 3.18 to the Company Disclosure Schedule, to
the best knowledge of the Company, each of the Company's vendors and customers
has ensured that each item of software, hardware, firmware, third-party
software, goods with computer chips, and services (a) provided by such vendor or
customer during the past four (4) years to any of its respective customers or
any other party or (b) used by such vendor or customer in its business, is and
shall remain Year 2000 Compliant through the Year 2000. The Company have
followed the procedures set forth in, and have taken and will continue to take
all actions required by the October 15, 1998 interim FFIEC Interagency
Guidelines Establishing Year 2000 Standards for Safety and Soundness Guidelines
Concerning the Year 2000 Business Risk and the companion interim rule Safety and
Soundness Standards and all previously applicable regulatory standards and
guidance papers regarding Year 2000 readiness (collectively, the "Year 2000
Guidelines") to ensure that all computer software owned by or licensed to the
Company is fully compliant with the Year 2000 Guidelines. Except as set forth on
Schedule 3.18 to the Company Disclosure Schedule, the Company has not received a
regulatory rating of less than satisfactory from any regulatory authority with
respect to any review of its compliance with the Year 2000 Guidelines or the
adequacy of its Year 2000 planning efforts.

SECTION 4. REPRESENTATIONS AND WARRANTIES OF TBC.

Except as set forth in its Disclosure Schedule delivered to the Company
(the "TBC Disclosure Schedule") as set forth in Section 6.24 hereof, TBC hereby
represents and warrants to the Company as of the date hereof and up to and
including the Closing Date as follows (all representations and warranties by TBC
include its subsidiaries):

4.2 TBC Capital Stock.

(b) Other than as set forth on Schedule 4.2(b) to TBC Disclosure
Schedule, TBC does not own directly or indirectly, beneficially or of
record, more than five percent of the out standing stock of any other
corporation and does not otherwise control any company or bank. Except as
set forth on Schedule 4.2(b) to TBC Disclosure Schedule, TBC does not have
any direct or indirect subsidiaries and does not have any interest in any
partnership, firm, association, corporation, or joint venture other than
investment securities purchased and loans made in the regular and usual
course of its business.

(c) Other than as set forth on Schedule 4.2(c) to TBC Disclosure
Schedule, there are no outstanding securities convertible into shares of
TBC capital stock or existing options, warrants, calls,

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commitments, or other rights of any character granted or entered into by
TBC relating to its authorized, issued or unissued capital stock.

(d) There are no outstanding or unsatisfied preemptive rights or
rights of first refusal with respect to TBC Common Stock or TBC's preferred
stock.

4.4 Financial Statements. TBC has delivered to the Company balance sheets
of TBC as of December 31, 1996 and 1997 and September 30, 1998, and the related
statements of operations, changes in stockholders' equity, and changes in
financial position or statements of cash flows for the year then ended, and the
related notes and related opinions thereon as applicable (the "TBC Financial
Statements"). TBC Financial Statements, as and when prepared, (i) with the
exception of the statement for and as of the period ended September 30, 1998,
have been audited, (ii) present fairly the financial condition of TBC as of the
date indicated and the results of operations, the changes in stockholders'
equity, the changes in financial position and cash flows for the respective
periods indicated; (iii) have been prepared in accordance with GAAP and RAP (to
the extent GAAP and RAP principles are the same, and GAAP in the case of any
difference between the two) as to audited statements and in a manner consistent
with past practice as to unaudited statements; (iv) contain and reflect reserves
for all material accrued liabilities; and (v) are based on the books and records
of TBC.

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has no liabilities or obligations, either accrued or contingent, which are
material to TBC and which have not been either (i) reflected or disclosed in the
audited financial statements of TBC for the December 31, 1997, and provided to
the Company in writing; or (ii) incurred subsequent to September 30, 1998, in
the ordinary course of business.

4.7 Absence of Certain Changes or Events. Except as set forth on Schedule
4.7 to TBC Disclosure Schedule, since September 30, 1998, there has not been:

(a) any material adverse change in the condition (financial or
otherwise), of the assets, liabilities or business of TBC;

(b) any material adverse change in the character of the assets or
liabilities of TBC;

(c) any capital improvements, except for ordinary maintenance and
repairs, or any purchase of property by TBC at a cost in excess of $25,000
other than supplies in the ordinary course of business;

(d) any physical damage, destruction or loss not covered by insurance
exceeding $25,000 in value or affecting in a material and adverse way the
property, assets, business or prospects of TBC;

(e) any material change in the accounting methods or practices of TBC
unless required by law, regulation, GAAP or RAP, as the case may be;

(f) any material change in the capital structure of TBC;

(g) any loss incurred or determined to be probable for TBC as a result
of environmental problems which has or would be expected to have a material
adverse effect on the financial position of TBC; or

4.9 Title to Properties; Absence of Liens and Encumbrances, Leases
Enforceable.

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of TBC's business or the ownership of its assets as are not material in
amount and do not affect the value of, or interfere with the present use
of, TBC's assets or otherwise materially impair its operations.

(c) The real property, if any, leased by TBC is held by it under valid
and enforceable leases. TBC is not in material default under any such
leases.

4.11 No Untrue Representations. The documents furnished by TBC to the
Company (the "TBC Documents"), including but not limited to TBC Disclosure
Schedule and TBC Financial Statements, are true and complete copies of such
documents and do not contain any untrue statement of a material fact. The TBC
Disclosure Schedule does not omit to state a material fact necessary in order to
make the statements made therein, in light of the circumstances under which they
were made, not misleading. There is no fact that TBC has not disclosed in TBC
Documents or otherwise to the Company in writing which materially and adversely
affects the properties, business, prospects, profits or condition (financial or
otherwise) of TBC or the ability of TBC to perform this Plan of Merger, except
that TBC makes no representation or warranty as to the effect of general
economic conditions, the condition of the financial markets, future legislation,
future regulatory action or any other event or circumstance that affects
financial institutions generally.

4.12 Employee Benefit Plans.

(b) Except as described in TBC Documents or set forth on Schedule
4.12(b) to TBC Disclosure Schedule, TBC is not a party to any oral or
written (i) union, guild or collective bargaining agreement

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which agreement covers employees in the United States (nor is it aware of
any union organizing activity currently being conducted in respect to any
of its employees), (ii) agreement with any executive officer or other key
employee the benefits of which are contingent, or the terms of which are
materially altered, upon the occurrence of a transaction of the nature
contemplated by this Plan of Merger and which provides for the payment of
in excess of $25,000, or (iii) agreement or plan, including any stock
option plan, stock appreciation rights plan, restricted stock plan or stock
purchase plan, any of the benefits of which will be increased, or the
vesting the benefits of which will be accelerated, by the occurrence of any
of the transactions contemplated by this Plan of Merger or the value of any
of the benefits of which will be calculated on the basis of any of the
transactions contemplated by this Plan of Merger.

4.13 Environmental Protection.

(c) All Hazardous Materials which have been remediated from any assets
of TBC prior to or during their ownership by TBC have been handled in
compliance with all applicable laws.

Except as set forth on Schedule 4.16 to the TBC Disclosure Schedule, to the
best knowledge of TBC and its subsidiaries, each of TBC's and TBC's subsidiary's
vendors and customers has ensured that each item of software, hardware,
firmware, third-party software, goods with computer chips, and services (a)
provided by such vendor or customer during the past four (4) years to any of its
respective customers or any other party or (b) used by such vendor or customer
in its business, is and shall remain Year 2000 Compliant through the Year 2000.
TBC and its subsidiaries have followed the procedures set forth in, and have
taken and will continue to take all actions required by the Year 2000 Guidelines
to ensure that all computer software owned by or licensed to TBC or its
subsidiaries is fully compliant with the Year 2000 Guidelines. Neither TBC nor
its subsidiaries have received a regulatory rating of less than satisfactory
from any regulatory authority with respect to any review of its compliance with
the Year 2000 Guidelines or the adequacy of its Year 2000 planning efforts.

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SECTION 5. ACCESS TO INFORMATION CONCERNING PROPERTIES AND RECORDS.

5.2 Return of Records. If the transactions contemplated hereby are not
consummated and this Plan of Merger terminates, each party agrees to promptly
return all documents, contracts, records, properties analyses, abstracts and any
related notes of the other party and all copies thereof furnished pursuant to
this Section 5 or otherwise. All information disclosed by any party or any
affiliate or representative of any party shall be deemed to be "Confidential
Information" as defined by that certain Confidentiality Agreement, dated January
20, 1999, by and between TBC and the Company.

5.3 Effect of Access.

SECTION 6. COVENANTS.

6.1 Preservation of Business. From the date of this Agreement, the Company
will use its best efforts to preserve the business organization of the Company
intact, to keep available to the Surviving Corporation the services of the
present employees of the Company, and to preserve for the Surviving Corporation
the goodwill of the suppliers, customers, depositors and others having business
relations with the Company.

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(a) the business of the Company shall be conducted only in the
ordinary course, and the Company will not encumber any asset or enter into
any transaction or make any contract or commitment relating to its
properties, assets and businesses, other than in the ordinary course of
business or as otherwise disclosed herein;

(b) no change shall be made in the articles of incorporation or bylaws
of the Company;

(c) except as provided in the Company's Disclosure Schedule, no change
shall be made in the number of shares of capital stock of the Company
issued and outstanding, nor shall any option, warrant, call, convertible
security, commitment or other right be granted or made by the Company
relating to its authorized or issued capital stock;

(d) except in the ordinary course of business as previously conducted,
no purchase order, contract or commitment (other than deposits, loan
commitments and investments or the sale of other real estate owned in the
ordinary course of business of the Company shall be entered into by or on
behalf of the Company extending for more than one year or involving payment
by the Company, as the case may be, of more than $25,000 in any one
contract or related series of contracts or otherwise materially affecting
its business;

(e) no employment agreement or other agreement will be entered into
with any employee of the Company and no employee's salary or benefits will
be increased except for normal annual increases as agreed to in writing,
and no employee benefit plan will be modified or amended except as required
by law;

(f) the Company will comply in all material respects with all laws
applicable to it and to the conduct of its business, if failure to comply
could have a material adverse effect upon its business;

(g) no dividends shall be paid, or distributions made, with respect to
the Company Common Stock;

(h) no loan in excess of $100,000 will be made by the Company without
providing TBC with all relevant documents related thereto and giving TBC a
reasonable opportunity to review such loan and comment thereon;

(k) the Company shall not take any action of a character as described
in Section 3.7(a) to 3.7(h), inclusive.

6.3 Intentionally Omitted.

6.4 The Subsidiary Shareholder Meeting. The Subsidiary shall take all
action necessary in accordance with applicable law and its articles of
incorporation and bylaws to (i) call, give notice of, convene and hold a meeting
of its shareholders (the "Subsidiary Special Meeting"), or (ii) obtain the
written consent of its shareholders for the purpose of approving and adopting
this Plan of Merger, the Merger and the transactions contemplated thereby. In
connection therewith, the Subsidiary shall mail to all shareholders of record
entitled to vote at the Subsidiary Special Meeting the Proxy Statement, as
defined in Section 6.8 hereof, which shall indicate that the Board of Directors
of the Subsidiary has, by resolution, approved the Merger on the terms and
subject to the conditions set forth in this Plan of Merger and, if consistent
with the fiduciary duty of the directors to the Subsidiary and the shareholders,
recommends to the shareholders that they vote in favor of adopting and approving
the Merger and the Plan of Merger. Subject to applicable laws and the fiduciary
duties of its directors, the Subsidiary shall use reasonable efforts to solicit
from its shareholders proxies in favor of such adoption and approval and shall
take all other reasonable action necessary or helpful to secure a favorable vote
of its shareholders.

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6.5 The Company Shareholder Meeting. The Company shall take all action
necessary in accordance with applicable law and its articles of incorporation
and bylaws to call, give notice of, convene and hold a meeting of its
shareholders (the "Company Special Meeting" and collectively with the Subsidiary
Special Meeting, the "Special Meetings") for the purpose of approving and
adopting this Plan of Merger, the Merger and the transactions contemplated
thereby. In connection therewith, the Company shall mail to all shareholders of
record entitled to vote at the Company Special Meeting the Proxy Statement, as
defined in Section 6.9 hereof, which shall indicate that the Board of Directors
of the Company has, by resolution, approved the Merger on the terms and subject
to the conditions set forth in this Plan of Merger and, if consistent with the
fiduciary duty of the directors to the Company and the shareholders, recommends
to the shareholders that they vote in favor of adopting and approving the Merger
and the Plan of Merger. Subject to applicable laws and the fiduciary duties of
its directors, the Company shall use reasonable efforts to solicit from its
share holders proxies in favor of such adoption and approval and shall take all
other reasonable action necessary or helpful to secure a favorable vote of its
shareholders.

6.6 Affiliate's Letters. The Company and TBC shall use their respective
best efforts to obtain and deliver to one another prior to the Special Meetings
a signed letter in the form attached hereto as Exhibit 6.6 from each of their
respective officers, directors or shareholders who may be deemed an "affiliate"
of the Company or TBC, as appropriate within the meaning of such term as used in
Rule 145 under the Securities Act.

6.7 Accounting Methods. Neither the Company nor TBC shall change, in any
material respect, its methods of accounting in effect at its most recent fiscal
year end, except as required by changes in GAAP or RAP, as the case may be, if
applicable, as concurred by such party's independent accountants.

6.8 Approvals of Regulatory Authorities. The Company will cooperate with
TBC and TBC will cooperate with the Company in the preparation and the filing by
TBC and the Subsidiary of such applications to the Board of Governors of the
Federal Reserve System (the "Fed"), the FDIC, the Florida Banking Department,
and other regulatory authorities as may be necessary to obtain all governmental
approvals requisite to the consummation of the Merger. As soon as practicable,
but in no event later than 30 days after execution of the Plan of Merger, TBC
and the Subsidiary shall file applications with the proper regulatory
authorities for approval of the Merger and shall thereafter take all action to
obtain the approval of such regulatory authorities. All of the representations
contained in the applications filed by TBC and the Subsidiary with regulators
with or on behalf of the Company, will be, at the time they are made, accurate
in all material respects, except TBC makes no representation or warranty as to
matters contained therein that are based on information provided by the Company
and the Company makes no representation or warranty as to matters contained
therein that are based on information provided by TBC. All filings, requests for
approval or other submissions for any regulatory approval, and all public
notices associated with such filings, shall be made available for review by the
Company sufficiently prior to filing to enable the Company to comment thereon.

6.9 Registration Statement.

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Statement declared effective by the SEC under the provisions of the
Securities Act and the Exchange Act. TBC shall provide the Company with
copies of all filings made pursuant to this Section 6.8 and shall consult
with the Company on responses to any comments made by the staff of the SEC
with respect thereto.

(b) The information specifically designated as being supplied by the
Company for inclusion or incorporation by reference in the Registration
Statement shall not, at the time the Registration Statement is declared
effective, at the time the Proxy Statement is first mailed to holders of
the Company Common Stock, at the time of the Special Meetings and at the
Effective Time, contain any untrue statement of a material fact or omit to
state any material fact required to be stated therein or necessary in order
to make the statements therein, not misleading. The information
specifically designated as being supplied by the Company for inclusion or
incorporation by reference in the Proxy Statement shall not, at the date
the Proxy Statement (or any amendment thereof or supplement thereto) is
first mailed to holders of the Company Common Stock, at the time of the
Special Meetings and at the Effective Time, contain any untrue statement of
a material fact or omit to state any material fact required to be stated
therein or necessary in order to make the statements therein, in the light
of the circumstances under which they are made, not misleading. If at any
time prior to the Effective Time any event or circumstance relating to the
Company or its officers or directors should be discovered by the Company
which should be set forth in an amendment to the Registration Statement or
a supplement to the Proxy Statement, the Company shall promptly inform TBC.
All documents, if any, that the Company is responsible for filing with the
SEC in connection with the transactions contemplated hereby will comply as
to form and substance in all material respects with the applicable
requirements of the Securities Act and the Exchange Act and the rules and
regulations thereunder.

