ONE VALLEY BANCORP OF WEST VIRGINIA INC, 10-K, 1995-03-29

ONE VALLEY BANCORP OF WEST VIRGINIA INC
10-K, 1995-03-29
STATE COMMERCIAL BANKS

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SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549

FORM 10-K

[check mark] ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [FEE REQUIRED]
For the fiscal year ended DECEMBER 31, 1994
OR

[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934 [NO FEE REQUIRED]
For the transition period from to .

Commission file number 0-10042

One Valley Bancorp of West Virginia, Inc.
(Exact name of registrant as specified in its charter)

West Virginia 55-0609408
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)

One Valley Square,
Summers and Lee Streets,
P.O. Box 1793
Charleston, West Virginia 25326
(Address of principal executive offices) (Zip Code)

Registrant's telephone number, including area code (304) 348-7000

SECURITIES REGISTERED PURSUANT TO SECTION 12(b) OF THE ACT:

Title of each class Name of each exchange on which registered

None None

SECURITIES REGISTERED PURSUANT TO SECTION 12(g) OF THE ACT:

Common Stock ($10.00 par value)
(Title of Class)

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Sections 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months, and (2) has been
subject to such filing requirements for the past 90 days. Yes (Check Mark) No

Indicate by check mark if disclosure of delinquent filers
pursuant to Item 405 of Regulation S-K is not contained herein, and will
not be contained, to the best of registrant's knowledge, in definitive
proxy or information statements incorporated by reference in Part III of
this Form 10-K or any amendment to this Form 10-K. [ ]

124 Total Pages Continued...
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State the aggregate market value of the voting stock held by
non-affiliates of the registrant. The aggregate market value shall be
computed by reference to the price at which the stock was sold, or the
average bid and asked prices of such stock, as of a specified date
within 60 days prior to the date of filing:

Aggregate of market value of voting stock Based upon reported closing price on

$365,570,407 March 7, 1995

Indicate the number of shares outstanding of each of the
registrant's classes of common stock as of the latest practicable date.

Class Outstanding at March 7, 1995

Common Stock ($10.00 par value) 17,004,868

DOCUMENTS INCORPORATED BY REFERENCE

The following lists the documents which are incorporated by
reference in the Form 10-K Annual Report, and the Parts and Items of the
Form 10-K into which the documents are incorporated.

Document Part of the Form 10-K into which the
Document is Incorporated

Portions of One Valley Bancorp of West Part I, Item 1; Part II, Items 5, 6, 7
Virginia, Inc., 1994 Annual Report to and 8; Part III, Item 13; and Part
Shareholders for the year ended IV, Item 14
December 31, 1994

Portions of One Valley Bancorp of West Part III, Items 10, 11, 12 and 13
Virginia, Inc., Proxy Statement for the
1995 Annual Meeting of Shareholders

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One Valley Bancorp of West Virginia, Inc.
Form 10-K

INDEX

Page

Part I
Item 1. Business ......................................... 4
Item 2. Properties ...................................... 15
Item 3. Legal Proceedings ................................ 16
Item 4. Submission of Matters to a Vote of Security Holders 16
Item 4A. Executive Officers of the Registrant ............. 16

Part II
Item 5. Market for the Registrant's Common Equity and
Related Stockholder Matters .................... 19
Item 6. Selected Financial Data .......................... 19
Item 7. Management's Discussion and Analysis of Financial
Condition and Results of Operations ............ 19
Item 8. Financial Statements and Supplementary Data ..... 19
Item 9. Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure ............ 20

Part III
Item 10. Directors and Executive Officers of the Registrant 21
Item 11. Executive Compensation ........................... 21
Item 12. Security Ownership of Certain Beneficial Owners and
Management ..................................... 21
Item 13. Certain Relationships and Related Transactions ... 21

Part IV
Item 14. Exhibits, Financial Statement Schedules,
and Reports on Form 8-K ........................ 22

Signatures 24

Index to Exhibits 28

3
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PART I

Item 1. Business

ONE VALLEY BANCORP OF WEST VIRGINIA, INC.

The Board of Directors of One Valley Bank, National Association,
formerly Kanawha Valley Bank, National Association ("One Valley Bank"),
caused One Valley Bancorp of West Virginia, Inc. ("One Valley"), a West
Virginia corporation, to be formed, through a corporate reorganization,
as a single bank holding company holding all of the common stock of One
Valley Bank. On September 4, 1981, the effective date of the
reorganization, the shareholders of One Valley Bank exchanged their
shares of Kanawha Valley Bank common stock for shares of One Valley
common stock, $10 par value ("One Valley Common Stock"), and became
shareholders of One Valley, and One Valley Bank became a wholly-owned
subsidiary of One Valley.

As of December 31, 1994, One Valley owned eleven operating
banking subsidiaries (the "Banking Subsidiaries") including: One Valley
Bank, National Association; One Valley Bank of Huntington, Inc.; One
Valley Bank of Mercer County, Inc.; One Valley Bank - East, National
Association; One Valley Bank of Oak Hill, Inc.; One Valley Bank of
Ronceverte, National Association; One Valley Bank of Morgantown, Inc.;
One Valley Bank of Summersville, Inc.; One Valley Bank - North, Inc.;
One Valley Bank of Clarksburg, National Association; and One Valley Bank
of Marion County, National Association. In addition, One Valley owns
100% of the outstanding stock of One Valley Square, Inc., a Texas
corporation, which owns the office building in which One Valley Bank and
One Valley are located. (All of these subsidiaries, including the
Banking Subsidiaries, are collectively referred to as the
"Subsidiaries".) One Valley's principal activities consist of owning
and supervising its Subsidiaries. At December 31, 1994, One Valley had
consolidated assets of $3,673,241,000, deposits of $2,926,479,000, and
shareholders' equity of $321,867,000.

One Valley has, from time to time, engaged in merger or
acquisition discussions with other banks and financial institutions both
within and outside of West Virginia, and it is anticipated that such
discussions will continue in the future.

RECENT DEVELOPMENTS

On September 2, 1994, One Valley announced the execution of an
Agreement and Plan of Merger to acquire Point Bancorp, Inc. ("Point").
Point owns 100% of the outstanding shares of common stock of Point
Pleasant Federal Savings Bank. The

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transaction was consummated on March 15, 1995. As of December 31, 1994
assets of Point were $57,063,000 and its deposits were $42,734,000.
Following consummation of the Point acquisition, the name of the federal
savings bank will be changed to One Valley Bank, F.S.B., and it will
continue to be operated as a federally-chartered savings bank.

HISTORY OF THE BANKING SUBSIDIARIES

One Valley Bank, the principal Banking Subsidiary of One Valley,
was incorporated in 1867 as a state bank under the laws of West
Virginia, with the name "The Kanawha Valley Bank". On February 10,
1975, Kanawha Valley Bank converted from a state bank to a national
banking association, and on September 1, 1987, adopted its present
corporate name. The other Banking Subsidiaries were incorporated or
chartered as state or national banks in the years indicated in the chart
below. In September 1987, One Valley adopted a common corporate
identity, primarily to promote a single corporate image for One Valley's
diverse banking operations.

Year in Currently
Name Which Organized Chartered As

One Valley Bank of 1911 State
Morgantown

One Valley Bank of 1906 State
Mercer County

One Valley Bank of 1904 State
Oak Hill

One Valley Bank of 1956 State
Huntington

One Valley Bank of 1900 National
Ronceverte

One Valley Bank of 1910 State
Summersville

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Year in Currently
Name Which Organized Chartered As

One Valley Bank - East 1865 National

One Valley Bank of 1903 National
Clarksburg

One Valley Bank of Marion 1939 National
County

One Valley Bank - North 1903 State

OPERATIONS OF THE BANKING SUBSIDIARIES

The Banking Subsidiaries offer all services traditionally
offered by full-service commercial banks, including commercial and
individual demand and time deposit accounts, commercial and individual
loans, credit card (MasterCard and Visa) and drive-in banking services.
In addition, One Valley Bank is active in correspondent banking
services. Trust services are offered on a statewide basis. No material
portion of any of the Banking Subsidiaries' deposits has been obtained
from a single or small group of customers, and the loss of any one
customer's deposits or a small group of customers' deposits would not
have a material adverse effect on the business of any of the Banking
Subsidiaries.

Although the market areas of several of the Banking Subsidiaries
encompass a portion of the coal fields located in southern West
Virginia, an area of the State which has been economically depressed,
the coal-related loans in the loan portfolios of the Banking
Subsidiaries constitute less than 5% of One Valley's total loans
outstanding. Ten of the 23 counties within One Valley's market areas
rank among the State's top ten counties in household income, and the
Banking Subsidiaries generally serve the stronger economic areas of the
State.

The Banking Subsidiaries also offer services to customers at
various locations within their service areas by use of automated teller
machines ("ATMs"). The ATMs allow customers to make deposits and
withdrawals at convenient locations. Customers may also borrow against
their revolving lines of credit or transfer funds between deposit
accounts at those locations. Customers of any Banking Subsidiary may
conduct transactions at any One Valley ATM and, by means of the MAC
system, a regional ATM system, through the CIRRUS ATM network, can
conduct ATM transactions nationwide. Customers of any of the Banking
Subsidiaries may
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also make deposits or withdrawals at any of One Valley's 80 statewide
main office and branch locations.

As of March 1, 1995, One Valley and its Subsidiaries had
approximately 1990 full-time equivalent employees.

LEGISLATION

The 1980s was a period of significant legislative change in West
Virginia for banks and bank holding companies. During the 1980s, West
Virginia converted from a unit banking state to permit unlimited branch
banking and the interstate acquisition of banks and bank holding
companies on a reciprocal basis. Statewide unlimited branch banking
commenced on and after January 1, 1987. Interstate banking activities
became permissible on January 1, 1988. The entry by out-of-state bank
holding companies is permitted only by the acquisition of an existing
institution which has operated for two years prior to acquisition, but
not by the chartering and acquisition of de novo banks in West Virginia
by out-of-state bank holding companies or the establishment of branch
banks across state lines (either de novo or by acquisition or merger).

West Virginia also allows reciprocal interstate acquisitions by
thrift institutions such as savings and loan holding companies, savings
and loan associations, savings banks, and building and loan
associations.

Under the Financial Institutions Reform, Recovery, and
Enforcement Act of 1989 ("FIRREA") One Valley is subject to provisions
which among other things create a so-called "cross guarantee" liability
on the part of insured depository institutions which are "commonly
controlled." This liability permits the Federal Deposit Insurance
Corporation ("FDIC"), as receiver of a failed insured depository
institution, to assert claims against other commonly controlled insured
depository institutions for losses suffered or reasonably anticipated to
be suffered by the FDIC with respect to such failed depository
institution.

In 1994, Congress passed the Riegle-Neal Interstate Banking and
Branching Efficiency Act. Under this Act, absent action to opt out or
limit interstate branching by the West Virginia Legislature, interstate
branch banking may occur after June 1, 1997. States are permitted: (i)
to opt into interstate branch banking prior to June 1, 1997; (ii) to opt
out of interstate bank branching prior to that date; (iii) to allow only
acquisitions of branches; (iv) to opt into de novo interstate branch
banking; and (v) to allow the acquisition of a branch of a bank without
acquiring the bank itself. It is too early to determine what option(s),
if any, will be adopted by the West Virginia Legislature.
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FEDERAL DEPOSIT INSURANCE CORPORATION IMPROVEMENT ACT OF 1991

In December 1991, Congress enacted the Federal Deposit Insurance
Corporation Improvement Act of 1991 ("FDICIA"), which substantially
revised the bank regulatory and funding provisions of the Federal
Deposit Insurance Act and several other federal banking statutes.

Among other things, FDICIA requires federal bank regulatory
authorities to take "prompt corrective action" with respect to
depository institutions that do not meet minimum capital requirements.
For these purposes, FDICIA establishes five capital tiers: well
capitalized, adequately capitalized, undercapitalized, significantly
undercapitalized and critically undercapitalized.

The Office of the Comptroller of the Currency ("OCC") and the
Office of Thrift Supervision ("OTS") have adopted regulations to
implement the prompt corrective action provisions of FDICIA. Among
other things, the regulations define the relevant capital measures for
the five capital categories. An institution is deemed to be "well
capitalized" if it has a total risk-based capital ratio of 10% or
greater, Tier 1 risk-based capital ratio of 6% or greater and a Tier 1
leverage ratio of 5% or greater and is not subject to a regulatory
order, agreement or directive to meet and maintain a specific capital
level for any capital measure. An institution is deemed to be
"adequately capitalized" if it has a total risk-based capital ratio of
8% or greater, a Tier 1 risk-based capital ratio of 4% or greater and,
generally, a Tier 1 leverage ratio of 4% or greater and the institution
does not meet the definition of a "well capitalized" institution. An
institution that does not meet one or more of the "adequately
capitalized" tests is deemed to be "undercapitalized". If the
institution has a total risk-based capital ratio that is less than 6%, a
Tier 1 risk-based capital ratio that is less than 3%, or a leverage
ratio that is less than 3%, it is deemed to be "significantly
undercapitalized". Finally, an institution is deemed to be "critically
undercapitalized" if it has a ratio of tangible equity (as defined in
the regulations) to total assets that is equal to or less than 2%.

"Undercapitalized" institutions are subject to growth
limitations and are required to submit a capital restoration plan. If an
"undercapitalized" institution fails to submit an acceptable plan, it is
treated as if it is significantly undercapitalized. "Significantly
undercapitalized" institutions may be subject to a number of
requirements and restrictions, including orders to sell sufficient
voting stock to become adequately capitalized, requirements to reduce
total assets and cessation of receipt of deposits from correspondent
banks. "Critically undercapitalized" institutions may not, beginning 60
days after becoming "critically undercapitalized" make any payment of
principal or interest on their subordinated debt. In addition,
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"critically undercapitalized" institutions are subject to appointment of
a receiver or conservator.

Under FDICIA, a depository institution that is not "well
capitalized" is generally prohibited from accepting brokered deposits
and offering interest rates on deposits higher than the prevailing rate
in its market.

Each of One Valley's Banking Subsidiaries currently meet the
FDIC's definition of a "well capitalized" institution for purposes of
accepting brokered deposits. For the purposes of the brokered deposit
rules, a bank is defined to be "well capitalized" if it maintains a
ratio of Tier 1 capital to risk-adjusted assets of at least 6%, a ratio
of total capital to risk-adjusted assets of at least 10% and a Tier 1
leverage ratio of at least 5% and is not otherwise in a "troubled
condition" as specified by its appropriate federal regulatory agency.

FDICIA directed that each federal banking agency prescribe
standards for depository institutions and depository institution holding
companies relating to internal controls, information systems, internal
audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth, compensation, a maximum ratio of classified
assets to capital, minimum earnings sufficient to absorb losses, a
minimum ratio of market value to book value for publicly-traded shares
and such other standards as the agency deems appropriate. In December,
1993, the FDIC adopted final rules to implement these provisions of
FDICIA. The rules set forth general standards to be observed, but in
most instances do not specify operating or managerial procedures to be
followed. The Board of Governors of the Federal Reserve System ("Board
of Governors") and the OCC are in the process of issuing rules
implementing various aspects of FDICIA. At this time, One Valley
believes that the rules will not have a material adverse effect on its
operations.

FDICIA also implemented a variety of other provisions that
affected the operations of One Valley's Banking Subsidiaries, including
additional reporting requirements, revised regulatory standards for real
estate lending, "truth in savings" provisions and the requirement that a
depository institution give 90 days' prior notice to customers and
regulatory authorities before closing any branch.

COMPETITION

Vigorous competition exists in all areas where One Valley and
the Banking Subsidiaries are engaged in business. The primary market
areas served by the Banking Subsidiaries are generally defined as West
Virginia and certain adjoining areas in Kentucky, Maryland, Ohio,
Pennsylvania and Virginia.
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For most of the services which the Banking Subsidiaries perform,
they compete with commercial banks as well as other financial
institutions. For instance, savings banks, savings and loan
associations, credit unions, stock brokers, and issuers of commercial
paper and money market funds actively compete for funds and for various
types of loans. In addition, insurance companies, investment counseling
firms and other business firms and individuals offer personal and
corporate trust and investment counseling services. The opening of
branch banks within One Valley's market areas has increased competition
for the Banking Subsidiaries. Although the bank legislation has provided
an opportunity for One Valley to acquire banking subsidiaries in other
attractive banking areas of the State, it has increased competition for
One Valley in its market areas, and, with reciprocal interstate banking,
One Valley faces additional competition in efforts to acquire other
subsidiaries throughout West Virginia and in neighboring states. The
Riegle- Neal Interstate Banking and Branching Efficiency Act will also
increase competition among banks. With its acquisition of Point, One
Valley gained the ability to engage in interstate branching on a
nationwide basis through that subsidiary.

Until 1993, the various banks and bank-holding companies
operating in West Virginia were predominantly owned by shareholders in
West Virginia and were financed by operations arising principally in
West Virginia. During 1993, Banc One Corp., one of the largest bank
holding companies in the United States, consummated its acquisition of
Key Centurion Bancshares Inc., and Huntington Bankshares Incorporated
consummated its acquisitions of Commerce Banc Corporation and CB&T
Financial Corp. It is anticipated that other large out-of-state banks
will, over time, expand their operations into West Virginia. While One
Valley believes that it can compete effectively with out-of-state banks,
One Valley will face larger competitors which have access to increased
capital resources and which have relatively sophisticated bank holding
companies and marketing structures in place.

As of December 31, 1994, there were 16 multi-bank holding
companies and 33 one-bank holding companies in the State of West
Virginia registered with the Federal Reserve System and the West
Virginia Board of Banking and Financial Institutions ("Board of
Banking"). These holding companies are headquartered in various West
Virginia cities and control banks throughout the State of West Virginia,
including banks which compete with the Banking Subsidiaries in their
market areas. One Valley has actively competed with some of these bank
holding companies to acquire its Banking Subsidiaries.

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SUPERVISION AND REGULATION

One Valley is a bank holding company within the provisions of
the Bank Holding Company Act of 1956, is registered as such, and is
subject to supervision by the Board of Governors. The Bank Holding
Company Act requires One Valley to secure the prior approval of the
Board of Governors before One Valley acquires ownership or control of
more than five percent (5%) of the voting shares or substantially all of
the assets of any institution, including another bank.

As a bank holding company, One Valley is required to file with
the Board of Governors an annual report and such additional information
as the Board of Governors may require pursuant to the Bank Holding
Company Act. The Board of Governors may also make examinations of One
Valley and of the Banking Subsidiaries. Furthermore, under Section 106
of the 1970 Amendments to the Bank Holding Company Act and the
regulations of the Board of Governors, a bank holding company and its
subsidiaries are prohibited from engaging in certain tie-in arrangements
in connection with any extension of credit or any provision of credit,
sale or lease of property or furnishing of services. In addition, the
Banking Subsidiaries are subject to certain restrictions under federal
law that limit the transfer of funds by the Banking Subsidiaries to One
Valley and its nonbanking subsidiaries, whether in the form of loans,
other extensions of credit, investments or asset purchases. Such
transfers by any Banking Subsidiaries to One Valley or any nonbanking
subsidiary are limited in amount to 10% of such Banking Subsidiary's
capital and surplus and, with respect to One Valley and all nonbanking
subsidiaries, to an aggregate of 20% of such Banking Subsidiary's
capital and surplus. Furthermore, such loans and extensions of credit
are required to be secured in specified amounts and must be fully
collateralized.

One Valley is required to register annually with the
Commissioner of Banking of West Virginia ("Commissioner") and to pay a
registration fee to the Commissioner based on the total amount of bank
deposits in banks with respect to which One Valley is a bank holding
company. Although legislation allows the Commissioner to prescribe the
registration fee, it limits the fee to ten dollars per million dollars
of deposits rounded off to the nearest million dollars. One Valley is
also subject to regulation and supervision by the Commissioner.

One Valley is required to secure the approval of the West
Virginia Board of Banking before acquiring ownership or control of more
than five percent of the voting shares or substantially all of the
assets of any institution, including another bank. West Virginia
banking law prohibits any West Virginia or non-West Virginia bank or
bank holding company from acquiring shares of a bank if the acquisition
would cause the combined deposits of all banks in the State of West
Virginia, with respect to which it is a bank holding company, to exceed
20% of the total deposits of
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all depository institutions in the State of West Virginia. The total
deposits of the Banking Subsidiaries were approximately 15% of the total
deposits in the State of West Virginia.

BANKING SUBSIDIARIES

The Banking Subsidiaries are subject to FDIC deposit insurance
assessments. The FDIC set an assessment rate for the Bank Insurance Fund
("BIF") of 0.23% which became effective on July 1, 1991. It has
recently been proposed by the FDIC that the BIF assessment rate should
be substantially decreased, however it is uncertain whether that
proposal will utimately be adopted. It is also possible, but less
likely, that BIF insurance assessments will be increased. A large
special assessment or substantial increase in the assesment rate could
have an adverse impact on One Valley's results of operations.

The operations of the Banking Subsidiaries are subject to
federal and state statutes, which apply to national and state banks.
The operations of the Banking Subsidiaries may also be subject to
regulations of the OCC, the Board of Governors, the Board of Banking and
the FDIC. Following the acquisition of Point Bancorp, Inc., the
operations of the federal savings bank will continue to be subject to
regulation by the Office of Thrift Supervision and its deposits will be
insured by the Savings Association Insurance Fund ("SAIF"). It is
anticipated the SAIF insurance assessment will remain at 0.23%.

The primary supervisory authority of One Valley's national
Banking Subsidiaries is the OCC while the primary supervisory authority
of its state chartered Banking Subsidiaries is the Commissioner. These
two authorities regularly examine such areas as reserves, loans,
investments, management practices and other aspects of the operations of
the Banking Subsidiaries.

One Valley's nationally chartered Banking Subsidiaries are
chartered under the laws of the United States and, as such, are member
banks of the Federal Reserve System. Its state chartered Banking
Subsidiaries are non-member banks of the Federal Reserve except for One
Valley Bank of Summersville, which is a member bank.

The regulation and examination of One Valley and its Banking
Subsidiaries are designed primarily for the protection of depositors and
not One Valley or its shareholders.

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CAPITAL REQUIREMENTS

The Board of Governors has issued risk-based capital guidelines for bank
holding companies, including One Valley. The guidelines establish a
systematic analytical framework that makes regulatory capital
requirements more sensitive to differences in risk profiles among
banking organizations, takes off-balance sheet exposures into explicit
account in assessing capital adequacy, and minimizes disincentives to
holding liquid, low-risk assets. Under the guidelines and related
policies, bank holding companies must maintain capital sufficient to
meet both a risk-based asset ratio test and leverage ratio test on a
consolidated basis. The risk- based ratio is determined by allocating
assets and specified off-balance sheet commitments into four weighted
categories, with higher levels of capital being required for categories
perceived as representing greater risk. The leverage ratio is determined
by relating core capital (as described below) to total assets adjusted
as specified in the guidelines. All of One Valley's Banking
Subsidiaries are subject to substantially similar capital requirements
adopted by applicable regulatory agencies.

Generally, under the applicable guidelines, the financial institution's
capital is divided into two tiers. "Tier 1", or core capital, includes
common equity, noncumulative perpetual preferred stock (excluding
auction rate issues) and minority interests in equity accounts or
consolidated subsidiaries, less goodwill and certain other intangible
assets. Bank holding companies, however, may include cumulative
perpetual preferred stock in their Tier 1 capital, up to a limit of 25%
of such Tier 1 capital. "Tier 2", or supplementary capital, includes,
among other things, cumulative and limited-life preferred stock, hybrid
capital instruments, mandatory convertible securities, qualifying
subordinated debt, and the allowance for loan losses, subject to certain
limitations, less required deductions. "Total capital" is the sum of
Tier 1 and Tier 2 capital.

Financial institutions are required to maintain a risk-based ratio of
8%, of which 4% must be Tier 1 capital. The appropriate regulatory
authority may set higher capital requirements when an institution's
particular circumstances warrant.

Financial institutions that meet certain specified criteria, including
excellent asset quality, high liquidity, low interest rate exposure and
the highest regulatory rating, are required to maintain a minimum
leverage ratio of 3%. Financial institutions not meeting these criteria
are required to maintain a leverage ratio which exceeds 3% by a cushion
of at least 100 to 200 basis points.

The guidelines also provide that financial institutions 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. Furthermore,
the Board of Governors' guidelines indicate that
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the Board of Governors will continue to consider a "tangible Tier 1
leverage ratio" in evaluating proposals for expansion or new activities.
The tangible Tier 1 leverage ratio is the ratio of an institution's Tier
1 capital, less all intangibles, to total assets, less all intangibles.

Failure to meet applicable capital guidelines could subject the
financial institution to a variety of enforcement remedies available to
the federal regulatory authorities, including limitations on the ability
to pay dividends, the issuance by the regulatory authority of a capital
directive to increase capital and the termination of deposit insurance
by the FDIC, as well as to the measures described under FDICIA as
applicable to undercapitalized institutions.

As of December 31, 1994, the Tier 1 risk-based ratio, total risk-based
ratio and total assets leverage ratio for One Valley were as follows:

Regulatory
Requirement One Valley
Tier 1 Risk-Based Ratio 4.00% 14.21%
Total Risk-Based Ratio 8.00% 15.46%
Total Assets Leverage Ratio 3.00% 8.80%

As of December 31, 1994 all of One Valley's Banking Subsidiaries had
capital in excess of all applicable requirements.

The Board of Governors, as well as the FDIC, the OCC and the OTS, have
adopted changes to their risk-based and leverage ratio requirements that
require that all intangible assets, with certain exceptions, be deducted
from Tier 1 capital. Under the Board of Governors' rules, the only types
of intangible assets that may be included in (i.e., not deducted from) a
bank holding company's capital are readily marketable purchased mortgage
servicing rights ("PMSRs") and purchased credit card relationships
("PCCRs"), provided that, in the aggregate, that total amount of PMSRs
and PCCRs included in capital does not exceed 50% of Tier 1 capital.
PCCRs are subject to a separate sublimate of 25% of Tier 1 capital. The
amount of PMSRs and PCCRs that a bank holding company may include in its
capital is limited to the lesser of (i) 90% of such assets' fair market
value (as determined under the guidelines), or (ii) 100% of such assets'
book value, each determined quarterly. Identifiable intangible assets
(i.e., intangible assets other than goodwill) other than PMSRs and
PCCRs, including core deposit intangibles, acquired on or before
February 19, 1992 (the date the Board of Governors issued its original
proposal for public comment), generally will not be deducted from
capital for supervisory purposes, although they will continue to be
deducted for purposes of evaluating applications filed by bank holding
companies.
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GOVERNMENTAL POLICIES

In addition to the effect of general economic conditions, the
earnings and future business activities of the Banking Subsidiaries,
both members and non- members of the Federal Reserve, are affected by
the fiscal and monetary policies of the federal government and its
agencies, particularly the Board of Governors. The Board of Governors
regulates the national money supply in order to mitigate recessionary
and inflationary pressures. The techniques used by the Board of
Governors include setting the reserve requirements of member banks,
establishing the discount rate on member bank borrowings and conducting
open market operations in United States government securities to
exercise control over the supply of money and credit.

The policies of the Board of Governors have a direct and
indirect effect on the amount of bank loans and deposits, and the
interest rates charged and paid thereon. While the impact of current
economic problems and the policies of the Board of Governors and other
regulatory authorities designed to deal with these economic problems
upon the future business and earnings of the Banking Subsidiaries cannot
be accurately predicted, those policies can materially affect the
revenues and income of the Banking Subsidiaries.

STATISTICAL DISCLOSURE BY BANK HOLDING COMPANIES

Statistical disclosures required by bank holding companies are
included in "Management's Discussion and Analysis of Financial Condition
and Results of Operations" set forth on pages six through 22 of One
Valley's 1994 Annual Report to Shareholders for the fiscal year ended
December 31, 1994. That information is incorporated herein by
reference.

Item 2. Properties

ONE VALLEY AND ONE VALLEY BANK

One Valley Bank owns the site of One Valley Bank's current
banking quarters, One Valley Square in the City of Charleston, West
Virginia. This property is leased by One Valley Bank to One Valley
Square, Inc. One Valley Square, Inc., constructed a fifteen story (plus
basement) office building on the site, and One Valley Bank leases a
portion of the basement and seven floors of One Valley Square for its
operations, consisting of approximately 130,000 square feet. In
addition, One Valley Bank subleases a portion of the seventh floor to
others. One Valley also conducts its operations from the space leased
by One Valley Bank in One Valley Square. The remaining space is leased
to non-affiliated tenants. Upon expiration of the land

<PAGE>

lease, all improvements will revert to the owner of the land. One
Valley Bank also conducts operations at its operations center, also
located in Charleston, and at 21 branch locations throughout Kanawha,
Putnam, Jackson, and Wood Counties.

OTHER AFFILIATE BANKS

The properties owned or leased by the other Banking Subsidiaries
consist generally of 11 main bank offices, related drive-in facilities,
47 branch offices and such other properties as are necessary to house
related support activities of those banks. All of the properties of the
Banking Subsidiaries are suitable and adequate for their current
operations and are generally being fully utilized.

Item 3. Legal Proceedings

Various legal proceedings are presently pending to which the
Banking Subsidiaries are parties; however, these proceedings are
ordinary routine litigation incidental to the business of the Banking
Subsidiaries. There are no material legal proceedings pending or
threatened against One Valley or its Subsidiaries.

Item 4. Submission of Matters to a Vote of Security Holders

None

Item 4A. Executive Officers of the Registrant

The executive officers of One Valley are:

Name Age Banking Experience and Qualifications

Robert F. Baronner 68 1991 to Present, Chairman of the Board,
One Valley. 1971 to 1991, One Valley
Bank. Previously, President and Chief
Executive Officer, One Valley.

16
<PAGE>

J. Holmes Morrison 54 1967 to present, One Valley Bank. Vice
President and Trust Officer, 1970; Senior
Vice President and Senior Trust Officer,
1978; Executive Vice President, 1982;
President and Chief Operating Officer,
1985; President and Chief Executive
Officer, 1988; Chairman of the Board,
1991. Vice President, One Valley, 1982;
Senior Vice President, One Valley, 1984;
Executive Vice President, One Valley,
1990; President and Chief Executive
Officer, One Valley, 1991.

Phyllis H. Arnold 46 1973-1979, One Valley Bank. Credit
Officer, 1974-1977; Vice President, 1977-
1979. West Virginia State Banking
Commissioner, 1979-1983. Executive
Vice President, One Valley Bank, 1988;
President and Chief Executive Officer,
One Valley Bank, 1991; Executive Vice
President, One Valley, 1994.

Frederick H. Belden, Jr. 56 1968 to present, One Valley Bank. Senior
Vice President and Senior Trust Officer,
1982; Executive Vice President, 1986.
Executive Vice President, One Valley,
1994.

James L. Whytsell 55 1959 to present, One Valley Bank. Senior
Vice President, 1977; Executive Vice
President, 1986. Senior Vice President,
One Valley, 1986. Data Processing.

Laurance G. Jones 48 1969 to present, One Valley Bank.
Controller, 1971; Vice President,
Controller and Treasurer, 1979; Senior
Vice President, 1980; Executive Vice
President, 1992. Treasurer, One
Valley, 1981; Treasurer and Chief
Financial Officer, One Valley, 1984;
Executive Vice President, One Valley,
1994. Finance and Accounting.

17
<PAGE>

Brent D. Robinson 47 1978 to 1994, Mountaineer Bankshares,
Inc. and its predecessors. Executive Vice
President, One Valley, 1994.

James A. Winter 42 1975 to present, One Valley Bank. Vice
President, Controller and Assistant
Treasurer, 1982. Senior Vice President,
1991; Vice President and Chief
Accounting Officer, One Valley, 1989.

18
<PAGE>

PART II

Item 5. Market for the Registrant's Common Equity and Related
Stockholder Matters

During 1994, One Valley Common Stock was traded over the counter
by Merrill Lynch, Pierce, Fenner & Smith, Inc.; Keefe, Bruyette & Woods,
Inc.; Robinson-Humphrey Co. Inc.; Legg, Mason, Wood, Walker, Inc.; Wheat
First Securities, Inc.; Rothschild, Inc.; Herzog, Heine, Geduld, Inc.;
Mayer & Schweitzer, Inc.; McDonald & Company Sec., Inc.; and Sandler
O'Neill & Partners. At March 7, 1995, the total number of holders of
One Valley Common Stock was approximately 8,400, including shareholders
of record and shares held in nominee name. The information set forth in
paragraphs number two and three in the subsection captioned "Balance
Sheet Analysis-Capital Resources" on page 18 of One Valley's 1994 Annual
Report to Shareholders is incorporated herein by reference.

Notes M and Q of Notes to the Consolidated Financial Statements
appearing at pages 38 and 40 of One Valley's 1994 Annual Report to
Shareholders are incorporated herein by reference. Table 1 "Six-Year
Selected Financial Summary" on page six of One Valley's 1994 Annual
Report to Shareholders is incorporated herein by reference.

Item 6. Selected Financial Data

Table 1 "Six-Year Selected Financial Summary" on page six of One
Valley's 1994 Annual Report to Shareholders is incorporated herein by
reference.

Item 7. Management's Discussion and Analysis of Financial Condition
and Results of Operations

The information contained on pages six through 22 of One
Valley's 1994 Annual Report to Shareholders is incorporated herein by
reference.

Item 8. Financial Statements and Supplementary Data

The information contained on pages 23 through 40 of One Valley's
1994 Annual Report to Shareholders is incorporated herein by reference.
See Item 14 for additional information regarding the financial
statements. The report of Crowe, Chizek and Company, independent
auditors of Mountaineer Bankshares of W.Va., Inc., and subsidiaries, for
the years ended December 31, 1993 and 1992, is included as Exhibit 99.2
and incorporated herein by reference.
19
<PAGE>

Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure

None.

20
<PAGE>

PART III

Item 10. Directors and Executive Officers of the Registrant

The information set forth in the sections captioned "Election of
Directors", "Management Nominees to the Board of One Valley", "Directors
Continuing to Serve Unexpired Terms," and "Compliance with Section 16(a)
of the Securities Exchange Act of 1934" on pages two through six and
page 19 of One Valley's definitive Proxy Statement dated March 20, 1995,
is incorporated herein by reference. Reference is also made to the
information concerning One Valley's executive officers provided in Part
I, Item 4A, of this report.

Item 11. Executive Compensation

The information set forth in the sections captioned "Executive
Compensation", "Change of Control Agreements", and "Compensation of
Directors" on pages 12 through 15 and page 19 of One Valley's definitive
Proxy Statement dated March 20, 1995, is incorporated herein by
reference.