(c) The information specifically designated as being supplied by TBC
for inclusion or incorporation by reference in the Registration Statement
shall not, at the time the Registration Statement is declared effective, at
the time the Proxy Statement is first mailed to holders of the Company
Common Stock, at the time of the Special Meetings and at the Effective
Time, contain any untrue statement of a material fact or omit to state any
material fact required to be stated therein or necessary in order to make
the statements therein, not misleading. The information specifically
designated as being supplied by TBC for inclusion or incorporation by
reference in the Proxy Statement in connection with the Special Meetings
shall not, at the date the Proxy Statement (or any amendment thereof or
supplement thereto) is first mailed to holders of the Company Common Stock,
at the time of the Special Meetings or at the Effective Time, contain any
untrue statement of a material fact or omit to state any material fact
required to be stated therein or necessary in order to make the statements
therein, not misleading. If at any time prior to the Effective Time any
event or circumstance relating to TBC or its officers or directors, should
be discovered by TBC which should be set forth in an amendment to the
Registration Statement or a supplement to the Proxy Statement, TBC should
promptly inform the Company and shall promptly file such amendment to the
Registration Statement. All documents that TBC is responsible for filing
with the SEC in connection with the transactions contemplated herein will
comply as to form and substance in all material respects with the
applicable requirements of the Securities Act and the Exchange Act and the
rules and regulations thereunder.

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6.10 Due Diligence. The Company and TBC shall each deliver by the Closing
Date all opinions, certificates and other documents required to be delivered by
it.

6.11 Status Reports. The Company and TBC shall advise one another from
time to time regarding the applications for regulatory approval of the Merger
and provide one another copies of all comments, correspondence and approvals to
or from regulators in connection with the applications, and give one another
copies of all regulatory approvals referred to in this Plan of Merger.

6.12 Pooling and Tax-Free Reorganization Treatment. Unless required by
law, neither the Company nor TBC shall take or cause to be taken any action,
whether on or before the Effective Time, which would disqualify the Merger as a
"pooling of interests" for accounting purposes or as a "reorganization" within
the meaning of Section 368(a) of the Code.

6.13 Other Actions. Unless required by law, neither the Company nor TBC
shall knowingly or intentionally take any action, or omit to take any action, if
such action or omission would, or reasonably might be expected to, result in any
of its representations and warranties set forth herein being or becoming untrue
in any material respect, or in any of the conditions to the Merger set forth in
this Plan of Merger not being satisfied, or (unless such action is required by
applicable law) which would materially adversely affect the ability of TBC or
the Company to obtain any consents or approvals required for the consummation of
the Merger without imposition of a condition or restriction which would have a
material adverse effect on the Surviving Corporation or which would otherwise
materially impair the ability of TBC or the Company to consummate the Merger in
accordance with the terms of the Plan of Merger or materially delay such
consummation.

6.14 Notice of Subsequent Events. Each party hereto shall notify the other
parties of any changes, additions or events which would cause any material
change in or material addition to any schedule to the Disclosure Schedule
delivered by the notifying party under this Plan of Merger, promptly after the
occurrence of the same. If the effect of such change or addition would,
individually or in the aggregate with the effect of changes or additions
previously disclosed pursuant to this Section 6.14, constitute a material
adverse effect on the notifying party, the non-notifying party may, within ten
(10) days after receipt of such notice, elect to terminate this Plan of Merger.
If the non-notifying party does not give written notice of such termination
within such 10-day period, the non-notifying party shall be deemed to have
consented to such change and shall not be entitled to terminate this Plan of
Merger by reason thereof.

6.15 Public Disclosures. TBC and the Company will consult with each other
before issuing any press release or otherwise making any public statement with
respect to the transactions contemplated by this Plan of Merger, and shall not
issue any such press release or make any such public statement prior to such
consultation except as may be required by applicable law or requirements of
Nasdaq. The parties shall issue a joint press release or simultaneous separate
press releases, mutually acceptable to TBC and the Company, promptly upon
execution and delivery of this Plan of Merger.

6.16 No Solicitations. Neither the Company nor any of its officers and
directors will, and the Company shall direct and use its best efforts to cause
its employees, agents and representatives not to, during the period beginning on
the date hereof and ending on the first to occur of (a) the Effective Time or
(b) the termination of this Plan of Merger, (i) sell or arrange for sale of any
the Company Common Stock, other than as required by the Company employee stock
purchase or option plan; (ii) negotiate, solicit or encourage or authorize any
person to solicit from any third party any proposals relating to the merger or
consolidation of the Company, disposition of a substantial portion of the
business or assets of the Company or the acquisition of the capital stock of the
Company; or (iii) except to the extent legally required for the discharge by the
board of directors of its fiduciary duties, make any information concerning the
Company available to any person for the purpose of affecting or causing a
merger, consolidation or disposition of the Company or its assets or common
stock.

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6.17 Cooperation.

(b) Subject to the terms and conditions herein provided, and unless
this Plan of Merger shall have been validly terminated as provided herein,
each of TBC and the Company shall use all reasonable efforts (i) to take,
or cause to be taken, all actions necessary to comply promptly with all
legal requirements which may be imposed on such party (or any subsidiaries
or affiliates of such party) with respect to the Plan of Merger and to
consummate the transactions contemplated hereby and (ii) to obtain (and to
cooperate with the other party to obtain) any consent, authorization, order
or approval of, or any exemption by, any governmental entity and/or any
other public or private third party which is required to be obtained or
made by such party or any of its subsidiaries or affiliates in connection
with this Plan of Merger and the transactions contemplated hereby. Each of
TBC and the Company will promptly cooperate with and furnish information to
the other in connection with any such burden suffered by, or requirement
imposed upon, either of them or any of their subsidiaries or affiliates in
connection with the foregoing. The parties shall, as of and upon the
Closing Date and if earlier required by Section 6.14, prepare and deliver
to each other updated Disclosure Schedules as are necessary or appropriate
to assure the accuracy and completeness thereof; provided that the
furnishing of any such supplement shall not modify, limit, or otherwise
affect any representations or warranties of a party contained in this
Agreement or any right of a party to terminate this Agreement.

6.19 Proxies from the Directors of the Company. The directors of the
Company shall have granted proxies to TBC, substantially in the form of Exhibit
6.19, as of the date of this Plan of Merger, to vote the shares of the Company
owned by such directors in favor of the Merger and such proxies shall remain
valid and in effect until the Effective Time.

6.20 Due Diligence of the Company Financial Advisor. TBC shall cooperate
with Sheshunoff and provide Sheshunoff with any information reasonably necessary
in order for Sheshunoff to render an opinion regarding the fairness of the
Merger.

6.21 Section 16 Exemption. Prior to the Effective Time, the Board of
Directors, or a committee thereof, of the Company shall have approved the
disposition of Company Common Stock as being exempt under Rule 16b-3 of the
Exchange Act if the disposition occurs simultaneously with or immediately before
the Merger. The Board of Directors of TBC shall approve the Rule 16b-3 exemption
of the acquisition of TBC Common Stock in the Merger.

6.22 TBC Employees. Any employees of the Company who are employed after
the Effective Time by TBC shall be employees-at-will (except to the extent that
such employees are parties to contracts providing for other employment terms, in
which case such employees shall be retained in accordance with the terms of

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such contracts) and TBC shall provide such employees with the same customary
employee benefits as TBC provides its existing employees, or reasonably
equivalent benefits. For the purpose of computing such benefits, any employee of
the Company retained by TBC shall receive credit for the time he was employed by
the Company though nothing herein shall entitle such employees to greater
benefits than those customarily given to the existing employees of TBC. Nothing
herein shall create any right to employment for the employees of the Company.

6.23 Restructuring the Merger. If the parties mutually determine that a
forward subsidiary merger would adversely affect the ability of the parties to
consummate the Merger and that a reverse subsidiary merger, or other equivalent
structure, would not, the Merger will be restructured in the form of a reverse
subsidiary merger of the Subsidiary into the Company, with the Company being the
Surviving Corporation, or otherwise as mutually agreed upon by the parties. In
such event, this Plan of Merger shall be appropriately modified to reflect such
form of merger, or other equivalent structure, though no change shall be made to
the Merger Consideration as a result of any such restructuring unless mutually
agreed upon by the parties.

6.24 Disclosure Schedules. TBC and the Company will deliver the TBC
Disclosure Schedule and the Company Disclosure Schedule, as the case may be, to
each other within ten business days of the date of this Plan of Merger. TBC and
the Company shall then have five business days to notify the other party of any
objections or exceptions taken to such other party's Disclosure Schedule. If any
reasonable objection or exception cannot be cured within ten (10) business days
of receipt of notice of objection or exception by the disclosing party, the
notifying party may elect to terminate this Plan of Merger, without liability to
either party, or its respective officers, directors, employees or agents.

SECTION 7. CONDITIONS.

7.1 Mutual Conditions. The respective obligations of the Company, the
Subsidiary and TBC under this Plan of Merger are subject to and conditioned upon
the satisfaction, prior to the Closing Date, of each of the following conditions
except as both the Company, the Subsidiary and TBC may waive in writing:

(b) Listing of TBC Common Stock. The shares of TBC Common Stock to be
issued in connection with the Merger shall have been approved for listing
by Nasdaq.

(d) Shareholder Approval. The holders of a majority of the
outstanding shares of the Company Common Stock and of the Subsidiary Common
Stock shall have approved the adoption of the Plan of Merger and any other
matters submitted to them pursuant to Sections 6.4 and 6.5 hereof.

(e) Approvals. Receipt of all authorizations, approvals and/or
consents of any third parties as well as the expiration of applicable
waiting periods, including federal or state governmental and/or regulatory
bodies and officials (including the Florida Banking Department and the
FDIC), necessary for the consummation of this Plan of Merger and for the
continuation in all material respects of the business of TBC and the
Company, without interruption after the Effective Time, in substantially
the manner in which such business is now conducted shall have been
received, and no such authorizations or approvals shall contain any
conditions or restrictions that the Company or TBC reasonably believes will
materially restrict or limit the business or activities of the Surviving
Corporation subsequent to the Merger, or have a material adverse effect on
their businesses, operations or financial conditions taken as a whole.

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(g) Share Exchange. The outstanding shares of common stock of the
Subsidiary not owned by C&L shall have been exchanged for shares of TBC
Common Stock pursuant to the Share Exchange Agreement prior to the Merger.

(b) Representations, Warranties and Agreements. Each representation
and warranty of TBC contained in this Plan of Merger or in any
certificates, schedules or other agreements delivered pursuant hereto or in
connection with the transactions contemplated hereby, that is qualified as
to materiality shall be true and correct, and each representation and
warranty that is not so qualified shall be true and correct in all material
respects, as of the date of the Plan of Merger and at the Closing Date as
if then made, except to the extent that any such representation and
warranty expressly relates to an earlier date (in which case any such
representation and warranty that is qualified as to materiality shall be
true and correct, and any such representation that is not so qualified
shall be true and correct in all material respects, as of such earlier
date). TBC shall have performed and complied with all covenants, agreements
and conditions required by this Plan of Merger to be performed or complied
with in all material respects by them, or either of them, prior to or at
the Closing Date.

(c) Officers' Certificate. The Company shall have received a
certificate in form and content satisfactory to the Company from the
appropriate officers of TBC, dated as of the Closing Date, to the effect
that the representations and warranties made herein by TBC on the date
hereof and on the Closing Date are true and correct as set forth in Section
4 and that TBC has per formed the covenants, obligations and agreements
undertaken by it herein in all material respects.

(g) Accountant's Letter. The Company shall have received from Ernst &
Young LLP a letter dated as of the date of the mailing of the Proxy
Statement and the Closing Date, in form and substance

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reasonably satisfactory to the Company and customary in scope and substance
for letters delivered by independent public accountants in connection with
pooling of interests transactions similar to the Merger.

(j) Acquisition of C&L Bank of Blountstown. The Merger shall occur
simultaneously with and be conditioned on TBC's acquisition of C&L Banking
Corporation.

7.3 Conditions in Favor of TBC and the Subsidiary. All obligations of TBC
under this Plan of Merger are subject to and shall be conditioned upon the
satisfaction, prior to or on the Closing Date, of each of the following
conditions except as TBC may waive such conditions in writing:

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reasonable and customary qualifications. In addition, such counsel may rely
on representations and certificates of officers and directors of the
Company and certificates of public officials.

(h) Proper Actions and Documentation. All actions required to be
taken by the Company by this Plan of Merger shall have been taken or
satisfied in all material respects, and all documents incidental thereto
shall be in a form and substance reasonably satisfactory to TBC, the
Subsidiary and its counsel, and TBC and the Subsidiary shall have received
copies of all documents that they may have reasonably requested in
connection with such transactions.

(i) Acquisition of C&L Bank of Blountstown. The Merger shall occur
simultaneously with and be conditioned on TBC's acquisition of C&L Banking
Corporation.

SECTION 8. TERMINATION

8.1 Termination. This Plan of Merger may be terminated and the Merger
abandoned (either before or after approvals and authorizations by the
shareholders of the Company, the Subsidiary and TBC contemplated hereby and
without seeking further shareholder approval) at any time prior to the Effective
Time only in one of the following manners:

(a) Mutual Agreement. By mutual written consent of the parties
authorized by their respective Boards of Directors at any time prior to the
Effective Time.

(b) by either the Company or TBC:

(i) if, upon a vote at a duly held meeting of shareholders or any
adjournment thereof, any required approval of the holders of shares of
the Company Common Stock shall not have been obtained;

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Breach of any representation, warranty, covenant or other agreement
contained in this Plan of Merger);

(e) by TBC or the Company, if the Closing Date Trading Price of TBC
Common Stock is equal to or less than $10.00.

8.2 Effect of Termination. In the event of termination of this Plan of
Merger as provided in Section 8.1, this Plan of Merger shall forthwith become
void and have no effect, without any liability or obligation on the part of any
party, other than the provisions of Sections 6.15, 8.2 and 8.6, and except to
the extent that such termination results from the willful and material breach by
a party of any of its representations, warranties, covenants or other agreements
set forth in this Plan of Merger. Further, in event of termination of this Plan
of Merger, the Confidentiality Agreement shall remain in full force and effect.

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SECTION 9. MISCELLANEOUS.

If to TBC:

Mr. James A. Taylor
Chairman of the Board
and Chief Executive Officer
The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203

With copies to:

James A. Taylor, Jr., Esq.
Executive Vice President, General Counsel
and Secretary
The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203

and

Haskell Slaughter & Young, L.L.C.
Attn: F. Hampton McFadden, Jr., Esq.
1200 AmSouth/Harbert Plaza
1901 Sixth Avenue North
Birmingham, Alabama 35203

If to the Company:

Mr. Jed M. Hiers
President and Chief Executive Officer
C&L Bank of Blountstown
307 W. Central Avenue
Blountstown, Florida 32424

With copies to:

Jenkens & Gilchrist, P.C.
Attn: Peter G. Weinstock, Esq.
1445 Ross Avenue
Suite 3200
Dallas, Texas 75202-2799

All such communications shall be deemed to have been delivered on the date of
hand delivery or on the next business day following the deposit of such
communications with the overnight courier.

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9.5 "Including". The word "including", when following any general
statement, term or matter, shall not be construed to limit such statement, term
or matter to the specific terms or matters as provided immediately following the
word "including" or to similar items or matters, whether or not non-limiting
language (such as "without limitation", "but not limited to", or words of
similar import) is used with reference to the word "including" or the similar
items or matters, but rather shall be deemed to refer to all other items or
matters that could reasonably fall within the broadcast possible scope of the
general statement, term or matter.

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9.9 Governing Law. This Plan of Merger shall be construed in accordance
with the laws of the State of Delaware, applied without giving effect to any
conflicts-of-law principles.

9.11 Entire Agreement. Other than the letter dated January 28, 1999,
regarding provisions to the loan allowance and the Confidentiality Agreement
which specifically covered the Plan of Merger, both of which are hereby
incorporated by reference, this Plan of Merger contains the entire agreement
between the parties hereto with respect to the transactions contemplated hereby
and thereby supersedes the Letter of Intent, dated January 26, 1999, and all
prior and contemporaneous agreements, understandings, negotiations and
discussions, whether oral or written, of the parties, and there are no
warranties, representations, covenants or other agreements between the parties
in connection with the subject matter hereof except as specifically set forth
herein.

9.12 Counterparts. This Plan of Merger may be executed in any number of
copies, each of which shall be deemed an original, and all of which together
shall be deemed one and the same instrument.

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IN WITNESS WHEREOF, pursuant to authority duly given by the respective
Boards of Directors of TBC, C&L, the Subsidiary and the Company, this Plan of
Merger has been signed on behalf of said corporations by their respective duly
authorized officers, all on the date, month and year first written above.

THE BANC CORPORATION

By: /s/ JAMES A. TAYLOR
------------------------------------
James A. Taylor
Chairman of the Board
and Chief Executive Officer

C&L BANKING CORPORATION

By: /s/ JED M. HIERS
------------------------------------
Jed M. Hiers
President and Chief Executive
Officer

C&L BANK OF BRISTOL

By: /s/ JED M. HIERS
------------------------------------
Jed M. Hiers
President

C&L BANK OF BLOUNTSTOWN

By: /s/ JED M. HIERS
------------------------------------
Jed M. Hiers
President and Chief Executive
Officer

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ANNEX D

DISSENTERS' RIGHTS UNDER THE FLORIDA BUSINESS CORPORATION ACT

607.1301 DISSENTERS' RIGHTS; DEFINITIONS. The following definitions apply to
sec.sec. 607.1302 and 607.1320:

(1) "Corporation" means the issuer of the shares held by a dissenting
shareholder before the corporate action or the surviving or acquiring
corporation by merger or share exchange of that issuer.

(2) "Fair value," with respect to a dissenter's shares, means the value of
the shares as of the close of business on the day prior to the shareholders'
authorization date, excluding any appreciation or depreciation in anticipation
of the corporate action unless exclusion would be inequitable.

(3) "Shareholders' authorization date" means the date on which the
shareholders' vote authorizing the proposed action was taken, the date on which
the corporation received written consents without a meeting from the requisite
number of shareholders in order to authorize the action, or, in the case of a
merger pursuant to sec. 607.1104, the day prior to the date on which a copy of
the plan of merger was mailed to each shareholder of record of the subsidiary
corporation.

History. sec. 118, ch. 89-154.

607.1302 RIGHT OF SHAREHOLDERS TO DISSENT.

(1) Any shareholder of a corporation has the right to dissent from, and
obtain payment of the fair value of his or her shares in the event of, any of
the following corporate actions:

(a) Consummation of a plan of merger to which the corporation is a
party:

1. If the shareholder is entitled to vote on the merger, or

2. If the corporation is a subsidiary that is merged with its
parent under sec. 607.1104, and the shareholders would have been
entitled to vote on action taken, except for the applicability of sec.
607.1104.

(b) Consummation of a sale or exchange of all, or substantially all,
of the property of the corporation, other than in the usual and regular
course of business, if the shareholder is entitled to vote on the sale or
exchange pursuant to sec. 607.1202, including a sale in dissolution but not
including a sale pursuant to court order or a sale for cash pursuant to a
plan by which all or substantially all of the net proceeds of the sale will
be distributed to the shareholders within 1 year after the date of sale;

(d) Consummation of a plan of share exchange to which the corporation
is a party as the corporation the shares of which will be acquired, if the
shareholder is entitled to vote on the plan;

(e) Any amendment of the articles of incorporation if the shareholder
is entitled to vote on the amendment and if such amendment would adversely
affect such shareholder by:

1. Altering or abolishing any preemptive rights attached to any of
his or her shares;

2. Altering or abolishing the voting rights pertaining to any of
his or her shares, except as such rights may be affected by the voting
rights of new shares then being authorized of any existing or new class
or series of shares;

3. Effecting an exchange, cancellation, or reclassification of any
of his or her shares, when such exchange, cancellation, or
reclassification would alter or abolish the shareholder's voting rights
or alter his or her percentage of equity in the corporation, or
effecting a reduction or cancellation of accrued dividends or other
arrearages in respect to such shares;

4. Reducing the stated redemption price of any of the shareholder's
redeemable shares, altering or abolishing any provision relating to any
sinking fund for the redemption or purchase of any of his

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or her shares, or making any of his or her shares subject to redemption
when they are not otherwise redeemable;

5. Making noncumulative, in whole or in part, dividends of any of
the shareholder's preferred shares which had theretofore been
cumulative;

6. Reducing the stated dividend preference of any of the
shareholder's preferred shares; or

7. Reducing any stated preferential amount payable on any of the
shareholder's preferred shares upon voluntary or involuntary
liquidation; or

(f) Any corporate action taken, to the extent the articles of
incorporation provide that a voting or nonvoting shareholder is entitled to
dissent and obtain payment for his or her shares.

(2) A shareholder dissenting from any amendment specified in paragraph
(1)(e) has the right to dissent only as to those of his or her shares which are
adversely affected by the amendment.

(3) A shareholder may dissent as to less than all the shares registered in
his or her name. In that event, the shareholder's rights shall be determined as
if the shares as to which he or she has dissented and his or her other shares
were registered in the name of different shareholders.

(4) Unless the articles of incorporation otherwise provide, this section
does not apply with respect to a plan of merger or share exchange or a proposed
sale or exchange of property, to the holders of shares of any class or series
which, on the record date fixed to determine the shareholders entitled to vote
at the meeting of shareholders at which such action is to be acted upon or to
consent to any such action without a meeting, were either registered on a
national securities exchange or designated as a national market system security
on an interdealer quotation system by the National Association of Securities
Dealers, Inc., or held of record by not fewer than 2,000 shareholders.

(5) A shareholder entitled to dissent and obtain payment for his or her
shares under this section may not challenge the corporate action creating his or
her entitlement unless the action is unlawful or fraudulent with respect to the
shareholder or the corporation.

History. sec.119, ch. 89-154; sec.5, ch. 94-327; sec.31, ch. 97-102.

607.1320 PROCEDURE FOR EXERCISE OF DISSENTERS' RIGHTS.

(1)(a) If a proposed corporate action creating dissenters' rights under
sec.607-1302 is submitted to a vote at a shareholders' meeting, the meeting
notice shall state that shareholders are or may be entitled to assert
dissenters' rights and be accompanied by a copy of sec.sec.607.1301, 607.1302,
and 607.1320. A shareholder who wishes to assert dissenters' rights shall:

1. Deliver to the corporation before the vote is taken written
notice of the shareholder's intent to demand payment for his or her
shares if the proposed action is effectuated; and

2. Not vote his or her shares in favor of the proposed action. A
proxy or vote against the proposed action does not constitute such a
notice of intent to demand payment.

(b) If proposed corporate action creating dissenters' rights under
sec. 607.1302 is effectuated by written consent without a meeting, the
corporation shall deliver a copy of sec.sec. 607.1301, 607.1302, and
607.1320 to each shareholder simultaneously with any request for the
shareholder's written consent or, if such a request is not made, within 10
days after the date the corporation received written consents without a
meeting from the requisite number of shareholders necessary to authorize
the action.

(2) Within 10 days after the shareholders' authorization date, the
corporation shall give written notice of such authorization or consent or
adoption of the plan of merger, as the case may be, to each shareholder who
filed a notice of intent to demand payment for his or her shares pursuant to
paragraph (1)(a) or, in the case of action authorized by written consent, to
each shareholder, excepting any who voted for, or consented in writing to, the
proposed action.

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(3) Within 20 days after the giving of notice to him or her, any
shareholder who elects to dissent shall file with the corporation a notice of
such election, stating the shareholder's name and address, the number, classes,
and series of shares as to which he or she dissents, and a demand for payment of
the fair value of his or her shares. Any shareholder failing to file such
election to dissent within the period set forth shall be bound by the terms of
the proposed corporate action. Any shareholder filing an election to dissent
shall deposit his or her certificates for certified shares with the corporation
simultaneously with the filing of the election to dissent. The corporation may
restrict the transfer of uncertified shares from the date the shareholder's
election to dissent is filed with the corporation.

(4) Upon filing a notice of election to dissent, the shareholder shall
thereafter be entitled only to payment as provided in this section and shall not
be entitled to vote or to exercise any other rights of a shareholder. A notice
of election may be withdrawn in writing by the shareholder at any time before an
offer is made by the corporation, as provided in subsection (5), to pay for his
or her shares. After such offer, no such notice of election may be withdrawn
unless the corporation consents thereto. However, the right of such shareholder
to be paid the fair value of his or her shares shall cease, and the shareholder
shall be reinstated to have all his or her rights as a shareholder as of the
filing of his or her notice of election, including any intervening preemptive
rights and the right to payment of any intervening dividend or other
distribution or, if any such rights have expired or any such dividend or
distribution other than in cash has been completed, in lieu thereof, at the
election of the corporation, the fair value thereof in cash as determined by the
board as of the time of such expiration or completion, but without prejudice
otherwise to any corporate proceedings that may have been taken in the interim,
if:

(a) Such demand is withdrawn as provided in this section;

(b) The proposed corporate action is abandoned or rescinded or the
shareholders revoke the authority to effect such action;

(c) No demand or petition for the determination of fair value by a
court has been made or filed within the time provided in this section; or

(d) A court of competent jurisdiction determines that such shareholder
is not entitled to the relief provided by this section.

(5) Within 10 days after the expiration of the period in which shareholders
may file their notices of election to dissent, or within 10 days after such
corporate action is effected, whichever is later (but in no case later than 90
days from the shareholders' authorization date), the corporation shall make a
written offer to each dissenting shareholder who has made demand as provided in
this section to pay an amount the corporation estimates to be the fair value for
such shares. If the corporate action has not been consummated before the
expiration of the 90-day period after the shareholders' authorization date, the
offer may be made conditional upon the consummation of such action. Such notice
and offer shall be accompanied by:

(a) A balance sheet of the corporation, the shares of which the
dissenting shareholder holds, as of the latest available date and not more
than 12 months prior to the making of such offer; and

(b) A profit and loss statement of such corporation for the 12-month
period ended on the date of such balance sheet or, if the corporation was
not in existence throughout such 12-month period, for the portion thereof
during which it was in existence.

(6) If within 30 days after the making of such offer any shareholder
accepts the same, payment for his or her shares shall be made within 90 days
after the making of such offer or the consummation of the proposed action,
whichever is later. Upon payment of the agreed value, the dissenting shareholder
shall cease to have any interest in such shares.

(7) If the corporation fails to make such offer within the period specified
therefor in subsection (5) or if it makes the offer and any dissenting
shareholder or shareholders fail to accept the same within the period of 30 days
thereafter, then the corporation, within 30 days after receipt of written demand
from any dissenting shareholder given within 60 days after the date on which
such corporate action was effected, shall, or at its election at any time within
such period of 60 days may, file an action in any court of competent
jurisdiction in

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the county in this state where the registered office of the corporation is
located requesting that the fair value of such shares be determined. The court
shall also determine whether each dissenting shareholder, as to whom the
corporation requests the court to make such determination, is entitled to
receive payment for his or her shares. If the corporation fails to institute the
proceeding as herein provided, any dissenting shareholder may do so in the name
of the corporation. All dissenting shareholders (whether or not residents of
this state), other than shareholders who have agreed with the corporation as to
the value of this shares, shall be made parties to the proceeding as an action
against their shares. The corporation shall serve a copy of the initial pleading
in such proceeding upon each dissenting shareholder who is a resident of this
state in the manner provided by law for the service of a summons and complaint
and upon each nonresident dissenting shareholder either by registered or
certified mail and publication or in such other manner as is permitted by law.
The jurisdiction of the court is plenary and exclusive. All shareholders who are
proper parties to the proceeding are entitled to judgment against the
corporation for the amount of the fair value of their shares. The court may, if
it so elects, appoint one or more persons as appraisers to receive evidence and
recommend a decision on the question of fair value. The appraisers shall have
such power and authority as is specified in the order of their appointment or an
amendment thereof. The corporation shall pay each dissenting shareholder the
amount found to be due him or her within 10 days after final determination of
the proceedings. Upon payment of the judgment, the dissenting shareholder shall
cease to have any interest in such shares.

(8) The judgment may, at the discretion of the court, include a fair rate
of interest, to be determined by the court.

(9) The costs and expenses of any such proceeding shall be determined by
the court and shall be assessed against the corporation, but all or any part of
such costs and expenses may be apportioned and assessed as the court deems
equitable against any or all of the dissenting shareholders who are parties to
the proceeding, to whom the corporation has made an offer to pay for the shares,
if the court finds that the action of such shareholders in failing to accept
such offer was arbitrary, vexatious, or not in good faith. Such expenses shall
include reasonable compensation for, and reasonable expenses of, the appraisers,
but shall exclude the fees and expenses of counsel for, and experts employed by,
any party. If the fair value of the shares, as determined, materially exceeds
the amount which the corporation offered to pay therefor or if no offer was
made, the court in its discretion may award to any shareholder who is a party to
the proceeding such sum as the court determines to be reasonable compensation to
any attorney or expert employed by the shareholder in the proceeding.

(10) Shares acquired by a corporation pursuant to payment of the agreed
value thereof or pursuant to payment of the judgment entered therefor, as
provided in this section, may be held and disposed of by such corporation as
authorized but unissued shares of the corporation, except that, in the case of a
merger, they may be held and disposed of as the plan of merger otherwise
provides. The shares of the surviving corporation into which the shares of such
dissenting shareholders would have been converted had they assented to the
merger shall have the status of authorized but unissued shares of the surviving
corporation.

History. sec. 120, ch. 89-154; sec. 35, ch. 93-281; sec. 32, ch. 97-102.

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ANNEX E

DISSENTERS' RIGHTS UNDER THE FLORIDA BANKING CODE

658.44 APPROVAL BY STOCKHOLDERS; RIGHTS OF DISSENTERS; PREEMPTIVE RIGHTS.

(1) The department shall not issue a certificate of merger to a resulting
state bank or trust company unless the plan of merger and merger agreement, as
adopted by a majority of the entire board of directors of each constituent bank
or trust company, and as approved by each appropriate federal regulatory agency
and by the department, has been approved:

(a) By the stockholders of each constituent national bank as provided
by, and in accordance with the procedures required by, the laws of the
United States applicable thereto, and

(b) After notice as hereinafter provided, by the affirmative vote or
written consent of the holders of at least a majority of the shares
entitled to vote thereon of each constituent state bank or state trust
company, unless any class of shares of any constituent state bank or state
trust company is entitled to vote thereon as a class, in which event as to
such constituent state bank or state trust company the plan of merger and
merger agreement shall be approved by the stockholders upon receiving the
affirmative vote or written consent of the holders of a majority of the
shares of each class of shares entitled to vote thereon as a class and of
the total shares entitled to vote thereon. Such vote of stockholders of a
constituent state bank of state trust company shall be at an annual or
special meeting of stockholders or by written consent of the stockholders
without a meeting as provided in sec. 607.0704.