Item 12. Security Ownership of Certain Beneficial Owners and Management.

The information set forth in the sections captioned "Principal
Holders of Voting Securities" and "Ownership of Securities by Directors,
Nominees and Officers" on pages eight through 11 of One Valley's
definitive Proxy Statement dated March 20, 1995, is incorporated herein
by reference.

Item 13. Certain Relationships and Related Transactions

The information set forth in the sections captioned "Certain
Transactions with Directors and Officers and Their Associates" and
"Compensation Committee Interlocks and Insider Participation" on page 19
of One Valley's definitive Proxy Statement dated March 20, 1995, and
Note E of the Notes to the Consolidated Financial Statements appearing
at page 32 of One Valley's 1994 Annual Report to Shareholders is
incorporated herein by reference.

21
<PAGE>

PART IV

Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K

1994 Annual Report
to Shareholders
Index Page(s)

(a) 1. Financial Statements

Consolidated Financial Statements
of One Valley Bancorp of West Virginia,
Inc. incorporated by reference in Part II,
Item 8 of this report.

Report of Independent Auditors 23

Consolidated Balance Sheets at 24
December 31, 1994 and 1993

Consolidated Statements of Income 25
for the years ended December 31,
1994, 1993 and 1992

Consolidated Statements of Share- 26
holders' Equity for the years ended
December 31, 1994, 1993 and 1992

Consolidated Statements of Cash Flows 27
for the years ended December 31, 1994,
1993 and 1992

Notes to Consolidated Financial 28-40
Statements

Report of Crowe, Chizek and Company, Exhibit 99.2
independent auditors of Mountaineer Bankshares (Form 10-K)
of W.Va., Inc., and subsidiaries, for the years ended
December 31, 1993 and 1992
22
<PAGE>

(a) 2. Financial Statement Schedules

All schedules are omitted, as the required information
is inapplicable or the information is presented in the
Consolidated Financial Statements or related notes thereto.

(a) 3. Exhibits required to be Filed by Item 601 of Page(s)
Regulation S-K and Item 14(c) of Form 10-K Form 10-K

See Index to Exhibits 28

(b) Reports on Form 8-K:

None.

See Item 14(a)3 above.

(d) Financial Statement Schedules

See Item 14(a)2 above.
23
<PAGE>

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of
the Securities Exchange Act of 1934, the registrant has duly caused this
report to be signed on its behalf by the undersigned, thereunto duly
authorized.

ONE VALLEY BANCORP OF
WEST VIRGINIA, INC.

By: /s/ J. Holmes Morrison
J. Holmes Morrison,
President and
Chief Executive Officer

March 21, 1995

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below by the following persons on
behalf of the registrant and in the capacities and as of the date
indicated.

Signature Title Date

/s/ Phyllis H. Arnold Director March 22, 1995
PHYLLIS H. ARNOLD

/s/ Charles M Avampato Director March 21, 1995
CHARLES M. AVAMPATO

/s/ Robert F. Baronner Chairman of the Board March 21, 1995
ROBERT F. BARONNER

/s/ C. Michael Blair Director March 21, 1995
C. MICHAEL BLAIR

24
<PAGE>

/s/ James K. Brown Director March 21, 1995
JAMES K. BROWN

/s/ John T. Chambers Director March 21, 1995
JOHN T. CHAMBERS

/s/ Nelle Ratrie Chilton Director March 21, 1995
NELLE RATRIE CHILTON

Director March __, 1995
RAY M. EVANS, JR.

Director March __, 1995
JAMES GABRIEL

/s/ Phillip H. Goodwin Director March 21, 1995
PHILLIP H. GOODWIN

Director March __, 1995
THOMAS E. GOODWIN

Director March __, 1995
CECIL B. HIGHLAND, JR.

/s/ Laurance G. Jones Treasurer and Chief March 20, 1995
LAURANCE G. JONES Financial Officer
(Principal Financial
Officer)

/s/ Robert E. Kamm, Jr. Director March 22, 1995
ROBERT E. KAMM, JR.

/s/ David E. Lowe Director March 21, 1995
DAVID E. LOWE

25
<PAGE>

Director March __, 1995
JOHN D. LYNCH

/s/ Edward H. Maier Director March 21, 1995
EDWARD H. MAIER

/s/ J. Holmes Morrison Chief Executive Officer, March 21, 1995
J. HOLMES MORRISON Director and President

Director March __, 1995
CHARLES R. NEIGHBORGALL, III

/s/ Robert O. Orders, Sr. Director March 21, 1995
ROBERT O. ORDERS, SR.

/s/ John L. D. Payne Director March 21, 1995
JOHN L. D. PAYNE

/s/ Angus E. Peyton Director March 21, 1995
ANGUS E. PEYTON

Director March __, 1995
LACY I. RICE, JR.

/s/ Brent D. Robinson Director March 22, 1995
BRENT D. ROBINSON

Director March __, 1995
JAMES W. THOMPSON

Director March __, 1995
J. LEE VAN METRE, JR.

26
<PAGE>

Director March __, 1995
RICHARD B. WALKER

Director March __, 1995
H. BERNARD WEHRLE, III

/s/ John H. Wick, III Director March 21, 1995
JOHN H. WICK, III

/s/ Thomas D. Wilkerson Director March 21, 1995
THOMAS D. WILKERSON

/s/ James A. Winter Vice President and March 21, 1995
JAMES A. WINTER Chief Accounting
Officer (Principal
Accounting Officer)

27
<PAGE>

INDEX TO EXHIBITS

Exhibit No. Description:

(3) Articles of Incorporation and Bylaws

Exhibit 3.1 Articles of Incorporation of One Valley, filed as part of One
Valley's 1981 Annual Report on Form 10-K and incorporated
herein by reference.

Exhibit 3.2 Articles of Amendment of One Valley dated July 17, 1981,
filed as part of One Valley's 1981 Annual Report on Form 10-
K and incorporated herein by reference.

Exhibit 3.3 Articles of Amendment of One Valley dated December 3,
1982, filed as part of One Valley's 1982 Annual Report on
Form 10-K and incorporated herein by reference.

Exhibit 3.4 Articles of Amendment of One Valley dated May 6, 1986, filed
as part of One Valley's Registration Statement on Form S-4,
Registration No. 33-5737, May 15, 1986, and incorporated
herein by reference.

Exhibit 3.5 Articles of Amendment of One Valley dated May 19, 1988,
filed as part of One Valley's 1992 Annual Report on Form 10-
K and incorporated herein by reference.

Exhibit 3.6 Articles of Amendment of One Valley dated May 26, 1993,
filed as part of One Valley's Registration Statement on Form
S-4, Registration No. 33-50729, October 22, 1993, and
incorporated herein by reference.

Exhibit 3.7 Amendment to the Bylaws of One Valley dated April 26,
1994, and a complete copy of One Valley's Bylaws as
amended.
28
<PAGE>

(10) Material Contracts.

Exhibit 10.1 Indemnity Agreement between Resolution Trust
Corporation and One Valley, filed as part of One Valley's
Registration Statement on Form S-2, Registration No. 33-
43384, October 22, 1991, and incorporated herein by reference.

Executive Compensation Plans and Arrangements.

Exhibit 10.2 Agreement dated as of May 7, 1985, between One Valley and
Thomas E. Goodwin, filed as part of One Valley's
Registration Statement on Form S-4, Registration No. 2-
99417, August 5, 1985, and incorporated herein by reference.

Exhibit 10.3 Form of Change of Control Agreement between One Valley
and 8 of its Executive Officers, dated as of January 1, 1987,
filed as part of One Valley's 1986 Annual Report on Form 10-K
and incorporated herein by reference.

Exhibit 10.4 One Valley Bancorp of West Virginia, Inc., 1983 Incentive
Stock Option Plan, as amended, filed as part of One Valley's
Registration Statement on Form S-8, Registration No. 33-
3570, July 2, 1990, and incorporated herein by reference.

Exhibit 10.5 One Valley Bancorp of West Virginia, Inc., 1993 Incentive
Stock Option Plan, filed as part of One Valley's Definitive
Proxy Statement, Registration No. 0-10042, and incorporated
herein by reference.

Exhibit 10.6 One Valley Bancorp of West Virginia, Inc., Management
Incentive Compensation Plan, as amended February, 1990,
filed as part of One Valley's 1992 Annual Report on Form 10-
K and incorporated herein by reference.

Exhibit 10.7 One Valley Bancorp of West Virginia, Inc., Supplemental
Benefit Plan, as amended April, 1990, filed as part of One
Valley's 1992 Annual Report on Form 10-K and incorporated
herein by reference.
29
<PAGE>

(11) Computation of Earnings Per Share -- found at page 47 herein.

(12) Statement Re Computation of Ratios -- found at page 48 herein.

(13) 1994 Annual Report to Security Holders -- found at page 49
herein.

(21) Subsidiaries of Registrant -- found at page 97 herein.

(23.1) Consent of Ernst & Young, LLP -- found at page 98 herein.

(23.2) Consent of Crowe, Chizek and Company -- found at page 99 herein.

(27) Financial Data Statement -- Edgar filing only

(99.1) Proxy Statement for the 1995 Annual Meeting of One Valley __
found at page 100 herein.

(99.2) Report of Independent Auditors - Crowe, Chizek and Company --
found at page 124 herein.

<PAGE>

Exhibit 3.7
BYLAWS

ONE VALLEY BANCORP OF WEST VIRGINIA, INC.

ARTICLE I. OFFICES

The principal offices of the Corporation shall be located in the
City of Charleston, County of Kanawha, State of West Virginia. The
Corporation may have such other offices, either within or without the
State of West Virginia, as the Board of Directors may designate or as
the business of the Corporation may require from time to time.

ARTICLE II. SHAREHOLDERS

Section 1. Annual Meeting. The annual meeting of the
shareholders shall be held on the fourth Tuesday in the month of April
in each year, at the hour of 12:00 noon, local time, or at such other
time on such other day within such month as shall be fixed by the Board
of Directors. If the day fixed for the annual meeting shall be a legal
holiday in the State of the principal office of the Corporation, such
meeting shall be held on the next succeeding business day. At an annual
meeting of the shareholders, 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 meeting (or any supplement thereto) given by or at the
direction of the Board of Directors, (b) otherwise properly brought
before the meeting by or at the direction of the Board of Directors, or
(c) otherwise properly brought before the meeting by a shareholder. For
business to be properly brought before an annual meeting by a
shareholder, the shareholder must have given timely notice thereof in
writing to the Secretary of the Corporation. To be timely, a
shareholder's notice must be delivered to or mailed and received at the
principal executive offices of the Corporation, not less than 40 days
prior to the meeting; provided, however, that in the event that less
than 50 days' notice or prior public disclosure of the date of the
meeting is given or made to shareholders, notice by the shareholder to
be timely must be so received not later than the close of business on
the 8th day following the day on which such notice of the date of the
annual meeting was mailed or such public disclosure was made. A
shareholder's notice to the Secretary shall set forth as to each matter
the shareholder proposes to bring before the annual meeting (a) a brief
description of the business desired to be
31
<PAGE>

brought before the annual meeting and the reasons for conducting such
business at the annual meeting, (b) the name and address, as they appear
on the Corporation's books, of the shareholder proposing such business,
(c) the class and number of shares of the Corporation which are
beneficially owned by the shareholder, and (d) any material interest of
the shareholder in such business. Notwithstanding anything in the
Bylaws to the contrary, no business shall be conducted at an annual
meeting except in accordance with the procedures set forth in this
Section 1. The Chairman of an annual meeting shall, if the facts
warrant, determine and declare to the meeting that business was not
properly brought before the meeting and in accordance with the
provisions of this Section 1, and if he should so determine, he shall so
declare to the meeting and any such business not properly brought before
the meeting shall not be transacted.

Section 2. Special Meetings. Special meetings of the
shareholders, for any purpose or purposes, may be called by the Chairman
of Board, if any, President, Secretary, or by the Board of Directors,
and shall be called by the President at the request of the holders of
not less than one-tenth of all outstanding shares of the Corporation
entitled to vote at the meeting.

Section 3. Place of Meeting. The Board of Directors may
designate any place, either within or without the State of West
Virginia, as the place of meeting for any annual meeting or for any
special meeting called by the Board of Directors. If no designation is
made, or if a special meeting be otherwise called, the place of meeting
shall be the principal office of the Corporation.

Section 4. Notice of Meeting. Written notice stating the
place, day and hour of the meeting and, the purpose or purposes for
which the meeting is called, shall be delivered not less than ten nor
more than fifty days before the date of the meeting, either personally
or by mail, by or at the direction of the Chairman of the Board,
President, Secretary or the officer of other persons calling the
meeting, to each shareholder of record entitled to vote at such meeting.
If mailed, such notice shall be deemed to be delivered when deposited in
the United States mail, addressed to the shareholder at his address as
it appears on the stock transfer books of the Corporation, with postage
thereon prepaid.

Section 5. Closing of Transfer Books or Fixing of Record Date.
For the purpose of determining shareholders entitled to notice of or
vote at any meeting of shareholders or any adjournment thereof, or
shareholders entitled to receive payment of any dividend, or in order to
make a determination of shareholders for any other proper purpose, the
Board of Directors of the Corporation may provide that the stock
transfer books shall be closed for a stated period but not to exceed, in
any case, fifty days. If the stock transfer books shall be closed for
the purpose of determining shareholders entitled to notice of or to vote
at a meeting of
32
<PAGE>

shareholders, such books shall be closed for at least ten days
immediately preceding such meeting. In lieu of closing the stock
transfer books, the Board of Directors may fix in advance a date as the
record date for any such determination of shareholders, such date in any
case to be not more than fifty days and, in case of a meeting of
shareholders, not less than ten days prior to the date on which the
particular action, requiring such determination of shareholders, is to
be taken. If the stock transfer books are not closed and no record date
is fixed for the determination of shareholders entitled to notice of or
to vote at a meeting of shareholders, or shareholders entitled to
received payment of a dividend, the date on which notice of the meeting
is mailed or the date on which the resolution of the Board of Directors
declaring such dividend is adopted, as the case may be, shall be the
record date for such determination of shareholders. When a
determination of shareholders entitled to vote at any meeting of
shareholders has been made as provided in this section, such
determination shall apply to any adjournment thereof.

Section 6. Voting Record. The officer or agent having charge
of the stock transfer books for shares of the Corporation shall make a
complete record of the shareholders entitled to vote at each meeting of
shareholders or any adjournment thereof, arranged in alphabetical order,
with the address of and the number of shares held by each. Such record
shall be produced and kept open at the time and place of the meeting and
shall be subject to the inspection of any shareholder during the whole
time of the meeting for the purposes thereof.

Section 7. Quorum. A majority of the outstanding shares of the
Corporation entitled to vote, represented in person or by proxy, shall
constitute a quorum at a meeting of shareholders. If less than a
majority of the outstanding shares are represented at a meeting, a
majority of the shares so represented may adjourn the meeting from time
to time without further notice. At such adjourned meeting at which a
quorum shall be present or represented, any business may be transacted
which might have been transacted at the meeting as originally noticed.
The shareholders present at a duly organized meeting may continue to
transact business until adjournment, notwithstanding the withdrawal of
enough shareholders to leave less than a quorum.

Section 8. Proxies. At all meetings of shareholders, a
shareholder may vote in person or by proxy executed in writing by the
shareholder or by his duly authorized attorney-in-fact. Such proxy
shall be filed with the Secretary of the Corporation before or at the
time of the meeting. No proxy shall be valid after eleven months from
the date of its execution, unless otherwise provided in the proxy.
33
<PAGE>

Section 9. Voting of Shares. Subject to the provisions of
Section 12 of this Article II, each outstanding share entitled to vote
shall be entitled to one vote upon each matter submitted to a vote at a
meeting of shareholders.

Section 10. Voting of Shares by Certain Holders. Shares
standing in the name of another corporation may be voted by such
officer, agent or proxy as the bylaws of such corporation may prescribe,
or, in the absence of such provision, as the Board of Directors of such
other corporation may determine.

Shares held by an administrator, executor, guardian, committee,
curator, or conservator may be voted by him, either in person or by
proxy, without a transfer of such shares into his name. Shares standing
in the name of a trustee may be voted by him, either in person or by
proxy, but no trustee shall be entitled to vote shares held by him
without a transfer of such shares into his name.

Shares standing in the name of a receiver may be voted by such
receiver, and shares held by or under the control of a receiver may be
voted by such receiver without the transfer thereof into his name if
authority to do so be contained in an appropriate order of the court by
which such receiver was appointed.

A shareholder whose shares are pledged shall be entitled to vote
such shares until the shares have been transferred into the name of the
pledgee, and thereafter the pledgee shall be entitled to vote the shares
so transferred.

Neither treasury shares of its own stock held by the Corporation
nor shares held by another corporation if a majority of the shares
entitled to vote for the election of directors of such other corporation
are held by the Corporation, shall be voted at any meeting or counted in
determining the total number of outstanding shares at any given time for
purposes of any meeting.

Section 11. Informal Action by Shareholders. Any action
required or permitted to be taken at a meeting of the shareholders may
be taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all of the shareholders entitled to
vote with respect to the subject matter thereof.

Section 12. Cumulative Voting. At each election for directors
every shareholder entitled to vote at such election shall have the right
to vote, in person or by proxy, the number of shares owned by him for as
many persons as there are directors to be elected and for whose election
he has a right to vote, or to cumulate his votes by giving one candidate
as many votes as the number of such directors multiplied by the number
of his shares shall equal, or by distributing such votes on the same
principle among any number of such candidates.
34
<PAGE>

Section 13. Nominations for election to the Board of Directors.
The nominations for election to the Board of Directors other than those
made by or on behalf of the existing management of the Corporation,
shall be made by a shareholder in writing delivered or mailed to the
President not less than 14 days nor more than 50 days prior to the
meeting called for the election of directors; provided, however, that if
less than 21 days' notice of the meeting is given to shareholders, the
nominations shall be mailed or delivered to the President not later than
the close of business on the 7th day following the day on which the
notice of meeting was mailed. the notice of nomination shall include to
the extent known: (a) name and address of proposed nominee(s); (b)
principal occupation of nominee(s); (c) total shares to be voted for
each nominee; (d) name and address of notifying shareholder; and (e)
number of shares owned by notifying shareholder. Nominations not made
in accordance with these requirements may be disregarded by the Chairman
of the meeting and in such case the votes cast for each such nominee
shall likewise be disregarded.

Section 14. Rules of Conduct at the Annual Meeting. The
chairman of the annual meeting of shareholders shall have the right and
authority to prescribe such rules, regulations and procedures and to do
all such acts and things as are necessary or desirable for the proper
conduct of the meeting, including, without limitation: maintenance of
order; safety; limitations on the time allotted to questions or comments
on the affairs of the corporation; ruling motions or comments out of
order (i) as a in poor taste, unworkable, moot, repetitious of another
proposal on the agenda, or otherwise; restrictions on entry to the
meeting after the time prescribed for the commencement thereof; and the
opening and closing of the voting polls.

ARTICLE III. BOARD OF DIRECTORS

Section 1. General Powers. The business and affairs of the
Corporation shall be managed by its Board of Directors.

Directors of the Corporation, one class to be originally elected for a
term expiring at the annual meeting of stockholders to be held in 1987,
another class to be originally elected for a term expiring at the annual
meeting of shareholders to be held in 1988, and another class to be
originally elected for a term expiring at the annual meeting of
shareholders to be held in 1989, with each class to hold office until
its successor is elected and qualified. At each annual meeting of the
shareholders of the Corporation, the successors of the class of
directors whose term expires at that meeting shall be elected to hold
office for a term expiring at the annual meeting of shareholders held in
the third year following the year of their election. Nominations for the
election of directors shall be given in the manner provided in Article
II, Section 13, of these bylaws. Directors need not be residents of the
State of West Virginia, but shall hold not less than one hundred shares
of the capital stock of the Corporation in order to be eligible to serve
as a director of the Corporation.

Section 3. Regular Meetings. A regular meeting of the Board of
Directors shall be held without notice other than this bylaw,
immediately after, and at the same place as, the annual meeting of
shareholders. The Board of Directors may provide, by resolution, the
time and place, either within or without the State of West Virginia, for
the holding of additional regular meetings without other notice than
such resolution.

Section 4. Special Meetings. Special meetings of the Board of
Directors may be called by or at the request of the Chairman of the
Board, if any, the President or the majority of the directors. The
person or persons authorized to call special meetings of the Board of
Directors may fix any place, either within or without the State of West
Virginia, as the place for holding any special meeting of the Board of
Directors called by them.

Section 5. Notice. Notice of any special meeting shall be
given at least three days previously thereto by written notice delivered
personally or mailed to each director at his business address, or by
telegram. If mailed at least five days prior to the date of meeting,
such notice shall be deemed to be delivered when deposited in the United
States mail, so addressed, with postage thereon prepaid. If notice be
given by telegram, such notice shall be deemed to be delivered when the
telegram is delivered to the telegraph company. Any director may waive
notice of any meeting. The attendance of a director at a meeting shall
constitute a waiver of notice of such meeting, except where a director
attends a meeting for the express purpose of objecting to the
transaction of any business because the meeting is not lawfully called
or convened. Neither the business to be transacted at, nor the purpose
of, any regular or special meeting of the Board of Directors need be
specified in the notice or waiver of notice of such meeting, except as
otherwise provided by statute.
36
<PAGE>

Section 6. Quorum. A majority of the number of directors fixed
by Section 2 of this Article III shall constitute a quorum for the
transaction of business at any meeting of the Board of Directors, but if
less than such majority is present at the meeting a majority of the
directors present may adjourn the meeting from time to time without
further notice.

Section 7. Manner of Acting. The act of the majority of the
directors present at a meeting at which a quorum is present shall be the
act of the Board of Directors.

Section 8. Action Without a Meeting. Any action required or
permitted to be taken by the Board of Directors at a meeting may be
taken without a meeting if a consent in writing, setting forth the
action so taken, shall be signed by all the directors.

Section 9. Newly created directorships and vacancies. Except
as otherwise provided for or fixed by or pursuant to the provisions of
Article VI of the Articles of Incorporation relating to the rights of
the holders of any class or series of stock having a preference over the
Common Stock as to dividends or upon liquidation to elect directors
under specified circumstances, newly created directorships resulting
from any increase in the number of directors and any vacancies on the
Board of Directors resulting from death, resignation, disqualification,
removal or other cause shall be filled by the affirmative vote of a
majority of the remaining Directors then in office, even though less
than a quorum of the Board of Directors. Any director elected in
accordance with the preceding sentence to fill a vacancy resulting from
the death, resignation, disqualification, removal or other cause shall
hold office for the remainder of the full term of the class of directors
in which the vacancy occurred and until such director's successor shall
have been elected and qualified, and any director elected in accordance
with the preceding sentence by reason of an increase in the number of
directors shall hold office only until the next election of directors by
shareholders and until his successor shall have been elected and
qualified. No decrease in the number of directors constituting the
Board of Directors shall shorten the term of any incumbent director.

Section 10. Compensation. By resolution of the Board of
Directors, each director may be paid his expenses, if any, of attendance
at each meeting of the Board of Directors, or committee thereof, and may
be paid a stated salary as director or a fixed sum for attendance at
each meeting of the Board of Directors or committee thereof or both. No
such payment shall preclude any director from serving the Corporation in
any other capacity and receiving compensation therefor.

Section 11. Presumption of Assent. A director of the
Corporation who is present at a meeting of the Board of Directors at
which action on any corporate matter is taken shall be presumed to have
assented to the action taken unless his
37
<PAGE>

dissent shall be entered in the minutes of the meeting or unless he
shall file his written dissent to such action with the person acting as
the Secretary of the meeting before the adjournment thereof or shall
forward such dissent by registered mail to the Secretary of the
Corporation immediately after the adjournment of the meeting. Such right
to dissent shall not apply to a director who voted in favor of such
action.

Section 12. Committees.

(a) Appointment. The Board of Directors, by resolution
adopted by a majority of the full board, may establish an Executive
Committee and such other standing or special committees of the board as
it may deem advisable, each of which shall consist of two or more
members of the Board of Directors. The designation of a committee and
the delegation thereto of authority shall not operate to relieve the
Board of Directors, or any member thereof, of any responsibility imposed
by law.

(b) Authority. The Executive committee, when the Board of
Directors is not in session shall have and may exercise all of the
authority of the Board of Directors except to the extent, if any, that
such authority shall be limited by the resolution appointing the
Executive Committee and except also that the Executive Committee shall
not have the authority of the Board of directors in reference to
amending the Articles of Incorporation, adopting a plan of merger or
consolidation, recommending to the shareholders the sale, lease or other
disposition of all or substantially all of the property and assets of
the Corporation otherwise than in the usual and regular course of its
business, recommending to the shareholders a voluntary dissolution of
the Corporation or a revocation thereof, or amending the bylaws of the
Corporation. The authority of other committees of the board shall be
set forth in the resolutions, as amended from time to time, establishing
the same.

(c) Tenure and Qualifications. Committees of the board
shall consist only of members of the Board of Directors. Each member of
the Executive Committee shall hold office until the next regular annual
meeting of the Board of Directors following his designation and until
his successor is designated as a member of the Executive Committee and
is elected and qualified. The tenure of members of other committees of
the board shall be set forth in the resolutions, as amended from time to
time, establishing the same.

(d) Meetings. Regular meetings of the committees of the
board may be held without notice at such times and places as each
committee may fix from time to time by resolution. Special meetings of
the committee may be called by any member thereof upon not less than the
one day's notice stating the place, date and hour of the meeting, which
notice may be written or oral, and if mailed at least five days prior to
the date of the meeting, shall be deemed to be delivered when deposited
in the United States mail addressed to the member of the committee at
his
38

<PAGE>

business address. Any member of a committee may waive notice of any
meeting and no notice of any meeting need be given to any member thereof
who attends in person. The notice of a meeting of a committee need not
state the business proposed to be transacted at the meeting.

(e) Quorum. A majority of the members of a committee shall
constitute a quorum for the transaction of business at any meeting
thereof, and action of the committee must be authorized by the
affirmative vote of a majority of the members present at a meeting at
which a quorum is present.

(f) Action Without a Meeting. Any action required or
permitted to be taken by a committee at a meeting may be taken without a
meeting if a consent in writing, setting forth the action so taken,
shall be signed by all of the members of the committee.

(g) Vacancies. Any vacancy in a committee may be filled by
a resolution adopted by a majority of the full Board of Directors.

(h) Resignations and Removal. Any member of a committee may
be removed at any time with or without cause by resolution adopted by a
majority of the full Board of Directors. Any member of a committee may
resign from the committee at any time by giving written notice to the
President or Secretary of the Corporation, and unless otherwise
specified therein, the acceptance of such resignation shall not be
necessary to make it effective.

(i) Procedure. A committee shall elect a presiding officer
from its members and may fix its own rules of procedure which shall not
be inconsistent with these bylaws. It shall keep regular minutes of its
proceedings and report the same to the Board of Directors for its
information at the meeting thereof held next after the proceedings shall
have been taken.

Section 13. Removal. Subject to the rights of any class or
series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect directors under the specified
circumstances, any director may be removed from office, with or without
cause and only by the affirmative vote of the holders of 80% of the
combined voting power of the then outstanding shares of stock entitled
to vote generally in the election of directors, voting together as a
single class.

Section 14. Participation in Meetings by Means of Conference
Telephone or Similar Instrument. Any or all directors may participate
in a meeting of the Board of Directors or in a meeting of a committee of
the Board of Directors by means of a conference telephone or any similar
electronic communications equipment by which all persons participating
in the meeting can hear each other.
39
<PAGE>

ARTICLE IV. OFFICERS

Section 1. Number. The officers of the Corporation shall be a
President, one or more Vice Presidents (the number thereof to be
determined by the Board of Directors), a Secretary, and a Treasurer,
each of whom shall be elected by the Board of Directors. A Chairman of
the board of Directors and such other officers and assistant officers as
may be deemed necessary may be elected or appointed by the Board of
Directors. Any two or more offices may be held by the same person,
except the offices of President and Secretary. The President and the
Chairman of the Board, if any, shall be elected from the membership of
the Board of Directors.

Section 2. Election and Term of Office. The officers of the
Corporation to be elected by the Board of Directors shall be elected
annually by the Board of Directors at the first meeting of the Board of
Directors held after each annual meeting of the shareholders. If the
election of officers shall not be held at such meeting, such election
shall be held as soon thereafter as conveniently may be. Each officer
shall hold office until his successor shall have been duly elected and
shall have qualified or until his death or until he shall resign or
shall have been removed in the manner hereinafter provided.

Section 3. Removal. Any officer or agent may be removed by the
Board of Directors whenever in its judgment the best interests of the
Corporation will be served thereby, but such removal shall be without
prejudice to the contract rights, if any, of the person so removed.
Election or appointment of an officer or agent shall not of itself
create contract rights.

Section 4. Vacancies. A vacancy in any office because of
death, resignation, removal, disqualification or otherwise, may be
filled by the Board of Directors for the unexpired portion of the term.

Section 5. Chairman of the Board and President. The Chairman
of the Board or the President, as the Board of Directors may from time
to time determine, shall be the principal executive officer of the
Corporation. If a Chairman of the Board is not elected or appointed,
the President shall be chief executive officer and shall act as chairman
of all meetings of the Board of Directors and as chairman of all
meetings of the Executive Committee. The principal executive officer of
the Corporation shall in general supervise and control all of the
business and affairs of the Corporation, subject to the control of the
Board of Directors. He shall, when present, preside at all meetings of
the shareholders. Whether the Chairman of the Board or the President be
designated as the principal executive officer of the Corporation the
other shall, in the absence or incapacity of the principal executive
officer or by his

40
<PAGE>

authority may, exercise any of the powers of the principal executive
officer. The Chairman of the Board or the President may sign deeds,
mortgages, bonds, contracts, or other instruments which the Board of
Directors has authorized to be executed, except in cases where the
signing and executing thereof shall be expressly delegated by the Board
or by these bylaws to some other officer or agent of the Corporation, or
shall be required by law to be otherwise signed or executed. The
Chairman of the board and the President shall each, in general, perform
all duties incident to their respective offices and shall perform such
other duties as may be prescribed by the Board of Directors from time to
time.

Section 6. The Vice Presidents. In the absence of the Chairman
of the Board and President or in the event of their death, inability or
refusal to act, the Vice President (or in the event there be more than
one Vice President, the Vice Presidents in the order designated at the
time of their election, or in the absence of any designation, then in
the order of their election) shall perform the duties of the Chairman of
the Board and President, and when so acting, shall have all the powers
of and be subject to all the restrictions upon the Chairman of the Board
and President. Any Vice President may sign, with the Secretary or an
Assistant Secretary, certificates for shares of the Corporation; and
shall perform such other duties as from time to time may be assigned to
him by the principal executive officer of the Corporation, the bylaws or
the Board of Directors.

Section 7. The Secretary. The Secretary shall: (a) keep the
minutes of the proceedings of the shareholders and of the Board of
Directors in one or more books provided for that purpose; (b) see that
all notices are duly given in accordance with the provisions of these
bylaws or as required by law; (c) be custodian of the corporate records
and of the seal of the Corporation and see that the seal of the
Corporation is affixed to all documents the execution of which on behalf
of the Corporation under its seal is duly authorized; (d) keep a
register of the post officer address of each shareholder which shall be
furnished to the Secretary by such shareholder; (e) sign with the
President, or a Vice President, certificates for shares of the
Corporation, the issuance of which shall have been authorized by
resolution of the Board of Directors; (f) have general charge of the
stock transfer books of the Corporation; and (g) in general perform all
duties incident to the office of Secretary and such other duties as from
time to time may be assigned to him by the principal executive officer
of the Corporation, the bylaws or by the Board of Directors.

Section 8. The Treasurer. The Treasurer shall: (a) have
charge and custody of and be responsible for all funds and securities of
the Corporation; (b) receive and give receipts for moneys due and
payable to the Corporation from any source whatsoever, and deposit all
such moneys in the name of the Corporation in such banks, trust
companies or other depositaries as shall be selected in accordance with
the provisions of Article V of these bylaws; and (c) in general perform
all of the
41
<PAGE>

duties incident to the office of Treasurer and such other duties as from
time to time may be assigned to him by the principal executive officer
of the Corporation, the bylaws or by the Board of Directors. If
required by the Board of Directors, the Treasurer shall give a bond for
the faithful discharge of his duties in such sum and with such surety or
sureties as the Board of Directors shall determine.

Section 9. Assistant Secretaries and Assistant Treasurers. The
Assistant Secretaries, when authorized by the Board of Directors, may
sign with the President or a Vice President certificates for shares of
the Corporation the issuance of which shall have been authorized by a
resolution of the Board of Directors. The Assistant Treasurers shall
respectively, if required by the Board of Directors, give bonds for the
faithful discharge of their duties in such sums and with such sureties
as the Board of Directors shall determine. The Assistant Secretaries
and Assistant Treasurers, in general, shall perform such duties as shall
be assigned to them by the Secretary or the Treasurer, respectively, or
by the principal executive officer of the Corporation, the bylaws or by
the Board of Directors.

Section 10. Officers' Salaries. The salaries of the officers
shall be fixed from time to time by the Board of Directors and no
officer shall be prevented from receiving such salary by reason of the
fact that he is also a director of the Corporation.

ARTICLE V. CONTRACTS, LOANS, CHECKS AND DEPOSITS

Section 1. Contracts. The Board of Directors may authorize any
officer or officers, agent or agents, to enter into any contract or
execute and deliver any instrument in the name of and on behalf of the
Corporation, and such authority may be general or confined to specific
instances.

Section 2. Loans. No loans shall be contracted on behalf of
the Corporation and no evidences of indebtedness shall be issued in its
name unless authorized by a resolution of the Board of Directors. Such
authority may be general or confined to specific instances. The Board
of Directors may encumber and mortgage real estate and pledge, encumber
and mortgage stocks, bonds and other securities and other personal
property of all types, tangible and intangible, and convey any such
property in trust to secure the payment of corporate obligations.

Section 3. Checks, Drafts, etc.. All checks, drafts and other
orders for the payment of money, notes or other evidences of
indebtedness issued in the name of the Corporation shall be signed by
such officer or officers, agent or agents of the Corporation and in such
manner as shall from time to time be determined by resolution of the
Board of Directors.
42
<PAGE>

Section 4. Deposits. All funds of the Corporation not
otherwise employed shall be deposited from time to time to the credit of
the Corporation in such banks, trust companies or other depositories as
the Board of Directors may select.

ARTICLE VI. CERTIFICATES FOR SHARES AND THEIR TRANSFER

Section 1. Certificates for Shares. Certificates representing
shares of the Corporation shall be in such form as shall be determined
by the Board of Directors. Such certificates shall be signed by the
President or a Vice President and by the Secretary or an Assistant
Secretary and sealed with the Corporate Seal or a facsimile thereof.
The signatures of such officers upon a certificate may be facsimiles if
the certificate is manually signed on behalf of a transfer agent or a
registrar, other than the Corporation itself or one of its employees.
Each certificate for shares shall be consecutively numbered or otherwise
identified. The name and address of the person to whom the shares
represented thereby are issued, with the number of shares and date of
issue, shall be entered on the stock transfer books of the Corporation.
All certificates surrendered to the Corporation for transfer shall be
canceled and no new certificate shall be issued until the former
certificate for a like number of shares shall have been surrendered and
canceled, except that in case of a lost, destroyed or mutilated
certificate a new one may be issued therefor upon such terms and
indemnity to the Corporation as the Board of Directors may prescribe.

Section 2. Transfer of Shares. Transfer of shares of the
Corporation shall be made only on the stock transfer books of the
Corporation by the holder of record thereof or by his legal
representative, who shall furnish proper evidence of authority to
transfer, or by his attorney thereunto authorized by power of attorney
duly executed and filed with the Secretary of the Corporation, and on
surrender for cancellation of the certificate for such shares. The
person in whose name shares stand on the books of the Corporation shall
be deemed by the Corporation to be the owner thereof for all purposes.

Section 3. Lost Certificates. Any person claiming a
certificate of shares to be lost or destroyed shall made an affidavit or
affirmation of that fact, and if requested do so by the Board of
Directors of the Corporation shall advertise such fact in such manner as
the Board of Directors may require, and shall give the Corporation a
bond of indemnity in such sum as the Board of Directors may direct, but
not less than double the value of shares represented by such
certificate, in form satisfactory to the Board of Directors and with or
without sureties as the Board of Directors may prescribe; whereupon the
President and the Secretary may cause to be issued a new certificate of
the same tenor and for the same number of shares as the one alleged to

43
<PAGE>

have been lost or destroyed, but always subject to the approval of the
Board of Directors.

Section 4. Stock Transfer Books. The stock transfer books of
the Corporation shall be kept in the principal office of the Corporation
and shares shall be transferred under such regulations as may be
prescribed by the Board of Directors.

ARTICLE VII. FISCAL YEAR

The fiscal year of the Corporation may be fixed and may be
changed from time to time by resolution of the Board of Directors.
Until the Board of Directors has acted to fix such fiscal year, the
fiscal year of the Corporation shall begin on the first day of January
and end on the thirty-first day of December in each year.

ARTICLE VIII. DIVIDENDS

The Board of Directors may, from time to time, declare and the
Corporation may pay dividends on its outstanding shares in the manner
and upon the terms and conditions provided by law and its Articles of
Incorporation.

ARTICLE IX. CORPORATE SEAL

The Board of Directors shall provide a corporate seal which
shall be circular in form and shall have inscribed thereon the name of
the Corporation and the state of incorporation and the words "Corporate
Seal".

ARTICLE X. WAIVER OF NOTICE

Whenever any notice is required to be given to any shareholder
or director of the Corporation under the provisions of these bylaws or
under the provisions of the Articles of Incorporation or by law, a
waiver thereof in writing signed by the person or persons entitled to
such notice, whether before or after the time stated therein, shall be
deemed equivalent to the giving of such notice.

ARTICLE XI. AMENDMENTS

Subject to the provisions of the Articles of Incorporation,
these Bylaws may be altered, amended or repealed at any regular meeting
of the shareholders (or at any
44
<PAGE>

special meeting thereof duly called for that purpose) by a majority vote
of the shares represented and entitled to vote at such meeting; provided
that in the notice of such meeting notice of such purpose shall be
given. Subject to the laws of the State of West Virginia, the Articles
of Incorporation and these Bylaws, the Board of Directors may be
majority vote of those present at any meeting at which a quorum is
present amend these Bylaws, or enact such other bylaws as in their
judgment may be advisable for the regulation of the conduct of the
affairs of the Corporation; provided, however, that, without the
affirmative vote of two-thirds of all members of the Board, the Board
may not amend the Bylaws to (i) change the principal office of the
Corporation, (ii) change the number of directors, (iii) change the
number of directors on the Executive Committee, or (iv) make a
substantial change in the duties of the Chairman of the Board and the
President.

ARTICLE XII. VOTING SHARES OF OTHER CORPORATIONS

Unless otherwise ordered by the Board of Directors, shares in
other corporations held by this Corporation may be voted by the Chairman
of the Board or the President of this Corporation.
45
<PAGE>

AMENDMENT OF BYLAWS OF
ONE VALLEY - ADOPTED
April 26, 1994

ARTICLE III. BOARD OF DIRECTORS

Section 2. Number, election and terms; nominations. Except as
otherwise fixed by or pursuant to the provisions of Article VI of the
Articles of Incorporation relating to the rights of the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation to elect additional directors under
specified circumstances, the number of the directors of the Corporation
shall be fixed from time to time by resolution of the Board of Directors
but shall not be less than six nor more than thirty-three. The
directors, other than those who may be elected by the holders of any
class or series of stock having a preference over the Common Stock as to
dividends or upon liquidation, shall be classified, with respect to the
time for which they severally hold office, into three classes, as nearly
equal in number as possible, as determined by the Board of Directors of
the Corporation, one class to be originally elected for a term expiring
at the annual meeting of stockholders to be held in 1987, another class
to be originally elected for a term expiring at the annual meeting of
shareholders to be held in 1988, and another class to be originally
elected for a term expiring at the annual meeting of shareholders to be
held in 1989, with each class to hold office until its successor is
elected and qualified. At each annual meeting of the shareholders of
the Corporation, the successors of the class of directors whose term
expires at that meeting shall be elected to hold office for a term
expiring at the annual meeting of shareholders held in the third year
following the year of their election. Nominations for the election of
directors shall be given in the manner provided in Article II, Section
13, of these bylaws. Directors need not be residents of the State of
West Virginia, but shall hold not less than one hundred shares of the
capital stock of the Corporation in order to be eligible to serve as a
director of the Corporation.
46

<PAGE>
EXHIBIT 11
STATEMENT RE: COMPUTATION OF EARNINGS PER SHARE

For The Three Months For The Year
Ended December 31 Ended December 31
1994 1993 1994 1993
PRIMARY:
<S> <C> <C> <C> <C>
Average Shares Outstanding 17,009,000 17,246,000 17,132,000 17,237,000
Net effect of the assumed
exercise of stock options-
based on the treasury stock
method 112,000 103,000 103,000 111,000
Total 17,121,000 17,349,000 17,235,000 17,348,000
Net Income $11,532,000 $ 7,690,000 $46,211,000 $37,954,000
Per Share Amount $0.67 $0.44 $2.68 $2.19

FULLY DILUTED:
Average Shares Outstanding 17,009,000 17,246,000 17,132,000 17,237,000
Net effect of the assumed
exercise of stock options-
based on the treasury stock
method 112,000 103,000 118,000 117,000
Total 17,121,000 17,349,000 17,250,000 17,354,000
Net Income $11,532,000 $ 7,690,000 $46,211,000 $37,954,000
Per Share Amount $0.67 $0.44 $2.68 $2.19
</TABLE>

<PAGE>
EXHIBIT 12
STATEMENT RE: COMPUTATION RATIOS

ROA- RETURN ON AVERAGE ASSETS: Return on Average Assets is defined as net
income divided by average total assets.

ROE- RETURN ON AVERAGE EQUITY: Return on Average Equity is defined as net
income divided by average total equity.

DIVIDEND PAYOUT RATIO: The Dividend Payout Ratio is defined as declared annual
cash dividends per share dividend by net income per share.

<PAGE>
One Valley

Bancorp

1994

ANNUAL REPORT

<PAGE>

SHAREHOLDER INFORMATION

STOCK LISTING

Current market quotations for the common stock of One Valley Bancorp are
available on the NASDAQ electronic quotation system for over-the-counter stocks,
under the symbol OVWV. Registered NASDAQ market makers in One Valley stock
include:

Herzog, Heine, Geduld, Inc.
Keefe, Bruyette & Woods, Inc.
Legg, Mason, Wood, Walker, Inc.
Mayer & Schweitzer, Inc.
McDonald & Company Sec., Inc.
Merrill Lynch, Pierce, Fenner & Smith, Inc.
Robinson-Humphrey Co. Inc.
Rothschild, Inc.
Sandler O'Neill & Partners
Wheat First Securities, Inc.

FINANCIAL STATEMENTS

During the year, One Valley distributes four interim quarterly financial
reports and an annual report. Additionally, One Valley files an annual report
to the Securities and Exchange Commission on Form 10-K and quarterly reports on
Form 10-Q. A copy of the reports may be obtained without charge upon written
request to:

Allen E. Davis, Staff Accountant
One Valley Bancorp
P.O. Box 1793
Charleston, West Virginia 25326

INDEPENDENT AUDITOR
Ernst & Young
900 United Center
Charleston, West Virginia 25301

DIVIDEND REINVESTMENT PLAN

One Valley Bancorp maintains a dividend reinvestment plan. Shareholders may
increase their ownership in One Valley by automatically reinvesting their
quarterly dividends into additional shares of common stock. There are no
commission costs or administration charges to the shareholder. Shareholders can
enroll in the Dividend Reinvestment Plan by contacting Joan L. Schatz, Assistant
Secretary, at (304) 348-7023.

STOCK TRANSFER AGENT
Harris Trust & Savings Bank
311 West Monroe Street
Chicago, Illinois 60606

CONTACTS

Analysts, portfolio managers, and others seeking financial information about
One Valley Bancorp should contact Laurance G. Jones, Executive Vice President
and Treasurer, at (304) 348-7062.

News media representatives and others seeking general information should
contact Lloyd P. Calvert, Vice President -Corporate Communications, at (304)
348-7207.

Shareholders seeking assistance should contact Joan Schatz, Assistant
Secretary, at (304) 348-7023.

NUMBER OF SHAREHOLDERS

At December 31, 1994, there were approximately 5,904 shareholders of record
of One Valley Common Stock.

<PAGE>

CONTENTS

Financial Highlights ................................................ 1
Report to Customers, Employees, Owners and Friends .................. 2
Management's Discussion and Analysis................................. 6
Consolidated Financial Statements ...................................23

Six-Year Financial Summaries ....................................... 41
Quality Council .................................................... 44
One Valley Bancorp Directors........................................ 44
Directors of Affiliate Banks......................... Inside Back Cover

FINANCIAL HIGHLIGHTS

<TABLE>
<CAPTION>
(Dollars in thousands, except per share data) 1994 1993 % CHANGE
<S> <C> <C> <C>
FOR THE YEAR
Net interest income....................... $ 156,486 $ 147,913 5.80%
Net income................................ 46,211 37,954 21.76
Average Balances
Total loans - net....................... 2,199,686 2,026,748 8.53
Total assets............................ 3,540,451 3,467,261 2.11
Deposits................................ 2,930,555 2,895,131 1.22
Equity.................................. 315,724 294,733 7.12

AT YEAR-END
Year-end Balances
Total loans - net....................... $ 2,335,519 2,132,888 9.50
Total assets............................ 3,673,241 3,512,876 4.57
Deposits................................ 2,926,479 2,936,735 (0.35)
Equity.................................. 321,867 305,184 5.47

PER SHARE
Net income................................ $ 2.70 $ 2.20 22.73
Cash dividends............................ 0.94 0.84 11.90
Book value................................ 18.93 17.70 6.95
</TABLE>

<PAGE>

REPORT TO CUSTOMERS, EMPLOYEES, OWNERS, AND FRIENDS

In the face of the Federal Reserve increasing interest rates six times and
250 basis points during the year, One Valley realized record profitability in
1994. As previously announced, One Valley's performance reached record levels
in net income per share, net income, loans and shareholders' equity while
deposits were relatively flat for the year. Key asset quality measures also
continued to improve in 1994.

Net income per share rose to $2.70 in 1994, up 22.7% from the $2.20 earned
in 1993. Net income for the year totaled $46.2 million versus $38.0 million for
the prior year which resulted in record annual returns of 1.31% on average
assets and 14.64% on shareholders' equity. Shareholders' equity increased 5.5%
to $321.9 million at year-end giving One Valley an 8.9% average equity-to-asset
ratio for the year. One Valley's risk based capital ratio, a regulatory measure
of capitalization, ended the year at 15.5%, well above the regulatory
requirement of 8.0%. Cash dividends declared in 1994 increased 11.9% to $0.94
per share versus $0.84 per share declared in 1993.

The improvement in One Valley's earnings in 1994 was mainly attributable to
higher net interest income, lower non-interest expense, and a lower provision
for loan losses. Higher net interest income was reflected in the net interest
margin, which rose to 4.98% in 1994 compared to 4.77% in 1993. Non-interest
expense declined 3.7% from 1993 primarily due to the non-recurring expenses in
the latter half of 1993 related to One Valley's data processing systems
conversion and the Mountaineer Bankshares merger. The provision for loan losses
declined to $4.8 million in 1994 versus $5.8 million in 1993 due to the
continued improvement in the credit quality of the loan portfolio. The increase
in net interest income and decrease in non-interest expense together with the
lower provision for loan losses more than offset a decrease in non-interest
income for 1994.

One Valley's asset quality ratios continued to improve and remain among the
best in the industry. Net loan charge-offs for the year decreased to $3.8
million versus $5.0 million in 1993. Net charge-offs as a percentage of
average total loans decreased to 0.17% in 1994 compared to 0.24% in 1993.
Although the provision for loan losses decreased in 1994 paralleling the
improvement in the quality of the loan portfolio, the $37.4 million allowance
for loan losses was 1.58% of year-end total loans. Non-performing assets plus
loans 90 days past due at December 31, 1994 declined to $13.5 million or 0.57%
of total loans compared to the $15.7 million or 0.73% of total loans at year-
end 1993. The $13.5 million of non-performing assets and loans was covered 278%
by the $37.4 million allowance for loan losses at year-end 1994, a very strong
coverage relative to peer group banking companies.

The "Management's Discussion and Analysis" section on pages 6 through 22
provides a detailed analysis of the financial condition and results of
operations of One Valley for 1994 and prior years and should be carefully read.
Some of the highlights include:

(Photo of J. Holmes Morrison appears here)
J. HOLMES MORRISON, PRESIDENT AND CEO

<PAGE>

(Bullet) Net income grew at a 19.3% compound annual rate over the past five
years, while net income per share had a 16.7% compound growth rate during this
same period. Additionally, the return on average assets averaged 1.08% over
the past five years while the return on average equity averaged 13.09%

(Bullet) Net interest income over the last five years grew at a 10.5%
compound annual rate. Non-interest income (excluding security transactions)
had a five-year compound annual growth rate of 17.6% while non-interest expense
grew at a compound rate of 9.9% during the same period.

(Bullet) One Valley's efficiency ratio goal (non-interest expense divided by
the sum of fully taxable equivalent net interest income plus non-interest
income) for 1994 was to be below 60% by year-end. This measure, which One
Valley uses to evaluate its operational efficiency, was 60.1% in 1994 versus
65.4% in 1993 and reflects the synergies derived from the Mountaineer
Bankshares merger.

(Bullet) Major components of the balance sheet reflect five-year compound
annual growth rates as follows: average total assets 8.3%; average net loans
10.3%; average deposits 7.7%; and average equity 11.3%.

(Bullet) One Valley's equity-to-average assets over the past five years
averaged 8.2%, which reflects a strong capital position in the industry.

(Bullet) Cash dividends per share grew at a 10.9% compound annual rate
during the last five years.

(Bullet) Other significant events for One Valley Bancorp during 1994 include:

(Bullet) The successful integration of Mountaineer Bankshares into One Valley
Bancorp whereby most financial goals were achieved. Synergies from the merger
included the sale of buildings, consolidation and renovation of offices, and the
mergers of several affiliate banks resulting in eleven separate affiliate banks.

NET INCOME AND DIVIDENDS PER SHARE

(Bar graph appears here. Plot points are listed below.)

1989 1990 1991 1992 1993 1994
Net Income $1.25 $1.55 $1.72 $2.13 $2.20 $2.70
Dividends $0.56 $0.59 $0.62 $0.70 $0.84 $0.94

<PAGE>

REPORT TO CUSTOMERS, EMPLOYEES, OWNERS, AND FRIENDS

(Bullet) The announcement of the agreement to acquire Point Bancorp, Inc.,
a $57 million savings and loan holding company located in Mason County, West
Virginia, with an anticipated closing in March 1995.

(Bullet) The successful statewide introduction of four new full service
checking account products (Valley Checking, Valley Checking Gold, Valley 50,
and Valley 50 Gold) that are designed to fit our customers' lifestyles.

(Bullet) With almost $300 million in total fund assets at year-end 1994,
The OVB Funds, a family of proprietary mutual funds for which One Valley Bank,
National Association serves as investment adviser, ranked 90th in size among
bank and thrift advised mutual funds across the country.

(Bullet) In connection with One Valley's pursuit to make The OVB Funds
available to its customers, 37 employees passed their NASD Securities
examination.

(Bullet) One Valley expanded its international banking services statewide
to meet the needs of its customers. In terms of manufacturing shipments, West
Virginia is the sixth largest exporting state in the country. International
banking will provide new sources of income to One Valley in future years.

(Bullet) "One Financial Place," which provides consolidated trust services,
expanded its statewide presence to eight locations with the addition of the
Clarksburg/Fairmont and Wheeling/Moundsville offices. One Financial Place's
85 employees administer over $2.6 billion in trust assets.

(Bullet) One Valley Bank of Morgantown was awarded Preferred Lender status
by the Small Business Administration (SBA). As a Preferred Lender, the bank
is able to underwrite, approve and close SBA loans and then simply report them
to the SBA. This process provides customers with a quicker turnaround on their
loan applications.

(Bullet) One Valley continues to be ranked as one of the top banking
companies in the country. Using a composite quality ranking, Keefe, Bruyette
& Woods, Inc. ranked One Valley 19th out of the 133 commercial banks it follows
nationwide in its December 1994 BANKSCAN report. In this report, One Valley
was the highest ranked bank doing business in West Virginia, including our
larger competitors who are headquartered out of state. We are proud of this
recognition of our efforts to bring quality products and services to you our
customers and shareholders.

(Bullet) One Valley's 2,000 employees, through their hard work and
dedication, brought about the successful integration of Mountaineer Bankshares
and produced record financial results in 1994. In recognition of their
efforts, the company awarded them a year-end bonus.

While it is anticipated that the Federal Reserve will continue to nudge up
interest rates in early 1995, One Valley's customers, employees and owners
should experience another rewarding year in 1995. As our economy and society
continue to undergo rapid change, One Valley must likewise continue to learn to
not only survive, but thrive on this change to meet the challenges ahead. With
our ongoing process of continuous improvement, we will expand our efforts to
provide quality service and products that meet or exceed our customers'
expectations, create a challenging and rewarding environment for our employees,
and return a reasonable profit for our shareholders while giving back to the
communities we serve.

Respectfully yours,

(Signature -- J. Holmes Morrison)
J. Holmes Morrison
President and CEO

<PAGE>

FIVE-YEAR TOTAL RETURN*

(Graph appears here. Plot points are listed below.)

1989 1990 1991 1992 1993 1994
One Valley Bancorp 100 88 177 276 263 275
S & P 500 100 97 126 136 150 152
All Banks 100 77 109 130 153 145

* Base period 12/31/89 =100.
Dividends reinvested.

BOOK VALUE PER SHARE

(Graph appears here. Plot points are listed below.)

1989 1990 1991 1992 1993 1994
12.48 13.44 14.83 16.29 17.70 18.93

RETURN ON AVERAGE ASSETS

(Graph appears here. Plot points are listed below.)

1989 1990 1991 1992 1993 1994
.80% .95% .95% 1.09% 1.09% 1.31%

RETURN ON AVERAGE EQUITY

(Graph appears here. Plot points are listed below.)

1989 1990 1991 1992 1993 1994
10.35% 12.07% 12.26% 13.62% 12.88% 14.64%

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS

INTRODUCTION
One Valley Bancorp of West Virginia, Inc. (One Valley) is a multi-bank
holding company headquartered in Charleston, West Virginia. It operates eleven
bank subsidiaries ranging in size from $103 million to $1.6 billion. Through
these banks, One Valley serves 50 cities and towns with a full range of banking
services in 79 locations strategically located throughout the State. One Valley
is also the parent of a real estate management corporation that owns and
operates a fifteen-floor office building in Charleston, West Virginia. This
office building is the headquarters for One Valley Bancorp and the main location
of its lead bank. At December 31, 1994, One Valley had approximately $3.7
billion in assets, $2.4 billion in total loans, and $2.9 billion in total
deposits.

One Valley entered into a significant merger agreement with Mountaineer
Bankshares of W.Va., Inc. (Mountaineer) in 1993. At December 31, 1993,
Mountaineer had total assets of approximately $739 million and total deposits of
approximately $608 million. The merger, which closed on January 28, 1994,
increased One Valley's market presence in the northern and eastern panhandle
regions of the State of West Virginia. This transaction has been accounted for
as a pooling-of-interests and, accordingly, all prior period financial
information has been restated, giving retroactive effect to the merger as though
it had been consummated in the earliest period presented.

The accompanying consolidated financial statements have been prepared by the
management of One Valley in conformity with generally accepted accounting
principles. The audit committee of the Board of Directors engaged Ernst & Young
LLP, independent certified public accountants, to audit the consolidated
financial statements, and their report is included herein. Financial information
appearing throughout this annual report is consistent with that reported in the
consolidated financial statements. The following discussion is designed to
assist readers of the consolidated financial statements in understanding
significant changes in One Valley's financial condition and results of
operations.

SIX-YEAR SELECTED FINANCIAL SUMMARY TABLE 1
(DOLLARS IN THOUSANDS, EXCEPT PER SHARE DATA)

5-Year
Compound
Growth
1994 1993 1992 1991 1990 1989 Rate
<S> <C> <C> <C> <C> <C> <C> <C>
SUMMARY OF OPERATIONS
Interest income............................ $ 251,383 $ 247,699 $ 263,484 $ 242,792 $ 234,025 $ 226,249 2.13%
Interest expense .......................... 94,897 99,786 120,039 130,913 134,462 131,335 (6.29)
Net interest income........................ 156,486 147,913 143,445 111,879 99,563 94,914 10.52
Provision for loan losses ................. 4,788 5,788 11,389 6,671 7,884 12,404 (17.34)
Non-interest income........................ 38,691 40,149 37,403 25,086 19,670 17,199 17.60
Gross securities transactions ............. (867) 113 (35) (730) (37) 265
Non-interest expense ...................... 121,402 126,107 116,140 92,429 79,201 75,676 9.91
Net income................................. 46,211 37,954 36,638 26,392 23,709 19,101 19.33

PER SHARE DATA
Net income................................. $ 2.70 $ 2.20 $ 2.13 $ 1.72 $ 1.55 $ 1.25 16.65%
Cash dividends............................. 0.94 0.84 0.70 0.62 0.59 0.56 10.91
Book value................................. 18.93 17.70 16.29 14.83 13.44 12.48 8.69

SELECTED AVERAGE BALANCES
Net loans ................................. $2,199,686 $2,026,748 $1,926,773 $1,557,230 $1,384,035 $1,346,884 10.31%
Investment securities...................... 1,050,980 1,074,467 1,049,459 834,820 745,063 657,578 9.83
Total assets .............................. 3,540,451 3,467,261 3,373,245 2,771,901 2,483,158 2,377,899 8.29
Deposits................................... 2,930,555 2,895,131 2,829,263 2,343,404 2,101,377 2,018,646 7.74
Long-term borrowings....................... 22,931 36,088 25,703 15,653 21,342 22,489 0.39
Equity..................................... 315,724 294,733 269,007 215,273 196,500 184,558 11.34

SELECTED RATIOS
Average equity to assets................... 8.92% 8.50% 7.97% 7.77% 7.91% 7.76%
Return on average assets .................. 1.31 1.09 1.09 0.95 0.95 0.80
Return on average equity .................. 14.64 12.88 13.62 12.26 12.07 10.35
Dividend payout ratio...................... 34.81 38.18 32.86 36.05 38.06 44.80
</TABLE>

<PAGE>

Management's objective of a fair presentation of financial information is
achieved through a system of strong internal accounting controls. The financial
control system of One Valley is designed to provide reasonable assurance that
assets are safeguarded from loss and that transactions are properly authorized
and recorded in the financial records. As an integral part of that financial
control system, One Valley maintains an internal audit staff at the parent
company with audit responsibility for all of its subsidiaries. The activities of
both the internal and external audit functions are reviewed by the audit
committee of the Board of Directors.

NET INTEREST INCOME
AND NET INCOME
Dollars in millions

(Line graph appears here. Plot points are listed below.)

1989 1990 1991 1992 1993 1994

Net Interest Income 94.914 99.563 111.879 143.445 147.913 156.486
Net Income 19.101 23.709 26.392 36.638 37.954 46.211

SUMMARY STATEMENT OF NET INCOME TABLE 2
(DOLLARS IN THOUSANDS )

<TABLE>
<CAPTION>
INCREASE (DECREASE) FROM PRIOR YEAR
1994 1993 1992 1994 1993
AMOUNT PERCENT AMOUNT PERCENT
<S> <C> <C> <C> <C> <C> <C> <C>
Interest Income *........................... $ 251,383 $ 247,699 $ 263,484 $ 3,684 1.49 $ (15,785) (5.99)
Interest Expense............................ 94,897 99,786 120,039 (4,889) (4.90) (20,253) (16.87)
Net Interest Income......................... 156,486 147,913 143,445 8,573 5.80 4,468 3.11
Other Operating Income...................... 38,691 40,149 37,403 (1.458) (3.63) 2,746 7.34
Gross Securities Transactions............... (867) 113 (35) (980) 148
Total Operating Income...................... 194,310 188,175 180,813 6,135 3.26 7,362 4.07
Provision for Loan Losses................... 4,788 5,788 11,389 (1,000) (17.28) (5,601) (49.18)
Other Operating Expenses.................... 121,402 126,107 116,140 (4,705) (3.73) 9,967 8.58
Income Before Taxes......................... 68,120 56,280 53,284 11,840 21.04 2,996 5.62
Income Taxes................................ 21,909 18,326 16,646 3,583 19.55 1,680 10.09

Net Income.................................. $ 46,211 $ 37,954 $ 36,638 $ 8,257 21.76 $ 1,316 3.59

* FULLY TAX-EQUIVALENT INTEREST INCOME USING
THE RATE OF 35% FOR 1994 AND 1993
AND 34% FOR 1992............................ $ 258,073 $ 252,344 $ 267,629 $ 5,729 2.27 $ (15,285) (5.71)
</TABLE>

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

SUMMARY FINANCIAL RESULTS

One Valley earned $46.2 million in 1994, a 21.8% increase over the $38.0
million earned in 1993. The increase is primarily due to increased net interest
income and lower net overhead as well as a lower provision for loan losses.
This increase in earnings follows an increase in 1993 of 3.6% over the $36.6
million earned in 1992. Earnings in 1993 were significantly impacted by
expenses related to the Mountaineer merger and expenses associated with the
conversion to an outsourced data processing system. Earnings per share were
$2.70 in 1994, an increase of 22.7% over the $2.20 earned in 1993, which
compares to the 3.3% increase in 1993 over the $2.13 earned in 1992. As shown
in Table 1, the five-year compound growth rate in earnings per share since 1989
has been 16.7%.

Table 1, Six-Year Selected Financial Summary, presents summary financial
data for the past six years, 1989 through 1994, along with a five-year compound
growth rate. This table shows the expansion of One Valley due to its growth in
banking operations and its acquisition activity. Particular attention should be
paid to the sustained growth rates in Equity, Assets, Net Income and Net Loans.
The management of One Valley values balanced growth in its financial position
rather than growth for growth's sake. A solid capital base is a key strength of
One Valley. As shown in Table 1, the average equity-to-average assets ratio has
remained consistently strong over the past six years. Since 1991, this ratio
has significantly improved, a result of record earnings performances and a
public stock offering in December 1991. Table 2, Summary Statement of Net
Income, presents three years of comparative income statement information.

Table 3 comparatively illustrates the components of ROA and ROE over the
previous five years. Return on average assets (ROA) measures how effectively
One Valley utilizes its assets to produce net income. One Valley's 1994 ROA of
1.31% was a significant increase over the 1.09% ROA reported in 1993 and 1992.
As shown in Table 3, the rise in ROA is attributed primarily to the increase in
net credit income. Net credit income (net interest income less the provision
for loan losses) significantly improved in 1994, as a percent of average earning
assets, to 4.83%. This increase follows a similar increase in 1993 to 4.59%, up
from 4.40% in 1992. This trend highlights One Valley's ability to manage
interest rate and credit risk. The decrease in non-interest income in 1994 was
less than the decrease in non-interest expense and thus One Valley's net
overhead ratio (non-interest expense less non-interest income as a percentage of
average earning assets) decreased to 2.55%. While this is lower than the 2.69%
ratio in 1993, it is comparable to the 2.54% ratio in 1992.

Return on average equity (ROE), another measure of earnings performance,
indicates the amount of net income earned in relation to the total equity
capital invested. One Valley's 1994 ROE was 14.64% compared to the 12.88%
earned in 1993 and 13.62% reported in 1992.

ANALYSIS OF RETURN ON ASSETS AND EQUITY TABLE 3

1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
AS A PERCENT OF AVERAGE EARNING ASSETS:
Fully taxable-equivalent net
interest income *................... 4.98% 4.77% 4.77% 4.60% 4.62%
Provision for loan losses............ (0.15) (0.18) (0.37) (0.26) (0.35)
Net credit income................... 4.83 4.59 4.40 4.34 4.27
Non-interest income.................. 1.15 1.25 1.21 0.96 0.86
Non-interest expense................. (3.70) (3.94) (3.75) (3.64) (3.47)
Tax equivalent adjustment............ (0.20) (0.15) (0.13) (0.20) (0.26)
Applicable income taxes.............. (0.67) (0.57) (0.54) (0.42) (0.36)
RETURN ON AVERAGE EARNING ASSETS....... 1.41 1.18 1.19 1.04 1.04
Multiplied by average earning assets
to average total assets............. 92.59 92.33 91.78 91.59 91.74
RETURN ON AVERAGE ASSETS............... 1.31% 1.09% 1.09% 0.95% 0.95%
Multiplied by average assets
to average equity................... 11.21X 11.76X 12.54X 12.88X 12.64X
RETURN ON AVERAGE EQUITY............... 14.64% 12.88% 13.62% 12.26% 12.07%
</TABLE>

*FULLY TAX-EQUIVALENT USING THE RATE OF 35% FOR 1994 AND 1993 AND 34% FOR
EARLIER YEARS.

8
<PAGE>
BALANCE SHEET ANALYSIS

SUMMARY

A financial institution's primary sources of revenue are generated by its
earning assets, while its major expenses are produced by the funding of these
assets with interest bearing liabilities. Effective management of these sources
and uses of funds is essential in attaining a financial institution's maximum
profitability while maintaining a minimum amount of interest rate and credit
risk. Information on rate-related sources and uses of funds for each of the
three years in the period ended December 31, 1994, is provided in Table 4,
Average Balance Sheet / Net Interest Income Analysis.

In 1994, average earning assets grew by 2.4% or $76.5 million over 1993,
following a 3.4% or $105.6 million increase in 1993 over 1992. Average interest
bearing liabilities, the primary source of funds supporting earning assets, has
remained relatively flat over the past three years. Average interest bearing
liabilities rose by $34.8 million or 1.3% in 1994 when compared to 1993, which
follows a $45.9 million or 1.7% increase in 1993 over 1992. The relatively low
growth in average interest bearing liabilities is attributed to the lower
interest rate environment over these periods and the resulting high competition
for funds, as more fully explained below.

AVERAGE BALANCE SHEET / NET INTEREST INCOME ANALYSIS TABLE 4
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
1994 1993 1992
AVERAGE YIELD/ AVERAGE YIELD/ AVERAGE YIELD/
BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1) BALANCE INTEREST (1) RATE (1)

<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans(2)
Taxable......................... $2,202,716 $189,040 8.58% $2,032,527 $179,971 8.85% $1,929,592 $186,681 9.67%
Tax-exempt...................... 34,430 3,618 10.51 31,153 3,255 10.45 30,351 3,133 10.32
Total loans.................... 2,237,146 192,658 8.61 2,063,680 183,226 8.88 1,959,943 189,814 9.68
Less: Allowance for losses...... 37,460 36,932 33,170
Total loans-net................ 2,199,686 8.76 2,026,748 9.04 1,926,773 9.85
Investment securities
Taxable......................... 874,901 48,881 5.59 973,890 55,868 5.74 966,198 64,466 6.67
Tax-exempt...................... 176,079 15,497 8.80 100,577 10,146 10.09 83,261 9,059 10.88
Total securities............... 1,050,980 64,378 6.13 1,074,467 66,014 6.14 1,049,459 73,525 7.01
Federal funds sold & other........ 27,363 1,037 3.79 100,270 3,104 3.10 119,696 4,290 3.58
Total earning assets........... 3,278,029 258,073 7.87 3,201,485 252,344 7.88 3,095,928 267,629 8.64
Other assets...................... 262,422 265,776 277,317
Total assets................... $3,540,451 $3,467,261 $3,373,245

LIABILITIES AND EQUITY
Interest bearing liabilities:
Interest bearing demand
deposits....................... $ 451,718 10,832 2.40 $ 451,321 13,642 3.02 $ 401,804 14,304 3.56
Savings deposits................ 816,739 22,021 2.70 799,784 25,505 3.19 691,897 27,548 3.98
Time deposits................... 1,250,082 52,368 4.19 1,247,315 51,660 4.14 1,362,074 67,861 4.98
Total interest bearing
deposits.................... 2,518,539 85,221 3.38 2,498,420 90,807 3.63 2,455,775 109,713 4.47
Short-term borrowings........... 242,304 8,491 3.50 214,460 6,270 2.92 221,601 8,203 3.70
Long-term borrowings............ 22,931 1,185 5.17 36,088 2,709 7.51 25,703 2,123 8.26
Total interest bearing
liabilities.................. 2,783,774 94,897 3.41 2,748,968 99,786 3.63 2,703,079 120,039 4.44
Demand deposits................... 412,016 396,711 373,488
Other liabilities................. 28,937 26,849 27,671
Shareholders' equity.............. 315,724 294,733 269,007
Total liabilities and equity... $3,540,451 $3,467,261 $3,373,245
Net interest earnings............. $163,176 $152,558 $147,590
Net yield on earning assets....... 4.98% 4.77% 4.77%
</TABLE>

(1) FULLY TAX-EQUIVALENT USING THE RATE OF 35% FOR 1994 AND 1993, AND 34% FOR
1992.
(2) NON-ACCRUAL LOANS ARE INCLUDED IN AVERAGE BALANCES.