Approval by the stockholders of a constituent bank or trust company of a
plan of merger and merger agreement shall constitute the adoption by the
stockholders of the articles of incorporation of the resulting state bank or
state trust company as set forth in the plan of merger and merger agreement.

(2) Written notice of the meeting of, or proposed written consent action
by, the stockholders of each constituent state bank or state trust company shall
be given to each stockholder of record, whether or not entitled to vote, and
whether the meeting is an annual or a special meeting or whether the vote is to
be by written consent pursuant to sec. 607.0704, and the notice shall state that
the purpose or one of the purposes of the meeting, or of the proposed action by
the stockholders without a meeting, is to consider the proposed plan of merger
and merger agreement. Except to the extent provided otherwise with respect to
stockholders of a resulting bank or trust company pursuant to subsection (7),
the notice shall also state that dissenting stockholders will be entitled to
payment in cash of the value of only those shares held by the stockholders:

(a) Which at a meeting of the stockholders are voted against the
approval of the plan of merger and merger agreement;

(b) As to which, if the proposed action is to be by written consent of
stockholders pursuant to s. 607.0704, such written consent is not given by
the holder thereof; or

(c) With respect to which the holder thereof has given written notice
to the constituent state bank or trust company, at or prior to the meeting
of the stockholders or on or prior to the date specified for action by the
stockholders without a meeting pursuant to sec. 607.0704 in the notice of
such proposed action, that the stockholder dissents from the plan of merger
and merger agreement.

Hereinafter in this section, the term "dissenting shares" means and
includes only those shares, which may be all or less than all the shares of any
class owned by a stockholder, described in paragraphs (a), (b), and (c).

(3) On or promptly after the effective date of the merger, the resulting
state bank or trust company, or a bank holding company which, as set out in the
plan of merger or merger agreement, is offering shares rights, obligations, or
other securities or property in exchange for shares of the constituent banks or
trust companies, may fix an amount which it considers to be not more than the
fair market value of the shares of a constituent bank or trust company and which
it will pay to the holders of dissenting shares of that constituent bank of
trust company and, if it fixes such amount, shall offer to pay such amount to
the holders of all dissenting shares of

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that constituent bank or trust company. The amount payable pursuant to any such
offer which is accepted by the holders of dissenting shares, and the amount
payable to the holders of dissenting shares pursuant to an appraisal, shall
constitute a debt of the resulting state bank or state trust company.

(4) The owners of dissenting shares who have accepted an offer made
pursuant to subsection (3) shall be entitled to receive the amount so offered
for such shares in cash upon surrendering the stock certificates representing
such shares at any time within 30 days after the effective date of the merger,
and the owners of dissenting shares, the value of which is to be determined by
appraisal, shall be entitled to receive the value of such shares in cash upon
surrender of the stock certificates representing such shares at any time within
30 days after the value of such shares has been determined by appraisal made on
or after the effective date of the merger.

(5) The value of dissenting shares of each constituent state bank or state
trust company, the owners of which have not accepted an offer for such shares
made pursuant to subsection (3), shall be determined as of the effective date of
the merger by three appraisers, one to be selected by the owners of at least
two-thirds of such dissenting shares, one to be selected by the board of
directors of the resulting state bank, and the third to be selected by the two
so chosen. The value agreed upon by any two of the appraisers shall control and
be final and binding on all parties. If, within 90 days from the effective date
of the merger, for any reason one or more of the appraisers is not selected as
herein provided, or the appraisers fail to determine the value of such
dissenting shares, the department shall cause an appraisal of such dissenting
shares to be made which will be final and binding on all parties. The expenses
of appraisal shall be paid by the resulting state bank of trust company.

(6) Upon the effective date of the merger, all the shares of stock of every
class of each constituent bank or trust company, whether or not surrendered by
the holders thereof, shall be void and deemed to be canceled, and no voting or
other rights of any kind shall pertain thereto or to the holders thereof except
only such rights as may be expressly provided in the plan of merger and merger
agreement or expressly provided by law.

(7) The provisions of subsection (6) and, unless agreed by all the
constituent banks and trust companies and expressly provided in the plan of
merger and merger agreement, subsections (3), (4), and (5) are not applicable to
a resulting bank or trust company or to the shares or holders of shares of a
resulting bank or trust company the cash, shares, rights, obligations, or other
securities or property of which, in whole or in part, is provided in the plan of
merger or merger agreement to be exchanged for the shares of the other
constituent bank or trust companies.

(8) The stock, rights, obligations, and other securities of a resulting
bank or trust company may be issued as provided by the terms of the plan of
merger and merger agreement, free from any preemptive rights of the holders of
any of the shares of stock or of any of the rights, obligations, or other
securities of such resulting bank or trust company or of any of the constituent
banks or trust companies.

(9) After approval of the plan of merger and merger agreement by the
stockholders as provided in subsection (1), there shall be filed with the
department, within 30 days after the time limit in s. 658.43(5), a fully
executed counterpart of the plan of merger and merger agreement as so approved
if it differs in any respect from any fully executed counterpart thereof
theretofore filed with the department, and copies of the resolutions approving
the same by the stockholders of each constituent bank or trust company,
certified by the president, or chief executive officer if other than the
president, and the cashier or corporate secretary of each constituent bank or
trust company, respectively, with the corporate seal impressed thereon.

History. sec. 4, ch. 28016, 1953; sec.sec. 12,35, ch. 69-106; sec. 3, ch.
76-168; sec. 1, ch. 77-457; sec.sec. 34, 151, 152, ch. 80-260; sec.sec. 2, 3,
ch. 81-318; sec. 147, ch. 83-216; sec.sec. 29, 51, ch. 84-216; sec. 1, ch.
91-307; sec.sec. 1, 127, ch. 92-303.

Note.--Former sec. 661.05.

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ANNEX F

ALEX SHESHUNOFF & CO.
INVESTMENT BANKING

April , 1999

Board of Directors
C&L Banking Corporation
Hwy 20 & Baker Street
Bristol, Florida 32321

Members of the Board:

You have requested us to update our oral opinion rendered on February 23,
1999 and our written opinion rendered on March 5, 1999, as to the fairness, from
a financial point of view, to the holders of the outstanding shares of common
stock of C&L Banking Corporation ("C&L") of the Merger Consideration to be
received in the proposed merger between C&L and The Banc Corporation,
Birmingham, Alabama, (the "Corporation"). It is our understanding that C&L owns
98.10 percent of the issued and outstanding shares of C&L Bank of Bristol ("Bank
of Bristol"). In consideration of the Merger, the Corporation has offered to
exchange $12,857,866.42 of its shares of common stock (the "Merger
Consideration") for the outstanding shares of C&L common stock subject to an
exchange ratio based upon the formula contained in the Merger Agreement. The
shares will be exchanged pursuant to the Plan and Agreement of Merger effective
as of February 25, 1999 (the "Merger Agreement"). Pursuant to the Merger
Agreement, the Corporation shall cause C&L to be merged with and into the
Corporation (the "Merger").

C&L did not retain Sheshunoff to act as its financial advisor in the
proposed Merger and the terms and conditions of the Merger were negotiated
directly between C&L and the Corporation.

Alex Sheshunoff & Co. Investment Banking ("Sheshunoff") is regularly
engaged in the valuation of securities in connection with mergers and
acquisitions, private placements, and valuations for estate, corporate and other
purposes.

In connection with our opinion, we have, among other things:

1. Evaluated Bank of Bristol's consolidated results based upon a review
of its annual financial statements for the three-year period ending
December 31, 1997 and the unaudited consolidated results for the
period ending December 31, 1998;

2. Reviewed Call Report information as of December 1998 for Bank of
Bristol;

3. Conducted conversations with executive management regarding recent
and projected financial performance of Bank of Bristol;

4. Compared Bank of Bristol's recent operating results with those of
certain other banks in the Southeast region of the United States
which have recently been acquired;

5. Compared Bank of Bristol's recent operating results with those of
certain other banks in Florida which have recently been acquired;

6. Compared the pricing multiples for C&L in the Merger to those of
certain other banks in the Southeast region of the United States
which have recently been acquired;

98 San Jacinto boulevard Suite 1925 Austin, Texas 78701
Phone 512-479-8200 Fax 512-472-8953

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Board of Directors
C&L Banking Corporation
April 20, 1999
Page 2

7. Compared the pricing multiples for C&L in the Merger to those of
certain other banks in Florida which have recently been acquired;

8. Analyzed the net present value of the after-tax cash flows Bank of
Bristol could produce through the year 2003, based on assumptions
provided by management;

9. Performed an affordability analysis based on the projections of
earnings for the combined entity subsequent to the Merger;

10. Reviewed the historical stock price data and trading volume of the
Corporation common stock and the lack of any active market for the
common stock of C&L; and

11. Performed such other analyses as we deemed appropriate.

We have assumed and relied upon, without independent verification, the
accuracy and completeness of the information provided to us by C&L for the
purposes of this opinion. In addition, where appropriate, we have relied upon
publicly available information that we believe to be reliable, accurate and
complete; however, we cannot guarantee the reliability, accuracy or completeness
of any such publicly available information.

We have not made an independent evaluation of the assets or liabilities of
Bank of Bristol or the Corporation, nor have we been furnished with any such
appraisals. We are not experts in the evaluation of loan portfolios for the
purposes of assessing the adequacy of the allowance for loan and lease losses
and have assumed that such allowances for each of the companies are, in the
aggregate, adequate to cover such losses.

Our opinion is necessarily based on economic, market and other conditions
as in effect on, and the information made available to us as of, the date
hereof. Events occurring after the date hereof could materially affect the
assumptions used in preparing this opinion. The Corporation is a new entity
having completed its initial public offering of securities on December 10, 1998.
Because of this, there is only a limited trading history for the common stock of
the Corporation and there is thus a higher than normal potential for stock price
changes, both positive and negative, in the immediate future. This factor could
have a material impact on a C&L shareholder's ability to sell the shares
received in the Merger at the price of such shares as of the date of the closing
of the transaction.

Our opinion is limited to the fairness of the Merger Consideration, from a
financial point of view, to the holders of C&L common stock. Moreover, this
letter and the opinion expressed herein do not constitute a recommendation to
any shareholder as to any approval of the Merger or the Merger Agreement. It is
understood that this letter is for the information of the Board of Directors of
C&L and may not be used for any other purpose without our prior written consent.

Based on the foregoing and such other matters we have deemed relevant, it
is our opinion, as of the date hereof, that the Merger Consideration to be
received by the C&L shareholders pursuant to the Merger is fair, from a
financial point of view, to the holders of C&L common stock.

Very truly yours,

ALEX SHESHUNOFF & CO.
INVESTMENT BANKING

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ANNEX G

ALEX SHESHUNOFF & CO.
INVESTMENT BANKING

April 20, 1999

Board of Directors
C&L Banking Corporation
Hwy 20 & Baker Street
Bristol, Florida 32321

Members of the Board:

You have requested our written opinion as to the fairness, from a financial
point of view, to the holders of the outstanding shares of common stock of C&L
Bank of Bristol ("Bank of Bristol") of the Consideration to be received in the
proposed share exchange (the "Share Exchange") between C&L Banking Corporation
("C&L"), Bank of Bristol, and The Banc Corporation, Birmingham, Alabama, (the
"Corporation"). In consideration of the Share Exchange, the Corporation has
offered to exchange $249,205.19 of its shares of common stock (the
"Consideration") for the outstanding shares of Bristol common stock not owned by
C&L subject to an exchange ratio based upon the formula contained in the Share
Exchange Agreement. The shares will be exchanged pursuant to the Plan and
Agreement of Merger and the Share Exchange Agreement both effective as of
February 25, 1999 (the "Agreements"). Pursuant to the Agreements, the
Corporation shall cause C&L to be merged with and into the Corporation (the
"Merger") and the Bank of Bristol shall become a wholly-owned subsidiary of the
Corporation.

C&L did not retain Sheshunoff to act as its financial advisor in the
proposed Merger and Share Exchange for itself or Bank of Bristol and the terms
and conditions of the Merger were negotiated directly between C&L and the
Corporation.

In connection with our opinion, we have, among other things:

2. Reviewed Call Report information as of December 1998 for Bank of
Bristol;

3. Conducted conversations with executive management regarding recent
and projected financial performance of Bank of Bristol;

4. Compared Bank of Bristol's recent operating results with those of
certain other banks in the Southeast region of the United States
which have recently been acquired;

5. Compared Bank of Bristol's recent operating results with those of
certain other banks in Florida which have recently been acquired;

6. Compared the pricing multiples for Bank of Bristol in the Share
Exchange to those of certain other banks in the Southeast region of
the United States which have recently been acquired;

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Board of Directors
C&L Banking Corporation
Page 2

7. Compared the pricing multiples for Bank of Bristol in the Share
Exchange to those of certain other banks in Florida which have
recently been acquired;

8. Analyzed the net present value of the after-tax cash flows Bank of
Bristol could produce through the year 2003, based on assumptions
provided by management;

9. Performed an affordability analysis based on the projections of
earnings for the combined entity subsequent to the Merger and Share
Exchange;

10. Reviewed the historical stock price data and trading volume of the
Corporation common stock and the lack of any active market for the
common stock of Bank of Bristol; and

11. Performed such other analyses as we deemed appropriate.

Our opinion is necessarily based on economic, market, and other conditions
as in effect on, and the information made available to us as of, the date
hereof. Events occurring after the date hereof could materially affect the
assumptions used in preparing this opinion. The Corporation is a new entity
having completed its initial public offering of securities on December 10, 1998.
Because of this, there is only a limited trading history for the common stock of
the Corporation and there is thus a higher than normal potential for stock price
changes, both positive and negative, in the immediate future. This factor could
have a material impact on a Bank of Bristol shareholder's ability to sell the
shares received in the Share Exchange at the price of such shares as of the date
of the closing of the transaction.

Our opinion is limited to the fairness of the Consideration, from a
financial point of view, to the holders of Bank of Bristol common stock.
Moreover, this letter and the opinion expressed herein do not constitute a
recommendation to any shareholder as to any approval of the Share Exchange or
the Agreements. It is understood that this letter is for the information of the
Board of Directors of C&L and may not be used for any other purpose without our
prior written consent.

Based on the foregoing and such other matters we have deemed relevant, it
is our opinion, as of the date hereof, that the Consideration to be received by
the Bank of Bristol shareholders pursuant to the Share Exchange is fair, from a
financial point of view, to the holders of Bank of Bristol common stock.

Very truly yours,

ALEX SHESHUNOFF & CO.
INVESTMENT BANKING

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ANNEX H

ALEX SHESHUNOFF & CO.
INVESTMENT BANKING

April 20, 1999

Board of Directors
C&L Bank of Blountstown
307 West Central Avenue
Blountstown, Florida 32424-1903

Members of the Board:

You have requested us to update our oral opinion rendered on February 23,
1999 and our written opinion rendered on March 5, 1999, as to the fairness, from
a financial point of view, to the holders of the outstanding shares of common
stock of C&L Bank of Blountstown ("Bank of Blountstown") of the Merger
Consideration to be received in the proposed merger between Bank of Blountstown,
C&L Bank of Bristol ("Bank of Bristol") and The Banc Corporation, Birmingham,
Alabama, (the "Corporation"). In consideration of the Merger, the Corporation
has offered to exchange $8,533,142.58 of its shares of common stock (the "Merger
Consideration") for the outstanding shares of Bank of Blountstown common stock
subject to an exchange ratio based upon the formula contained in the Merger
Agreement. The shares will be exchanged pursuant to the Plan and Agreement of
Merger effective as of February 25, 1999 (the "Merger Agreement"). Pursuant to
the Merger Agreement, the Corporation shall cause Bank of Blountstown to be
merged with and into the Bank of Bristol (the "Merger"). Immediately prior to
the Merger, C&L Banking Corporation ("C&L") shall be merged with and into the
Corporation and the Bank of Bristol shall become a wholly-owned subsidiary of
the Corporation.

Bank of Blountstown did not retain Sheshunoff to act as its financial
advisor in the proposed Merger and the terms and conditions of the Merger were
negotiated directly between Bank of Blountstown and the Corporation.

In connection with our opinion, we have, among other things:

1. Evaluated Bank of Blountstown's consolidated results based upon a
review of its annual financial statements for the three-year period
ending December 31, 1997 and the unaudited consolidated results for
the period ending December 31, 1998;

2. Reviewed Call Report information as of December 1998 for Bank of
Blountstown;

3. Conducted conversations with executive management regarding recent
and projected financial performance of Bank of Blountstown;

4. Compared Bank of Blountstown's recent operating results with those of
certain other banks in the Southeast region of the United States
which have recently been acquired;

5. Compared Bank of Blountstown's recent operating results with those of
certain other banks in Florida which have recently been acquired;

6. Compared the pricing multiples for Bank of Blountstown in the Merger
to those of certain other banks in the Southeast region of the United
States which have recently been acquired;

H-1
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Board of Directors
C&L Bank of Blountstown
Page 2

7. Compared the pricing multiples for Bank of Blountstown in the Merger
to those of certain other banks in Florida which have recently been
acquired;

8. Analyzed the net present value of the after-tax cash flows Bank of
Blountstown could produce through the year 2003, based on assumptions
provided by management;

9. Performed an affordability analysis based on the projections of
earnings for the combined entity subsequent to the Merger;

10. Reviewed the historical stock price data and trading volume of the
Corporation common stock and the lack of any active market for the
common stock of Bank of Blountstown; and

11. Performed such other analyses as we deemed appropriate.

We have assumed and relied upon, without independent verification, the
accuracy and completeness of the information provided to us by Bank of
Blountstown for the purposes of this opinion. In addition, where appropriate, we
have relied upon publicly available information that we believe to be reliable,
accurate and complete; however, we cannot guarantee the reliability, accuracy or
completeness of any such publicly available information.

We have not made an independent evaluation of the assets or liabilities of
Bank of Blountstown or the Corporation, nor have we been furnished with any such
appraisals. We are not experts in the evaluation of loan portfolios for the
purposes of assessing the adequacy of the allowance for loan and lease losses
and have assumed that such allowances for each of the companies are, in the
aggregate, adequate to cover such losses.

Our opinion is necessarily based on economic, market and other conditions
as in effect on, and the information made available to us as of, the date
hereof. Events occurring after the date hereof could materially affect the
assumptions used in preparing this opinion. The Corporation is a new entity
having completed its initial public offering of securities on December 10, 1998.
Because of this, there is only a limited trading history for the common stock of
the Corporation and there is thus a higher than normal potential for stock price
changes, both positive and negative, in the immediate future. This factor could
have a material impact on a Bank of Blountstown shareholder's ability to sell
the shares received in the Merger at the price of such shares as of the date of
the closing of the transaction.

Our opinion is limited to the fairness of the Merger Consideration, from a
financial point of view, to the holders of Bank of Blountstown common stock.
Moreover, this letter and the opinion expressed herein do not constitute a
recommendation to any shareholder as to any approval of the Merger or the Merger
Agreement. It is understood that this letter is for the information of the Board
of Directors of Bank of Blountstown and may not be used for any other purpose
without our prior written consent.

Based on the foregoing and such other matters we have deemed relevant, it
is our opinion, as of the date hereof, that the Merger Consideration to be
received by the Bank of Blountstown shareholders pursuant to the Merger is fair,
from a financial point of view, to the holders of Bank of Blountstown common
stock.

Very truly yours,

ALEX SHESHUNOFF & CO.
INVESTMENT BANKING

H-2
<PAGE> 303

PART II

INFORMATION NOT REQUIRED IN PROSPECTUS

ITEM 20. INDEMNIFICATION OF DIRECTORS AND OFFICERS

THE BANC CORPORATION

Section 102(b)(7) of Delaware law grants corporations the right to limit or
eliminate the personal liability of their directors in certain circumstances in
accordance with provisions therein set forth. The Corporation's Restated
Certificate of Incorporation contains a provision eliminating or limiting
director liability to the Corporation and its stockholders for monetary damages
arising from acts or omissions in the director's capacity as a director. The
provision does not, however, eliminate or limit the personal liability of a
director

- for any breach of such director's duty of loyalty to the Corporation or
its stockholders.

- for acts or omissions not in good faith or which involve intentional
misconduct or a knowing violation of law.

- under the Delaware statutory provision making directors personally
liable, under a negligence standard, for unlawful dividends or unlawful
stock purchases or redemptions.

- for any transaction from which the director derived an improper personal
benefit. This provision offers persons who serve on the Board of
Directors of the Corporation protection against awards of monetary
damages resulting from breaches of their duty of care (except as
indicated above). As a result of this provision, the ability of the
Corporation or a stockholder thereof to successfully prosecute an action
against a director for a breach of his duty of care is limited. However,
the provision does not affect the availability of equitable remedies such
as an injunction or rescission based upon a director's breach of his duty
of care. The SEC has taken the position that the provision will have no
effect on claims arising under the federal securities laws.

Section 145 of Delaware law grants corporations the right to indemnify
their directors, officers, employees and agents in accordance with the
provisions therein set forth. The Corporation's Bylaws provide for mandatory
indemnification rights, subject to limited exceptions, to any director, officer,
employee, or agent of the Corporation who, by reason of the fact that he or she
is a director, officer, employee, or agent of the Corporation, is involved in a
legal proceeding of any nature. Such indemnification rights include
reimbursement for expenses incurred by such director, officer, employee, or
agent in advance of the final disposition of such proceeding in accordance with
the applicable provisions of Delaware law.

The Corporation has entered into agreements with all of its directors and
its executive officers pursuant to which the Corporation has agreed to indemnify
such directors and executive officers against liability incurred by them by
reason of their services of a director to the fullest extent allowable under
applicable law.

See Item 22 of this Registration Statement on Form S-4.

ITEM 21. EXHIBITS

Exhibits:

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
<C> <C> <S>
(2)-1 -- Plan and Agreement of Merger, dated as of February 25, 1999,
by and between The Banc Corporation and C&L Banking
Corporation, attached to this Registration Statement as
Annex A to the Prospectus-Joint Proxy Statement, is hereby
incorporated herein by reference.
</TABLE>

II-1
<PAGE> 304

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
<C> <C> <S>
(2)-2 -- Share Exchange Agreement, dated as of February 25, 1999,
among The Banc Corporation, Bristol Acquisition Corporation,
C&L Banking Corporation and C&L Bank of Bristol attached to
the Registration Statement on Annex B to the
Prospectus-Joint Proxy Statement, is hereby incorporated
herein by reference.
(2)-3 -- Plan and Agreement of Merger, dated as of February 25, 1999,
by and among The Banc Corporation, C&L Banking Corporation,
C&L Bank of Bristol and C&L Bank of Blountstown, attached to
this Registration Statement as Annex C to the
Prospectus-Joint Proxy Statement, is hereby incorporated
herein by reference.
(3)-1 -- Restated Certificate of Incorporation of The Banc
Corporation, filed as Exhibit (3)-1 to the Corporation's
Registration Statement on Form S-4 (Registration No.
333-58493), is hereby incorporated herein by reference.
(3)-2 -- Bylaws of The Banc Corporation, filed as Exhibit (3)-2 to
the Corporation's Registration Statement on Form S-4
(Registration No. 333-58493), is hereby incorporated herein
by reference.
(5) -- Form of Opinion of Haskell Slaughter & Young, L.L.C., as to
the legality of the shares of the Corporation common stock
being registered.
(8)-1 -- Form of Opinion of Haskell Slaughter & Young, L.L.C., as to
certain federal income tax consequences of the C&L Banking
Corporation merger.
(8)-2 -- Form of Opinion of Jenkens & Gilchrist, P.C. as to certain
federal income tax consequences of the C&L Banking
Corporation merger.
(8)-3 -- Form of Opinion of Haskell Slaughter & Young, L.L.C., as to
certain federal income tax consequences of the share
exchange.
(8)-4 -- Form of Opinion of Jenkens & Gilchrist, P.C., as to certain
federal income tax consequences of the share exchange.
(8)-5 -- Form of Opinion of Haskell Slaughter & Young, L.L.C., as to
certain federal income tax consequences of the C&L Bank of
Blountstown merger.
(8)-6 -- Form of Opinion of Jenkens & Gilchrist, P.C. as to certain
federal income tax consequences of the C&L Bank of
Blountstown merger.
(10)-1 -- Amended and Restated 1998 Stock Incentive Plan of The Banc
Corporation, filed as Exhibit (4)-2 to the Corporation's
Registration Statement on Form S-8, dated February 22, 1999
(Registration No. 333-72747), is hereby incorporated herein
by reference.
(10)-2 -- Commerce Bank of Alabama Incentive Stock Compensation Plan,
filed as Exhibit (4)-3 to the Corporation's Registration
Statement on Form S-8, dated February 22, 1999 (Registration
No. 333-72747), is hereby incorporated herein by reference.
(10)-3 -- The Banc Corporation 401(k) Plan, filed as Exhibit (4)-2 to
the Corporation's Registration Statement on Form S-8, dated
January 21, 1999 (Registration No. 333-70953) is hereby
incorporated by reference herein.
(10)-4 -- Employment Agreement by and between The Banc Corporation and
James A. Taylor, filed as Exhibit (10)-1 to the
Corporation's Registration Statement on Form S-1
(Registration No. 333-67011), is hereby incorporated herein
by reference.
(10)-5 -- Deferred Compensation Plan by and between The Banc
Corporation and James A. Taylor, filed as Exhibit (10)-2 to
the Corporation's Registration Statement on Form S-1
(Registration No. 333-67011), is hereby incorporated herein
by reference.
(10)-6 -- Employment Agreement, dated as of October 30, 1998, by and
between The Banc Corporation and W.T. Campbell, Jr., filed
as Exhibit (10)-4 to the Corporation's Registration
Statement on Form S-1 (Registration No. 333-67011), is
hereby incorporated herein by reference.
</TABLE>

II-2
<PAGE> 305

<TABLE>
<CAPTION>
EXHIBIT
NUMBER DESCRIPTION
- -------- -----------
<C> <C> <S>
(10)-7 -- Employment Agreement, dated as of February 12, 1998, by and
between The Banc Corporation and Terry DuBose, filed as
Exhibit (10)-7 to the Corporation's Annual Report on Form
10-K for the year ended December 31, 1998, is hereby
incorporated by reference herein.
(10)-8 -- Employment Agreement, dated as of January 1, 1999, by and
between The Banc Corporation and James A. Taylor, Jr., filed
as Exhibit (10)-8 to the Corporation's Annual Report on Form
10-K for the year ended December 31, 1998, is hereby
incorporated herein by reference.
(10)-9 -- Employment Agreement, dated as of January 1, 1999, between
The Bank and Marie Swift filed as Exhibit (10)-9 to the
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998, is hereby incorporated by reference.
(10)-10 -- Employment Agreement, dated as of January 1, 1999, between
The Bank and Johnny Wallis filed as Exhibit (10)-10 to the
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998, is hereby incorporated by reference.
(10)-11 -- Form of Employment Agreement by and between The Banc
Corporation and Jed M. Hiers
(21) -- Subsidiaries of the Corporation filed as Exhibit (21) to the
Corporation's Annual Report on Form 10-K for the year ended
December 31, 1998, is hereby incorporated by reference.
(23)-1 -- Consent of Ernst & Young LLP.
(23)-2 -- Consent of Saltmarsh Cleaveland & Gund.
(23)-3 -- Consent of Williams Cox Weidner and Cox.
(23)-4 -- Consent of Williams Cox Weidner and Cox.
(23)-5 -- Consent of Haskell Slaughter & Young, L.L.C. (included in
the opinions filed as Exhibits (5) and (8)-1, (8)-3 and
(8)-5.
(23)-6 -- Consent of Jenkens & Gilchrist, P.C. (included in the
opinions filed as Exhibit (8)-2, (8)-4 and (8)-6.
(23)-7 -- Consent of Jerry M. Smith.
(23)-8 -- Consent of Alex Sheshunoff & Co.
(24) -- Powers of Attorney. See the signature page to original
filing of this Registration Statement on Form S-4.
(99)-1 -- Form of C&L Proxy.
(99)-2 -- Form of Bank of Bristol Proxy.
(99)-3 -- Form of Bank of Blountstown Proxy.
</TABLE>

ITEM 22. UNDERTAKINGS

(1) Insofar as indemnification for liabilities arising under the Securities
Act of 1933 may be permitted to directors, officers and controlling persons of
the Registrant pursuant to the foregoing provisions, or otherwise, the
Registrant has been advised that in the opinion of the Securities and Exchange
Commission such indemnification is against public policy as expressed in the Act
and is, therefore, unenforceable. In the event that a claim for indemnification
against such liabilities (other than the payment by the Registrant of expenses
incurred or paid by a director, officer or controlling person of the Registrant
in the successful defense of any action, suit or proceeding) is asserted by such
director, officer or controlling person in connection with the securities being
registered, the Registrant will, unless in the opinion of its counsel the matter
has been settled by controlling precedent, submit to a court of appropriate
jurisdiction the question whether such indemnification by it is against public
policy as expressed in the Act and will be governed by the final adjudication of
such issue.

II-3
<PAGE> 306

(2) The undersigned Registrant hereby undertakes as follows: that prior to
any public re-offering of the securities registered hereunder through use of a
prospectus which is part of the registration statement, by any person or party
who is deemed to be an underwriter within the meaning of Rule 145(c), the issuer
undertakes that such re-offering prospectus will contain the information called
for by the applicable registration form with respect to re-offerings by persons
who may be deemed underwriters, in addition to the information called for by the
other items of the applicable form.

(3) The Registrant undertakes that every prospectus: (i) that is filed
pursuant to paragraph (2) immediately preceding, or (ii) that purports to meet
the requirements of Section 10(a)(3) of the Act and is used in connection with
an offering of securities subject to Rule 415, will be filed as a part of an
amendment to the registration statement and will not be used until such
amendment is effective, and that, for purposes of determining any liability
under the Securities Act of 1933, each such post-effective amendment shall be
deemed to be a new registration statement relating to the securities offered
therein, and the offering of such securities at that time shall be deemed to be
the initial bona fide offering thereof.

(4) The undersigned Registrant hereby undertakes to supply by means of a
post-effective amendment all information concerning a transaction, and the
company being acquired involved therein, that was not subject of and included in
the Registration Statement when it became effective.

(5) The undersigned Registrant hereby undertakes to respond to requests for
information that is incorporated by reference into the prospectus pursuant to
Items 4, 10(b), 11, or 13 of this form, within one business day of receipt of
such request, and to send the incorporated documents by first class mail or
other equally prompt means. This includes information contained in documents
filed subsequent to the effective date of the Registration Statement through the
date of responding to the request.

II-4
<PAGE> 307

SIGNATURES

Pursuant to the requirements of the Securities Act, the Registrant has duly
caused this Registration Statement to be signed on its behalf by the
undersigned, thereunto duly authorized, in the City of Birmingham, State of
Alabama on April 30, 1999.