9
<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

Additional information on each of the components of earning assets and
interest bearing liabilities is contained in the following sections of this
report.

LOAN PORTFOLIO

One Valley's loan portfolio is its largest and most profitable component
of average earning assets, totaling 67.1% of average earning assets. One Valley
continued to emphasize increasing its loan portfolio in 1994. Average net loans
increased by $172.9 million or 8.5% in 1994, following a 5.2% or $100.0 million
increase in 1993. The increase in 1994 average loans was due to a balanced
increase in the three major types of loans; commercial, real estate and
consumer installment. The increase in 1993 average loans was primarily
attributable to an increase in residential real estate loans. As a result of
these increases, average net loans have increased as a percentage of average
earning assets, from 62.2% in 1992 to 67.1% in 1994. Similarly, One Valley's
loan-to-deposit ratio continued its upward trend in 1994, Loans ending the year
at 79.8%. This ratio compares to 72.6% at December 31, 1993 and 68.1% at
December 31, 1992. Expanding affiliate market share, as well as One Valley's
carefully planned acquisition activity, have contributed greatly to the growth
in the loan portfolio.

Total loans at December 31, 1994, increased by $203.6 million or 9.4% over
the total at December 31, 1993. This increase compares to a $171.5 million or
8.6% increase in 1993 over the total loans at December 31, 1992. As mentioned
above, the increase in 1994 was in all areas of lending. Commercial loans
increased by $64.0 million or 19.2% during 1994, compared to a $32.9 or 10.9%
increase in 1993. Residential real estate loans including revolving home
equity loans increased by $77.7 million or 8.0% during 1994, compared to a
$101.6 million or 11.7% increase in 1993. Consumer installment loans increased
by $67.0 million or 14.4% in 1994, following a $11.2 million or 2.5% increase
during 1993. Commercial real estate loans, including apartment
buildings and complexes, was the only category of loans to decrease in 1994.
Declining by $13.0 million or 3.6%, commercial real estate loans have
historically only averaged less than one-sixth of the total loan portfolio.
This low concentration of such loans has limited One Valley's exposure to swings
in commercial real estate values and the potential for related credit losses.

Table 5, Loan Summary, presents a five-year comparison of loans by type.
With the exception of those categories included in the comparison, there are no
loan concentrations which exceed 10% of total loans. Additionally, One
Valley's loan portfolio contains no loans to foreign borrowers nor does it have
any material volume of highly leveraged transaction lending. Over the past
four years, total loans have increased $908 million, a result of acquisitions
and internal growth. While loan growth has been substantial, One Valley
imposes underwriting and credit standards which are designed to maintain a
quality loan portfolio.

Loans secured by real estate, which in total constituted approximately 61%
of One Valley's loan portfolio at December 31, 1994, consist of a diverse
portfolio of predominantly single family residential loans and loans for
commercial purposes where real estate is merely collateral, not the primary
source of repayment. The majority of these loans is secured by property
located within West Virginia, where real estate values have remained relatively
stable over the past ten years.

One Valley also originates residential real estate loans to be sold in the
secondary market. In 1994, $50.8 million of loans were originated to be sold
in the secondary market. This compares to approximately $163.8 million of new
loan volume originated for sale in the secondary market in 1993 and $218.5
million in 1992. This activity generates considerable processing and servicing
fee income for One Valley, as discussed further in the "Income Statement
Analysis" section of this report. The decline in the volume of loans
originated for sale in 1994 was due to the rising interest rate environment and
the resulting lower volume of mortgage refinancings when compared to 1993 and
1992.

In addition to the loans reported in Table 5, One Valley also offers certain
off-balance sheet products such as letters of credit, revolving credit
agreements, and other loan commitments. These products are offered under the
same credit standards as the loan portfolio and are included in the risk-based
capital ratios used by the Federal Reserve to evaluate capital adequacy.
Additional information on off-balance sheet commitments is contained in Note N
to the consolidated financial statements.

Table 5 also reports the level of non-performing assets and loans
contractually past due over 90 days for the last five years.

AVERAGE EARNING ASSETS
Dollars in millions

(Stacked bar graph appears here. The plot points are listed below).

1989 1990 1991 1992 1993 1994
Loans 1347 1384 1557 1927 2027 2200
Investment Securities & Other 832 894 981 1169 1175 1078

TOTAL LOANS
Dollars in millions

(Stacked bar graph appears here. The plot points are listed below).

1989 1990 1991 1992 1993 1994

Consumer 404 396 433 454 465 532
Commercial Real Estate 216 233 290 329 362 349
Residential Real Estate 466 512 872 871 972 1,050
Commercial, Financial & Other 317 325 339 345 370 442

<PAGE>

LOAN SUMMARY TABLE 5
(DOLLARS IN THOUSANDS)

AS OF DECEMBER 31
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
SUMMARY OF LOANS BY TYPE
Commercial, financial,
agricultural, and other loans.............. $ 398,105 $ 334,068 $ 301,155 $ 274,436 $ 298,857
Real estate:
Construction loans.......................... 42,746 33,682 43,108 37,307 25,713
Revolving home equity....................... 113,142 102,648 93,092 70,927 57,539
Single family residentials.................. 936,698 869,502 777,428 801,525 454,345
Apartment buildings and complexes........... 37,475 41,465 45,798 37,490 25,306
Commercial.................................. 311,691 320,668 282,728 252,557 207,511
Bankers' acceptances.......................... 849 2,123 560 26,887 0
Consumer installment loans.................... 532,251 465,216 454,032 432,941 395,739
Subtotal.................................... 2,372,957 2,169,372 1,997,901 1,934,070 1,465,010
Less: Allowance for loan losses.............. 37,438 36,484 35,679 30,567 20,290
Net loans................................... $2,335,519 $2,132,888 $1,962,222 $1,903,503 $1,444,720

PERCENT OF LOANS BY CATEGORY
Commercial, financial,
agricultural, and other..................... 16.78% 15.40% 15.07% 14.19% 20.40%
Real estate:
Construction loans.......................... 1.80 1.55 2.16 1.93 1.76
Revolving home equity....................... 4.77 4.73 4.66 3.67 3.93
Single family residentials.................. 39.46 40.09 38.91 41.44 31.01
Apartment buildings and complexes........... 1.58 1.91 2.29 1.94 1.73
Commercial.................................. 13.14 14.78 14.15 13.06 14.16
Bankers' acceptances.......................... 0.04 0.10 0.03 1.39 0.00
Consumer installment loans.................... 22.43 21.44 22.73 22.38 27.01
Total....................................... 100.00% 100.00% 100.00% 100.00% 100.00%

NON-PERFORMING ASSETS
Non-accrual loans............................. $ 7,664 $ 8,819 $ 14,125 $ 18,202 $ 14,263
Other real estate owned....................... 1,436 3,124 8,853 10,630 10,877
Restructured loans............................ 552 597 131 1,964 0
Total non-performing assets................. $ 9,652 $ 12,540 $ 23,109 $ 30,796 $ 25,140

Non-performing assets as a % of total loans... 0.41% 0.58% 1.16% 1.59% 1.72%

LOANS PAST DUE OVER 90 DAYS.................... $ 3,827 $ 3,180 $ 4,139 $ 3,628 $ 3,962
As a % of total loans......................... 0.16% 0.15% 0.21% 0.19% 0.27%

ALLOCATION OF LOAN LOSS RESERVE
BY LOAN TYPE
Commercial, financial, and
unallocated portion......................... $ 14,765 $ 16,698 $ 13,899 $ 12,873 $ 10,733
Real estate construction loans................ 220 180 224 209 76
Real estate loans - other..................... 8,036 8,277 9,179 7,411 2,263
Consumer installment loans.................... 14,417 11,329 12,377 10,074 7,218
Total....................................... $ 37,438 $ 36,484 $ 35,679 $ 30,567 $ 20,290
</TABLE>

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

Total non-performing assets, which consist of past due loans on which
interest is not being accrued, foreclosed properties in the process of
liquidation, and loans the terms of which have been restructured to enable a
delinquent borrower to repay, were $9.7 million or 0.41% of total loans at year-
end 1994. Over the past three years One Valley has diligently worked to reduce
its level of non-performing assets, which increased significantly in 1991 due to
an acquisition.

The amount of loans contractually past due over 90 days, but which continue
to accrue interest, increased in dollars, but remained relatively flat as a
percentage of year-end total loans. At December 31, 1994, these loans
constituted only 0.16% of year-end loans, virtually unchanged from the 0.15% at
December 31, 1993. The consistently favorable ratio of problem loans to total
loans has occurred while the loan portfolio has increased significantly over the
last five years, and thus the favorable ratio is indicative of One Valley's
commitment to a quality loan portfolio. Both the increase in the size and the
credit quality of the loan portfolio have enabled One Valley to increase its net
credit income by $9.6 million or 6.7% in 1994 and $10.1 million or 7.6% in 1993.

It is One Valley's policy to place loans that are past due over 90 days on
non-accrual status, unless the loans are adequately secured and in the process
of collection. For real estate loans, upon repossession (or substantive
repossession), the balance of the loan is transferred to "Other Real Estate
Owned" (OREO) and carried at the lower of the outstanding loan balance or the
fair market value of the property based on current appraisals and other current
market trends. If a writedown of the OREO property is necessary at the time of
foreclosure, the amount is

COMPARATIVE LOAN LOSS INFORMATION TABLE 6
(DOLLARS IN THOUSANDS)

FOR THE YEAR ENDED DECEMBER 31
1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C>
ALLOWANCE FOR LOAN LOSSES, BEGINNING OF PERIOD...... $ 36,484 $ 35,679 $ 30,567 $ 20,290 $18,993
Charge-offs:
Commercial, financial, and agricultural loans..... 1,207 2,644 2,756 2,801 2,570
Real estate construction loans.................... 0 0 0 0 0
Real estate loans - other......................... 1,118 1,320 1,525 961 1,589
Installment loans................................. 3,660 3,417 4,280 3,826 4,276
Total charge-offs................................ 5,985 7,381 8,561 7,588 8,435

Recoveries:
Commercial, financial, and agricultural loans..... 793 930 821 954 402
Real estate construction loans.................... 0 0 0 0 16
Real estate loans - other......................... 274 373 394 168 146
Installment loans................................. 1,084 1,095 1,069 988 1,284
Total recoveries................................. 2,151 2,398 2,284 2,110 1,848
Net charge-offs..................................... 3,834 4,983 6,277 5,478 6,587
Provision for loan losses........................... 4,788 5,788 11,389 6,671 7,884
Balance of acquired subsidiaries.................... 0 0 0 9,084 0
ALLOWANCE FOR LOAN LOSSES, END OF PERIOD............ $ 37,438 $ 36,484 $ 35,679 $ 30,567 $20,290

Average total loans................................. $2,237,146 $2,063,680 $1,959,943 $ 1,581,829 $1,404,196
Total loans at year-end............................. 2,372,957 2,169,372 1,997,901 1,934,070 1,465,736

AS A PERCENT OF AVERAGE TOTAL LOANS:
Net charge-offs................................... 0.17% 0.24% 0.32% 0.35% 0.47%
Provision for loan losses......................... 0.21 0.28 0.58 0.42 0.56
Allowance for loan losses......................... 1.67 1.77 1.82 1.93 1.44

AS A PERCENT OF TOTAL LOANS AT YEAR-END:
Allowance for loan losses......................... 1.58% 1.68% 1.79% 1.58% 1.38%

AS A MULTIPLE OF NET CHARGE-OFFS:
Allowance for loan losses......................... 9.76X 7.32X 5.68X 5.58X 3.08X
Income before tax and provision for loan losses... 19.02 12.46 10.30 8.00 6.06
</TABLE>

<PAGE>

charged off against the allowance for loan losses. A quarterly review of
the recorded property value is performed in conjunction with normal loan
reviews, and if market conditions indicate that the recorded value exceeds the
fair market value, additional write-downs of the property value are charged
directly to operations. One Valley had no commitments to provide additional
funds on non-accrual loans at December 31, 1994. During 1994, One Valley
recognized less than $0.1 million of interest on non-accrual loans, while
approximately $0.7 million would have been recognized on these loans had they
been current throughout 1994 in accordance with their original terms. In
comparison, during 1993, approximately $0.3 million was recognized on non-
accrual loans, while approximately $1.9 million would have been recognized in
accordance with their original terms.

In May 1993, the FASB issued Statement No. 114, "Accounting by Creditors for
Impairment of a Loan," which was amended by FASB Statement No. 118 and is
effective for fiscal years beginning after December 15, 1994. The Statement
requires that impaired loans be measured at the present value of expected
future cash flows discounted at the loan's original effective interest rate or,
as a practical expedient, at the loan's observable market price or the fair
value of the collateral if the loan is collateral dependent. One Valley will
adopt this Statement on January 1, 1995, and it will not have a material effect
on One Valley's financial statements.

The allowance for loan losses is maintained to absorb probable losses
associated with lending activities. Factors considered in determining the
adequacy of the allowance include an individual assessment of risk on large
commercial credits, historical charge-off experience, levels of non-performing
loans, and an evaluation of current economic conditions. As a part of the
holding company structure, One Valley maintains a credit analysis and review
department to evaluate large commercial credit requests and to complete loan
follow-up procedures. One Valley also maintains a loan administration function
to continually identify and monitor problem loans. At December 31, 1994, the
allowance for loan losses was $37.4 million or 1.58% of total year-end loans,
which is sufficient to absorb nearly ten times the amount of net charge-offs
experienced during 1994. The 1.58% ratio is a decrease from the prior year's
1.68% and a further decline from the 1.79% at the end of 1992. In management's
opinion, the allowance for loan losses is adequate to absorb the current
estimated risk of loss in the existing portfolio. Table 5 includes a summary
of the allowance for loan losses allocated by loan type. Table 6, Comparative
Loan Loss Information, provides a detailed history of the allowance for loan
losses, illustrating charge-offs and recoveries by loan type, and the annual
provision for loan losses over the past five years.

The provision for loan losses in 1994 was $4.8 million, down from the $5.8
million provision in 1993 and down significantly from the $11.4 million
provision in 1992. The increased provision in 1992 was in response to growth in
the loan portfolio and a continued conservative assessment of $339 million in
loans purchased from a thrift operated by Resolution Trust Corporation.
Management evaluated the loans conservatively because the loans were originated
under the former thrift's credit standards, rather than the stricter One Valley
credit standards. While One Valley experienced considerable loan growth during
1994 and 1993, the credit quality of the portfolio has improved significantly,
as evidenced by the low level of non-performing assets and the low level of net
charge-offs during those years. Thus management was able to lower the
provision for loan losses for those years and still maintain a relatively high
ratio of the allowance for loan losses to non-performing assets.

Net charge-offs in 1994 decreased by $1.1 million or 23.1% from 1993 net
charge-offs. This decrease follows a $1.3 million or 20.6% decrease in 1993 from
1992 net charge-offs. Net charge-offs as a percentage of average total loans
declined to 0.17%, which compares to 0.24% in 1993 and 0.32% in 1992. All three
of these ratios compare favorably to peer group banks across the country.
Although the dollar amount of net charge-offs could increase in the coming
months due to the increase in the total dollar amount of loans, management
anticipates for the near future, based on the credit quality of the loan
portfolio, that the ratio of net charge-offs to average total loans will
continue to remain near the historically low level One Valley has experienced
over the years.

NON-PERFORMING ASSET AND LOANS 90 DAYS PAST DUE
AS A % OF TOTAL LOANS

(Bar graph appears here. The plot points are listed below.)

1989 1990 1991 1992 1993 1994
Non-performing Assets 1.43% 1.72% 1.59% 1.16% 0.58% 0.41%
Loans 90 Days Past Due 0.29% 0.27% 0.19% 0.21% 0.15% 0.16%

PROVISION FOR LOAN LOSSES AND NET CHARGE-OFFS
AS A % OF AVERAGE TOTAL LOANS

(Bar graph appears here. The plot points are listed below.)

1989 1990 1991 1992 1993 1994
Net Charge-offs 0.73% 0.47% 0.35% 0.32% 0.24% 0.17%
Provision 0.91% 0.56% 0.42% 0.58% 0.28% 0.21%

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

INVESTMENT PORTFOLIO AND OTHER EARNING ASSETS

Investment securities averaged $1,051.0 million in 1994, a 2.2% decrease
from the $1,074.5 million averaged in 1993. This slight decrease follows a 2.4%
increase over the $1,049.5 million averaged in 1992. The decrease in the
average balance during 1994 is primarily in response to the increased loan
demand during the year, as One Valley was able to place maturing investments in
its more profitable loan portfolio. The increase in 1993 was due largely to
increases in sources of funds and a decline in the average balance of federal
funds sold, which are short-term investments with other banks.

As sources of funds (deposits, federal funds purchased, and repurchase
agreements with corporate customers) fluctuate, excess funds are initially
invested in federal funds sold and other short-term investments. Based upon
continual analyses of asset/ liability repricing, interest rate forecasts, and
liquidity requirements, funds are periodically reinvested in high-quality debt
securities, which typically mature over a longer period of time (Table 8). At
the time of purchase, management determines whether securities will be
classified as available-for-sale or held-to-maturity (held-for-investment in
1993). If classified as held-to-maturity, securities are recorded at historical
cost and adjusted monthly over their remaining lives for the accretion or
amortization of the difference between cost and maturity value of the
investments. Thus at the time of maturity, the proceeds from maturity and the
book value of the investment are equivalent and no gain or loss is recognized.
One Valley, through its size and the stable nature of its deposit base, is able
to purchase securities with a wide variety of maturities, the majority of which
are short-term.

One Valley adopted the provisions of Financial Accounting Standards Board
(FASB) Statement No. 115, "Accounting for Certain Investments in Debt and Equity
Securities." for investments held as of or acquired after January 1, 1994. In
accordance with the Statement, prior period financial statements have not been
restated to reflect the change in accounting principle. The cumulative effect
of adopting this Statement as of January 1, 1994, was to increase the opening
balance of shareholders' equity by $4.8 million (net of $3.2 million in
deferred income taxes) to reflect the net unrealized holding gains on
securities classified as available-for-sale previously carried at amortized
cost. Securities designated as available-for-sale at January 1, 1994,
approximated $632 million. During 1994, One Valley sold a portion of the
securities classified as available-for-sale as part of its management of
interest rate risk, as shown in the Statements of Cash Flows. One Valley does
not have any securities classified as trading and it has no plans to establish
such classification at the present time. At year-end 1994, approximately 55%
of the total investment portfolio was classified as available-for-sale, while
45% was classified as held-to-maturity. Other information regarding investment
securities may be found in Table 8, Securities Maturity and Yield Analysis,
and in Note D to the consolidated financial statements.

Due to unfavorable laws relating to investments in tax-exempt assets and
corporate minimum tax regulations, levels of tax-exempt securities held by One
Valley, as well as their average maturity period, declined in the years from
1986 to 1993. However, due to the lower interest rate environment, overall
yields on tax-exempt securities have become attractive once again. During 1994,
One Valley increased its tax-exempt securities by $41.7 million, or 30.3%, over
the level of tax-exempt securities held at December 31, 1993. This increase
followed an increase in 1993 of $54.0 million, or 64.6%, over the level held at
December 31, 1992. Future investments in tax-exempt securities will generally
be made if the related yield is greater than that available with a similar
taxable investment.

As shown in Table 8, the average maturity period of securities available-
for-sale was 2 years while the average maturity period of securities held-to-
maturity was 10 years 9 months at the end of 1994. The average maturity of
mortgage-backed securities

REMAINING MATURITIES OF LOANS TABLE 7
(DOLLARS IN THOUSANDS)

<TABLE>
<CAPTION>
BALANCE PROJECTED MATURITIES*
DECEMBER 31 ONE YEAR ONE TO FIVE OVER FIVE
1994 OR LESS YEARS YEARS
<S> <C> <C> <C> <C>
Commercial, financial, and agricultural loans... $373,583 $157,603 $125,598 $ 90,382
Real estate construction loans.................. 42,746 27,317 5,923 9,506
Commercial real estate loans.................... 349,166 53,669 195,808 99,689

Loans with:
Floating rates................................ $489,266 $155,820 $185,286 $148,160
Predetermined rates........................... 276,229 82,769 142,043 51,417
</TABLE>

*BASED ON SCHEDULED OR APPROXIMATE REPAYMENTS.

<PAGE>

SECURITIES MATURITY AND YIELD ANALYSIS TABLE 8
(DOLLARS IN THOUSANDS)

AS OF DECEMBER 31, 1994
AVERAGE TAXABLE
HELD-TO-MATURITY BOOK MATURITY EQUIVALENT
VALUE (Years/ Months) YIELD*
<S> <C> <C> <C>
U. S. TREASURY SECURITIES
After one but within five years........................ $ 25,576 7.12%
After five but within ten years........................ 1,055 8.36
Over ten years......................................... 21,275 7.06
Total U.S. Treasury Securities....................... 47,906 7/3 7.12

U. S. GOVERNMENT AGENCIES SECURITIES
After one but within five years........................ 21,011 4.87
After five but within ten years........................ 56,525 6.83
Over ten years......................................... 1,000 7.49
Total U.S. Government Agencies Securities............ 78,536 5/2 6.31

STATES AND POLITICAL SUBDIVISIONS SECURITIES
Within one year........................................ 7,667 11.43
After one but within five years........................ 20,591 10.81
After five but within ten years........................ 20,181 8.08
Over ten years......................................... 130,907 8.06
Total States and Political Subdivisions
Securities......................................... 179,346 15/2 8.52

MORTGAGE-BACKED SECURITIES**
Within one year........................................ 458 7.01
After one but within five years........................ 6,414 6.75
After five but within ten years........................ 19,892 7.41
Over ten years......................................... 112,167 7.38
Total Mortgage-Backed Securities..................... 138,931 10/10 7.35

OTHER SECURITIES........................................ 439
TOTAL SECURITIES HELD-TO-MATURITY....................... $445,158 10/9 7.61%
</TABLE>

AS OF DECEMBER 31, 1994
AVERAGE TAXABLE
AVAILABLE-FOR-SALE FAIR MATURITY EQUIVALENT
VALUE (Years/ Months) YIELD*
<S> <C> <C> <C>
U. S. TREASURY SECURITIES
Within one year............................... $205,846 4.26%
After one but within five years............... 210,276 5.72
After five but within ten years............... 975 6.29
Total U.S. Treasury Securities.............. 417,097 1/2 5.00

U. S. GOVERNMENT AGENCIES SECURITIES
Within one year............................... 63,021 5.55
After one but within five years............... 12,012 6.85
Total U.S. Government Agencies Securities... 75,033 0/7 5.76

MORTGAGE-BACKED SECURITIES**
After one but within five years............... 1,667 6.98
After five but within ten years............... 9,600 6.19
Over ten years................................ 23,575 6.26
Total Mortgage-Backed Securities............ 34,842 14/5 6.28

OTHER SECURITIES............................... 14,229
TOTAL SECURITIES AVAILABLE-FOR-SALE............ $541,201 2/0 5.06%
</TABLE>

* FULLY TAX-EQUIVALENT USING THE RATE OF 35%.
** MATURITIES FOR MORTGAGE-BACKED SECURITIES ARE BASED ON CONTRACTUAL
REPAYMENTS.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

included in the table was based on the contractual maturity. The average
maturity of the investment portfolio is managed at a level to maintain a proper
matching with liability maturity patterns.

One Valley's average investment in federal funds sold and other short-term
investments has declined over the past three years, averaging $27.4 million in
1994, a decrease from the $100.3 million averaged during 1993, and a further
decrease from the $119.7 million averaged during 1992. Fluctuations in federal
funds sold and other short-term investments reflect management's goal to
maximize asset yields while maintaining proper asset/ liability structure, as
discussed in greater detail above.

FUNDING SOURCES

Over the past three years, declines in market interest rates have forced
banks to reduce their rates paid on interest bearing deposits. In 1994, the
average rate paid on interest bearing liabilities was 3.41%, down from the
3.63% average rate paid in 1993, and down further still from 4.44% paid in
1992. Due to alternative sources of investment and an increasing
sophistication of customers in funds management techniques to maximize return
on their money, competition for funds has become more intense. One Valley has
offered new deposit products as well as periodic special rate products to
attract additional deposits. One Valley's deposits, on average, increased by
1.2% or $35.4 million in 1994. This increase follows a 2.3% increase in 1993.
During 1994, non-interest bearing deposits increased on average by 3.9% over
1993, while interest bearing deposits increased by only 0.8%. This trend is
reflective of an increased customer base in the use of checking and other non-
interest bearing deposit products, and the stiff competition for interest
bearing investments in a low interest rate environment.

Short-term borrowings increased, on average, by $27.8 million or 13.0% from
1993, following a 3.2% decrease in 1993 from 1992. Pass-through federal funds
purchased from correspondent banks increased, on average, by $5.8 million or
30.0% in 1994. This increase follows a 0.7% increase in 1993. Fluctuations in
federal funds purchased are considered normal and are generally influenced by
market interest rates and the availability of funds. Repurchase agreements and
other short-term borrowings increased, on average, by $22.1 million or 11.3%
in 1994, primarily to fund loan growth. This increase follows a 3.6% decrease
in 1993.

Long-term borrowings, on average, decreased by $13.2 million, or 36.5%, in
1994, following a $10.4 million increase in 1993. As a result, One Valley now
has $19.5 million of long-term debt, primarily Federal Home Loan Bank (FHLB)
borrowings, with repayment schedules from one to nine years. Other information
regarding short- and long-term borrowings is contained in Notes H and I to the
consolidated financial statements.

INTEREST SENSITIVITY AND LIQUIDITY

Asset/liability management is a means of maximizing net interest income
while minimizing interest rate risk by planning and controlling the mix and
maturities of interest related assets and liabilities. One Valley has
established an Asset/Liability Management Committee for the purpose of
monitoring and managing interest rate risk. Interest rate risk is the earnings
variation that could occur due to changes in market interest rates.

AVERAGE DEPOSITS
Dollars in millions

(Stacked bar graph appears here. Plot points are listed below.)

1989 1990 1991 1992 1993 1994

Demand Deposits 262 273 296 373 397 412
Time Deposits 1084 1148 1265 1,401 1,247 1,453
Savings - Regular 463 450 511 692 800 614
Savings - Checking 210 230 271 363 451 452

MATURITY DISTRIBUTION OF CERTIFICATES OF DEPOSIT
IN AMOUNTS OF $100,000 OR MORE TABLE 9
(DOLLARS IN THOUSANDS)

AS OF DECEMBER 31, 1994 AS OF DECEMBER 31, 1993
AMOUNT PERCENT AMOUNT PERCENT
<S> <C> <C> <C> <C>
Three months or less........ $ 83,923 44.90% $ 65,875 38.36%
Three through six months.... 28,531 15.26 32,655 19.00
Six through twelve months... 32,919 17.61 28,556 16.63
Over twelve months.......... 41,530 22.22 44,662 26.00
Total...................... $186,903 100.00% $171,748 100.00%
</TABLE>

<PAGE>

One commonly used measure of interest rate risk is the gap report. A gap
report identifies the ratio of earning assets to interest bearing liabilities
that will mature or reprice within a given time period. A sensitivity ratio
greater than 1.00 (positive gap) indicates that more earning assets will be
subject to interest rate repricing during a given period than interest bearing
liabilities during the same period. Thus, an increase in interest rates would
tend to have a positive impact on net interest income, while a decline in rates
would tend to have the opposite effect.

Table 10, Comparative Rate Sensitivity Summary shows One Valley's gap
position as of December 31, 1994. The information presented includes various
assumptions and estimates by management regarding maturity and repayment
patterns. As shown in Table 10, One Valley's cumulative interest sensitivity
ratio in the first six-month time frame is 1.03, a positive gap. As such,
approximately $37.8 million more earning assets than interest bearing
liabilities will be subject to interest rate repricing in the next six months.

The information presented in the gap report (Table 10) represents a static
view of One Valley. One Valley uses computer generated scenarios to simulate
the future as a primary tool for analyzing interest rate risk and modeling
business strategies in a dynamic framework. The simulations begin with the gap
report information and use various assumptions, such as expected changes in the
interest rate environment; the shape of the yield curve; pricing strategies for
loans and deposits; the growth, volume and mix of interest sensitive assets and
liabilities; and potential hedging strategies. These simulations assist
management in minimizing risk and maintaining a conservative sensitivity
position.

One Valley's investments have been limited to traditional investment
securities and the company does not currently have any investments in derivative
instruments. However, One Valley continually evaluates all investment
alternatives in its management of interest rate risk and asset/liability
structure.

COMPARATIVE RATE SENSITIVITY SUMMARY TABLE 10
(DOLLARS IN THOUSANDS)

DECEMBER 31, 1994 0-3 MONTHS 3-6 MONTHS 6-12 MONTHS OVER 1 YEAR TOTAL
<S> <C> <C> <C> <C> <C>
Earning Assets
Loans.................................. $ 924,944 $168,432 $300,979 $ 978,602 $2,372,957
Investments............................ 100,979 102,101 110,810 676,766 990,656
Other earning assets................... 24,875 0 0 0 24,875
Total earning assets................. 1,050,798 270,533 411,789 1,655,368 3,388,488
Interest Bearing Liabilities
Interest bearing deposits.............. 710,419 189,293 218,409 1,429,846 2,547,967
Short-term borrowings.................. 368,458 6,881 0 0 375,339
Long-term borrowings................... 5,505 3,005 3,029 7,911 19,450
Total interest bearing liabilities... 1,084,382 199,179 221,438 1,437,757 2,942,756
Interest sensitivity gap for period.... (33,584) 71,354 190,351 217,611 445,732
Cumulative interest sensitivity gap.... (33,584) 37,770 228,121 445,732
Cumulative rate sensitivity ratio...... 0.97 1.03 1.15 1.15

DECEMBER 31, 1993
Earning Assets
Loans.................................. $ 793,684 $126,920 $239,693 $1,009,075 $2,169,372
Investments............................ 135,394 58,189 244,018 630,463 1,068,064
Other earning assets................... 31,145 0 0 0 31,145
Total earning assets................. 960,223 185,109 483,711 1,639,538 3,268,581
Interest Bearing Liabilities
Interest bearing deposits.............. 599,075 239,420 252,436 1,433,487 2,524,418
Short-term borrowings.................. 194,497 6,374 13,091 4,458 218,420
Long-term borrowings................... 2,160 2,128 4,256 14,244 22,788
Total interest bearing liabilities... 795,732 247,922 269,783 1,452,189 2,765,626
Interest sensitivity gap for period.... 164,491 (62,813) 213,928 187,349 502,955
Cumulative interest sensitivity gap.... 164,491 101,678 315,606 502,955
Cumulative rate sensitivity ratio...... 1.21 1.10 1.24 1.18
</TABLE>

AVERAGES ARE USED WHEN PERIOD-END BALANCES WOULD PRODUCE DISTORTED RESULTS.
THIS TABLE INCLUDES VARIOUS ASSUMPTIONS AND ESTIMATES BY MANAGEMENT OF MATURITY
AND REPAYMENT PATTERNS.
17

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

Liquidity is the ability to satisfy demands for deposit withdrawals, lending
commitments, and other corporate needs. One Valley's liquidity is based on the
stable nature of consumer core deposits held by the banking subsidiaries.
Likewise, additional liquidity is available from holdings of investment
securities and short-term investments which can be readily converted to cash.
Furthermore, One Valley continues to have the ability to attract short-term
sources of funds such as federal funds and repurchase agreements, and to arrange
credit lines to meet its cash needs.

One Valley generated $76.3 million of cash from operations in 1994, which
compares to $64.4 million in 1993 and $49.1 million in 1992. Additional cash of
$120.3 million was generated through net financing activities in 1994, which
compares to $48.5 million in 1993 and $67.6 million in 1992. These proceeds
along with proceeds from the sale and maturity of securities were used to fund
loans and purchase securities during the year. Net cash used in investing
activities totaled $168.9 million in 1994, which compares to $224.0 million in
1993 and $71.5 million in 1992. Details on the sources and uses of cash can be
found in the Statements of Cash Flows in the consolidated financial statements.

CAPITAL RESOURCES

One Valley's average equity-to-asset ratio increased to 8.92% during 1994,
up from 8.50% during 1993 and 7.97% in 1992. The increases primarily resulted
from the record earnings performances of One Valley. At year-end 1994, One
Valley's primary capital ratio was 9.68% compared to 9.62% at year-end 1993.
The Federal Reserve's risk-based capital guidelines and leverage ratio measure
the capital adequacy of banking institutions. The risk-based capital guidelines
weight balance sheet assets and off-balance sheet commitments by prescribed
factors relative to credit risk, thus eliminating disincentives for holding low
risk assets and requiring more capital for holding higher risk assets. At year-
end 1994, One Valley's risk adjusted capital-to-assets ratio was 15.5% compared
to 14.7% at December 31, 1993. The increase in the ratio is due to an increase
in earnings performance and a decrease in securities loaned, an off-balance
sheet factor, at the lead bank when compared to the prior year. Both of these
ratios are well above the minimum level of 8.0% prescribed for bank-holding
companies of One Valley's size. The leverage ratio is a measure of total
tangible equity to total tangible assets. One Valley's leverage ratio at
December 31, 1994 was 8.8% compared to 8.5% at December 31, 1993. Both of these
ratios are well above the minimum 3.0% and the recommended 4.0 to 5.0%
prescribed by the Federal Reserve. These healthy ratios are the direct result of
management's desire to maintain a strong capital position.

The primary source of funds for dividends paid by One Valley to its
shareholders is the dividends received from its subsidiary banks. Federal
regulatory agencies impose certain restrictions on the payment of dividends and
the transfer of assets from the banking subsidiaries to the holding company.
Historically, these restrictions have not had an impact on One Valley's dividend
policy, and it is not anticipated that they will in the future. Additional
information concerning dividend restrictions is discussed in Note M to the
consolidated financial statements.

In April 1994, the Board of Directors authorized management to repurchase up
to 400,000 shares of One Valley Bancorp common stock in the open market. During
1994, 263,500 shares were repurchased under this program. At December 31, 1994,
One Valley held 533,500 shares in its treasury. Any additional purchases will
depend upon future market conditions.

NET INTEREST MARGIN
Percent of earning assets
Fully taxable equivalent

(Line graph appears here. Plot points are listed below.)

1989 1990 1991 1992 1993 1994

Yield on Earning Assets 10.70 10.52 9.76 8.64 7.88 7.87
Cost of All Funds 6.04 5.90 5.16 3.87 3.11 2.89
Net Interest Margin 4.66 4.62 4.60 4.77 4.77 4.98

<PAGE>

INCOME STATEMENT ANALYSIS

NET INTEREST INCOME

Net interest income, the amount by which interest generated from earning
assets exceeds the expense associated with funding those assets, is One Valley's
most significant component of earnings. Net interest income on a fully tax-
equivalent basis was $163.2 million in 1994, up 7.0% over the 1993 level,
following a 3.4% increase in 1993 over 1992. When net interest income is
presented on a fully tax-equivalent basis, interest income from tax-exempt
earning assets is increased by the amount equivalent to the federal income taxes
which would have been paid if this income were taxable at the statutory federal
tax rate (35% for 1994 and 1993, 34% for 1992). The increase in net interest
income in 1994 is largely due to the increase in the volume of earning assets,
primarily loans. As shown in Table 11, Rate Volume Analysis, increases in the
volume of earning assets in both 1994 and 1993 have provided a significant
increase in net interest income. In 1994, the increase in the volume of earning
assets increased interest income by $13.7 million. This increase was partially
offset by declines in interest yields on earning assets due to declines in the
overall interest rate environment on average for the entire year. As a result,
total interest income increased by $5.7 million in 1994 over 1993. Similarly,
increased volume of interest bearing liabilities boosted interest expense by
$0.7 million, but the lower cost of interest bearing liabilities resulted in an
overall decline in total interest expense of $4.9 million. The increase in
total interest income coupled with the decline in overall interest expense
resulted in a $10.6 million increase in fully tax-equivalent net interest income
in 1994 over 1993. Similar trends were experienced in 1993 over 1992. The
decline in interest expense in 1993 was greater than the decline in total
interest income and, therefore, net interest income increased in 1993 over 1992.
During both years, the increase in loan volume has been the most significant
factor contributing to increased net interest income.

In 1994, as net interest income increased due to increased investment in
higher yielding loans, the net interest margin percentage on a fully tax-
equivalent basis also increased. The relatively low market interest rates in
the earlier months of 1994 kept the overall annual cost of funds down for the
year. The combination of these two factors resulted in a 4.98% net interest
margin in 1994, an increase over the 4.77% earned in 1993 and 1992. In 1993,
during the time of declining interest rates, the yield on the total loan
portfolio did not decline as rapidly as market rates paid for deposits and other
funding sources. Fixed rate loans helped maintain the relatively high yield in
the loan

RATE VOLUME ANALYSIS OF CHANGES IN INTEREST INCOME AND EXPENSE TABLE 11
(DOLLARS IN THOUSANDS)

1994 VS 1993 1993 VS 1992
INCREASE (DECREASE) INCREASE (DECREASE)
IN NET INTEREST INCOME IN NET INTEREST INCOME
VOLUME RATE TOTAL VOLUME RATE TOTAL

<S> <C> <C> <C> <C> <C> <C>
EARNING ASSETS
Loans:
Taxable................................ $ 14,730 $ (5,661) $ 9,069 $ 9,633 $ (16,343) $ (6,710)
Tax-exempt............................. 344 19 363 83 39 122
Total loans.......................... 15,074 (5,642) 9,432 9,716 (16,304) (6,588)
Investment Securities:
Taxable................................ (5,561) (1,426) (6,987) 509 (9,107) (8,598)
Tax-exempt............................. 6,786 (1,435) 5,351 1,782 (695) 1,087
Total investment securities.......... 1,225 (2,861) (1,636) 2,291 (9,802) (7,511)
Federal funds sold & other.............. (2,644) 577 (2,067) (645) (541) (1,186)
Total earning assets................. 13,655 (7,926) 5,729 11,362 (26,647) (15,285)

INTEREST BEARING LIABILITIES
Time and savings deposits............... 659 (6,245) (5,586) 346 (19,252) (18,906)
Short-term borrowings................... 878 1,343 2,221 (257) (1,676) (1,933)
Long-term borrowings.................... (795) (792) (1,524) 794 (208) 586
Total interest bearing liabilities... 742 (5,631) (4,889) 883 (21,136) (20,253)
NET INTEREST EARNINGS..................... $ 12,913 $ (2,295) $ 10,618 $10,479 $ (5,511) $ 4,968
</TABLE>

* FULLY TAXABLE EQUIVALENT USING THE RATE OF 35% FOR 1994 AND 1993 AND 34% FOR
1992.
NOTE - CHANGES TO RATE/VOLUME ARE ALLOCATED TO BOTH RATE AND VOLUME ON A
PROPORTIONATE DOLLAR BASIS.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

portfolio. However, as shown in the Net Interest Margin graph, One Valley's
net interest margin has not fluctuated substantially, up or down, over the past
six years. Further discussion of net interest income is included in the section
of this report entitled "Balance Sheet Analysis."

NON-INTEREST INCOME AND EXPENSE

Non-interest income has been and will continue to be an important factor for
improving profitability. Recognizing this importance, management continues to
evaluate areas where non-interest income can be enhanced. However, as shown in
Table 12, non-interest income decreased by $2.4 million or 6.1% in 1994
compared to 1993. The decrease is primarily due to a decline in real estate
loan processing and servicing fees. As mortgage loan refinancings and sales in
the secondary market have significantly declined from the level experienced in
1993 and 1992, One Valley's processing and servicing fees have also declined.
The decrease in non-interest income in 1994 follows a 7.7% increase in 1993
over 1992.

In 1994, service charges on deposit accounts declined slightly while credit
card fees increased significantly due to an increase in the number of
customers. Trust income increased in 1994 to $7.9 million, a $0.6 million or
8.5% increase over 1993. This increase follows a 20.4% increase in 1993 over
1992. Trust revenues are increasing primarily due to new business over the
past several years. In 1994, One Valley realized $867,000 in losses on
securities sales. These securities were sold as part of a plan to reinvest the
proceeds in higher yielding investments.

Just as management continues to evaluate areas where non-interest income can
be enhanced, it strives to find ways to improve the efficiency of its operations
and thus reduce operating costs. In 1994, efficiencies were achieved in
combining the operations of One Valley and Mountaineer Bankshares. One Valley's
1994 net overhead ratio, or non-interest expense less non-interest income
excluding securities transactions to average earning assets, was 2.52%, a
decrease from the 2.68% realized in 1993, and down from the 2.54% ratio
realized in 1992. For the year 1994, net overhead was $82.7 million, a
decrease of 3.8% from the 1993 net overhead of $86.0 million. By comparison,
net overhead totaled $78.8 million in 1992. A lower net overhead ratio means
more of the net interest margin flows through as net income. Over the past five
years, net overhead has grown by a compound rate of 7.18% whereas average
earning assets have grown by 8.51%.

Total non-interest expense decreased by $4.7 million, or 3.7% from 1993.
This compares to an 8.6% increase in 1993 versus 1992. Total staff costs rose
by 2.5% in 1994, compared to a 10.9% increase in 1993. Higher expenses in 1993
due to severance packages for employees of One Valley's data processing
subsidiary resulted in a lower percentage increase in 1994. These severance
packages and additional expense associated with the adoption of FASB Statement
106 account for the growth in staff expenses in 1993. Additional information
concerning the adoption of FASB Statement 106 is discussed in Note K to the
consolidated financial statements.

In 1993, the FASB issued Statement No. 112, "Employers' Accounting for
Postemployment Benefits," which was adopted in 1994 by One Valley. This
Statement requires employers to recognize the obligation to provide
postemployment benefits to employees if the obligation is attributable to
services already rendered, the rights to those benefits accumulate or vest,
payment of the benefits is probable, and the amount of the benefits can be
reasonably estimated. The adoption of this Statement did not have a material
impact on One Valley's financial statements.

Advertising expense decreased by 15.0% in 1994 compared to 1993, primarily
due to operating efficiencies after the merger of Mountaineer Bankshares.
Advertising expense decreased by 6.5% in 1993, due to increased advertising in
1992 associated with the integration of a acquisition. FDIC insurance increased
by 1.9% in 1994 and 6.4% in 1993 due to deposit growth. Net occupancy expense
declined slightly in 1994, down 3.1% from 1993, which remained virtually
unchanged when compared to 1992. Equipment expenses declined by 20.1% or $2.1
million in 1994, primarily due to realized savings from ceasing internal data
processing operations. Equipment expenses increased by 1.0% in 1993 versus
1992. Outside data processing costs increased by 2.8% in 1994 which compares
to a 94.6%

NET OVERHEAD RATIO
Net overhead as a % of average earning assets

(Line graph appears here. Plot points are listed below.)

1989 1990 1991 1992 1993 1994
2.68% 2.61% 2.65% 2.54% 2.68% 2.52%

EFFICIENCY RATIO
Non-interest expense as a % of total adjusted revenues*

(Line graph appears here. Plot points are listed below.)

1989 1990 1991 1992 1993 1994
63.60% 63.43% 65.13% 62.78% 65.44% 60.14%

*Tax-equivalent net interest income plus other income

<PAGE>

increase in 1993 compared to 1992. The increase in 1993 is largely due to
costs related to the conversion of One Valley's in-house data processing system
to outside service bureaus. Taxes not on income increased by 8.0% in 1994, due
to increases in gross receipts and equity, which are taxed at the local level.
The 0.9% increase in 1993 was primarily due to increases in equity based state
and county taxes. Supplies and postage expense declined by 3.0% in 1994,
primarily due to operational synergies realized after the Mountaineer Bankshares
merger. This decrease follows a 5.2% increase in 1993 over 1992 due to the data
processing conversion. Other expenses decreased by 15.1% in 1994, partially due
to expenses in 1993 related to the merger of One Valley and Mountaineer and
operating synergies realized after the merger. Other expenses increased 4.3% in
1993, primarily due to expenses associated with the merger of One Valley and
Mountaineer.

An analysis of the allowance for loan losses and related provision for loan
losses is included in the Loan Portfolio section of the Balance Sheet Summary of
this report.

APPLICABLE INCOME TAXES

Income tax expense in 1994 was $21.9 million compared to $18.3 million in
1993 and $16.6 million in 1992. The increase in 1994 is primarily due to
increases in pretax earnings, which was partially offset by an increase in tax-
exempt income. With the purchase of additional tax-exempt investments in 1994
and 1993, discussed above, tax-exempt income increased in 1994. One Valley's
effective tax rate was 32.2% in 1994, down from 32.6% in 1993 and up from 31.2%
in 1992. Additional information regarding income taxes is contained in Note J
to the consolidated financial statements.

NON-INTEREST INCOME AND EXPENSE TABLE 12
(DOLLARS IN THOUSANDS)

INCREASE (DECREASE) OVER PRIOR YEAR
1994 1993 1992 1994 1993
AMOUNT PERCENT AMOUNT PERCENT
<S> <C> <C> <C> <C> <C> <C> <C>
SERVICE CHARGES AND OTHER
OPERATING INCOME
Trust income................................... $ 7,892 $7,272 $ 6,041 $ 620 8.53 $ 1,231 20.38
Credit card fees............................... 3,254 2,749 2,055 505 18.37 694 33.77
Service charges on deposit accounts............ 11,441 11,963 11,281 (522) (4.36) 682 6.05
Insurance service fees......................... 840 819 990 21 2.56 (171) (17.27)
Real estate loan processing & servicing fees... 5,176 8,080 8,453 (2,904) (35.94) (373) (4.41)
Checkbook sales................................ 2,798 2,957 3,115 (159) (5.38) (158) (5.07)
Securities transactions........................ (867) 113 (35) (980) (867.26) 148 (422.86)
Miscellaneous.................................. 7,290 6,309 5,468 981 15.55 841 15.38
TOTAL NON-INTEREST INCOME................... $ 37,824 $40,262 $ 37,368 $ (2,438) (6.06) $ 2,894 7.74

STAFF AND OTHER OPERATING EXPENSES
Salaries & wages............................... $ 49,149 $48,906 $ 45,436 $ 243 0.50 $ 3,470 7.64
Employee benefits.............................. 13,893 12,605 10,021 1,288 10.22 2,584 25.79
Total staff expenses.......................... 63,042 61,511 55,457 1,531 2.49 6,054 10.92
Other Operating Expenses
Advertising................................... 2,293 2,697 2,884 (404) (14.98) (187) (6.48)
FDIC insurance................................ 6,642 6,519 6,127 123 1.89 392 6.40
Occupancy, net................................ 6,014 6,206 6,199 (192) (3.09) 7 0.11
Equipment..................................... 8,468 10,604 10,503 (2,136) (20.14) 101 0.96
Outside data processing....................... 4,705 4,575 2,351 130 2.84 2,224 94.60
Taxes not on income........................... 2,542 2,354 2,334 188 7.99 20 0.86
Supplies and postage.......................... 6,588 6,793 6,456 (205) (3.02) 337 5.22
All other..................................... 21,108 24,848 23,829 (3,740) (15.05) 1,019 4.28
Total other operating expenses................ 58,360 64,596 60,683 (6,236) (9.65) 3,913 6.45
TOTAL NON-INTEREST EXPENSE.................. $ 121,402 $126,107 $116,140 $ (4,705) (3.73) $ 9,967 8.58
</TABLE>

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

EFFECTS OF CHANGING PRICES

The results of operations and financial condition presented in this report
are based on historical cost, unadjusted for the effects of inflation.
Inflation affects One Valley in two ways. One is that inflation can result in
increased operating costs which must be absorbed or recovered through increased
prices for services. The second effect is on the purchasing power of the
corporation. Virtually all of a bank's assets and liabilities are monetary in
nature. Regardless of changes in prices, most assets and liabilities of the
banking subsidiaries will be converted into a fixed number of dollars. Non-
earning assets, such as premises and equipment, do not comprise a major portion
of One Valley's assets; therefore, most assets are subject to repricing on a
more frequent basis than in other industries.

One Valley's ability to offset the effects of inflation and potential
reductions in future purchasing power depends primarily on its ability to
maintain capital levels by adjusting prices for its services and to improve net
interest income by maintaining an effective asset/liability mix. Management's
efforts to meet these goals are described in other sections of this report.

SUMMARY RESULTS OF OPERATIONS

FOURTH QUARTER 1994

Net income for the three months ended December 31, 1994 was $11.5 million,
an increase of 50.0% over the $7.7 million earned during the fourth quarter of
1993. The lower earnings in the fourth quarter of 1993 was the result of
increased expenses related to the pending merger with Mountaineer Bankshares and
expenses related to the conversion of the data processing system discussed
above. On a per share basis, 1994 fourth quarter earnings were $0.68 compared
to $0.45 in 1993, an increase of 51.1%.

Net interest income increased by 4.4% when compared to the same three months
of 1993. Non-interest income, excluding securities gains (losses), decreased by
5.2%, primarily due to declines in real estate loan processing and servicing
fees. The decline in non-interest income was more that offset by a 12.6%
decrease in non-interest expense. Fourth quarter 1993 non-interest expenses
include costs associated with the completed data processing conversion and the
Mountaineer merger. The provision for loan losses declined by 4.4% when
compared to the fourth quarter of 1993.

Additional quarterly financial data is provided in Note Q to the
consolidated financial statements.

<PAGE>

REPORT OF ERNST AND YOUNG LLP, INDEPENDENT AUDITORS

The Board of Directors and Shareholders
One Valley Bancorp of West Virginia, Inc.

We have audited the accompanying consolidated balance sheets of One Valley
Bancorp of West Virginia, Inc. and subsidiaries (One Valley) as of December 31,
1994 and 1993, and the related consolidated statements of income, shareholders'
equity, and cash flows for each of the three years in the period ended December
31, 1994. These financial statements are the responsibility of the Company's
management. Our responsibility is to express an opinion on these financial
statements based on our audits. We did not audit the consolidated financial
statements of Mountaineer Bankshares of W.VA., Inc. and subsidiaries
(Mountaineer) which statements reflect total assets of $738,517 as of December
31, 1993 and total interest income of $52,645 and $55,403 for the years ended
December 31, 1993 and 1992. 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 Mountaineer, 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 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 One Valley
Bancorp of West Virginia, Inc. and subsidiaries at December 31, 1994 and 1993,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 1994, in conformity with
generally accepted accounting principles.

One Valley adopted Statement of Financial Accounting Standards No. 115,
"Accounting for Certain Investments in Debt and Equity Securities," as of
January 1, 1994 (See Note D).
(Signature of Ernst & Young LLP)

Charleston, West Virginia
January 19, 1995

<PAGE>

CONSOLIDATED BALANCE SHEETS

ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(Dollars in thousands)

DECEMBER 31
1994 1993

<S> <C> <C>
ASSETS
Cash and due from banks-Note B............................ $ 178,900 $ 141,195
Interest-bearing deposits in other banks.................. 4,297 8,028
Federal funds sold........................................ 24,875 31,145
Cash and cash equivalents................................ 208,072 180,368

Securities-Note D
Available-for-Sale, at fair value........................ 541,201
Held-to-Maturity (fair value approximated $422,381
at
December 31, 1994)..................................... 445,158
Held-for-Investment (fair value approximated $
1,081,742 at
December 31, 1993)..................................... 1,060,036
Loans, net-Notes E and F.................................. 2,335,519 2,132,888
Premises and equipment-Note G............................. 82,853 80,233
Accrued interest receivable............................... 28,404 26,900
Other assets.............................................. 32,034 32,451

TOTAL ASSETS.......................................... $3,673,241 $3,512,876

LIABILITIES
Deposits:
Non-interest bearing..................................... $ 378,512 $ 412,317
Interest bearing......................................... 2,547,967 2,524,418
Total deposits......................................... 2,926,479 2,936,735
Short-term borrowings-Note H:
Federal funds purchased.................................. 53,145 14,012
Securities sold under agreements to repurchase and
other.................................................. 322,194 204,408
Total short-term borrowings............................ 375,339 218,420
Long-term borrowings-Note I............................... 19,450 22,788
Other liabilities......................................... 30,106 29,749
TOTAL LIABILITIES..................................... 3,351,374 3,207,692

SHAREHOLDERS' EQUITY
Preferred Stock-$10 par value; authorized 1,000,000
shares;
none issued
Common Stock-$10 par value; authorized 40,000,000
shares;
17,538,368 and 17,516,795 shares outstanding at
December 31,
1994 and 1993, respectively, including 533,500 and
270,000
shares in treasury at December 31, 1994 and 1993......... 175,384 175,168
Capital surplus........................................... 25,954 25,830
Retained earnings......................................... 137,437 107,315
Unrealized losses on available-for-sale securities,
net of deferred income taxes............................. (6,535)
Treasury stock............................................ (10,373) (3,129)
TOTAL SHAREHOLDERS' EQUITY............................ 321,867 305,184

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY............ $3,673,241 $3,512,876
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

CONSOLIDATED STATEMENTS OF INCOME

ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(Dollars in thousands, except per share data)

YEAR ENDED DECEMBER 31
1994 1993 1992
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans:
Taxable............................................ $189,040 $179,971 $186,681
Tax-exempt......................................... 2,352 2,122 2,068
Total............................................ 191,392 182,093 188,749
Interest and dividends on securities:
Taxable............................................ 48,881 55,868 64,466
Tax-exempt......................................... 10,073 6,634 5,979
Total............................................ 58,954 62,502 70,445
Other............................................... 1,037 3,104 4,290
Total interest income............................ 251,383 247,699 263,484

INTEREST EXPENSE
Deposits............................................ 85,221 90,807 109,713
Short-term borrowings-Note H........................ 8,491 6,270 8,203
Long-term borrowings-Note I......................... 1,185 2,709 2,123
Total interest expense........................... 94,897 99,786 120,039
NET INTEREST INCOME................................... 156,486 147,913 143,445
PROVISION FOR LOAN LOSSES-Note F...................... 4,788 5,788 11,389
NET INTEREST INCOME AFTER PROVISION FOR LOAN LOSSES... 151,698 142,125 132,056

OTHER INCOME
Trust Department.................................... 7,892 7,272 6,041
Service charges on deposit accounts................. 11,441 11,963 11,281
Real estate loan processing and servicing fees...... 5,176 8,080 8,453
Other service charges and fees...................... 4,745 4,083 4,236
Securities (losses) gains........................... (867) 113 (35)
Other-Note O........................................ 9,437 8,751 7,392
Total other income............................... 37,824 40,262 37,368

OTHER EXPENSES
Salaries and employee benefits-Note K............... 63,042 61,511 55,457
Net occupancy-Note G................................ 6,014 6,206 6,199
Equipment........................................... 8,468 10,604 10,503
Federal deposit insurance assessments............... 6,642 6,519 6,127
Outside data processing............................. 4,705 4,575 2,351
Other-Note O........................................ 32,531 36,692 35,503
Total other expenses............................. 121,402 126,107 116,140

INCOME BEFORE INCOME TAXES............................ 68,120 56,280 53,284
APPLICABLE INCOME TAXES-Note J........................ 21,909 18,326 16,646

NET INCOME............................................ $ 46,211 $ 37,954 $ 36,638

NET INCOME PER COMMON SHARE........................... $ 2.70 $ 2.20 $ 2.13

Average common shares outstanding..................... 17,132 17,237 17,211
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
25

<PAGE>

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(Dollars in thousands, except per share data)

UNREALIZED NET
GAIN UNREALIZED
(LOSS) ON LOSS ON
AVAILABLE MARKETABLE
COMMON CAPITAL RETAINED TREASURY FOR SALE EQUITY
STOCK SURPLUS EARNINGS STOCK SECURITIES SECURITIES
<S> <C> <C> <C> <C> <C> <C>
BALANCES AT JANUARY 1, 1992............................ $116,076 $ 24,933 $116,555 $ (3,129) $ 0 $ (239)

Net income............................................. 36,638
Acquisition of treasury stock by Mountaineer........... (41)
Stock options exercised (50,423 shares)-Note K......... 505 472
Cash dividends on One Valley shares ($.70 per share)... (8,968)
Cash dividends on Mountaineer shares................... (2,483)
Three-for-two stock split in the form of a
50% stock dividend................................... 36,453 (12) (36,461)
Six-for-five stock split in the form of a
20% stock dividend................................... 21,901 (21,901)
Change in net unrealized loss on marketable
equity securities.................................... (239)

BALANCES AT DECEMBER 31, 1992.......................... 174,935 25,352 83,380 (3,129) 0 0

Net income............................................. 37,954
Sale of treasury stock by Mountaineer.................. 420
Stock options exercised (24,280 shares) and
adjustment for fractional shares-Note K.............. 233 58
Cash dividends on One Valley shares ($.84 per share)... (10,826)
Cash dividends on Mountaineer shares................... (3,193)

BALANCES AT DECEMBER 31, 1993.......................... 175,168 25,830 107,315 (3,129) 0 0

Adjustment at beginning of the year for change in
accounting method, net of deferred income
taxes of ($3,177)-Note D............................. 4,765
Change in unrealized gains and losses, net of
deferred income taxes of $7,533...................... (11,300)
Net income............................................. 46,211
Purchase of treasury stock (263,500 shares)............ (7,244)
Stock options exercised (21,843 shares) and
adjustment for fractional shares-Note K.............. 216 124
Cash dividends on One Valley shares ($.94 per share)... (16,089)

BALANCES AT DECEMBER 31, 1994.......................... $175,384 $ 25,954 $137,437 $ (10,373) $ (6,535) $ 0
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

CONSOLIDATED STATEMENTS OF CASH FLOWS

ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(Dollars in thousands)

YEAR ENDED DECEMBER 31
1994 1993 1992
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income................................................. $ 46,211 $ 37,954 $ 36,638
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses............................... 4,788 5,788 11,389
Depreciation............................................ 7,633 7,492 8,104
Amortization, net of accretion.......................... 2,776 7,390 7,828
Deferred income taxes (benefit)......................... (107) (2,142) (2,018)
Net losses (gains) from sales of assets................. 585 (544) (593)
Loans originated for sale............................... (50,806) (163,800) (218,466)
Proceeds from loans sold................................ 66,067 170,220 207,871
Net change in accrued interest receivable............... (1,504) 1,844 2,659
Net change in accrued interest payable.................. 1,497 (2,978) (70)
Net change in other assets and other
liabilities........................................... (852) 3,141 (4,239)
Net cash provided by operating activities............. 76,288 64,365 49,103

INVESTING ACTIVITIES
Proceeds from sales of available-for-sale securities....... 138,922
Proceeds from maturities of available-for-sale
securities............................................... 206,013
Purchases of available-for-sale securities................. (256,556)
Proceeds from maturities of held-to-maturity
securities............................................... 61,742
Purchases of held-to-maturity securities................... (93,169)
Proceeds from sale of marketable equity securities......... 35,572
Proceeds from sales of securities held-for-investment...... 35,604 27,326
Proceeds from maturities of securities held-for-
investment............................................... 504,582 611,284
Purchase of securities held-for-investment................. (581,210) (665,703)
Sale of branch, net of deposits transferred and gain on
sale..................................................... (8,489)
Net increase in loans...................................... (215,615) (175,424) (62,691)
Purchases of premises and equipment........................ (10,253) (7,524) (8,797)
Net cash used in investing activities................. (168,916) (223,972) (71,498)

FINANCING ACTIVITIES
Net change in deposits..................................... (10,256) 55,123 64,258
Net change in federal funds purchased...................... 39,133 (3,706) 4,607
Net change in other short-term borrowings.................. 117,786 17,850 (4,783)
Repayment of long-term borrowings.......................... (18,037) (19,586) (4,821)
Proceeds from long-term borrowings......................... 14,699 12,156 18,900
Proceeds from issuance of common stock..................... 340 291 957
Purchase of treasury stock................................. (7,244)
Sales (purchases) of treasury stock by Mountaineer......... 420 (41)
Cash dividends............................................. (16,089) (14,019) (11,451)
Net cash provided by financing activities............. 120,332 48,529 67,626

INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS........... 27,704 (111,078) 45,231
Cash and cash equivalents at beginning of year.............. 180,368 291,446 246,215

CASH AND CASH EQUIVALENTS AT END OF YEAR.................... $ 208,072 $ 180,368 $ 291,446
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
27

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES DECEMBER 31, 1994
(Dollars in thousands, except per share data)

SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES NOTE A

The accounting and reporting policies of One Valley Bancorp of West
Virginia, Inc. and its subsidiaries (One Valley) conform to generally accepted
accounting principles and to general practices within the banking industry. The
following is a summary of the more significant policies.

PRINCIPLES OF CONSOLIDATION

The accompanying consolidated financial statements include the accounts of
One Valley Bancorp of West Virginia, Inc. and its wholly-owned subsidiaries.
All significant intercompany balances and transactions have been eliminated.

CASH AND CASH EQUIVALENTS

One Valley considers cash and due from banks, interest-bearing deposits in
other banks, and federal funds sold as cash and cash equivalents.

SECURITIES

Management determines the appropriate classification of securities at the
time of purchase and reevaluates such designation as of each balance sheet date.
Debt securities are classified as held-to-maturity when One Valley has the
positive intent and ability to hold the securities to maturity. Held-to-maturity
(held-for-investment in 1993) securities are stated at amortized cost.

Debt securities not classified as held-to-maturity are classified as
available-for-sale. Available-for-sale securities are stated at fair value with
the unrealized gains and losses, net of deferred income taxes, reported in a
separate component of shareholders' equity. Unrealized gains and losses
represent the difference between the estimated fair value and amortized cost of
available-for-sale securities.

The amortized cost of debt securities classified as held-to-maturity or
available-for-sale is adjusted for amortization of premiums and accretion of
discounts, which are recognized as adjustments to interest income.

The cost of securities sold is based on the specific identification method.

LOANS HELD FOR SALE

Mortgage loans originated and intended for sale in the secondary market are
carried at the lower of cost or estimated fair value in the aggregate.

ALLOWANCE FOR LOAN LOSSES

In determining the adequacy of the allowance for loan losses, as well as the
appropriate provision for loan losses, management takes into consideration the
results of internal review procedures, historical loan loss experience, an
assessment of the effect of current and anticipated future economic conditions
on the loan portfolio, the financial condition of the borrower and such other
factors which, in management's judgment, deserve recognition. In management's
judgment, the allowance for loan losses is maintained at a level adequate to
provide for probable losses on existing loans and commitments.

PREMISES AND EQUIPMENT

Premises and equipment are stated at cost less accumulated depreciation.
Depreciation is computed principally on the straight-line method over the
estimated useful lives of the assets.

INCOME TAXES

Deferred income taxes (included in other assets) are provided for temporary
differences between the tax basis of an asset or liability and its reported
amount in the financial statements at the statutory tax rate.

One Valley and its subsidiaries file consolidated federal and state income
tax returns. Each subsidiary provides for income taxes on a separate return
basis, and remits amounts determined to be currently payable to the parent
company.

REVENUE RECOGNITION

Interest income on loans, amortization of unearned income, and accretion of
discounts are computed by methods which generally result in level rates of
return on principal amounts outstanding.

The accrual of interest income generally is discontinued when a loan
becomes 90 days past due as to principal or interest. When interest accruals are
discontinued, unpaid interest recognized in income in the current year is
reversed, and interest accrued in prior years is charged to the allowance for
loan losses. Management may elect to continue the accrual of interest when the
estimated net realizable value of collateral exceeds the principal balance and
accrued interest, and the loan is in the process of collection.

<PAGE>

SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES-CONTINUED NOTE A

LOAN FEES AND COSTS

Loan origination and commitment fees and direct loan origination costs are
being recognized as collected and incurred. The use of this method of
recognition does not produce results that are materially different from results
which would have been produced if such costs and fees were deferred and
amortized as an adjustment of the loan yield over the life of the related loan.

NET INCOME PER COMMON SHARE

Net income per common share is computed by dividing net income by the
average common shares outstanding during the year. Options under One Valley's
stock option plans are considered common stock equivalents for the purpose of
net income per common share data but are excluded from the computation because
they are immaterial.

RESTRICTIONS ON CASH AND DUE FROM BANK ACCOUNTS NOTE B

Bank subsidiaries are required to maintain average reserve balances with the
Federal Reserve Bank. The average amount of those reserve balances for the
year ended December 31, 1994, was approximately $26,900.

MERGER AND ACQUISITIONS NOTE C

In January 1994, One Valley acquired all of the outstanding common stock of
Mountaineer in exchange for 4,350,000 shares of One Valley common stock. This
combination has been accounted for as a pooling of interests. The pooling of
interests method requires the combining of the financial information of the
merging companies as though they had always been combined. Following is an
analysis presenting the results of operations for 1993 and 1992 of the separate
companies.

<TABLE>
<CAPTION>
1993 1992
<S> <C> <C>
Net interest income:
One Valley................ $116,912 $113,670
Mountaineer............... 31,001 29,775
Consolidated.............. $147,913 $143,445

Net income:
One Valley................ $ 32,469 $ 29,477
Mountaineer............... 5,485 7,161
Consolidated.............. $ 37,954 $ 36,638

Net income per common share:
One Valley................ $ 2.52 $ 2.29
Mountaineer............... 1.89 2.48
Consolidated.............. $ 2.20 $ 2.13
</TABLE>

One Valley has acquired several financial institutions in prior years in
acquisitions accounted for using the purchase method of accounting. The
purchase prices of all these acquisitions were allocated to the identifiable
tangible and intangible assets acquired based upon their fair value at the
acquisition date. Intangible assets representing the present value of future
net income to be earned from deposits of acquired banks are being amortized on
an accelerated basis over a ten-year period. Deposit intangibles included in
other assets approximated $1,300 and $1,800 at December 31, 1994 and 1993.
Deposit intangible amortization approximated $500 in 1994, $800 in 1993, and
$900 in 1992.

The excess of purchase price over the fair market value of assets of
subsidiary banks acquired (goodwill) is being amortized on a straight-line basis
over periods ranging from 15 to 25 years. Goodwill, included in other assets,
approximated $4,000 and $4,300 at December 31, 1994 and 1993. Goodwill
amortization approximated $300 in 1994, 1993, and 1992.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

SECURITIES NOTE D

The following is a summary of available-for-sale and held-to-maturity
securities as of December 31, 1994:

Available-for-Sale
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations of
U.S. government agencies and corporations... $ 501,001 $ 409 $ (9,280) $ 492,130
Mortgage-backed securities.................... 36,881 195 (2,234) 34,842
Other securities.............................. 14,210 19 14,229

Total securities............................ $ 552,092 $ 623 $ (11,514) $ 541,201
</TABLE>

Held-to-Maturity
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
U.S. Treasury securities and obligations of
U.S. government agencies and corporations........ $ 126,442 $ 206 $ (2,883) $ 123,765
Obligations of states and political subdivisions... 179,346 1,348 (14,781) 165,913
Mortgage-backed securities......................... 138,931 656 (7,315) 132,272
Other securities................................... 439 10 (18) 431

Total securities................................. $ 445,158 $ 2,220 $ (24,997) $ 422,381
</TABLE>

During the year ended December 31, 1994, gross realized gains and losses on
available-for-sale securities approximated $285 and $1,167.

The following is a summary of securities held-for-investment as of December
31, 1993 and 1992:

<TABLE>
<CAPTION>
Gross Gross Estimated
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
<S> <C> <C> <C> <C>
December 31, 1993
U.S. Treasury securities and obligations of
U.S. government agencies and corporations........ $ 709,229 $ 12,330 $ (526) $ 721,033
Obligations of states and political subdivisions... 137,654 5,864 (650) 142,868
Mortgage-backed securities......................... 197,444 5,104 (731) 201,817
Other securities................................... 15,709 319 (4) 16,024

Total securities................................. $1,060,036 $ 23,617 $ (1,911) $1,081,742

December 31, 1992
U.S. Treasury securities and obligations of
U.S. government agencies and corporations........ $ 755,737 $ 13,590 $ (354) $ 768,973
Obligations of states and political subdivisions... 83,653 4,402 (115) 87,940
Mortgage backed-securities......................... 171,346 5,182 (410) 176,118
Other securities................................... 18,539 200 (8) 18,731

Total securities................................. $1,029,275 $ 23,374 $ (887) $1,051,762
</TABLE>

<PAGE>

SECURITIES-CONTINUED NOTE D
In May 1993 the Financial Accounting Standards Board (FASB) issued Statement
of Financial Accounting Standards No. 115, "Accounting for Certain Investments
in Debt and Equity Securities." One Valley adopted the provisions of the new
standard for investments held as of or acquired after January 1, 1994. In
accordance with the Statement, prior period financial statements have not been
restated to reflect the change in accounting principle. The cumulative effect
of adopting this Statement as of January 1, 1994, was to increase the opening
balance of shareholders' equity by $4,765 (net of $3,177 in deferred income
taxes) to reflect the net unrealized holding gains on securities classified as
available-for-sale previously carried at amortized cost. Securities designated
as available-for-sale at January 1, 1994, approximated $630,000.