THE BANC CORPORATION

By: /s/ JAMES A. TAYLOR
------------------------------------
James A. Taylor
Chairman of the Board,
Chief Executive Officer and
President

KNOW ALL MEN BY THESE PRESENTS, that each person whose signature appears
below constitutes and appoints James A. Taylor, Jr. and David R. Carter, and
each of them, his attorney-in-fact with power of substitution for him in any and
all capacities, to sign any amendments, supplements, subsequent registration
statements relating to the offering to which this Registration Statement
relates, or other instruments he deems necessary or appropriate, and to file the
same, with exhibits thereto, and other documents in connection therewith, with
the Securities and Exchange Commission, hereby ratifying and confirming all that
said attorney-in-fact or his substitute may do or cause to be done by virtue
hereof.

Pursuant to the requirements of the Securities Act of 1933, this
Registration Statement has been signed below by the following persons in the
capacities and on the dates indicated.

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ JAMES A. TAYLOR Chairman of the Board, Chief April 30, 1999
- ----------------------------------------------------- Executive Officer and
James A. Taylor President (Principal Executive
Officer)

/s/ DAVID R. CARTER Executive Vice President, Chief April 30, 1999
- ----------------------------------------------------- Financial Officer and Director
David R. Carter (Principal Financial and
Accounting Officer)

/s/ TERRY DUBOSE Vice Chairman April 30, 1999
- -----------------------------------------------------
Terry Dubose

/s/ JAMES MAILON KENT, JR. Vice Chairman April 30, 1999
- -----------------------------------------------------
James Mailon Kent, Jr.

/s/ LARRY D. STRIPLIN, JR. Vice Chairman April 30, 1999
- -----------------------------------------------------
Larry D. Striplin, Jr.

/s/ JAMES R. ANDREWS, M.D. Director April 30, 1999
- -----------------------------------------------------
James R. Andrews, M.D.

/s/ CHARLES BARKLEY Director April 30, 1999
- -----------------------------------------------------
Charles Barkley
</TABLE>

II-5
<PAGE> 308

<TABLE>
<CAPTION>
SIGNATURE TITLE DATE
--------- ----- ----
<C> <S> <C>

/s/ NEAL R. BERTE, ED.D Director April 30, 1999
- -----------------------------------------------------
Neal R. Berte, ED.D

/s/ W.T. CAMPBELL, JR. Director April 30, 1999
- -----------------------------------------------------
W.T. Campbell, Jr.

/s/ PETER N. DICHIARA Director April 30, 1999
- -----------------------------------------------------
Peter N. Dichiara

/s/ K. EARL DURDEN Director April 30, 1999
- -----------------------------------------------------
K. Earl Durden

/s/ STEVEN C. HAYS Director April 30, 1999
- -----------------------------------------------------
Steven C. Hays

/s/ LARRY R. HOUSE Director April 30, 1999
- -----------------------------------------------------
Larry R. House

/s/ THOMAS E. JERNIGAN, JR. Director April 30, 1999
- -----------------------------------------------------
Thomas E. Jernigan, Jr.

/s/ RANDALL E. JONES Director April 30, 1999
- -----------------------------------------------------
Randall E. Jones

/s/ MAYER MITCHELL Director April 30, 1999
- -----------------------------------------------------
Mayer Mitchell

/s/ RONALD W. ORSO, M.D. Director April 30, 1999
- -----------------------------------------------------
Ronald W. Orso, M.D.

/s/ HAROLD W. RIPPS Director April 30, 1999
- -----------------------------------------------------
Harold W. Ripps

/s/ RICHARD M. SCRUSHY Director April 30, 1999
- -----------------------------------------------------
Richard M. Scrushy

/s/ MICHAEL E. STEPHENS Director April 30, 1999
- -----------------------------------------------------
Michael E. Stephens

/s/ MARIE SWIFT Director April 30, 1999
- -----------------------------------------------------
Marie Swift

/s/ JAMES A. TAYLOR, JR. Director April 30, 1999
- -----------------------------------------------------
James A. Taylor, Jr.

/s/ T. MANDELL TILLMAN Director April 30, 1999
- -----------------------------------------------------
T. Mandell Tillman

/s/ JOHNNY WALLIS Director April 30, 1999
- -----------------------------------------------------
Johnny Wallis
</TABLE>

II-6

<PAGE> 1
EXHIBIT (5)

[LAW OFFICES HASKELL SLAUGHTER & YOUNG, L.L.C. LETTERHEAD]
1200 AMSOUTH/HARBERT PLAZA
1901 SIXTH AVENUE NORTH
BIRMINGHAM, ALABAMA 35203-2618

PLEASE REPLY TO: BIRMINGHAM

April __, 1999

The Banc Corporation
17 North 20th Street
Birmingham, AL 35203

RE: REGISTRATION STATEMENT ON FORM S-4--
THE BANC CORPORATION
OUR FILE NO. 05136-012

Gentlemen:

We have served as counsel for The Banc Corporation, a corporation
organized and existing under the laws of the State of Delaware (the
"Corporation"), in connection with the registration under the Securities Act of
1933, as amended, pursuant to the Corporation's Registration Statement on Form
S-4, as amended (Commission File No. 333-_____) (the "Registration Statement"),
of up to 2,164,921 shares of common stock, par value $.001 per share, of the
Corporation (the "Shares") to be issued pursuant to that certain Plan and
Agreement of Merger, dated as of February 25, 1999, by and among the Corporation
and C&L Banking Corporation, that certain Plan and Agreement of Merger, dated as
of February 25, 1999, by and among the Corporation, C&L Banking Corporation, C&L
Bank of Bristol and C&L Bank of Blountstown, and that certain Share Exchange
Agreement, dated as of February 25, 1999, by and among the Corporation, Bristol
Acquisition Corporation, C&L Banking Corporation and C&L Bank of Bristol
(collectively the "Agreements"). This opinion is furnished to you pursuant to
the requirements of Form S-4.

<PAGE> 2

The Banc Corporation
April __, 1999
Page 2

In connection with this opinion, we have examined and are familiar with
originals or copies (certified or otherwise identified to our satisfaction) of
such documents, corporate records and other instruments relating to the
incorporation of the Corporation and to the authorization and issuance of the
Shares and the authorization and adoption of the Agreements as we have deemed
necessary and appropriate.

Based upon the foregoing, and having regard for such legal
considerations as we have deemed relevant, it is our opinion that:

1. The Shares have been duly authorized.

2. Upon issuance, sale and delivery of the Shares as contemplated
in the Registration Statement and the Agreements, the Shares will be legally
issued, fully paid and nonassessable.

We do hereby consent to the reference to our firm under the heading
"Legal Matters" in the Registration Statement and to the filing of this Opinion
as an Exhibit thereto.

Very truly yours,

HASKELL SLAUGHTER & YOUNG, L.L.C.

By
--------------------------------------
Robert E. Lee Garner

<PAGE> 1
EXHIBIT (8)-1

LAW OFFICES

[HASKELL SLAUGHTER & YOUNG, L.L.C. LETTERHEAD]

PLEASE REPLY TO: BIRMINGHAM

DRAFT

_______ ___, 1999

The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203

RE: PLAN AND AGREEMENT OF MERGER BY AND BETWEEN THE BANC
CORPORATION AND C&L BANKING CORPORATION

Gentlemen:

submitted to us as originals, the conformity to original documents of all
documents submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies. In rendering the opinion set
forth below, we have relied upon certain written representations and covenants
of TBC and Company which are annexed hereto (the "Representations and
Warranties").

In rendering our opinion, we have considered the applicable provisions
of the Internal Revenue Code of 1986, as amended (the "Code"), Treasury
Regulations, pertinent judicial authorities, interpretive rulings of the
Internal Revenue Service and such other authorities as we have considered
relevant.

Based upon and subject to the foregoing and assuming that as of the
Effective Time of the Merger and following the Merger there will be no acts or
omissions which will violate or be inconsistent with any of the Representations
and Warranties, we are of the opinion that:

(i) Provided the Merger qualifies as a statutory merger
under the General Corporation Law of the State of Delaware and the
Florida Business Corporation Act, the Merger will constitute a
reorganization within the meaning of Section 368(a) of the Code, and
TBC and Company will each be a "party to the reorganization" within
the meaning of Section 368(b) of the Code;

(ii) No gain or loss will be recognized by TBC or Company
as a result of the Merger;

(iii) No gain or loss will be recognized by a Company
shareholder who receives solely shares of TBC Common Stock in exchange
for Company Common Stock;

(iv) The receipt of cash by a Company shareholder in
lieu of fractional shares of TBC Common Stock will be treated as if
the fractional shares were distributed as part of the exchange and
then were redeemed by TBC. These payments will be treated as having
been received as distributions in full payment in exchange for the
stock redeemed as provided in Section 302(a) of the Code, provided the
redemption is not essentially equivalent to a dividend;

(v) The tax basis of the shares of TBC Common Stock
received by a Company shareholder will be equal to the tax bases of
the Company Common Stock exchanged therefor, excluding any basis
allocable to a fractional share of TBC Common Stock for which cash is
received;
<PAGE> 3
The Banc Corporation
__________ ____, 1999
Page 3

(vi) The holding period of the shares of TBC Common Stock
received by a Company shareholder will include the holding period or
periods of the Company Common Stock exchanged therefor, provided that
the Company Common Stock is held as a capital asset within the meaning
of Section 1221 of the Code at the Effective Time of the Merger; and

(vii) Where solely cash is received by a Company
shareholder in exchange for his Company Common Stock pursuant to the
exercise of dissenters' rights, such cash will be treated as having
been received in redemption of his Company Common Stock, subject to
the provisions and limitations of Section 302 of the Code.

The Merger should have no immediate federal income tax consequences to
TBC stockholders.

Except as set forth above, we express no opinion as to the tax
consequences, whether federal, state, local or foreign, to any party to the
Merger or of any transactions related to the Merger or contemplated by the Plan
of Merger.

This opinion is being provided solely for the use of TBC. No other
person or party shall be entitled to rely on this opinion.

We hereby consent to the reference to our Firm under the heading
"Legal Matters" in the Prospectuses which form a part of the Registration
Statement, and to the filing of this opinion as an Exhibit thereto.

Very truly yours,

HASKELL SLAUGHTER & YOUNG, L.L.C.

By
-----------------------------------------
Ross N. Cohen

<PAGE> 1
EXHIBIT (8)-2

[Jenkens & Gilchrist Letterhead]

April ___, 1999

C&L Banking Corporation
Highway 20 and Baker Street
Bristol, Florida 32321

Ladies and Gentlemen:

Set forth below are our opinions and the assumptions and documents
upon which we have relied in rendering our opinions.

A. Documents Reviewed

In connection with the opinions rendered below, we have reviewed and
relied upon the following documents:

1. the Plan of Merger,

2. the Registration Statement,

3. the Certificates of the Company and TBC attached
hereto as Exhibits "A" and "B", respectively (collectively, the
"Certificates"), and

4. such other documents as we have deemed necessary or
appropriate for purposes of this opinion.
<PAGE> 2

C&L Banking Corporation
April __, 1999
Page 2

B. Assumptions

In connection with the opinions rendered below, we have assumed:

1. that all signatures on all documents submitted to us
are genuine, that all documents submitted to us as originals are authentic,
that all documents submitted to us as copies are accurate, that all information
submitted to us is accurate and complete, and that all persons executing and
delivering originals or copies of documents examined by us are competent to
execute and deliver such documents.

2. that the Merger and the other transactions specified
in the Plan of Merger will be effected on or prior to the Closing Date and will
be consummated as contemplated in the Plan of Merger, without waiver of any
material provision thereof.

C. Opinions

Based solely upon the documents and assumptions set forth above, and
conditioned upon the initial and continuing accuracy of the factual
representations set forth in the Certificates as of the date hereof and as of
the Effective Time, it is our opinion that for United States federal income tax
purposes the Merger will constitute a reorganization within the meaning of
section 368(a) of the Code.

D. Limitations

1. Except as otherwise indicated, the opinions
contained in this letter are based upon the Code and its legislative history,
the Treasury regulations promulgated thereunder (the "Regulations"), judicial
decisions, and current administrative rulings and practices of the Internal
Revenue Service, all as in effect on the date of this letter. These authorities
may be amended or revoked at any time. Any such changes may or may not be
retroactive with respect to transactions entered into or contemplated prior to
the effective date thereof and could significantly alter the conclusions
reached in this letter. There is no assurance that legislative, judicial, or
administrative changes will not occur in the future. We assume no obligation to
update or modify this letter to reflect any developments that may occur after
the date of this letter.

C&L Banking Corporation
April __, 1999
Page 3

assumptions made and the factual representations contained in the Certificates.
To the extent that any of the factual representations provided to us in the
Certificates is with respect to matters set forth in the Code or the
Regulations, we have reviewed with the individuals making such factual
representations the relevant portions of the Code and the applicable
Regulations and are reasonably satisfied that such individuals understand such
provisions and are capable of making such factual representations. We have made
no independent investigation of the facts contained in the documents and
assumptions set forth above, the factual representations set forth in the
Certificates or the Registration Statement. No facts have come to our
attention, however, that would cause us to question the accuracy and
completeness of such facts or documents in a material way. Any material
inaccuracy or incompleteness in these documents, assumptions or factual
representations (whether made by any or all of the Company or TBC) could
adversely affect the opinions stated herein.

3. We are expressing opinions only as to those matters
expressly set forth in Section C above. No opinion should be inferred as to any
other matters. This opinion does not address the various state, local or
foreign tax consequences that may result from the Merger or the other
transactions contemplated by the Plan of Merger. In addition, no opinion is
expressed as to any federal income tax consequence of the Merger or the other
transactions contemplated by the Plan of Merger except as specifically set
forth herein, and this opinion may not be relied upon except with respect to
the consequences specifically discussed herein.

4. This opinion letter is issued for your benefit and
the shareholders of the Company and the shareholders of the Bank and no other
person or entity may rely hereon without our express written consent. This
opinion letter may be filed as an exhibit to the Registration Statement.
Furthermore, we consent to the reference to Jenkens & Gilchrist, a Professional
Corporation, under the captions "Legal Matters" and "MERGER BETWEEN CORPORATION
AND C&L -- Material Federal Income Tax Consequences". In giving this consent,
we do not thereby admit that we are within the category of persons whose
consent is required under section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Commission promulgated thereunder.
<PAGE> 4

C&L Banking Corporation
April __, 1999
Page 4

Very truly yours,

JENKENS & GILCHRIST,
a Professional Corporation

By: ---------------------------------------------
William P. Bowers, Authorized Signatory

<PAGE> 1
EXHIBIT (8)-.3

LAW OFFICES
[HASKELL SLAUGHTER & YOUNG, L.L.C. LETTERHEAD]

PLEASE REPLY TO: BIRMINGHAM

DRAFT

________ ___, 1999

The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203

RE: SHARE EXCHANGE AGREEMENT BY AND BETWEEN C&L BANK OF BRISTOL
AND BRISTOL ACQUISITION CORPORATION, A WHOLLY-OWNED SUBSIDIARY OF
THE BANC CORPORATION, AND JOINED IN BY C&L BANKING CORPORATION

Gentlemen:

We have acted as counsel to The Banc Corporation, a Delaware
corporation ("TBC"), in connection with the proposed merger (the "Merger") of
C&L Banking Corporation, a Florida corporation (the "Company"), with and into
TBC, pursuant to the terms of that certain Plan and Agreement of Merger, dated
as of February 25, 1999 (the "Plan of Merger"), by and between TBC and the
Company, as described in more detail in the Plan of Merger and in the
Registration Statement on Form S-4 (Commission File No. 333-__________) filed
by TBC with the Securities and Exchange Commission, as amended (the
"Registration Statement"). We have also acted as counsel to TBC in connection
with the proposed share exchange (the "Share Exchange") by shareholders of C&L
Banking of Bristol, a Florida corporation owned 98.1 percent by the Company
prior to the Merger (the "Bank"), of their shares of common stock in the Bank
for shares of common stock in TBC immediately following the Merger, pursuant to
the terms of that certain Share Exchange Agreement, dated as of February 25,
1999, by and between the Bank and Bristol Acquisition Corporation, a Florida
corporation and wholly-owned subsidiary of TBC (the "Subsidiary") (the "Share
Exchange Agreement"), as described in more detail in the Share
<PAGE> 2
The Banc Corporation
____________ ___, 1999
Page 2

Exchange Agreement and in the Registration Statement. All capitalized terms,
unless otherwise specified, have the meaning assigned to them in the
Registration Statement.

In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Registration Statement, (ii) the Share Exchange
Agreement and (iii) such other documents as we have deemed necessary or
appropriate in order to enable us to render the opinion below. In our
examination, we have assumed the genuineness of all signatures, the legal
capacity of all natural persons, the authenticity of all documents submitted to
us as originals, the conformity to original documents of all documents
submitted to us as certified, conformed or photostatic copies and the
authenticity of the originals of such copies. In rendering the opinion set
forth below, we have relied upon certain written representations and covenants
of TBC, the Subsidiary and the Bank which are annexed hereto (the
"Representations and Warranties").

Based upon and subject to the foregoing and assuming that as of the
Effective Time of the Share Exchange and following the Share Exchange there
will be no acts or omissions which will violate or be inconsistent with any of
the Representations and Warranties, we are of the opinion that:

(i) The Share Exchange will constitute a reorganization
within the meaning of Section 368(a) of the Code, and TBC, the
Subsidiary and the Bank will each be a "party to the reorganization"
within the meaning of Section 368(b) of the Code;

(ii) No gain or loss will be recognized by TBC, the
Subsidiary or the Bank as a result of the Share Exchange;

(iii) No gain or loss will be recognized by a Bank
shareholder who receives solely shares of TBC Common Stock in exchange
for Bank Common Stock;

(iv) The receipt of cash by a Bank shareholder in lieu of
fractional shares of TBC Common Stock will be treated as if the
fractional shares were distributed as part of the exchange and then
were redeemed by TBC. These payments will be treated as having been
received as distributions in full payment
<PAGE> 3
The Banc Corporation
____________ ___, 1999
Page 3

in exchange for the stock redeemed as provided in Section 302(a) of
the Code, provided the redemption is not essentially equivalent to a
dividend;

(v) The tax basis of the shares of TBC Common Stock
received by a Bank shareholder will be equal to the tax bases of the
Bank Common Stock exchanged therefor, excluding any basis allocable to
a fractional share of TBC Common Stock for which cash is received;

(vi) The holding period of the shares of TBC Common Stock
received by a Bank shareholder will include the holding period or
periods of the Bank Common Stock exchanged therefor, provided that the
Bank Common Stock is held as a capital asset within the meaning of
Section 1221 of the Code at the Effective Time of the Share Exchange;
and

(vii) Where solely cash is received by a Bank shareholder
in exchange for his Bank Common Stock pursuant to the exercise of
dissenters' rights, such cash will be treated as having been received
in redemption of his Bank Common Stock from the Bank, subject to the
provisions and limitations of Section 302 of the Code.

The Share Exchange should have no immediate federal income tax
consequences to TBC stockholders.

Except as set forth above, we express no opinion as to the tax
consequences, whether federal, state, local or foreign, to any party to the
Share Exchange or of any transactions related to the Share Exchange or
contemplated by the Share Exchange Agreement.

This opinion is being provided solely for the use of TBC. No other
person or party shall be entitled to rely on this opinion.
<PAGE> 4
The Banc Corporation
____________ ___, 1999
Page 4

Very truly yours,

HASKELL SLAUGHTER & YOUNG, L.L.C.

By
-----------------------------------------
Ross N. Cohen

<PAGE> 1
EXHIBIT (8)-4

[JENKENS & GILCHRIST LETTERHEAD]

April ___, 1999

C&L Banking Corporation
Highway 20 and Baker Street
Bristol, Florida 32321

Ladies and Gentlemen:

We have acted as counsel to C&L Banking Corporation, a Florida
corporation ("Company"), in connection with the Company's merger (the "Merger")
with and into The Banc Corporation, a Delaware corporation ("TBC") pursuant to
the terms of that certain Plan and Agreement of Merger, dated as of February
25, 1999, by and between TBC and the Company (the "Plan of Merger"), as
described in more detail in the Plan of Merger. We have also acted as counsel
to the Company in connection with the exchange (the "Share Exchange") by
shareholders owning 1.9 percent of C&L Bank of Bristol, a Florida corporation
owned 98.1 percent by the Company immediately prior to the Merger (the "Bank"),
of their shares of common stock in the Bank ("Bank Common Stock") for shares of
common stock in TBC ("TBC Common Stock") immediately following the Merger,
pursuant to the terms of that certain Share Exchange Agreement, dated as of
February 25, 1999, by and between the Bank, Bristol Acquisition Corporation, a
Florida Corporation, and TBC (the "Share Exchange Agreement"), as described in
more detail in the Share Exchange Agreement. In connection with the Share
Exchange, you have asked us to render certain opinions with respect to the
federal income tax treatment of the Share Exchange under the Internal Revenue
Code of 1986, as amended (the "Code"). Except as otherwise indicated,
capitalized terms used herein shall have the meanings assigned to them in the
Share Exchange Agreement.

Set forth below are our opinions and the assumptions and documents
upon which we have relied in rendering our opinions.

A. Documents Reviewed

In connection with the opinions rendered below, we have reviewed and
relied upon the following documents:

1. the Share Exchange Agreement,
<PAGE> 2
C&L Banking Corporation
April __, 1999
Page 2

2. the Registration Statement,

3. the Certificates of the Company and TBC attached
hereto as Exhibits "A" and "B", respectively (collectively, the
"Certificates"), and

4. such other documents as we have deemed necessary or
appropriate for purposes of this opinion.

B. Assumptions

In connection with the opinions rendered below, we have assumed:

2. that the Share Exchange and the other transactions
specified in the Share Exchange Agreement will be effected on or prior to the
Closing Date and will be consummated as contemplated in the Share Exchange
Agreement, without waiver of any material provision thereof.

C. Opinions

1. the Share Exchange will constitute a reorganization within
the meaning of section 368(a) of the Code;

2. no gain or loss will be recognized by the minority
shareholders of the Bank who exchange all of their Bank Common Stock solely for
TBC Common Stock pursuant to the Share Exchange (except with respect to cash
received in lieu of a fractional share interest in TBC Common Stock);
<PAGE> 3
C&L Banking Corporation
April __, 1999
Page 3

3. the aggregate tax basis of TBC Common Stock received by
shareholders of the Bank who exchange all of their Bank Common Stock solely for
TBC Common Stock pursuant to the Share Exchange will be the same as the
aggregate tax basis of the Bank Common Stock surrendered in exchange therefor
(reduced by any amount allocable to a fractional interest for which cash is
received); and

4. the holding period of the TBC Common Stock received by each
shareholder of the Bank who exchanges all of their Bank Common Stock solely for
TBC Common Stock pursuant to the Share Exchange will include such shareholder's
holding period in the Bank Common Stock surrendered in exchange therefor,
provided that the Bank Common Stock was a capital asset in the hands of such
shareholder at the Effective Time of the Share Exchange.

D. Limitations

2. The opinions expressed herein represent counsel's
best legal judgment and are not binding upon the Internal Revenue Service or
the courts and are dependent upon the accuracy and completeness of the
documents we have reviewed under the circumstances, the assumptions made and
the factual representations contained in the Certificates. To the extent that
any of the factual representations provided to us in the Certificates is with
respect to matters set forth in the Code or the Regulations, we have reviewed
with the individuals making such factual representations the relevant portions
of the Code and the applicable Regulations and are reasonably satisfied that
such individuals understand such provisions and are capable of making such
factual representations. We have made no independent investigation of the facts
contained in the documents and assumptions set forth above, the factual
representations set forth in the Certificates or the Registration Statement. No
facts have come to our attention, however, that would cause us to question the
accuracy and completeness of such facts or documents in a material way. Any
material inaccuracy or incompleteness in these documents, assumptions or
factual representations
<PAGE> 4
C&L Banking Corporation
April __, 1999
Page 4

(whether made by any or all of the Company or TBC) could adversely affect the
opinions stated herein.

3. We are expressing opinions only as to those matters
expressly set forth in Section C above. No opinion should be inferred as to any
other matters. This opinion does not address the various state, local or
foreign tax consequences that may result from the Share Exchange or the other
transactions contemplated by the Share Exchange Agreement. In addition, no
opinion is expressed as to any federal income tax consequence of the Share
Exchange or the other transactions contemplated by the Share Exchange Agreement
except as specifically set forth herein, and this opinion may not be relied
upon except with respect to the consequences specifically discussed herein.

4. This opinion letter is issued for your benefit and
the shareholders of the Bank and no other person or entity may rely hereon
without our express written consent. This opinion letter may be filed as an
exhibit to the Registration Statement. Furthermore, we consent to the reference
to Jenkens & Gilchrist, a Professional Corporation, under the captions "Legal
Matters" and "SHARE EXCHANGE BETWEEN THE CORPORATION, BRISTOL, ACQUISITION
CORPORATION AND BANK OF BRISTOL -- Tax Consequences". In giving this consent,
we do not thereby admit that we are within the category of persons whose
consent is required under section 7 of the Securities Act of 1933, as amended,
or the rules and regulations of the Commission promulgated thereunder.

Very truly yours,

JENKENS & GILCHRIST,
a Professional Corporation

By:
------------------------------------------
William P. Bowers, Authorized Signatory

<PAGE> 1
EXHIBIT (8)-5

LAW OFFICES
[HASKELL SLAUGHTER & YOUNG, L.L.C. LETTERHEAD]

PLEASE REPLY TO: BIRMINGHAM

DRAFT

________ ___, 1999

The Banc Corporation
17 North 20th Street
Birmingham, Alabama 35203

RE: PLAN AND AGREEMENT OF MERGER AMONG THE BANC CORPORATION, C&L
BANKING CORPORATION, C&L BANK OF BRISTOL AND C&L BANK OF
BLOUNTSTOWN

Gentlemen:

We have acted as counsel to The Banc Corporation, a Delaware
corporation ("TBC"), in connection with the proposed merger (the "Merger") of
C&L Bank of Blountstown, a Florida corporation ("Company"), with and into C&L
Bank of Bristol, a Florida corporation ("Subsidiary") and wholly-owned
subsidiary of TBC, pursuant to the terms of that certain Plan and Agreement of
Merger, dated as of February 25, 1999, among TBC, C&L Banking Corporation, a
Florida corporation, Subsidiary and Company (the "Plan of Merger"), as
described in more detail in the Plan of Merger and in the Registration
Statement on Form S-4 (Commission File No. 333-________) filed by TBC with the
Securities and Exchange Commission, as amended (the "Registration Statement").
This opinion is being provided in satisfaction of the conditions set forth in
Section 7.3(f) of the Plan of Merger. All capitalized terms, unless otherwise
specified, have the meaning assigned to them in the Registration Statement.
<PAGE> 2
The Banc Corporation
__________ ____, 1999
Page 2

In connection with this opinion, we have examined and are familiar
with originals or copies, certified or otherwise identified to our
satisfaction, of (i) the Registration Statement, (ii) the Plan of Merger and
(iii) such other documents as we have deemed necessary or appropriate in order
to enable us to render the opinion below. In our examination, we have assumed
the genuineness of all signatures, the legal capacity of all natural persons,
the authenticity of all documents submitted to us as originals, the conformity
to original documents of all documents submitted to us as certified, conformed
or photostatic copies and the authenticity of the originals of such copies. In
rendering the opinion set forth below, we have relied upon certain written
representations and covenants of TBC, Subsidiary and Company which are annexed
hereto (the "Representations and Warranties").

(i) Provided the Merger qualifies as a statutory merger
under the Florida Financial Institutions Code, the Merger will
constitute a reorganization within the meaning of Section 368(a) of
the Code, and TBC, Subsidiary and Company will each be a "party to the
reorganization" within the meaning of Section 368(b) of the Code;

(ii) No gain or loss will be recognized by TBC,
Subsidiary or Company as a result of the Merger;

(iii) No gain or loss will be recognized by a Company
shareholder who receives solely shares of TBC Common Stock in exchange
for Company Common Stock;

(iv) The receipt of cash by a Company shareholder in lieu
of fractional shares of TBC Common Stock will be treated as if the
fractional shares were distributed as part of the exchange and then
were redeemed by TBC. These payments will be treated as having been
received as distributions in full payment in exchange for the stock
redeemed as provided in Section 302(a) of the Code, provided the
redemption is not essentially equivalent to a dividend;
<PAGE> 3
The Banc Corporation
__________ ____, 1999
Page 3

The Merger should have no immediate federal income tax consequences to
TBC stockholders.

This opinion is being provided solely for the use of TBC. No other
person or party shall be entitled to rely on this opinion.

Very truly yours,

HASKELL SLAUGHTER & YOUNG, L.L.C.

By
-----------------------------------------
Ross N. Cohen

<PAGE> 1
EXHIBIT (8)-6

[Jenkens & Gilchrist Letterhead]

April ___, 1999

C&L Bank of Blountstown
307 W. Central Avenue
Blountstown, Florida 32424

Ladies and Gentlemen:

We have acted as counsel to C&L Bank of Blountstown, a Florida
corporation ("Company"), in connection with the Company's merger (the "Merger")
with and into C&L Bank of Bristol, a Florida corporation ("Subsidiary")
pursuant to the terms of that certain Plan and Agreement of Merger, dated as of
February 25, 1999, by and between The Banc Corporation, a Delaware corporation
("TBC"), C&L Banking Corporation, a Florida corporation ("C&L"), Company and
Subsidiary (the "Plan of Merger"), as described in more detail in the Plan of
Merger. Pursuant to Section 7.2(f) of the Plan of Merger, you have asked us to
render certain opinions with respect to the federal income tax treatment of the
Merger under the Internal Revenue Code of 1986, as amended (the "Code"). Except
as otherwise indicated, capitalized terms used herein shall have the meanings
assigned to them in the Plan of Merger.

Set forth below are our opinions and the assumptions and documents
upon which we have relied in rendering our opinions.

A. Documents Reviewed

In connection with the opinions rendered below, we have reviewed and
relied upon the following documents:

1. the Plan of Merger,

2. the Registration Statement,

3. the Certificates of the Company and of TBC and
Subsidiary attached hereto as Exhibits "A" and "B", respectively (collectively,
the "Certificates"), and
<PAGE> 2
C&L Bank of Blountstown
April __, 1999
Page 2

4. such other documents as we have deemed necessary or
appropriate for purposes of this opinion.

B. Assumptions

In connection with the opinions rendered below, we have assumed:

C. Opinions

D. Limitations

2. The opinions expressed herein represent counsel's
best legal judgment and are not binding upon the Internal Revenue Service or
the courts and are dependent upon the accuracy and completeness of the
documents we have reviewed under the circumstances, the assumptions made and
the factual representations contained in the Certificates. To the extent that
any of the factual representations provided to us in the Certificates is with
respect to matters set forth in the Code or the Regulations, we have reviewed
with the individuals making such factual representations the relevant portions
of the Code and the applicable Regulations and are reasonably satisfied that
such individuals understand such provisions and are capable of making such
factual representations. We have made no independent investigation of the facts
contained in the documents and assumptions set forth above, the factual
representations set forth in the Certificates, the Registration Statement or
the Plan of Merger. No facts have come to our attention, however, that would
cause us to question the accuracy and completeness of such facts or documents
in a material way. Any material inaccuracy or incompleteness in these
documents, assumptions or factual representations (whether made by any or all
of the Company, TBC, or Subsidiary) could adversely affect the opinions stated
herein.