The amortized cost and estimated fair value of debt securities at December
31, 1994, by contractual maturity, are shown below. Expected maturities may
differ from contractual maturities because borrowers may have the right to call
or prepay obligations with or without call or prepayment penalties.

<TABLE>
<CAPTION>
Estimated
Amortized Fair
Cost Value
<S> <C> <C>
Available-For-Sale
Due in one year or less.................. $ 270,719 $ 268,867
Due after one year through five years.... 229,271 222,288
Due after five years through ten years... 1,011 975
501,001 492,130
Mortgage-backed securities............... 36,881 34,842
Other.................................... 14,210 14,229

Total securities....................... $ 552,092 $ 541,201

Estimated
Amortized Fair
Cost Value
Held-to-Maturity
Due in one year or less.................. $ 7,667 $ 7,743
Due after one year through five years.... 67,178 67,352
Due after five years through ten years... 77,761 76,221
Due after ten years...................... 153,182 138,362
305,788 289,678
Mortgage-backed securities............... 138,931 132,272
Other.................................... 439 431

Total securities....................... $ 445,158 $ 422,381
</TABLE>

At December 31, 1994 and 1993, securities carried at $420,700 and $429,200
were pledged to secure public deposits, repurchase agreements, and for other
purposes as required or permitted by law.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

LOANS NOTE E

<TABLE>
<CAPTION>
Loans are summarized as follows:

December 31
1994 1993
<S> <C> <C>
Commercial, financial
and agricultural................. $ 373,583 $ 306,425
Real estate:
Revolving home equity............ 113,142 102,648
Single family residential........ 936,698 869,502
Apartment buildings
and complexes.................. 37,475 41,465
Commercial....................... 311,691 320,668
Construction..................... 42,746 33,682
Installment loans to individuals... 532,251 465,216
Bankers' acceptances............... 849 2,123
Other.............................. 24,522 27,643
Total loans net of
unearned income................ 2,372,957 2,169,372
Less allowance for loan losses..... 37,438 36,484

Loans - net.................... $2,335,519 $2,132,888
</TABLE>

Unearned income approximated $1,800 and $4,100 at December 31, 1994 and
1993.

One Valley and its subsidiaries have granted loans to officers and
directors of One Valley and its subsidiaries and to their associates. Related
party loans were made on substantially the same terms, including interest rates
and collateral, as those prevailing at the time for comparable transactions with
unrelated persons and did not involve more than normal risk of collectibility.

The following presents the activity with respect to related party loans
aggregating $60 or more to any one related party:

<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Balance, January 1..... $ 72,846 $ 70,695
Additions.............. 35,009 26,989
Amount collected....... (34,362) (24,838)

Balance, December 31... $ 73,493 $ 72,846
</TABLE>

In May 1993, the FASB issued Statement of Financial Accounting Standards No.
114, "Accounting by Creditors for Impairment of a Loan," which was amended by
FASB Statement No. 118 and is effective for fiscal years beginning after
December 15, 1994. The Statement requires that impaired loans be measured at
the present value of expected future cash flows discounted at the loan's
original effective interest rate or, as a practical expedient, at the loan's
observable market price or the fair value of the collateral if the loan is
collateral dependent. One Valley will adopt this Statement on January 1, 1995,
and it will not have a material effect on One Valley's financial statements.

One Valley originates and sells fixed rate mortgage loans primarily to
governmental agencies on a servicing retained basis. Interest rates are
determined at the date of the commitment to sell the loans and the commitment
period generally ranges from 60 to 90 days. At December 31, 1994, One Valley
held loans for sale of approximately $3,500 and had commitments to originate and
sell loans of approximately $2,000.

The mortgage loan portfolio serviced by One Valley for the benefit of
others approximated $896,500, $842,000, and $1,007,000 at December 31, 1994,
1993, and 1992. Custodial escrow balances maintained in connection with the
foregoing loan servicing and One Valley's own mortgage loan portfolio were
approximately $10,800 and $11,000 at December 31, 1994 and 1993.

ALLOWANCE FOR LOAN LOSSES NOTE F

Changes in the allowance for loan losses for each of the three years in the
period ended December 31, 1994, were as follows:

1994 1993 1992
<S> <C> <C> <C>
Balance, January 1.......... $36,484 $35,679 $30,567
Charge-offs................. (5,985) (7,381) (8,561)
Recoveries.................. 2,151 2,398 2,284
Net charge-offs........... (3,834) (4,983) (6,277)
Provision for loan losses... 4,788 5,788 11,389

Balance, December 31........ $37,438 $36,484 $35,679
</TABLE>

<PAGE>

PREMISES AND EQUIPMENT NOTE G

The major categories of premises and equipment and accumulated depreciation
are summarized as follows:

December 31
1994 1993
<S> <C> <C>
Land.............................. $ 14,643 $ 14,510
Buildings and improvements........ 77,072 73,065
Equipment......................... 53,592 49,202
Total............................. 145,307 136,777
Less accumulated depreciation... (62,454) (56,544)

Premises and equipment-net........ $ 82,853 $ 80,233
</TABLE>

One Valley has entered into noncancelable lease agreements (operating
leases) for certain premises and equipment and outside data processing services.
The minimum annual rental commitment under these lease and service agreements,
exclusive of taxes and other charges payable by the lessees, is: 1995-$4,300;
1996-$4,000; 1997-$3,600; 1998-$3,500; and 1999-$2,000, with $2,400 of
commitments extending beyond 2000.

Total expense under these lease agreements, including cancelable and
noncancelable leases, was $3,500 in 1994, $3,100 in 1993, and $1,700 in 1992.

SHORT-TERM BORROWINGS NOTE H

Federal funds purchased and securities sold under agreements to repurchase
represent borrowings with maturities primarily from overnight to 90 days.
Additional details regarding short-term borrowings
are set forth below:

<TABLE>
<CAPTION>
Federal Repurchase
Funds Agreements
Purchased and Other
<S> <C> <C>
1994
Average amount outstanding during year........ $ 25,114 $ 217,190
Maximum amount outstanding at any month-end... 84,638 322,193
Weighted average interest rate:
During year................................. 4.26% 3.34%
End of year................................. 5.02 3.97

1993
Average amount outstanding during year........ $ 19,313 $ 195,080
Maximum amount outstanding at any month-end... 22,236 221,779
Weighted average interest rate:
During year................................. 3.17% 2.90%
End of year................................. 2.92 2.58

1992
Average amount outstanding during year........ $ 19,183 $ 202,418
Maximum amount outstanding at any month-end... 42,366 218,381
Weighted average interest rate:
During year................................. 3.51% 3.71%
End of year................................. 2.92 3.26
</TABLE>

Interest paid on deposits, short-term borrowings, and long-term borrowings
approximated $93,000 in 1994, $103,000 in 1993, and $121,000 in 1992.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

LONG-TERM BORROWINGS NOTE I

Long-term borrowings of $19,450 and $22,788 at December 31, 1994 and 1993
primarily consist of Federal Home Loan advances. The advances mature as follows:
1995 - $11,500, 1996 - $5,000, and 2003 - $2,600. The advances bear a weighted
average interest rate of 5.65% at December 31, 1994.

INCOME TAXES NOTE J

The income tax provisions (benefits) included in the consolidated statements
of income are summarized as follows:

<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Current:
Federal.................... $18,772 $18,100 $16,854
State...................... 3,244 2,480 1,963
Deferred Federal and State... (107) (2,254) (2,171)

Total.................... $21,909 $18,326 $16,646
</TABLE>

A reconciliation between the amount of reported income tax expense and the
amount computed by applying the statutory federal

income tax rate to income before income taxes is as follows:

1994 1993 1992
<S> <C> <C> <C> <C> <C> <C>
Computed tax at statutory federal rate...... $23,842 35.0% $19,698 35.0% $18,116 34.0%
Plus: State income taxes,
net of federal tax benefits............... 1,986 2.9 1,511 2.7 1,198 2.2
25,828 37.9 21,209 37.7 19,314 36.2
Increase (decrease) in taxes resulting from:
Tax-exempt interest...................... (4,348) (6.4) (2,931) (5.2) (2,708) (5.1)
Other-net................................. 429 .6 48 .1 40 .1

Actual tax expense...................... $21,909 32.1% $18,326 32.6% $16,646 31.2%
</TABLE>

Significant components of One Valley's deferred tax assets and liabilities
are as follows:

December 31
1994 1993
<S> <C> <C>
Deferred tax assets:
Available-for-sale securities...... $ 4,356 $ 0
Allowance for loan losses.......... 14,877 14,187
Accrued employee benefits.......... 3,157 2,578
Other.............................. 2,473 2,426
Total deferred tax assets........ 24,863 19,191

Deferred tax liabilities:
Premises and equipment............. 2,780 2,871
Loans.............................. 5,328 4,804
Other.............................. 1,188 413
Total deferred tax liabilities... 9,296 8,088

Net deferred tax assets........ $15,567 $11,103
</TABLE>

Income taxes (benefit) related to securities gains (losses) approximated
$(347), $45, and $(14) in 1994, 1993, and 1992.

One Valley made tax payments of approximately $21,000 in 1994, $22,000 in
1993, and $20,000 in 1992.

<PAGE>

EMPLOYEE BENEFIT PLANS NOTE K

One Valley has a defined benefit pension plan covering substantially all of
its employees. The benefits are based on years of service and the employee's
compensation during the last five years of employment. The funding policy of
One Valley is to contribute annually the maximum amount that can be deducted for
income tax purposes. During 1994, the Mountaineer defined benefit pension plan
was merged into One Valley's defined benefit pension plan.

The following table presents the funded status of the combined plans and
amounts recognized in the consolidated balance sheets at December 31:

<TABLE>
<CAPTION>
1994 1993
<S> <C> <C>
Actuarial present value of accumulated benefit obligation,
including vested benefits of
$17,210 in 1994 and $18,020 in 1993....................... $ 18,370 $ 19,137

Actuarial present value of projected benefit obligation
for services rendered to date............................. $ (26,294) $ (28,602)
Plan assets at fair value, consisting primarily of cash,
listed stocks, and U.S. bonds............................. 21,923 22,705
Projected benefit obligation in excess of plan assets....... (4,371) (5,897)
Unrecognized net asset at November 1, 1987, net of
amortization.............................................. (2,363) (2,598)
Unrecognized net loss from past experience different from
that assumed and
effects of changes in assumptions......................... 3,144 6,064
Unrecognized prior service cost............................. 764 219
Accrued pension cost included in other liabilities.......... $ (2,826) $ (2,212)
</TABLE>

Following is a summary of the components of net periodic pension cost:

<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Service cost-benefits earned during the period... $ 1,883 $ 1,445 $ 1,231
Interest cost on projected benefit obligation.... 1,991 1,740 1,568
Actual loss (return) on plan assets.............. 1,524 (2,640) (996)
Net amortization and deferral.................... (3,249) 893 (629)

Net periodic pension cost...................... $ 2,149 $ 1,438 $ 1,174
</TABLE>

The weighted-average discount rate used in determining the actuarial present
value of projected benefit obligations was 8.25% and 7% at December 31, 1994 and
1993. The rate of increase in future compensation levels used in determining
the actuarial present value of projected benefit obligations was 5.5% in 1994
and 1993. The expected long-term rate of return on plan assets in 1994, 1993,
and 1992 was 8.5%. The unrecognized net loss decreased in 1994 due to the
change in the weighted-average discount rate. This decrease was partially
offset by actuarial experience losses relating to the return on plan assets.

One Valley has nonqualified and incentive stock option plans for certain
key employees. Pursuant to these plans, an aggregate maximum of 1,158,000
shares of common stock were reserved for issuance, although no more than 162,000
shares may be issued in any calendar year. At December 31, 1994, there were
outstanding and exercisable options for the purchase of 385,940 shares at prices
ranging from $10.28 to $28.38 per share. During 1994, 21,843 shares were
exercised at prices ranging from $11.67 to $21.74.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

EMPLOYEE BENEFIT PLANS-CONTINUED NOTE K

In 1993, One Valley adopted FASB No. 106, "Employers' Accounting for
Postretirement Benefits Other Than Pensions." One Valley has a defined benefit
postretirement plan covering all employees who qualify for and elect to retire
with a normal or early retirement benefit under the defined benefit pension
plan. The plan provides medical and dental benefits. This plan is
contributory and contains cost sharing features such as deductibles and
co-insurance. One Valley's policy is to fund the cost of the plan in amounts
determined at the discretion of management.

The following table presents the plan's funded status and amounts
recognized in the consolidated balance sheets at December 31:

<TABLE>
<CAPTION>
<S> <C> <C>
1994 1993
Accumulated postretirement benefit obligation:
Active plan participants fully eligible for
benefits................................................ $ (71) $ (54)
Other active participants................................. (2,150) (2,512)
Current retirees.......................................... (2,639) (2,700)
(4,860) (5,266)
Plan assets................................................. 0 0
Accumulated postretirement benefit obligation in excess of
plan assets............................................... (4,860) (5,266)
Unrecognized transition obligation.......................... 3,932 4,151
Unrecognized prior service cost............................. 233 245
Unrecognized net loss from past experience different from
that assumed and
effects of changes in assumptions......................... (361) 467

Accrued postretirement benefit cost included in other
liabilities............................................. $ (1,056) $ (403)
</TABLE>

Net periodic postretirement benefit cost included the following components:

<TABLE>
<CAPTION>
1994 1993 1992
<S> <C> <C> <C>
Service cost.......................................... $ 260 $ 141
Interest cost......................................... 377 350
Amortization of transition obligation over 20 years... 230 218

Net periodic postretirement benefit cost............ $ 867 $ 709 $ 261
</TABLE>

The weighted-average annual assumed rate of increase in the per capita cost
of covered benefits (i.e. health care cost trend rate) is 11% for 1995 and is
assumed to decrease gradually to 6% in 2000 and remain at that level thereafter.
The health care cost trend rate assumption has a significant effect on the
amounts reported. For example, increasing the assumed health care cost trend
rates by one percentage point in each year would increase the accumulated
postretirement benefit obligation for the plan as of December 31, 1994, by $280
and the aggregate of the service and interest cost components of net periodic
postretirement benefit cost for 1994 by $68.

The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 8.25% and 7% at December 31, 1994 and
1993.

<PAGE>

PARENT COMPANY CONDENSED FINANCIAL INFORMATION NOTE L

CONDENSED BALANCE SHEETS

December 31
Assets 1994 1993
<S> <C> <C>
Repurchase agreement with a
subsidiary bank.............. $ 21,328 $ 0
Interest-bearing deposits in
subsidiary bank.............. 25,841
Securities:
Available-for-sale........... 6,426
Held-to-maturity............. 909
Held-for-investment.......... 1,486
Premises and equipment......... 777 393
Investment in subsidiaries:
Banks........................ 288,801 274,337
Non-banks.................... 5,683 8,869
Other assets................... 3,363 1,320
Total assets................. $327,287 $312,246

Liabilities
Other liabilities.............. $ 5,420 $ 7,062
Total liabilities............ 5,420 7,062

Shareholders' Equity
Common stock................... 175,384 175,168
Capital surplus................ 25,954 25,830
Retained earnings.............. 137,437 107,315
Unrealized losses.............. (6,535)
Treasury stock................. (10,373) (3,129)
Total shareholders' equity... 321,867 305,184
Total liabilities and
shareholders' equity....... $327,287 $312,246
</TABLE>

CONDENSED STATEMENTS OF INCOME

Year Ended December 31
1994 1993 1992
<S> <C> <C> <C>
Income:
Dividends from bank subsidiaries... $35,426 $31,869 $22,937
Other income....................... 3,078 2,825 2,237
Total income..................... 38,504 34,694 25,174

Expenses:
Salaries and employee benefits..... 7,200 5,279 4,504
Other expenses..................... 3,268 5,940 4,374
Interest expense................... 14 54 512
Total expenses................... 10,482 11,273 9,390
Income before income taxes and
equity in undistributed earnings
of subsidiaries.................... 28,022 23,421 15,784
Applicable income tax (benefit)...... (2,927) (3,074) (3,568)
Income before equity in undistributed
earnings of subsidiaries.......... 30,949 26,495 19,352
Equity in undistributed earnings
of subsidiaries.................... 15,262 11,459 17,286
Net income....................... $46,211 $37,954 $36,638
</TABLE>

CONDENSED STATEMENTS OF CASH FLOWS

Year Ended December 31
1994 1993 1992
<S> <C> <C> <C>
Operating Activities:
Net income.......................... $ 46,211 $ 37,954 $ 36,638
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation & amortization....... 220 430 853
Equity in undistributed
earnings of subsidiaries........ (15,262) (11,459) (17,286)
Net change in other assets
and other liabilities........... (3,531) (188) 130
Net cash provided by
operating activities.......... 27,638 26,737 20,335

Investing Activities:
Purchase of securities:
Available-for-sale................ (5,108)
Held-to-maturity.................. (912)
Proceeds from maturities and
sale of investment securities..... 2,520
Purchase of investment securities... (78) (1,042)
Investment in subsidiaries.......... (2,500) (3,000)
Purchase of equipment............... (638) (142) (222)
Proceeds from sale of
other real estate................. 600
Net cash (used in) provided by
investing activities............ (9,158) (2,620) 1,256

Financing Activities:
Repayment of long-term
borrowings........................ (1,326) (4,566)
Proceeds from issuance of
common stock...................... 340 291 957
Purchase of treasury stock.......... (7,244)
Sales (purchases) of treasury
stock by Mountaineeer............. 420 (41)
Cash dividends paid................. (16,089) (14,019) (11,451)
Net cash used in
financing activities............ (22,993) (14,634) (15,101)

(Decrease) increase in
cash and cash equivalents........... (4,513) 9,483 6,490

Cash and cash equivalents at
beginning of year................... 25,841 16,358 9,868

Cash and cash equivalents at
end of year......................... $ 21,328 $ 25,841 $ 16,358
</TABLE>

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

RESTRICTIONS ON SUBSIDIARY DIVIDENDS NOTE M

The primary source of funds for the dividends paid by One Valley Bancorp is
dividends received from its subsidiary banks. Dividends paid by the subsidiary
banks are subject to restrictions by banking regulations. The most restrictive
provision requires regulatory approval if dividends declared in any year exceed
the year's retained net profits, as defined, plus the retained net profits of
the two preceding years. During 1995, the retained net profits available for
distribution to One Valley Bancorp as dividends without regulatory approval are
approximately $29,000, plus retained net profits for the interim periods through
the date of declaration.

COMMITMENTS AND CONTINGENT LIABILITIES NOTE N

In the normal course of business, One Valley offers certain financial
products to its customers to aid them in meeting their requirements for
liquidity and credit enhancement. Generally accepted accounting principles
require that these products be accounted for as contingent liabilities and,
accordingly, they are not reflected in the accompanying financial statements.
One Valley's exposure to loss in the event of nonperformance by the counterparty
for commitments to extend credit and standby letters of credit is the contract
or notional amounts of these instruments. Management does not anticipate any
material losses as a result of these commitments and contingent liabilities.
Following is a discussion of these commitments and contingent liabilities.

STANDBY LETTERS OF CREDIT

These agreements are used by One Valley's customers as a means of improving
their credit standing in their dealings with others. Under these agreements, One
Valley guarantees certain financial commitments in the event that its customers
are unable to satisfy their obligations. One Valley has issued standby letters
of credit of approximately $35,000 as of December 31, 1994.

Management conducts regular reviews of these commitments on an individual
customer basis, and the results are considered in assessing the adequacy of One
Valley's allowance for loan losses.

LOAN COMMITMENTS

As of December 31, 1994, the Bank had commitments outstanding to extend
credit at prevailing market rates approximating $381,000. These commitments
generally require the customers to maintain certain credit standards. The
amount of collateral obtained, if deemed necessary by One Valley upon extension
of credit, is based on management's credit evaluation of the customer.
Collateral held varies but may include accounts receivable, inventory, property,
plant and equipment, and income producing commercial properties.

LOANS SOLD WITH RECOURSE

One Valley is contingently liable on certain loans previously sold by an
acquired company. At December 31, 1994, there were approximately $44,000 in
outstanding loans sold with recourse. Pursuant to the terms of an Indemnity
Agreement with the Resolution Trust Corporation, the Resolution Trust
Corporation agreed to indemnify any and all costs, losses, liabilities and
expenses, including legal fees, resulting from certain third-party claims.

OTHER INCOME AND EXPENSES NOTE O

Included in other income are checkbook sales which approximated $2,798 in
1994, $2,957 in 1993, and $3,115 in 1992 and credit card fees which approximated
$3,254 in 1994, $2,749 in 1993, and $2,055 in 1992. Included in other expenses
is supplies expense which approximated $3,447 in 1994, $3,771 in 1993, and
$3,652 in 1992, postage expense which approximated $3,141 in 1994, $3,022 in
1993, and $2,804 in 1992, and professional fees which approximated $2,858 in
1994, $3,799 in 1993, and $3,703 in 1992.

<PAGE>

FAIR VALUE OF FINANCIAL INSTRUMENTS NOTE P

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

CASH AND CASH EQUIVALENTS

The carrying values of cash and cash equivalents approximate their fair
values.

SECURITIES

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

LOANS

The fair values for fixed rate commercial, mortgage, and consumer loans are
estimated using discounted cash flow analyses at interest rates currently being
offered for loans with similar terms to borrowers of similar credit quality.
For variable-rate loans that reprice frequently and with no significant change
in credit risk, fair values are based on carrying values.

ACCRUED INTEREST

The carrying value of accrued interest approximates its fair value.

DEPOSITS

The fair values of demand deposits (i.e. interest and noninterest bearing
checking, regular savings, and other types of money market demand accounts) are,
by definition, equal to their carrying values. Fair values for certificates of
deposit are estimated using a discounted cash flow calculation that applies
interest rates currently being offered on certificates to a schedule of
aggregate expected monthly maturities of time deposits. FASB Statement No. 107
defines the fair value of demand deposits as the amount payable on demand, and
prohibits adjusting fair value for any value derived from retaining those
deposits for an unexpected future period of time (commonly referred to as a
deposit base intangible). Accordingly, the deposit base intangible is not
considered in the estimated fair value of total deposits at December 31, 1994
and 1993.

SHORT-TERM BORROWINGS

The carrying values of federal funds purchased and securities sold under
agreements to repurchase approximate their fair values.

LONG-TERM BORROWINGS

The fair values of the long-term borrowings are estimated using discounted
cash flow analyses based on One Valley's current incremental borrowing rates for
similar types of borrowing arrangements.

COMMITMENTS

The fair values of commitments (standby letters of credit and loan
commitments) are estimated based on fees currently charged to enter into similar
agreements, taking into consideration the remaining terms of the agreements and
the counterparties' credit standing. The estimated fair value of these
commitments at December 31, 1994 and 1993, approximate their carrying value.

The fair values of One Valley's financial instruments are summarized below:

December 31, 1994 December 31, 1993
Carrying Fair Carrying Fair
Amount Value Amount Value
<S> <C> <C> <C> <C>
Cash and cash equivalents..... $ 208,072 $ 208,072 $ 180,368 $ 180,368
Securities.................... 986,359 963,582 1,060,036 1,081,742
Loans......................... 2,335,519 2,319,848 2,132,888 2,173,000
Accrued interest receivable... 28,404 28,404 26,900 26,900
Deposits...................... 2,926,479 2,914,411 2,936,735 2,946,000
Short-term borrowings......... 375,339 375,339 218,420 218,420
Long-term borrowings.......... 19,450 18,788 22,788 22,900
Accrued interest payable...... 10,353 10,353 8,856 8,856
</TABLE>

39
<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

QUARTERLY FINANCIAL DATA (UNAUDITED) NOTE Q

Quarterly financial data for 1994 and 1993 is summarized below:

<TABLE>
<CAPTION>
1994 1993
Three Months Ended Three Months Ended
March 31 June 30 Sept 30 Dec 31 March 31 June 30 Sept 30 Dec 31
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income......................... $ 60,126 $ 61,294 $ 64,339 $ 65,624 $ 61,225 $ 62,200 $ 61,870 $ 62,404
Interest expense........................ 22,351 22,414 24,156 25,976 25,755 25,146 24,467 24,418
Net interest income................... 37,775 38,880 40,183 39,648 35,470 37,054 37,403 37,986
Provision for loan losses............... 1,179 1,213 1,185 1,211 1,551 1,564 1,406 1,267
Net interest income after provision
for loan losses....................... 36,596 37,667 38,998 38,437 33,919 35,490 35,997 36,719
Other income, excluding securities
gains................................. 8,899 10,811 9,249 9,732 9,728 10,146 10,014 10,261
Securities transactions................. 197 (504) (410) (150) - 58 119 (64)
Other expenses.......................... 29,604 30,072 30,314 31,412 29,330 29,792 31,064 35,921
Income before income taxes.............. 16,088 17,902 17,523 16,607 14,317 15,902 15,066 10,995
Applicable income taxes................. 5,257 5,853 5,724 5,075 4,479 5,243 5,299 3,305
Net Income.......................... $ 10,831 $ 12,049 $ 11,799 $ 11,532 $ 9,838 $ 10,659 $ 9,767 $ 7,690

Per Share Data:
Average shares outstanding (in
thousands).......................... 17,250 17,165 17,105 17,009 17,228 17,237 17,237 17,246
Net income per share.................. $ .63 $ .70 $ .69 $ .68 $ .57 $ .62 $ .57 $ .45
Dividends per share................... .22 .22 .25 .25 .20 .20 .22 .22
High bid/share........................ 28.50 29.00 29.75 30.25 32.25 29.75 33.25 31.25
Low bid/share......................... 24.75 24.25 27.75 28.00 28.25 25.25 26.75 27.00
</TABLE>

<PAGE>

SIX-YEAR AVERAGE BALANCE SHEET SUMMARY

ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(Dollars in thousands)

1994 1993 1992 1991 1990 1989
% OF % OF % OF % OF % OF % OF
$ TOTAL $ TOTAL $ TOTAL $ TOTAL $ TOTAL $ TOTAL
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Loans:
Taxable.................... 2,202,716 62 2,032,527 58 1,929,592 57 1,549,386 56 1.373,880 56 1,330,372 56
Tax-exempt................. 34,430 1 31,153 1 30,351 1 32,443 1 30,316 1 34,295 2
Total loans............... 2,237,146 63 2,063,680 59 1,959,943 58 1,581,829 57 1,404,196 57 1,364,667 58
Less: Allowance for losses... 37,460 1 36,932 1 33,170 1 24,599 1 20,161 1 17,783 1
Total loans-net........... 2,199,686 62 2,026,748 58 1,926,773 57 1,557,230 56 1,384,035 56 1,346,884 57
Investment Securities:
Taxable.................... 874,901 25 973,890 28 966,198 29 740,927 27 634,354 26 533,379 23
Tax-exempt................. 176,079 5 100,577 3 83,261 2 93,893 3 110,709 4 124,199 5
Total securities.......... 1,050,980 30 1,074,467 31 1,049,459 31 834,820 30 745,063 30 657,578 28
Federal funds sold & other... 27,363 1 100,270 3 119,696 4 146,612 5 148,837 6 174,667 7
Total earning assets...... 3,278,029 93 3,201,485 92 3,095,928 92 2,538,662 91 2,277,935 92 2,179,129 92
Other assets................. 262,422 7 265,776 8 277,317 8 233,239 9 205,223 8 198,770 8
Total assets............ 3,540,451 100 3,467,261 100 3,373,245 100 2,771,901 100 2,483,158 100 2,377,899 100

LIABILITIES &
SHAREHOLDERS' EQUITY
Interest Bearing Liabilities:
Time & savings deposits.... 2,518,539 71 2,498,420 72 2,455,775 73 2,047,057 74 1,828,345 74 1,757,040 74
Short-term borrowings...... 242,304 6 214,460 6 221,601 6 168,061 6 139,215 5 127,832 5
Long-term borrowings....... 22,931 1 36,088 1 25,703 1 15,653 0 21,342 1 22,489 1
Total interest bearing
liabilities............. 2,783,774 78 2,748,968 79 2,703,079 80 2,230,771 80 1,988,902 80 1,907,361 80
Demand deposits.............. 412,016 12 396,711 11 373,488 11 296,347 11 273,032 11 261,606 11
Other liabilities............ 28,937 1 26,849 1 27,671 1 29,510 1 24,724 1 24,374 1
Total liabilities......... 3,224,727 91 3,172,528 91 3,104,238 92 2,556,628 92 2,286,658 92 2,193,341 92
Shareholders' equity......... 315,724 9 294,733 9 269,007 8 215,273 8 196,500 8 184,558 8
Total liabilities &
shareholders' equity.... 3,540,451 100 3,467,261 100 3,373,245 100 2,771,901 100 2,483,158 100 2,377,899 100
</TABLE>

<PAGE>
SIX-YEAR NET INTEREST INCOME SUMMARY

ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(Dollars in thousands)

1994 1993 1992 1991 1990 1989
% OF % OF % OF % OF % OF % OF
TOTAL TOTAL TOTAL TOTAL TOTAL TOTAL
INTEREST INTEREST INTEREST INTEREST INTEREST INTEREST
$ INCOME $ INCOME $ INCOME $ INCOME $ INCOME $ INCOME
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest Income:
Loans:
Taxable................... 189,040 73.2 179,971 71.3 186,681 69.7 165,539 66.8 155,243 64.8 150,470 64.6
Tax-exempt................ 3,618 1.4 3,255 1.3 3,133 1.2 3,866 1.6 4,111 1.7 6,358 2.7
Total loans............. 192,658 74.6 183,226 72.6 189,814 70.9 169,405 68.4 159,354 66.5 156,828 67.3
Securities
Taxable................... 48,881 19.0 55,868 22.2 64,466 24.1 58,483 23.6 55,201 23.0 46,340 19.9
Tax-exempt................ 15,497 6.0 10,146 4.0 9,059 3.4 10,721 4.3 12,467 5.2 13,847 5.9
Total securities........ 64,378 25.0 66,014 26.2 73,525 27.5 69,204 27.9 67,668 28.2 60,187 25.8
Funds sold & other......... 1,037 0.4 3,104 1.2 4,290 1.6 9,142 3.7 12,640 5.3 16,104 6.9
Total interest income... 258,073 100.0 252,344 100.0 267,629 100.0 247,751 100.0 239,662 100.0 233,119 100.0

Interest Expense:
Deposits................... 85,221 33.0 90,807 36.0 109,713 41.0 120,437 48.6 122,284 51.0 118,685 50.9
Short-term borrowings...... 8,491 3.3 6,270 2.5 8,203 3.1 8,947 3.6 10,003 4.2 10,346 4.4
Long-term borrowings....... 1,185 0.5 2,709 1.1 2,123 0.8 1,529 0.6 2,175 0.9 2,304 1.0
Total interest expense.... 94,897 36.8 99,786 39.6 120,039 44.9 130,913 52.8 134,462 56.1 131,335 56.3
Tax equivalent
net interest income........ 163,176 63.2 152,558 60.4 147,590 55.1 116,838 47.2 105,200 43.9 101,784 43.7
Tax equivalent adjustment.... 6,690 2.6 4,645 1.8 4,145 1.5 4,959 2.0 5,637 2.4 6,870 3.0

Net interest income.......... 156,486 60.6 147,913 58.6 143,445 53.6 111,879 45.2 99,563 41.5 94,914 40.7
SUMMARY OF AVERAGE RATES
EARNED & PAID*
Taxable loans................ 8.58% 8.85% 9.67% 10.68% 11.30% 11.31%
Tax-exempt loans............. 10.51 10.45 10.32 11.92 13.56 18.54
Net loans.................. 8.76 9.04 9.85 10.88 11.51 11.64
Taxable securities........... 5.59 5.74 6.67 7.89 8.70 8.69
Tax-exempt securities........ 8.80 10.09 10.88 11.42 11.26 11.15
Total securities........... 6.13 6.14 7.01 8.29 9.08 9.15
Funds sold & deposits........ 3.79 3.10 3.58 6.24 8.49 9.22
Total earning assets ....... 7.87% 7.88% 8.64% 9.76% 10.52% 10.70%

Time & savings deposits..... 3.38 3.63 4.47 5.88 6.69 6.75
Short-term borrowings....... 3.50 2.92 3.70 5.32 7.19 8.09
Long-term borrowings........ 5.17 7.51 8.26 9.77 10.19 10.24
Total interest cost....... 3.41 3.63 4.44 5.87 6.76 6.89
Total cost of all funds... 2.89 3.11 3.87 5.16 5.90 6.04
Net interest margin..... 4.98% 4.77% 4.77% 4.60% 4.62% 4.66%
</TABLE>

* YIELDS ARE COMPUTED ON A FULLY TAXABLE EQUIVALENT BASIS USING THE RATES OF
35% FOR 1994 AND 1993 AND 34% FOR 1992 THROUGH 1989.