4. This opinion letter is issued for your benefit and
the shareholders of the Company and no other person or entity may rely hereon
without our express written consent. This opinion letter may be filed as an
exhibit to the Registration Statement. Furthermore, we consent to the reference
to Jenkens & Gilchrist, a Professional Corporation, under the captions "Legal
Matters" and " "MERGER BETWEEN BANK OF BLOUNTSTOWN AND BANK OF BRISTOL --
Material Federal Income Tax Consequences". In giving this consent, we do not
thereby admit that we are within the category of persons whose consent is
required under section 7 of the Securities Act of 1933, as amended, or the
rules and regulations of the Commission promulgated thereunder.
<PAGE> 4
C&L Bank of Blountstown
April __, 1999
Page 4

Very truly yours,

JENKENS & GILCHRIST,
a Professional Corporation

By:
-----------------------------------------
William P. Bowers, Authorized Signatory

<PAGE> 1

EXHIBIT (10) - 11

FORM OF EMPLOYMENT AGREEMENT

THIS EMPLOYMENT AGREEMENT (this "Agreement") is effective _________,
1999 (the "Effective Date"), by and between The Banc Corporation, a Delaware
corporation ("TBC"), C&L Bank of Bristol, a Florida banking corporation (the
"Bank" or "Employer"), and Jed M. Hiers ("Executive").

Recitals

WHEREAS, TBC has entered into that certain Plan and Agreement of
Merger, dated as of February 25, 1999, by and between The Banc Corporation and
C&L Banking Corporation (the "Company") (the "Plan of Merger"), pursuant to
which the Company will be merged with and into TBC and the Bank will become a
subsidiary of TBC;

WHEREAS, Executive has been and continues to be employed by the Bank
and as a condition to the consummation of the transactions provided for in the
Plan of Merger, Executive and Employer have agreed to enter into this agreement;

WHEREAS, the Employer desires to employ Executive as the President of
the Bank and the Executive is willing to accept such employment;

Agreement

NOW THEREFORE, in consideration of the mutual recitals and covenants
contained herein, the parties hereby agree as follows:

1. EMPLOYMENT. Employer agrees to employ Executive and Executive
agrees to be employed by Employer, subject to the terms and provisions of this
Agreement.

2. TERM. The employment of Executive by Employer as provided in
Section 1 will be for a period of three (3) years commencing on the Effective
Date for a three year term and terminable by Employer only upon prior notice
pursuant to Section 8 for a period equal to the remaining term or otherwise as
provided in Section 7. The Board of Directors of Employer shall review this
Agreement at least annually to consider renewal for an additional three-year
term.

3. DUTIES; EXTENT OF SERVICES. Executive shall perform for
Employer all duties incident to the position of President of the Bank. In
addition, Executive shall engage in such other services for Employer or its
affiliates as Employer from time to time shall direct. Executive shall use his
best efforts in, and devote his entire time, attention, and energy, to
Employer's business; provided that nothing contained herein is intended to
prohibit Executive from spending a reasonable amount of time managing his
personal investments and discharging his civic responsibilities as long as such
activities do not interfere with his duties and obligations under this
Agreement.

<PAGE> 2

4. COMPENSATION.

During the Term of this Agreement:

a. Compensation: Executive's total annual cash
compensation shall be an amount not less than $120,000.

b. Life Insurance: Term life insurance equal to two
times base compensation, plus life insurance policies on dependents.

c. Insurance: Fully paid health insurance (employee and
dependents, customary plan), fully-paid disability and dental
insurance.

d. Retirement: Standard plans offered by Employer,
including profit-sharing, 401K, etc.

e. Civic clubs: Employer pays fees for any clubs which
Executive joins at Employer's request.

f. Vacation, sick days, holidays: pursuant to Employer's
standard policies.

g. Other executive compensation plans: Full
participation in other executive level compensation plans offered by
the Employer and affiliates until termination of this agreement.

5. DISCLOSURE OF INFORMATION. Executive will not, during or after
the term of this Agreement, (i) disclose any confidential information or any
information regarding the business or operations of TBC or Employer to any
person, firm, corporation, association, or other entity not employed by or
affiliated with TBC or Employer for any reason on purpose whatsoever, or (ii)
use any confidential information for any reason other than to further the
business of TBC and Employer. Executive agrees to return any written
confidential information, and all copies thereof, upon the termination of
Executive's employment (whether hereunder or otherwise).

6. NON-COMPETITION. Except as specifically provided otherwise in
this Agreement, during the period of his employment by Employer and for such
time as Employer is paying to Executive any of the compensation provided in
Section 4 and for one year thereafter, Executive will not, directly or
indirectly, carry on or engage in the business of banking or solicit or do
similar business with any customer of the Bank, TBC or its subsidiaries in
Calhoun County, Florida, Liberty County, Florida or in any county located west
of Calhoun or Liberty County, Florida. The Employee agrees that the geographic
scope and duration of the foregoing restriction on competition is reasonable.
Employee agrees to execute and deliver such certifications and other instruments
as the Employer may reasonably request in order to show compliance with the
terms of this provision.

<PAGE> 3

7. TERMINATION.

a. Employer shall be obligated to comply with all provisions of
this Agreement and may terminate Executive only For Cause. "For Cause" shall
mean (i) any act on the part of Executive which constitutes fraud or willful
malfeasance of duty or an act of moral turpitude and is demonstrably likely to
lead to material injury to the Bank or TBC, (ii) a felony conviction of
Executive; or (iii) the suspension or removal of Executive by federal or state
banking regulatory authorities; provided, that "For Cause" shall not include
Executive's medical disability.

b. If Employer terminates Executive's employment hereunder "For
Cause" or if Executive terminates his employment hereunder Executive shall not
be entitled to any further compensation from Employer and the provisions of
Section 6 shall survive for one year following the date of such termination.

c. If Employer terminates Executive other than "For Cause", (i)
all rights and obligations specified in Section 6 shall survive any such
termination for three years following the date of such termination and, (ii)
Executive shall continue to receive the compensation provided for in Section 4
for three years following the date of such termination.

d. The provisions of Section 5 shall survive regardless of any
termination of Executive's employment hereunder, whether voluntary or
involuntary.

8. NOTICE. For the purposes of this Agreement, notices and
demands shall be deemed given when mailed by United States mail, addressed in
the case of the Bank to C&L Bank of Bristol, Post Office Box 550, Bristol,
Florida 32321, Attention: Chief Executive Officer with a copy to The Banc
Corporation, 17 North 20th Street, Birmingham, Alabama 35203, Attention: James
A. Taylor; or in the case of the Executive to Post Office Box 552, Bristol,
Florida 32321.

9. MISCELLANEOUS. No provision of this Agreement may be modified,
waived or discharged unless such modification, waiver or discharge is agreed to
in writing. The validity, interpretation, construction and performance of this
Agreement shall be governed by the laws of the State of Alabama. This Agreement
supersedes and cancels any prior employment agreement or understanding entered
into between Executive and the Company, the Bank or TBC.

10. VALIDITY. The invalidity of any provision or provisions of
this Agreement shall not affect any other provision of this Agreement, which
shall remain in full force and effect, nor shall the invalidity of a portion of
any provision of this Agreement affect the balance of such provision.

11. PARTIES. This Agreement shall be binding upon and shall inure
to the benefit of any successors or assigns to the the Bank or TBC. Executive
may not assign any of his rights or delegate any of his duties or obligations
under this Agreement or any portion hereof.

<PAGE> 4

IN WITNESS WHEREOF, this Agreement has been duly executed and delivered
by Executive and by a duly authorized officer of the Bank and TBC as of the date
first above written.

Witnesses:

- ----------------------------------- -----------------------------------
Jed M. Hiers

Attest: C&L BANK OF BRISTOL

By: By:
-------------------------------- --------------------------------
Its: Secretary
Its:
-------------------------------

[Corporate Seal]

Attest: THE BANC CORPORATION

By: By:
-------------------------------- --------------------------------
Its: Secretary
Its:
-------------------------------

[Corporate Seal]

<PAGE> 1
EXHIBIT (23) - 1

Consent of Independent Auditors

We consent to the reference to our firm under the caption "Experts" in the
Registration Statement (Form S-4 No. 333-00000) and related Prospectus of
The Banc Corporation for the registration of 2,164,921 shares of its common
stock and to the use of our report dated March 31, 1999, with respect to the
supplemental consolidated financial statements of The Banc Corporation included
herein.

/s/ Ernst & Young LLP

Birmingham, Alabama
April 27, 1999

<PAGE> 1
EXHIBIT (23)-2

CONSENT OF INDEPENDENT AUDITORS

We consent to the reference to our firm and to the use of our report dated
March 19, 1999 with respect to the consolidated financial statements of Emerald
Coast Bancshares, Inc. and Subsidiary included in the Form S-4 of The Banc
Corporation.

/s/ Saltmarsh, Cleveland & Gund

Pensacola, Florida
April 30, 1999

<PAGE> 1
EXHIBIT (23)-3

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of The Banc Corporation on
Form S-4 of our reports relating to C & L Banking Corporation and Subsidiary
dated March 3, 1999 and March 31, 1999, and to the reference to us under the
heading "EXPERTS" in the proxy statement-prospectus that constitutes part of
this Registration Statement.

/s/ Williams, Cox, Weidner and Cox
Williams, Cox, Weidner and Cox

April 8, 1999

<PAGE> 1
EXHIBIT (23)-4

INDEPENDENT AUDITORS' CONSENT

We consent to the use in this Registration Statement of The Banc Corporation on
Form S-4 of our reports relating to C & L Bank of Blountstown dated March 3,
1999 and March 31, 1999, and to the reference to us under the heading "EXPERTS"
in the proxy statement-prospectus that constitutes part of this Registration
Statement.

/s/ Williams, Cox, Weidner and Cox
Williams, Cox, Weidner and Cox

April 8, 1999

<PAGE> 1
EXHIBIT (23)-7

CONSENT

The undersigned hereby consents to the reference to such person in the
Registration Statement on Form S-4 filed by The Banc Corporation on __________,
1999 (the "Registration Statement") as a person being a director of The Banc
Corporation.

/s/ Jerry M. Smith
- ------------------------------
Jerry M. Smith

April 19, 1999

<PAGE> 1

CONSENT OF ALEX SHESHUNOFF & CO. INVESTMENT BANKING

We hereby consent to the incorporation by reference in the Registration
Statement on Form S-4 of The Banc Corporation of our updated opinions, dated
April 20, 1999 with respect to the mergers and share exchange of The Banc
Corporation, C&L Banking Corporation, C&L Bank of Bristol and C&L Bank of
Blountstown, and to our firm, respectively, included in the Registration
Statement No. 333-______ of The Banc Corporation and to the inclusion of such
opinions as annexes to the Registration Statement. By giving such consent, we do
not thereby admit that we come within the category of persons whose consent is
required under Section 7 of the Securities Act of 1933 or the rules and
regulations of the Securities and Exchange Commission thereunder.

ALEX SHESHUNOFF & CO.
INVESTMENT BANKING

By: /s/ James E. Mayer
-------------------

AUSTIN, TX
April 30, 1999

<PAGE> 1

SOLICITED BY THE EXHIBIT (99)-1
BOARD OF DIRECTORS

PROXY

C&L BANKING CORPORATION

The undersigned hereby constitutes and appoints and ,
or either of them, as proxies, each with full power of substitution, to vote the
number of shares of common stock of C&L Banking Corporation ("C&L") which the
undersigned would be entitled to vote if personally present at the special
meeting of stockholders to be held at C&L Bank of Bristol, Highway 20 and Baker
Street, Bristol, Florida 32321, a.m., local time, on , 1999, and at
any adjournment or postponement thereof upon the proposal described in the
Prospectus-Joint Proxy Statement and the notice of special meeting of
stockholders, both dated , 1999, as follows:

Proposal to approve and adopt the Plan and Agreement of Merger, dated as of
February 25, 1999, by and between C&L and The Banc Corporation, a Delaware
corporation (the "Corporation"), pursuant to which C&L will merge with the
Corporation and the holders of C&L common stock will receive Corporation common
stock, all as more fully described in the Prospectus-Joint Proxy Statement.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL STATED ABOVE.

Please sign exactly as name appears on the related envelope. When shares are
held jointly, both should sign. When signing as attorney, executor,
administrator, trustee or guardian, please give full title as such. If a
corporation, please sign in full corporate name by president or other authorized
officer. If a partnership, please sign in partnership name by authorized person.

Dated: ---------------- , 1999

----------------------------------
Signature

----------------------------------
Signature if held jointly

This Proxy is solicited by the Board of Directors of C&L and may be revoked
prior to its exercise.

<PAGE> 1

SOLICITED BY THE EXHIBIT (99)-2
BOARD OF DIRECTORS

PROXY

C&L BANK OF BRISTOL

The undersigned hereby constitutes and appoints and ,
or either of them, as proxies, each with full power of substitution, to vote the
number of shares of common stock of C&L Bank of Bristol ("Bank of Bristol")
which the undersigned would be entitled to vote if personally present at the
special meeting of stockholders to be held at Bank of Bristol, Highway 20 and
Baker Street, Bristol, Florida 32321, a.m., local time, on , 1999,
and at any adjournment or postponement thereof upon the proposal described in
the Prospectus-Joint Proxy Statement and the notice of special meeting of
stockholders, both dated , 1999, as follows:

Proposal to approve and adopt the Share Exchange Agreement, dated as of
February 25, 1999, by and among Bank of Bristol, C&L Banking Corporation,
Bristol Acquisition Corporation, a Florida corporation and subsidiary of The
Banc Corporation, a Delaware corporation (the "Corporation"), and the
Corporation pursuant to which the holders of Bank of Bristol common stock will
receive Corporation common stock, all as more fully described in the
Prospectus-Joint Proxy Statement.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL STATED ABOVE.

Dated: ---------------- , 1999

----------------------------------
Signature

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Signature if held jointly

This Proxy is solicited by the Board of Directors of Bank of Bristol and may be
revoked prior to its exercise.

<PAGE> 1

SOLICITED BY THE EXHIBIT (99)-3
BOARD OF DIRECTORS

PROXY

C&L BANKING OF BLOUNTSTOWN

The undersigned hereby constitutes and appoints and ,
or either of them, as proxies, each with full power of substitution, to vote the
number of shares of common stock of C&L Bank of Blountstown ("Bank of
Blountstown") which the undersigned would be entitled to vote if personally
present at the special meeting of stockholders to be held at W.T. Neal Civic
Center, Highway 71 North, Blountstown, Florida 32424, a.m., local time, on
, 1999, and at any adjournment or postponement thereof upon the proposal
described in the Prospectus-Joint Proxy Statement and the notice of special
meeting of stockholders, both dated , 1999, as follows:

Proposal to approve and adopt the Share Exchange Agreement, dated as of
February 25, 1999, by and among Bank of Blountstown, a Florida banking
corporation, C&L Banking Corporation, C&L Bank of Bristol, a Florida banking,
and The Banc Corporation, a Delaware corporation (the "Corporation"), pursuant
to which Bank of Blountstown will merge with the Bank of Bristol and the holders
of Bank of Blountstown common stock will receive Corporation common stock, and
as more fully described in the Prospectus-Joint Proxy Statement.

FOR [ ] AGAINST [ ] ABSTAIN [ ]

THIS PROXY, WHEN PROPERLY EXECUTED, WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE UNDERSIGNED STOCKHOLDER. IF NO DIRECTION IS MADE, THIS PROXY WILL BE
VOTED FOR THE PROPOSAL STATED ABOVE.

Dated: ---------------- , 1999

----------------------------------
Signature

----------------------------------
Signature if held jointly

This Proxy is solicited by the Board of Directors of Bank of Blountstown and may
be revoked prior to its exercise.