<PAGE>

SIX-YEAR OPERATING INCOME SUMMARY

ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES
(Dollars in thousands)

1994 1993 1992 1991 1990 1989
% OF % OF % OF % OF % OF % OF
ADJUSTED ADJUSTED ADJUSTED ADJUSTED ADJUSTED ADJUSTED
OPERATING OPERATING OPERATING OPERATING OPERATING OPERATING
$ INCOME $ INCOME $ INCOME $ INCOME $ INCOME $ INCOME
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Interest income............... 251,383 86.9 247,699 86.0 263,484 87.6 242,792 90.9 234,025 92.3 226,249 92.8

Interest expense.............. 94,897 32.8 99,786 34.7 120,039 39.9 130,913 49.0 134,462 53.0 131,335 53.9

Net interest income........... 156,486 54.1 147,913 51.3 143,445 47.7 111,879 41.9 99,563 39.3 94,914 38.9
Provision for loan losses..... 4,788 1.7 5,788 2.0 11,389 3.8 6,671 2.5 7,884 3.1 12,404 5.1

Net interest income after
provision for loan losses... 151,698 52.4 142,125 49.3 132,056 43.9 105,208 39.4 91,679 36.2 82,510 33.8

Other Income:
Trust Department income..... 7,892 2.7 7,272 2.5 6,041 2.0 5,327 2.0 4,838 1.9 4,433 1.8
Service charges on
deposit accounts.......... 11,441 4.0 11,963 4.2 11,281 3.7 8,981 3.4 6,568 2.6 5,554 2.3
Other service
charges and fees.......... 9,921 3.4 12,163 4.2 12,689 4.2 5,954 2.2 4,054 1.6 3,491 1.4
Other operating income...... 9,437 3.3 8,751 3.1 7,392 2.5 4,824 1.8 4,210 1.7 3,721 1.5
Securities transactions..... (867) (0.3) 113 0.0 (35) (0.0) (730) (0.3) (37) 0.0 265 0.1
Total other income........ 37,824 13.1 40,262 13.9 37,368 12.4 24,356 9.1 19,633 7.8 17,464 7.1

Operating Expenses:
Salaries & benefits......... 63,042 21.8 61,511 21.4 55,457 18.4 46,236 17.3 41,105 16.2 38,638 15.9
Occupancy expense........... 6,014 2.1 6,206 2.2 6,199 2.1 4,315 1.6 3,360 1.3 3,164 1.3
Equipment expense........... 8,468 2.9 10,604 3.7 10,503 3.5 8,759 3.3 4,971 2.0 6,859 2.8
External computer costs..... 4,705 1.6 4,575 1.6 2,351 0.8 1,864 0.7 1,549 0.6 1,535 0.6
Other expense............... 39,173 13.5 43,211 15.0 41,630 13.8 31,255 11.7 28,216 11.1 25,480 10.5
Total operating expenses.. 121,402 41.9 126,107 43.9 116,140 38.6 92,429 34.6 79,201 31.2 75,676 31.1

Income before tax............. 68,120 23.6 56,280 19.6 53,284 17.7 37,135 13.9 32,111 12.8 24,298 9.8
Applicable income taxes....... 21,909 7.6 18,326 6.4 16,646 5.5 10,743 4.0 8,402 3.3 5,197 2.1

Net income.................... 46,211 16.0 37,954 12.9 36,638 12.2 26,392 9.9 23,709 9.5 19,101 7.7
</TABLE>

* ADJUSTED OPERATING INCOME EQUALS INTEREST INCOME PLUS OTHER INCOME.

<TABLE>
<CAPTION>
Per Share Summary
(in dollars, except average shares) 1994 1993 1992 1991 1990 1989
<S> <C> <C> <C> <C> <C> <C>
Net income........ 2.70 2.20 2.13 1.72 1.55 1.25
Cash dividends.... 0.94 0.84 0.70 0.62 0.59 0.56
Stock dividends... 0 50%/20% 0 0 0 0
Average shares.... 17,132,000 17,237,000 17,211,000 15,361,000 15,296,000 15,280,000
</TABLE>

43
<PAGE>

ONE VALLEY BANCORP QUALITY COUNCIL

Phyllis H. Arnold
EXECUTIVE VICE PRESIDENT AND PRESIDENT & CEO, ONE VALLEY BANK, NA

Frederick H. Belden, Jr.
EXECUTIVE VICE PRESIDENT AND ASSISTANT CORPORATE SECRETARY

C. Michael Blair
PRESIDENT & CEO, ONE VALLEY BANK - NORTH

J. G. Call
PRESIDENT & CEO, ONE VALLEY BANK OF HUNTINGTON

John M. Frazier
PRESIDENT & CEO, ONE VALLEY BANK OF OAK HILL

Michael H. Hudnall
PRESIDENT & CEO, ONE VALLEY BANK OF MARION COUNTY, N.A.

Laurance G. Jones
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

Robert E. Kamm, Jr.
PRESIDENT & CEO, ONE VALLEY BANK OF SUMMERSVILLE

Larry F. Mazza
PRESIDENT & CEO, ONE VALLEY BANK OF CLARKSBURG, N.A.

James L. Miller
PRESIDENT & CEO, ONE VALLEY BANK OF MERCER COUNTY

J. Holmes Morrison
PRESIDENT AND CHIEF EXECUTIVE OFFICER

John L. Robertson
PRESIDENT & CEO, ONE VALLEY BANK OF RONCEVERTE, N.A.

Brent D. Robinson
EXECUTIVE VICE PRESIDENT

William D. Stegall
PRESIDENT & CEO, ONE VALLEY BANK - EAST, N.A.

Kenneth R. Summers
PRESIDENT & CEO, ONE VALLEY BANK OF MORGANTOWN

James L. Whytsell
SENIOR VICE PRESIDENT - DATA PROCESSING

DIRECTORS OF ONE VALLEY BANCORP

Phyllis H. Arnold
EXECUTIVE VICE PRESIDENT,
ONE VALLEY BANCORP OF WEST VIRGINIA, INC.
PRESIDENT & CHIEF EXECUTIVE OFFICER,
ONE VALLEY BANK, N.A.

Charles M. Avampato
PRESIDENT, CLAY FOUNDATION, INC.

Robert F. Baronner
CHAIRMAN OF THE BOARD,
ONE VALLEY BANCORP OF WEST VIRGINIA, INC.

C. Michael Blair
PRESIDENT & CHIEF EXECUTIVE OFFICER,
ONE VALLEY BANK - NORTH

James K. Brown
ATTORNEY, JACKSON & KELLY

John T. Chambers
COMMERCIAL REALTOR,
PRESIDENT, RAVENSWOOD LAND CO. AND
MOUNT ALPHA DEVELOPMENT COMPANY

Nelle Ratrie Chilton
DIRECTOR, DICKINSON FUEL COMPANY, INC.
AND TERRA CO., INC.

Ray Marshall Evans, Jr.
PRESIDENT, DICKINSON COMPANY,
CHESAPEAKE MINING COMPANY AND HUBBARD
PROPERTIES, INC., VICE PRESIDENT, GEARY
SECURITIES

James Gabriel
PRESIDENT & CEO, GABRIEL BROTHERS, INC.

Phillip H. Goodwin
PRESIDENT, CAMCARE & CAMC

Thomas E. Goodwin
CHAIRMAN OF THE BOARD,
ONE VALLEY BANK OF RONCEVERTE, N.A.

Cecil B. Highland, Jr.
CHAIRMAN OF THE BOARD,
ONE VALLEY BANK OF CLARKSBURG, N.A.,
PRESIDENT, CLARKSBURG PUBLISHING CO.

Robert E. Kamm, Jr.
PRESIDENT & CHIEF EXECUTIVE OFFICER,
ONE VALLEY BANK OF SUMMERSVILLE, INC.

David E. Lowe
PRESIDENT, BELL ATLANTIC WV, INC.

John D. Lynch
VICE PRESIDENT, DAVIS LYNCH GLASS CO.

Edward H. Maier
PRESIDENT, GENERAL CORPORATION

J. Holmes Morrison
PRESIDENT & CHIEF EXECUTIVE OFFICER,
ONE VALLEY BANCORP OF WEST VIRGINIA, INC.
CHAIRMAN OF THE BOARD,
ONE VALLEY BANK, N.A.

Charles R. Neighborgall, III
PRESIDENT, NEIGHBORGALL CONSTRUCTION CO.

Robert O. Orders, Sr.
CHIEF EXECUTIVE OFFICER,
ORDERS CONSTRUCTION COMPANY

John L. D. Payne
PRESIDENT, PAYNE-GALLATIN MINING CO.

Angus E. Peyton
ATTORNEY, BROWN & PEYTON

Lacy I. Rice, Jr.
VICE CHAIRMAN OF THE BOARD,
ONE VALLEY BANCORP OF WEST VIRGINIA, INC.,
ATTORNEY, BOWLES, RICE, MCDAVID
GRAFF & LOVE

Brent D. Robinson
EXECUTIVE VICE PRESIDENT,
ONE VALLEY BANCORP OF WEST VIRGINIA, INC.

James W. Thompson
CHAIRMAN OF THE BOARD,
ONE VALLEY BANK OF MERCER COUNTY

John L. Van Metre, Jr.
ATTORNEY, STEPTOE & JOHNSON

Richard B. Walker
CHAIRMAN OF THE BOARD AND CEO,
CECIL I. WALKER MACHINERY CO.

H. Bernard Wehrle, III
PRESIDENT, MCJUNKIN CORPORATION

John Henry Wick, III
VICE PRESIDENT,
DICKINSON FUEL COMPANY, INC.

Thomas D. Wilkerson
SENIOR AGENT,
NORTHWESTERN MUTUAL LIFE INSURANCE CO.

HONORARY MEMBERS
James F. Brown, III
Charles T. Jones
James R. McCartney
Mary Price Ratrie

<PAGE>

AFFILIATE DIRECTORS

ONE VALLEY BANK,
NATIONAL ASSOCIATION
ONE VALLEY SQUARE
CHARLESTON, WV 25326

Phyllis H. Arnold*
Charles M. Avampato
Robert F. Baronner
James K. Brown
John T. Chambers
Nelle Ratrie Chilton
Ray Marshall Evans, Jr.
Robert F. Goldsmith
Phillip H. Goodwin
O. Nelson Jones
Carl E. Little
David E. Lowe
Edward H. Maier
J. Holmes Morrison
Robert O. Orders, Sr.
John L. D. Payne
Angus E. Peyton
William A. Rice, Jr.
K. Richard C. Sinclair
James C. Smith
James R. Thomas, II
Edwin H. Welch
John Henry Wick, III
Thomas D. Wilkerson
James D. Williams

HONORARY MEMBERS
James F. Brown, III
Charles T. Jones
Mary Price Ratrie
John M. Wells, Sr.

ONE VALLEY BANK OF
SUMMERSVILLE
811 MAIN STREET
SUMMERSVILLE, WV 26651

Roy V. Groves
W. H. Henderson
Charles H. Hinkle
Robert E. Kamm, Jr.*
David Lackey
Glenn H. McMillion
Robert C. Rader

ONE VALLEY BANK OF
OAK HILL
100 MAIN STREET
OAK HILL, WV 25901

John M. Frazier*
George W. Jones III
Elizabeth M. Lewis
James E. Lively
William E. Meador
Marilyn T. Montgomery
Donald C. Newell, Jr.
Walter A. Noyes
N. M. Steen

ONE VALLEY BANK OF
RONCEVERTE. N.A.
100 MAPLEWOOD AVENUE
RONCEVERTE, WV 24970

Richard Aide
Gary M. Ambler
Thomas E. Goodwin
Norman O. Nutter
Michael O'Brien
Henry E. Riffe
John L. Robertson*
David Sebert
Marion Shiflet

HONORARY MEMBER
George A. Aide

ONE VALLEY BANK OF
MERCER COUNTY
COURTHOUSE SQUARE
PRINCETON, WV 24740

Homer K. Ball
Jerry L. Beasley
Fred A. Bolton
J. Richard Copeland
Harry Finkelman
H. Allen Griffith
A. Glendon Hill
M. D. Kirk, Jr.
Joseph F. Marsh
James L. Miller*
Charles W. Pace
Dewey W. Russell
Guy B. Scyphers
James W. Thompson
Ted L. White
H. Elwood Winfrey

HONORARY MEMBERS
James W. Anderson
John C. Anderson
W. R. Cooke
Richard V. Lilly
Fred McKenzie
Lawrence J. Pace
Joseph C. Shaffer, Jr.

ONE VALLEY BANK OF
HUNTINGTON
SIXTH AVE. & FIRST ST.
HUNTINGTON, WV 25701

J. G. Call*
W. Dan Egnor
Stephen G. Fox
Henry M. Kayes
Sara H. Lowe
Charles R. Neighborgall, III
Stephen G. Roberts
Kevin D. Thompson
David P. Reed
J. Roger Smith

ONE VALLEY BANK OF
CLARKSBURG, N.A.
4TH AND MAIN STREETS
CLARKSBURG, WV 26302

Marcia Allen Broughton
Earl N. Flowers
John C. Hart
J. Cecil Jarvis
Cecil B. Highland, Jr.
C. William Johnson
William M. Kidd
Larry F. Mazza*
Paul G. Robinson
William W. Simpson
Leonard J. Timms, Jr.

ONE VALLEY BANK OF
MORGANTOWN
496 HIGH STREET
MORGANTOWN, WV 26505

Iona L. Bucklew
Samuel Chico, Jr.
Laurence S. DeLynn
George R. Farmer, Jr.
Arthur Gabriel
Kenneth Juskowich
James L. Laurita, Sr.
John D. Lynch
Paul F. Malone
Jordan C. Pappas
James M. Stevenson
Paul T. Swanson
Kenneth R. Summers*
Bernard G. Westfall

HONORARY MEMBERS
James R. McCartney
Glenn W. Thorne

ONE VALLEY BANK
NORTH
414 JEFFERSON AVENUE,
MOUNDSVILLE, WV 26041

C. Michael Blair*
Earl G. Downs
Robert L. Fisher
Loren Gene Gray
Sidney E. Grisell
Carlos C. Jimenez
Helen E. Levenson
William Medovic
Shelley R. Moore
James P. Ovies
Charles E. Rexroad
Paul G. Robinson
Clinton Rogerson
Nick A. Sparachane
Bernard P. Twigg
Glenn Reed Whipkey
Bruce W. Wilson

ONE VALLEY BANK
EAST, N.A.
148 SOUTH QUEEN STREET
MARTINSBURG, WV 25401

A. Elwood Butler
Walter L. Butler
James W. Dailey, II
Deborah J. Dhayer
Conrad C. Hammann
Charles A. Hensell
John B. Hoke, Jr.
James B. Hutzler
Robert A. McMillan
John M. Miller III
Bonn A. Poland, III
Lacy I. Rice, Jr.
Douglas M. Roach
William D. Stegall*
John L. Van Metre, Jr.

HONORARY MEMBERS
George E. Alter, Jr.
Guy R. Avey
Howard N. Carper, Jr.
F. Dennis Clarke
Robert G. Criswell
Frank H. Fischer
N. Blaine Groves
T. Fred Hammond
Otho S. Lewis
Floyd C. Odom
Walter B. Ridenour
Robert A. Sanders
Philip T. Siebert
Clyde E. Smith, Jr.
Paul E. Tederick
C. Vincent Townsend

ONE VALLEY BANK OF
MARION COUNTY, N.A.
4TH AND MAIN STREETS
CLARKSBURG, WV 26302

Michael E. Basile
John R. Carpenter
Sarah L. Crayton
Trevelyn F. Hall, II
Wendell G. Hardway
Benjamin H. Hayes
Michael H. Hudnall*
Thomas M. Prendergast
Paul G. Robinson
Howard A. Shriver
Carl J. Snyder
Kenneth R. Summers
Robert H. Thompson
Hays Webb
Brian K. Wilson

* PRESIDENT AND CEO

<PAGE>

Exhibit 21

SUBSIDIARIES OF REGISTRANT

1) One Valley Bank, National Association, a national banking
association organized under the laws of the United States of America.

2) One Valley Bank of Huntington, Inc., a West Virginia banking
corporation.

3) One Valley Bank of Mercer County, Inc., a West Virginia banking
corporation.

4) One Valley Bank - East, National Association, a national banking
association organized under the laws of the United States of America.

5) One Valley Bank of Oak Hill, Inc., a West Virginia banking
corporation.

6) One Valley Bank of Ronceverte, National Association, a national
banking association organized under the laws of the United States of
America.

7) One Valley Bank of Morgantown, Inc., a West Virginia banking
corporation.

8) One Valley Bank of Summersville, Inc., a West Virginia banking
corporation.

9) One Valley Bank - North, Inc., a West Virginia corporation.

10) One Valley Bank of Marion County, National Association, a
national banking association organized under the laws of the United
States of America.

11) One Valley Bank of Clarksburg, National Association, a national
banking association organized under the laws of the United States of
America.

12) One Valley Square, Inc., a Texas corporation.

<PAGE>

Exhibit 23.1

CONSENT OF INDEPENDENT AUDITORS

We consent to the incorporation by reference in this Annual Report (Form
10- K) of One Valley Bancorp of West Virginia, Inc. of our report dated
January 19, 1995, included in the 1994 Annual Report to Shareholders of
One Valley Bancorp of West Virginia, Inc.

We also consent to the incorporation by reference in the Registration
Statements pertaining to the Amended 1983 Incentive Stock Option Plan
(Form S-8, No. 2-90738) and pertaining to the 1993 Incentive Stock
Option Plan (Form S-8, No. 33-66700) of One Valley Bancorp of West
Virginia, Inc. of our report dated January 19, 1995, with respect to the
consolidated financial statements of One Valley Bancorp of West
Virginia, Inc. and Subsidiaries incorporated by reference in the Annual
Report on Form 10-K for the year ended December 31, 1994.

/s/ Ernst & Young LLP

Charleston, WV
March 27, 1995

<PAGE>

Exhibit 23.2

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to the incorporation in this Form 10-K of our report dated
February 4, 1994, relating to the consolidated financial statements of
Mountaineer Bankshares of W. Va., Inc. for the years ended December 31,
1993 and 1992.

We also consent to the incorporation by reference in the Registration
Statements pertaining to the Amended 1983 Incentive Stock Option Plan
(Form S-8, No. 2-90738) and pertaining to the 1993 Incentive Stock
Option Plan (Form S-8, No. 33-66700) of One Valley Bancorp of West
Virginia, Inc. of our report dated February 4, 1994, with respect to the
consolidated financial statements of Mountaineer Bankshares of W. Va.,
Inc., incorporated in the Annual Report on Form 10-K for the year ended
December 31, 1994.

/s/ Crowe, Chizek and Company

Columbus, Ohio
March 27, 1995

<ARTICLE> 9
<LEGEND>
This schedule contains summary financial information extracted from the
consolidated balance sheets and statements of income of One Valley Bancorp as
well as supplemental schedules of the analysis of loan losses and non-performing
asses and the consolidated average balance sheets and is qualified in its
entirety by reference to such financial statements and supplemental schedules.
</LEGEND>
<CIK> 0000351616
<NAME> ONE VALLEY BANCORP
<MULTIPLIER> 1000

<S> <C>
<C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> DEC-31-1994
<CASH> 178900
<INT-BEARING-DEPOSITS> 4297
<FED-FUNDS-SOLD> 24875
<TRADING-ASSETS> 0
<INVESTMENTS-HELD-FOR-SALE> 541201
<INVESTMENTS-CARRYING> 445158
<INVESTMENTS-MARKET> 422381
<LOANS> 2372957
<ALLOWANCE> 37438
<TOTAL-ASSETS> 3673241
<DEPOSITS> 2926479
<SHORT-TERM> 375339
<LIABILITIES-OTHER> 30106
<LONG-TERM> 19450
<COMMON> 175384
0
0
<OTHER-SE> 146483
<TOTAL-LIABILITIES-AND-EQUITY> 3673241
<INTEREST-LOAN> 191392
<INTEREST-INVEST> 58954
<INTEREST-OTHER> 1037
<INTEREST-TOTAL> 251383
<INTEREST-DEPOSIT> 85221
<INTEREST-EXPENSE> 94897
<INTEREST-INCOME-NET> 156486
<LOAN-LOSSES> 4788
<SECURITIES-GAINS> (867)
<EXPENSE-OTHER> 121402
<INCOME-PRETAX> 68120
<INCOME-PRE-EXTRAORDINARY> 68120
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 46211
<EPS-PRIMARY> 2.70
<EPS-DILUTED> 2.70
<YIELD-ACTUAL> 4.98
<LOANS-NON> 7664
<LOANS-PAST> 3827
<LOANS-TROUBLED> 552
<LOANS-PROBLEM> 0
<ALLOWANCE-OPEN> 36484
<CHARGE-OFFS> 5985
<RECOVERIES> 2151
<ALLOWANCE-CLOSE> 37438
<ALLOWANCE-DOMESTIC> 37438
<ALLOWANCE-FOREIGN> 0
<ALLOWANCE-UNALLOCATED> 0

</TABLE>

ONE VALLEY BANCORP OF WEST VIRGINIA, INC.
Charleston, West Virginia

NOTICE OF REGULAR ANNUAL MEETING OF SHAREHOLDERS
To be held April 25, 1995

To the Shareholders:

The Regular Annual Meeting of Shareholders of One Valley Bancorp
of West Virginia, Inc. ("One Valley"), will be held at the Charleston
Town Center Marriott, 200 Lee Street, East, in Charleston, West
Virginia, at 10:00 a.m. on Tuesday, April 25, 1995, for the purpose of
considering and voting upon proposals:

1. To elect eleven directors - nine to serve for a term of three years,
one to serve for a term of two years, and one to serve for a term of one
year, and until their successors are chosen and qualify.

2. To approve the appointment by the Board of Directors of Ernst & Young
as independent Certified Public Accountants for the year 1995.

3. To transact such other business as may properly be brought before the
meeting or any adjournment thereof.

Only those shareholders of record at the close of business on
March 7, 1995, are entitled to notice of the meeting and to vote at the
meeting. We hope that you will attend this meeting.

By Order of the Board of Directors
J. Holmes Morrison
President

PLEASE SIGN AND RETURN THE ENCLOSED PROXY AS PROMPTLY AS POSSIBLE,
WHETHER OR NOT YOU PLAN TO ATTEND THE MEETING IN PERSON. YOU MAY
REVOKE YOUR PROXY AT ANY TIME BEFORE IT IS VOTED AT THE ANNUAL
MEETING.

March 20, 1995

<PAGE>

ONE VALLEY BANCORP OF WEST VIRGINIA, INC.
ONE VALLEY SQUARE
CHARLESTON, WEST VIRGINIA

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS -- APRIL 25, 1995

This statement is furnished in connection with the solicitation
of proxies for use at the Annual Meeting of Shareholders of One Valley
Bancorp of West Virginia, Inc. ("One Valley"), to be held on Tuesday,
April 25, 1995, at the time and for the purposes set forth in the
accompanying Notice of Regular Annual Meeting of Shareholders. The
approximate date on which this Proxy Statement and the form of proxy are
to be first mailed to shareholders is March 20, 1995. The mailing
address of the principal executive offices of One Valley is P. O. Box
1793, Charleston, West Virginia, 25326.

Solicitation of Proxies

The solicitation of proxies is made by management at the
direction of the Board of Directors of One Valley. These proxies enable
shareholders to vote on all matters which are scheduled to come before
the meeting. If the enclosed proxy is signed and returned, it will be
voted as directed; or if not directed, the proxy will be voted "FOR" the
election of the eleven management nominees as directors for the terms
specified, and "FOR" the approval of the appointment of Ernst & Young as
independent Certified Public Accountants. A shareholder executing the
proxy may revoke it at any time before it is voted by notifying One
Valley in person, by giving written notice to One Valley of the
revocation of the proxy, by submitting to One Valley a subsequently
dated proxy, or by attending the meeting and withdrawing the proxy
before it is voted at the meeting.

The expense for the solicitation of proxies will be paid by One
Valley. In addition to this solicitation by mail, officers and regular
employees of One Valley and its subsidiaries may, to a limited extent,
solicit proxies personally or by telephone or telegraph.

Eligibility of Stock for Voting Purposes

Pursuant to the Bylaws of One Valley, the Board of Directors has
fixed March 7, 1995, as the record date for the purpose of determining
the shareholders entitled to notice of, and to vote at, the meeting or
any adjournment thereof, and only shareholders of record at the close of
business on that date are entitled to notice of and to vote at the
Annual Meeting of Shareholders or any adjournment thereof.

As of the record date for the Annual Meeting, 17,004,868 shares
of the common stock with a par value of Ten Dollars ($10.00) per share
("One Valley Common Stock") of One Valley were issued and outstanding
and entitled to vote. One Valley's subsidiary banks hold of record as
trustee, co-trustee, executor or co-executor, but not beneficially,
3,269,756 shares of stock representing 19.23% of the shares of One
Valley outstanding. Of these shares, the banks hold 2,677,540 shares as
co-trustee or co-executor and 592,216 shares as sole trustee or sole
executor (other principal holders of One Valley's stock are discussed
under "Principal Holders of Securities"). The 2,677,540 shares held as
co-trustee or co-executor are voted by the individual co-trustee(s) or
co-executor(s) and not by the banks. Of the remaining 592,216 shares
held by the banks as sole trustee or sole executor, 535,076 shares (or
3.15% of the total shares outstanding) will be voted by the banks, as
trustee or executor, "FOR" the election of the eleven management
nominees as directors, and "FOR" the approval of the appointment of
Ernst & Young as independent Certified Public Accountants. The
remaining 57,140 shares are held by the banks as sole trustee or sole
executor in personal trust and self-directed employee benefit accounts
and will be voted by the banks at the direction of the grantor, settlor
or beneficiary of those accounts.

<PAGE>

PURPOSE OF MEETING

1. ELECTION OF DIRECTORS

The Bylaws of One Valley currently provide that the Board of
Directors shall consist of not fewer than six nor more than 33 members,
the exact number of directors within these minimum and maximum limits to
be fixed and determined by resolution of a majority of the Board of
Directors. There are presently 29 directors on the Board; and, at a
meeting held February 21, 1995, the Board's Executive Committee fixed at
29 the number of directors to constitute the full Board of Directors of
One Valley effective April 25, 1995.

One Valley's Articles of Incorporation authorize classification
of the Board of Directors into three classes, each of which serves for
three years, with one class being elected each year. Pursuant to this
arrangement, nine nominees have been nominated for three-year terms, one
nominee has been nominated for a two-year term, and one nominee has been
nominated for a one-year term, and until their successors are chosen and
qualify. This will result in a Board composed of three classes with
eleven directors in the class of 1996, nine directors in the class of
1997, and nine directors in the class of 1998.

Management Nominees to the Board of One Valley

Unless otherwise directed, the proxies will be voted "FOR" the
election of the following eleven directors to serve for terms expiring
at the Annual Meeting of Shareholders in the years indicated in the
table below, and until their successors are chosen and qualify.

Served
As A Family
Director Relationship Principal
of One With Directors Year In Occupation
Valley and Other Which Term Or Employment
Nominees Age Since Nominees Expires Last Five Years
<S> <C> <C> <C> <C> <C>
Robert F. Baronner 68 1981 None 1998 Chairman of the Board-One
Valley Bancorp of West
Virginia, Inc., Charleston,
WV; formerly President and
Chief Executive Officer-One
Valley Bancorp of West
Virginia, Inc., Charleston, WV

C. Michael Blair 52 1994 None 1998 Chairman of the Board,
President and Chief Executive
Officer - One Valley Bank-
North, Inc.; formerly
Chairman of the board,
President and Chief Executive
Officer - Mercantile Banking
and Trust Company,
Moundsville, WV

James K. Brown 65 1981 None 1998 Attorney - Jackson & Kelly,
Charleston, WV

Nelle Ratrie Chilton 55 1989 (1) 1998 Director and Vice President -
Dickinson Fuel Co., Inc.,
Charleston, WV; TerraCo.,
Inc., Charleston, WV; Terra-
Care, Inc., Terra Salis, Inc.,
TerraSod, Inc., Malden, WV
(Landscaping)

<PAGE>

Served
As A Family
Director Relationship Principal
of One With Directors Year In Occupation
Valley and Other Which Term Or Employment
Nominees Age Since Nominees Expires Last Five Years
<S> <C> <C> <C> <C> <C>
R. Marshall Evans, Jr. 53 1984 (2) 1998 President-Dickinson Co.,
Quincy Coal Co., and
Chesapeake Mining Co.,
Charleston, WV; Vice
President - Geary Securities,
Charleston, WV; President-
Hubbard Properties, Inc.,
Cheyenne, WY

Phillip H. Goodwin 54 1989 None 1998 President-CAMCARE and
Charleston Area Medical
Center, Charleston, WV

J. Holmes Morrison 54 1990 None 1997 1991 to present - President and
Chief Executive Officer-One
Valley Bancorp of West
Virginia, Inc.; formerly
Executive Vice President-One
Valley Bancorp of West
Virginia, Inc.; President and
Chief Executive Officer-One
Valley Bank, National
Association, Charleston, WV

Robert O. Orders, Sr. 69 1989 None 1998 Chief Executive Officer -
Orders Construction Co., St.
Albans, WV

John L. D. Payne 56 1981 (2) 1998 President - Payne-Gallatin
Mining Co., Charleston, WV

Brent D. Robinson 47 1994 None 1998 Executive Vice President -
One Valley Bancorp of West
Virginia, Inc.; formerly
President, Chief Operating
Officer and Chief Financial
Officer - Mountaineer
Bankshares of W.Va., Inc.

H. Bernard Wehrle, III 43 1991 None 1996 President - McJunkin
Corporation, Charleston, WV
(Steel Fabricators)

<PAGE>

Directors Continuing to Serve Unexpired Terms

The following Directors will continue to serve until the
expiration of their terms:

Served
As A Family
Director Relationship Principal
of One With Directors Year In Occupation
Valley and Other Which Term Or Employment
Nominees Age Since Nominees Expires Last Five Years
<S> <C> <C> <C> <C> <C>
Phyllis H. Arnold 46 1993 None 1996 1991 to present - President and
Chief Executive Officer - One
Valley Bank, National
Association; formerly Exe-
cutive Vice President - One
Valley Bank, National
Association, Charleston, WV

Charles M. Avampato 56 1984 None 1996 President - Clay Foundation,
Inc., Charleston, WV
(Charitable Foundation)

John T. Chambers 71 1981 None 1996 Commercial Realtor; President -
Ravenswood Land Co. and Mt.
Alpha Development Co.,
Charleston, WV

James Gabriel 64 1993 None 1996 President and Chief Exe-
cutive Officer - Gabriel
Brothers, Inc., Morgantown,
WV (Retail Sales)

Thomas E. Goodwin 65 1985 None 1996 Chairman of the Board -
One Valley Bank of
Ronceverte, National Assoc-
iation, Ronceverte, WV

Cecil B. Highland, Jr. 76 1994 None 1997 Chairman of the Board - One
Valley Bank of Clarksburg,
National Association;
President and General Manager -
Clarksburg Publishing Co.,
Clarksburg, WV

Robert E. Kamm, Jr. 43 1987 None 1997 President and Chief Executive
Officer-One Valley Bank of
Summersville, Inc., Summers-
ville, WV

<PAGE>

Served
As A Family
Director Relationship Principal
of One With Directors Year In Occupation
Valley and Other Which Term Or Employment
Nominees Age Since Nominees Expires Last Five Years
<S> <C> <C> <C> <C> <C>
David E. Lowe 54 1993 None 1997 1993-President and Chief
Executive Officer- Bell Atlantic
WV, Inc., Charleston, WV;
1990 to 1993, Vice President,
Chesapeake and Potomac
Telephone Company of
Virginia, Richmond, VA;
1988 to 1990, Assistant
Vice President, Bell Atlantic,
Arlington, VA

John D. Lynch 54 1986 None 1996 Vice President - Davis Lynch
Glass Company, Star City,
WV

Edward H. Maier 51 1983 None 1997 President - General
Corporation, Charleston, WV
(Real Estate Investment,
Natural Gas Production,
Warehousing)

Charles R.
Neighborgall, III 53 1987 None 1996 President - The Neighborgall
Construction Company,
Huntington, WV (General
Contractors)

Angus E. Peyton (3) 68 1981 None 1997 Attorney-Brown and Peyton,
Charleston, WV

Lacy I. Rice, Jr. 63 1994 None 1997 Attorney - Bowles, Rice,
McDavid, Graff & Love; Vice
Chairman of the Board - One
Valley Bancorp of West
Virginia Inc., Charleston,
WV; Chairman of the Board -
One Valley Bank - East,
Martinsburg, WV; formerly
Chairman of the Board, and
Chief Executive Officer -
Mountaineer Bankshares of
W.Va., Inc.

<PAGE>

J. Lee Van Metre, Jr. 57 1986 None 1996 Attorney - Steptoe &
Johnson; Secretary of the
Board-One Valley Bank - East,
National Association,
Martinsburg, WV

Richard B. Walker 56 1991 None 1997 Chairman of the Board and
Chief Executive Officer-
Cecil I. Walker Machinery

John H. Wick, III 49 1993 (1) 1996 1992 to present - Vice
President - Dickinson Fuel
Co., Inc., Charleston, WV;
1980 to 1992 - Commercial
Realtor, Harrison & Bates,
Inc., Richmond, VA

Thomas D. Wilkerson 66 1981 None 1997 Senior Agent-Northwestern
Mutual Life Insurance
Company, Charleston, WV

</TABLE>
(1) John H. Wick, III, is the brother-in-law of Nelle Ratrie Chilton.

(2) R. Marshall Evans, Jr. and John L. D. Payne are first cousins.

(3) Angus E. Peyton is a member of the Board of Directors of American
Electric Power Company, Inc.

<PAGE>

General

The Bylaws of One Valley provide that in the election of directors of
One Valley each shareholder will have the right to vote the number of
shares owned by that shareholder for as many persons as there are
directors to be elected, or to cumulate such shares and give one
candidate as many votes as the number of such directors multiplied by
the number of shares owned will equal, or to distribute them on the same
principle among as many candidates as the shareholder sees fit. For all
other purposes, each share is entitled to one vote. If any shares are
voted cumulatively for the election of directors, the Proxies, unless
otherwise directed, will have full discretion and authority to cumulate
their votes and vote for less than all such nominees.

The Bylaws of One Valley provide that nominations for election to the
Board of Directors, other than those made by or on behalf of the
existing management of One Valley, must be made by a shareholder in
writing delivered or mailed to the President not less than 14 days nor
more than 50 days prior to the meeting called for the election of
directors; provided, however, that if less than 21 days' notice of the
meeting is given to shareholders, the nominations must be mailed or
delivered to the President not later than the close of business on the
7th day following the day on which the notice of meeting was mailed.
The notice of nomination must contain the following information, to the
extent known: (a) name and address of proposed nominee(s); (b) principal
occupation of proposed nominee(s); (c) total shares to be voted for each
proposed nominee; (d) name and address of notifying shareholder; and (e)
number of shares owned by notifying shareholder. Nominations not made
in accordance with these requirements may be disregarded by the Chairman
of the meeting, in which case the votes cast for the proposed nominee
will likewise be disregarded.

One Valley commenced business on September 4, 1981, as a bank holding
company. The financial operations of One Valley in 1994 primarily
related to the ownership and the establishment of policies for the
management and direction of One Valley Bank, National Association, One
Valley Bank of Huntington, Inc., One Valley Bank of Mercer County, Inc.,
One Valley Bank of Ronceverte, National Association, One Valley Bank of
Morgantown, Inc., One Valley Bank of Oak Hill, Inc., a wholly-owned
subsidiary of One Valley Bank of Summersville, Inc., One Valley Bank of
Marion County, National Association, One Valley Bank - East, National
Association, One Valley Bank - North, Inc., and One Valley Bank of
Clarksburg, National Association. On September 2, 1994, an Agreement
and Plan of Merger was executed pursuant to which Point Bancorp, Inc.,
agreed to merge with and into a wholly-owned subsidiary of One Valley.
It is anticipated that this merger will be consummated in the first
quarter of 1995.

Committees of the Board

One Valley has a standing Audit Committee, Compensation Committee and
Nominating Committee.

The Audit Committee of One Valley consists of five members, Charles
M. Avampato, Nelle Ratrie Chilton, Edward H. Maier, John L. D. Payne and
Richard B. Walker and met four times in 1994. This Committee reviews
and evaluates significant matters relating to audit and internal
controls, reviews the scope and results of audits by independent
auditors, reviews the activities of the internal audit staff, meets with
the appropriate management personnel regarding internal and external
audit results and reports its findings to the Board of Directors.

The Compensation Committee of One Valley consists of six members,
Charles M. Avampato, Nelle Ratrie Chilton, Phillip H. Goodwin, David E.
Lowe, John L. D. Payne, and H. Bernard Wehrle, III, and met three times
in 1994. The Compensation Committee administers the One Valley Bancorp
of West Virginia, Inc., 1983 and 1993 Incentive Stock Option Plans. It
also approves compensation levels for the executive management group of
One Valley and its subsidiaries.

The Nominating Committee of One Valley consists of five members,
Robert F. Baronner, Nelle Ratrie Chilton, J. Holmes Morrison, John L. D.
Payne and Angus E. Peyton and met once in 1994. The Nominating
Committee recommends nominees to fill vacancies on the Board of
Directors, although the President of One Valley will also entertain
nominations made in accordance with the Bylaws of One Valley previously
described.

<PAGE>

The Board of One Valley met 9 times in 1994, and there were numerous
meetings of the Committees of the Board. During 1994, Directors
Gabriel, Highland, Phillip Goodwin, and Wehrle attended fewer than 75%
of the aggregate of the total number of meetings of the Board of One
Valley and the total number of meetings held by all Committees on which
they served.

Principal Holders of Voting Securities

John L. Dickinson and C. C. Dickinson, sons of John Q. Dickinson, one
of the original incorporators of One Valley Bank, National Association,
formerly Kanawha Valley Bank, National Association (hereinafter "One
Valley Bank"), each owned more than 10% of the issued and outstanding
stock of One Valley Bank. Both John L. and C. C. Dickinson are
deceased, and much of the stock formerly held by them is now held by
family trusts created by them or their spouses. At the time of the
formation of One Valley as a one bank holding company holding all of the
stock of One Valley Bank, the shares of One Valley Bank were exchanged
on a one for one basis for shares of One Valley. The John L. Dickinson
Family Trusts collectively hold 1,291,301 shares, representing 7.6% of
the issued and outstanding stock of One Valley. The C. C. Dickinson
Family Trusts collectively hold 866,980 shares, representing 5.1% of the
issued and outstanding stock of One Valley. The following table sets
forth the names and addresses of those shareholders who own beneficially
more than 5% of the outstanding One Valley Common Stock as of March 7,
1995, the amount and nature of the beneficial ownership, and the
percentage of outstanding voting securities represented by the amount
owned. The individuals named in the table are co-trustees of certain of
the Dickinson Family Trusts and most of the shares owned by them are
owned in their capacity as co-trustees.

Title of Name and Address Amount and Nature of Percent of
Class of Beneficial Owner Beneficial Ownership (1) Class
<S> <C> <C> <C>
Common Stock Mary Price Ratrie 979,482(2) 5.8%
Kanawha Salines
Malden, WV 25306

Common Stock Charles C. Dickinson, III 914,523(3) 5.4%
1111 City National Building
Wichita Falls, Texas 76301

Common Stock Robert F. Goldsmith 865,998(4) 5.1%
1528 Dogwood Road
Charleston, WV 25314

Common Stock Ray M. Evans, Jr. 1,435,871(5) 8.4%
3401 Northside Parkway
Atlanta, GA 30327
</TABLE>

(1) This table includes a duplication of beneficial ownership of
securities in cases where the named individuals have overlapping
co-trustee relationships. These four individuals hold, excluding
duplication, a total of 2,494,291 shares, or 14.7% of the total
17,004,868 shares of One Valley Common Stock outstanding as of the
record date. Although One Valley Bank, a subsidiary of One Valley,
is a co-trustee of these various trusts, in all instances, the named
individual co-trustees vote the stock of One Valley held in the
trusts.

(2) Consists of 39,080 shares owned of record; 866,980 shares held as
co-trustee with Charles C. Dickinson, III, and One Valley Bank (in
which trusts Mary Price Ratrie has a one-third beneficial interest);
756 shares owned by J. Q. Dickinson & Co., a sole proprietorship
owned by Mary Price Ratrie; and 72,666 shares owned by Dickinson
Property Limited Partnership in which Mary Price Ratrie is a
beneficial owner.

(3) Consists of 47,543 shares owned of record and 866,980 shares held as
co-trustee with Mary Price Ratrie and One Valley Bank (in which
trusts Mr. Dickinson has a one-fifth beneficial interest).

<PAGE>

(4) Consists of 25,579 shares owned of record; 2,428 shares owned of
record by his wife; 837,991 shares held as co-trustee with Ray M.
Evans, Jr., and One Valley Bank. Not included in this total amount
are 36,643 shares held in trusts from which Mr. Goldsmith may, at
the discretion of the co-trustees, receive distributions of income
and, under certain circumstances, distributions of principal.

(5) Consists of 837,991 shares held as co-trustee with Robert F.
Goldsmith and One Valley Bank; 140,460 shares held as co-trustee
with One Valley Bank and another individual co-trustee; 119,526
shares held with One Valley Bank as co-trustee; 23,131 shares held
by his wife as trustee of trusts for the benefit of his children;
28,502 shares owned of record; 5,782 shares owned of record by his
wife; and 280,479 shares owned by Dickinson Company, of which Mr.
Evans is an executive officer. Not included in this total amount
are 11,713 shares held in a trust from which Mr. Evans may, at the
discretion of the co-trustees, receive distributions of income and,
under certain circumstances, distributions of principal.

Ownership of Securities by Directors, Nominees and Officers

The following tabulation sets forth the number of shares of One
Valley Common Stock beneficially owned by (i) each of the nominees and
directors, (ii) each of the executive officers listed in the Summary
Compensation Table, and (iii) the directors, nominees, and executive
officers of One Valley as a group as of March 7, 1995, and indicates the
percentages of common stock so owned. There is no other class of voting
securities issued and outstanding.

Amount and Nature
of Beneficial Percent of
Name of Beneficial Owner Ownership (1) Class

Phyllis H. Arnold 39,412 Direct (2)
145 Indirect *

Charles M. Avampato 18,012 Direct
2,922 Indirect *

Robert F. Baronner 10,216 Direct
6,037 Indirect *

Frederick H. Belden, Jr. 18,130 Direct (3)
136 Indirect *

C. Michael Blair 57,036 Direct (4)
3,818 Indirect *

James K. Brown 2,577 Direct
1,212 Indirect *

John T. Chambers 7,067 Direct
850 Indirect *

Nelle Ratrie Chilton 43,462 Direct
55,153 Indirect *

R. Marshall Evans, Jr. 28,502 Direct
1,407,369 Indirect (5) 8.4%

James Gabriel 6,482 Direct *

<PAGE>

Amount and Nature
of Beneficial Percent of
Name of Beneficial Owner Ownership (1) Class
Phillip H. Goodwin 1,515 Direct *

Thomas E. Goodwin 7,422 Direct
7,478 Indirect *

Cecil B. Highland, Jr. 324,582 Direct
7,331 Indirect 2.0%

Laurance G. Jones 13,200 Direct (6) *
2,500 Indirect

Robert E. Kamm, Jr. 274,567 Direct (7)
107,285 Indirect 2.3%

David E. Lowe 700 Direct *

John D. Lynch 21,000 Direct
3,000 Indirect *

Edward H. Maier 5,780 Direct *

J. Holmes Morrison 55,062 Direct (8)
782 Indirect *

Charles R. Neighborgall, III 1,188 Direct
2,677 Indirect *

Robert O. Orders, Sr. 15,669 Direct *

John L. D. Payne 714 Direct
434,479 Indirect (9) 2.6%

Angus E. Peyton 35,077 Direct
166,170 Indirect 1.2%

Lacy I. Rice, Jr. 149,500 Direct *

Brent D. Robinson 29,009 Direct (10)
682 Indirect *

James W. Thompson 8,805 Direct
4,080 Indirect *

J. Lee Van Metre, Jr. 3,208 Direct *

Richard B. Walker 1,777 Direct *

H. Bernard Wehrle, III 1,180 Direct *

John H. Wick, III 9,084 Direct
39,905 Indirect *

<PAGE>

Amount and Nature
of Beneficial Percent of
Name of Beneficial Owner Ownership (1) Class
Thomas D. Wilkerson 1,800 Direct *

All Directors, Nominees and Executive 1,233,109 Direct
Officers as a Group (33 individuals) 1,973,532 Indirect 18.9%

*Beneficial ownership does not exceed one percent of the class.

(1) Share totals of directors include 100 directors' qualifying shares,
which each director is required to own pursuant to One Valley's
Bylaws. Shares held indirectly include shares held by family
members and shares held through trusts or corporations which in turn
hold shares of One Valley.

(2) Includes options to purchase 18,720 shares pursuant to One Valley's
1983 Stock Option Plan. Includes options to purchase 10,140 shares
pursuant to One Valley's 1993 Stock Option Plan.

(3) Includes options to purchase 7,560 shares pursuant to One Valley's
1983 Stock Option Plan. Includes options to purchase 7,960 shares
pursuant to One Valley's 1993 Stock Option Plan.

(4) Includes options to purchase 2,800 shares pursuant to One Valley's
1993 Stock Option Plan. Includes options to purchase 7,310 shares
pursuant to Mountaineer Bankshares of W.Va., Inc. Stock Option
Plan.

(5) See Note (5) to Principal Holders of Voting Securities.

(6) Includes options to purchase 3,420 shares pursuant to One Valley's
1983 Stock Option Plan. Includes options to purchase 7,280 shares
pursuant to One Valley's 1993 Stock Option Plan.

(7) Includes options to purchase 11,295 shares pursuant to One
Valley's 1983 Stock Option Plan. Includes options to purchase
5,120 shares pursuant to One Valley's 1993 Stock Option Plan.

(8) Includes options to purchase 31,320 shares pursuant to One
Valley's 1983 Stock Option Plan. Includes options to purchase
18,000 shares pursuant to One Valley's 1993 Stock Option Plan.

(9) Consists of 70,599 shares held in nine trusts of which John L. D.
Payne is a co-trustee, 363,160 shares held by Dickinson Company,
Payne-Gallatin Mining Company and Horse Creek Land and Mining
Company (in which companies Mr. Payne is an executive officer),
and 720 shares owned by his children; does not include 88,033
shares held in or through trusts in which John L. D. Payne, at the
discretion of the trustees, is an income beneficiary.

(10) Includes options to purchase 3,800 shares pursuant to One Valley's
1993 Stock Option Plan. Includes options to purchase 8,850 shares
pursuant to Mountaineer Bankshares of W.Va., Inc. Stock Option
Plan.

<PAGE>

Executive Compensation

The following table sets forth the annual and long-term compensation
for services in all capacities to One Valley for the fiscal years ended
December 31, 1994, 1993, and 1992, of those persons who were, as of
December 31, 1994, (i) the chief executive officer and (ii) the four
other most highly compensated officers of One Valley.

SUMMARY COMPENSATION TABLE

Annual Compensation Long Term Compensation
Awards Payouts

Other Securities All
Name Annual Restricted Under- Other
and Compen- Stock lying LTIP Compen-
Principal Salary Bonus sation(1) Award(s) Options Payouts sation(2)
Position Year ($) ($) ($) ($) (#) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
J. Holmes Morrison 1994 315,000 110,250 0 0 9,000 0 5,476
President & CEO 1993 275,000 114,297 0 0 9,000 0 5,263
1992 233,000 106,015 0 0 9,000 0 4,577

Phyllis H. Arnold 1994 190,000 63,840 0 0 5,100 0 4,531
Exec. Vice President 1993 170,000 63,750 0 0 5,040 0 4,553
1992 150,000 58,500 0 0 5,040 0 3,890

Frederick H. Belden, Jr. 1994 156,000 47,190 0 0 4,000 0 4,691
Exec. Vice President 1993 148,000 50,875 0 0 3,960 0 4,550
1992 135,000 48,263 0 0 3,960 0 3,479

Laurance G. Jones 1994 150,000 43,313 0 0 3,800 0 4,687
Exec. Vice President 1993 132,000 43,560 0 0 3,480 0 4,462
1992 117,000 41,828 0 0 3,420 0 3,017

Brent D. Robinson 1994 150,000 41,250 29,311 0 3,800 0 49,121
Exec. Vice President 1993 138,900 27,754 0 0 0 0 8,813
1992 126,336 0 0 0 3,000 0 7,539
</TABLE>

(1) The amount included for Mr. Robinson in "Other Annual Compensation"
is the amount reimbursed for payment of taxes as a result of the
expenses paid by One Valley as listed in footnote (2).

(2) The amounts included in "All Other Compensation" consist of One
Valley's contributions on behalf of the listed officers to the
401(k) Plan, pursuant to which all eligible employees receive up to
a 50% matching contribution from One Valley for all amounts
contributed to the 401(k) Plan by the employee, to a maximum of 5%
of the employee's salary. In the case of Mr. Robinson, the amount
reported for 1994 pertains to the 401(k) Plan ($3,808), relocation
expenses ($20,313), and termination of an arrangement with
Mountaineer Bankshares for a company-provided automobile ($25,000);
for 1993 and 1992 pertains to the Mountaineer Bankshares 401(k) Plan
match and Board and Committee fees for services rendered as a Board
member of Mountaineer Bankshares. Under the Mountaineer Bankshares
401(k) Plan, employees were permitted to contribute up to 6% of
salary for which the company made a 50% matching contribution.

<PAGE>

The following table sets forth further information on grants of stock
options during 1994 to (i) the listed officers and (ii) all optionees as
a group pursuant to One Valley's 1993 Incentive Stock Option Plan. The
table also provides information concerning the potential gain to all
shareholders at the designated rate of appreciation. No stock
appreciation rights ("SARs") were awarded by One Valley.

OPTION GRANTS IN LAST FISCAL YEAR

Grant Date
Individual Grants Value(1)

Number of % of Total Potential Realizable Value
Securities Options at Assumed Annual Rates
Underlying Granted to Exercise of Stock Appreciation for
Options Employees or Base Expira- Ten-Year Option Term
Granted in Fiscal Price(2) tion 0% 5% 10%
Name (#) Year ($/Sh) Date ($) ($) ($)
<S> <C> <C> <C> <C> <C> <C> <C>

J. Holmes Morrison 9,000 9.4% 26.50 4/28/04 0 150,030 380,070
Phyllis H. Arnold 5,100 5.3% 26.50 4/28/04 0 85,017 215,373
Frederick H. Belden, Jr. 4,000 4.2% 26.50 4/28/04 0 66,680 168,920
Laurance G. Jones 3,800 4.0% 26.50 4/28/04 0 63,346 160,474
Brent D. Robinson 3,800 4.0% 26.50 4/28/04 0 63,346 160,474

All Optionees (including
the five listed above) 95,800 100% 26.50 4/28/04 0 1,596,986 4,045,634

All Shareholders - - - - 0 281,874,164 714,069,942

Optionee Gain as % of
All Shareholders Gain - - - - 0 0.56% 0.56%

</TABLE>

(1) The actual value, if any, an executive may realize depends on the
excess of the stock price over the exercise price on the date the
option is exercised.

(2) The exercise price is the fair market value of One Valley Common
Stock on the date the options were granted. Options are
exercisable immediately, and terminate upon termination of
employment for reasons other than death or retirement, upon the
expiration of three months after the date of retirement, upon the
expiration of one year from the date of death, or ten years from
the option date.

<PAGE>

The following table sets forth information concerning (i) the value
realized upon the exercise of stock options during 1994 by the listed
officers, and (ii) the number of unexercised options held by each listed
officer as of December 31, 1994, and the market value of the underlying
shares if the options had been exercised on that date. No SARs have
been awarded by One Valley.

AGGREGATED OPTION EXERCISES IN LAST
FISCAL YEAR AND FY-END OPTION VALUES

Number of
Securities Value of
Underlying Unexercised
Unexercised In-the-Money
Options at Options at
Shares Acquired Value FY-End (#) FY-End ($)
Name On Exercise (#) Realized ($)(1) Exercisable Exercisable
<S> <C> <C> <C> <C>
J. Holmes Morrison 0 0 49,320 403,104
Phyllis H. Arnold 4,590 66,928 28,860 256,382
Frederick H. Belden, Jr. 0 0 15,520 91,712
Laurance G. Jones 0 0 10,700 28,915
Brent D. Robinson 0 0 12,650 119,552
</TABLE>

(1) Market value of underlying securities at exercise, minus the
exercise or base price.

The following table indicates, for purposes of illustration, the
approximate annual retirement benefits (Qualified Plan and Supplemental
Plan) that would be payable to an employee retiring on November 1, 1994,
at age 65 on the full life annuity form under various assumptions as to
salary and years of service. Benefits are not subject to deduction for
Social Security or other offset amounts.

PENSION PLAN TABLE

Highest Consecutive Estimated Annual Pension For
Five Year Representative Years of Credited Service
Average Compensation 15 20 25 30 35

$125,000 $28,177 $37,569 $67,486 $67,486 $67,486
150,000** 34,177 45,569 87,763 87,763 87,763
175,000 34,177 45,569 99,986 99,986 99,986
200,000 34,177 45,569 116,236 116,236 116,236
225,000 34,177 45,569 132,486 132,486 132,486

250,000 34,177 45,569 148,736 148,736 148,736
300,000 34,177 45,569 181,236 181,236 181,236
400,000 34,177 45,569 246,236 246,236 246,236
450,000 34,177 45,569 278,736 278,736 278,736
500,000 34,177 45,569 311,236 311,236 311,236

**IRS Maximum for Qualified Plan.

<PAGE>

Compensation covered by the qualified pension plan is based on total
pay, including all Management Incentive Compensation Plan payments,
received during the sixty consecutive months of employment which results
in the highest total divided by five. Such compensation is directly
related to the total annual salary and bonus set forth in the Summary
Compensation Table and does not vary by more than ten percent from that
set forth therein, except that bonus payments listed in the table are
actually paid to the recipient (and consequently included in determining
plan benefits) in the year after that listed. As of November 1, 1994,
the credited years of service under the retirement plan for the
individuals named in the table shown under Executive Compensation were:
Phyllis H. Arnold, 18.667 years; J. Holmes Morrison, 27.17 years;
Frederick H. Belden, Jr., 27 years; Laurance G. Jones, 25.33 years; and
Brent D. Robinson, 6.833 years.

In 1990, a Supplemental Employee Retirement Plan (SERP) was
established for certain members of senior management, including the
individuals named in the Cash Compensation Table, which provides for a
benefit at normal retirement of 65 percent of final average
compensation, less (i) the retirement benefit under the Defined Benefit
Pension Plan, and (ii) any retirement benefits from a previous employer,
and (iii) the employee's Social Security benefit. The plan further
provides reduced early retirement benefit target objectives and a
disability retirement benefit target of 60 percent of final average
compensation at the time of disability, minus the benefits paid under
the Defined Benefit Pension Plan and the employee's Social Security
benefit. During 1994, $123,262 was paid into the SERP Trust for 1993,
and $232,415 was accrued for 1994.

Change of Control Arrangements

In January 1987, and in January 1994 in the case of Mr. Robinson, One
Valley entered into agreements with the officers listed in the Summary
Compensation Table and with certain other officers to encourage those
key officers not to seek other employment because of the possibility
that One Valley might be acquired by another entity. The Board of
Directors determined that such an arrangement was appropriate,
especially in view of the volatile banking market anticipated in West
Virginia with the advent of interstate banking. The agreements were not
undertaken in the belief that a change of control of One Valley was
imminent.

The agreements are for a term of three years and on each anniversary
date the term is automatically extended for an additional one-year
period unless a 60-day prior written notice is given by either party.
Generally, the agreements provide severance compensation to those
officers if their employment should end under certain specified
conditions after a change of control of One Valley. Compensation is
paid upon any involuntary termination following a change of control
unless the officer is terminated for cause. In addition, compensation
will be paid after a change of control if the officer voluntarily
terminates employment because of a salary reduction, reassignment
without consent to an office more than 50 miles from the officer's
location at the time of a change of control, failure by One Valley to
obtain assumption of the contract by its successor, or termination of
employment without a 30-day written notice.

Under the agreements, a change of control is deemed to occur in the
event of any business combination which would require a higher than
majority vote of the shareholders under One Valley's Articles of
Incorporation, or an occurrence of a nature that would be required to be
reported to the Securities and Exchange Commission as a change of
control. Severance benefits include: (a) a cash payment equal to the
officer's monthly base salary multiplied by the number of full months
between the date of termination and a date which is 30 months after the
date on which the change of control occurs; (b) payment of the award
due, if any, under One Valley's Management Incentive Compensation Plan
for the year in which termination occurs; and (c) continuing
participation in employee benefit plans and programs such as retirement,
disability and medical insurance for a period of 30 months after the
change in control.

<PAGE>

Board Compensation Committee Report on Executive Compensation

The Compensation Committee ("Committee") of the Board of Directors
establishes compensation policies, plans and programs which are intended
to accomplish three objectives: to attract and retain highly capable and
well-qualified executives; to focus executives' efforts on increasing
long-term shareholder value; and to reward executives at levels which
are competitive with the marketplace for similar positions and
commensurate with performance of each executive and of One Valley. The
Committee has determined that to accomplish these objectives, total
compensation should be comprised of base salary, short-term incentive
compensation, and long-term incentive compensation.

The Committee meets several times annually with the Chief Executive
Officer and senior human resources executives to review, modify as
appropriate, and approve the compensation programs for executives,
utilizing the services of outside compensation consultants when
appropriate. In determining the salary budget for 1994 and in fixing
levels of executive compensation, the Committee considered internal
equity, external competitiveness of base compensation and total
compensation, the inflation rate, and One Valley's performance relative
to its long-range goals. In its evaluation of One Valley's corporate
performance for the purpose of fixing base salary levels, the Committee
does not attempt to assign specific weights to multiple factors which,
taken together, constitute "corporate performance." Consequently, its
evaluation of corporate performance is subjective to the extent that the
Committee considers all aspects of corporate performance, including but
not limited to long-range plan goals for earnings, asset quality,
capital, liquidity and resource utilization; however, significant
emphasis is given to the annual increase in One Valley's earnings per
share. Base salaries for executive officers are determined first by an
evaluation of the officer's success as measured against annually
established goals for individual performance and the performance of the
business unit(s) for which they have responsibility. Second, base
salaries are measured against market place salaries of equivalent
positions in financial institutions of comparable size. Marketplace
information is determined using data from several recognized
compensation survey services, specifically the Hay Compensation Report
of Banks and Associated Financials produced by Hay Management
Consultants, the SNL Executive Compensation Review, the Wyatt Data
Services Financial Institutions Compensation Survey, and the William M.
Mercer Finance, Accounting and Legal Compensation Survey. This
information was selected for comparison because of the formidable
position that these surveys hold in the industry and the availability of
representative peer group information.

Currently base compensation for executives of One Valley, while
competitive, continues to be below the average for similar positions
within comparable financial institutions. When One Valley executives,
including the CEO and the officers listed in the Summary Compensation
Table, were compared to the marketplace, their base salaries were, in
the aggregate, well below the median of the marketplace. The Committee
believes, philosophically, that compensation should, on the whole, be
incentive driven; however, base compensation should be reasonably
competitive in the marketplace. To this end, the Committee has set a
base salary range target for executives at the 37.5 percentile of the
marketplace average. The Committee believes that the appropriate level
of executive base compensation is primarily market-driven, although base
compensation is also dependent on corporate performance and on each
executive's progress toward individual goals.

The Committee believes that incentive compensation is an appropriate
adjunct to base compensation which, together with base compensation,
should approach the industry median for total compensation if
established goals are met. Short-term incentive compensation is
provided to key executives, as determined by the Compensation Committee
pursuant to One Valley's Management Incentive Compensation Plan
("MICP"). Awards under MICP are granted based upon One Valley's
earnings per share relative to a target level set by the Board of
Directors. If the target is met, awards are calculated for each
participant based upon the level of corporate performance relative to
the target, upon performance of the executive and the unit he or she
manages in meeting assigned objectives, and upon the executive's
relative position within One Valley. The determination of corporate
performance for this purpose is based solely upon earnings per share.
Thus the level of annual performance of One Valley, determined in a
manner which emphasizes factors which should have a positive impact upon
total return to shareholders, has a significant impact upon total
executive compensation.

<PAGE>

The Committee believes that shareholder value can be further enhanced
by closely aligning the financial interests of One Valley's key
executives with those of its shareholders. Awards of stock options
pursuant to One Valley's Incentive Stock Option Plan ("ISOP") are
intended to meet this objective and constitute the long-term incentive
portion of executive compensation. Participation in the ISOP is limited
to approximately thirty employees of the top management of One Valley
and its affiliate banks who are deemed to have the opportunity to most
significantly affect corporate results. Under the ISOP, the option
price paid by the executive to exercise the option is the fair market
value of the stock on the day the option is granted, and the option is
freely exercisable within a ten-year period. The options attain value
over that time only if the market price of the underlying stock
increases, and the increase in value of the option is directly tied to
the increase in the value of the stock. The Committee believes the ISOP
focuses the attention and efforts of executive management upon
increasing long-term shareholder value and the Committee periodically
awards options to key executives in amounts it believes are adequate to
achieve the desired objective. The total number of shares available for
award in each plan year is specified in the ISOP. These shares are
generally allocated based upon the Committee's subjective judgment,
taking into account the historical levels of awards and the relative
positions of the participants in the ISOP.

Total compensation for the CEO is determined in essentially the same
way as for other executives, recognizing that the CEO has overall
responsibility for the performance of One Valley. Therefore, One
Valley's performance has a direct impact upon the CEO's compensation in
that its earnings per share determine the amount of base compensation
increase and the MICP award; and, in addition, the market price of One
Valley's Common Stock determines the value of options awarded during
prior periods. The base compensation of the CEO in 1994 was based in
large measure on the corporate results in 1993 relative to long-range
plan goals for earnings, asset quality, capital, liquidity and resource
utilization. As discussed above, no attempt is made by the Committee to
assign relative weights to the various components of corporate
performance in fixing the CEO's base compensation. The targeted earnings
were $2.47 per share and actual earnings per share were $2.52, which was
10% higher than 1992 earnings of $2.29 per share. This relative success
of One Valley was a major consideration in establishing the base
compensation for the CEO. During 1994 One Valley consistently received
high rankings from multiple industry research companies. The MICP award
for 1994 was based on the earnings per share performance in 1994 which
was $2.70 The ISOP awards to the CEO for 1994 were based on the
historical level of awards and the Committee's determination of the
appropriate level of prospective ownership necessary to motivate long-
term performance.

Recent revisions to the Internal Revenue Code disallow deductions in
excess of $1,000,000 for certain executive compensation. The Committee
has not adopted a policy in this regard since none of One Valley's
executives receive compensation approaching the $1,000,000 level. The
report shall not be deemed incorporated by reference by any general
statement incorporating by reference this proxy statement into any
filing under the Securities Act of 1933 or the Securities Exchange Act
of 1934, except to the extent that One Valley specifically incorporates
this report by reference, and shall not otherwise be filed under such
Acts.

The report is submitted by the Compensation Committee, which consists
of

Phillip H. Goodwin, Chairman
Charles M. Avampato
Nelle Ratrie Chilton
David E. Lowe
John L. D. Payne
H. Bernard Wehrle, III.

<PAGE>

Performance Graph

The following graph compares the yearly percentage change in One
Valley's cumulative total shareholder return on its Common Stock for the
five-year period ending December 31, 1994, with the cumulative total
return of the Standard & Poor's 500 Stock Index and the Media General
Industry Group Index - 04, which consists of all banks and bank holding
companies within the United States whose stock has been publicly traded
for at least six years. The graph assumes (i) the reinvestment of all
dividends and (ii) an initial investment of $100. There is no assurance
that One Valley's stock performance will continue in the future with the
same or similar trends as depicted in the graph. The graph shall not be
deemed incorporated by reference by any general statement incorporating
by reference this proxy statement into any filing under the Securities
Act of 1933 or the Securities Exchange Act of 1934, except to the extent
that One Valley specifically incorporates this graph by reference, and
shall not otherwise be filed under such Acts.

Five-year Cumulative Total Return Comparison

(The Comparison Chart appears here. The plot points are listed below:)

1989 1990 1991 1992 1993 1994
One Valley Bancorp 100 $88 $177 $276 $263 $275
Standard & Poors 500 100 $97 $126 $136 $150 $152
All Publicly Traded Banks 100 $77 $109 $130 $153 $145
(Media General Industry Group Index - 04)

<PAGE>

Compensation of Directors

During 1994, each director who was not also an officer and full-time
employee of One Valley received $600 for each meeting of the Board of
Directors of One Valley attended, $350 to the respective directors who
attended the Board's Audit Committee, and, as members of certain other
committees of the Board of Directors, received $275 for each meeting of
a committee of the Board of Directors attended. In addition, Mr.
Baronner received compensation in the amount of $18,000 for serving as
Chairman of the Board of Directors. During 1994, there were no other
arrangements pursuant to which any director of One Valley was
compensated for services as a director.

Directors of One Valley are eligible to defer fees pursuant to the
One Valley Deferred Compensation Plan, which was adopted in 1984, with
respect to fees received in 1984 and thereafter for services rendered as
a director of One Valley.

Compliance with Section 16(a) of the Securities Exchange Act of 1934

Section 16(a) of the Securities Exchange Act of 1934 requires the
Company's directors and executive officers, and persons who own more
than ten percent of a registered class of the Company's equity
securities, to file with the Securities and Exchange Commission initial
reports of ownership and reports of changes in ownership of Common Stock
and other equity securities of the Company. Officers, directors and
greater than ten percent shareholders are required by SEC regulation to
furnish the Company with copies of all Section 16(a) forms they file.

To the Company's knowledge, based solely upon review of the copies of
such reports furnished to the Company and written representations that
no other reports were required, during the two fiscal years ended
December 31, 1993, all Section 16(a) filing requirements applicable to
its officers, directors and greater than ten percent beneficial owners
were complied with, except that one report covering one transaction was
filed late by Mr. James Gabriel.

Certain Transactions with Directors and Officers and Their Associates

One Valley and its various banking subsidiaries have had and expect
to have in the future, transactions in the ordinary course of business
with directors, officers, principal shareholders and their associates.
During 1994, all of these transactions were made on substantially the
same terms, including interest rates, collateral and repayment terms on
extensions of credit, as those prevailing at the same time for
comparable transactions with other unaffiliated persons. Such
transactions, which at December 31, 1994, were, in the aggregate, 22.8%
of total shareholders' equity, in the opinion of the management of One
Valley, did not involve more than the normal risk of collectibility or
present other unfavorable features.

Jackson & Kelly, a law firm in which Director James K. Brown is a
partner, Steptoe & Johnson, a law firm in which Director J. Lee Van
Metre, Jr., is a partner, Bowles, Rice, McDavid, Graff & Love, a law
firm in which Director Lacy I. Rice, Jr., is a partner, and McNeer,
Highland & McMunn, a law firm in which Director Cecil B. Highland, Jr.,
is of counsel, performed legal services for One Valley and its
subsidiaries in 1994 and will perform similar services in 1995. On the
basis of information provided by Messrs. Brown, Van Metre, Rice and
Highland, it is believed that less than five percent of the gross
revenues of those law firms did in 1994, and will in 1995, result from
payment for legal services by One Valley and its subsidiaries. In the
opinion of One Valley, these transactions were on terms as favorable to
One Valley as they would have been with third parties not otherwise
affiliated with One Valley.

Compensation Committee Interlocks and Insider Participation

During 1994, One Valley's affiliate banks, and One Valley Square,
Inc., paid $126,580 to TerraCare, Inc., for landscaping services.
TerraCare, Inc., is a wholly-owned subsidiary of TerraCo, Inc. Mary
Price Ratrie, a principal shareholder of One Valley, is the principal
shareholder and President of TerraCo, Inc., and Director Nelle Ratrie
Chilton is Vice President and director of TerraCo, Inc. During 1994,
The

<PAGE>

Neighborgall Construction Co. received payments of $196,345.26 from
One Valley's affiliate, One Valley Bank of Huntington, Inc., for
miscellaneous renovation and repair work to facilities owned by the bank
and for construction of a new branch in Ceredo. It is anticipated that
additional payments will be made in 1995 to TerraCare, Inc., and to The
Neighborgall Construction Co. In the opinion of One Valley, these
transactions were on terms as favorable to One Valley as they would have
been with third parties not otherwise affiliated with One Valley. The
members of One Valley's Compensation Committee are Phillip H. Goodwin,
Charles M. Avampato, Nelle Ratrie Chilton, David E. Lowe, John L. D.
Payne, and H. Bernard Wehrle, III.

2. PROPOSAL TO APPROVE SELECTION OF AUDITORS

The Board of Directors has selected the firm of Ernst & Young to
serve as independent auditors for One Valley for the calendar year 1995
and proposes the approval by the shareholders at the Annual Meeting of
Shareholders of that selection. If that selection does not receive the
approval of a majority of the votes represented in person or by proxy,
the Board will request a later approval of an alternate auditor. One
Valley is advised that no member of this accounting firm has any direct
or indirect material interest in One Valley, or any of its subsidiaries.
A representative of Ernst & Young will be present at the Annual Meeting
to respond to appropriate questions and to make a statement if desired.
The enclosed proxy will be voted "FOR" the approval of the selection of
Ernst & Young unless otherwise directed. The affirmative vote of a
majority of the shares of One Valley Common Stock represented at the
Annual Meeting of Shareholders is required to approve the selection of
Ernst & Young.

FORM 10-K ANNUAL REPORT TO THE SECURITIES AND EXCHANGE
COMMISSION

Upon written request by any shareholder to Laurance G. Jones,
Treasurer, One Valley Bancorp of West Virginia, Inc., P. O. Box 1793,
Charleston, West Virginia 25326, a copy of One Valley's 1994 Annual
Report on Form 10-K will be provided without charge.

OTHER INFORMATION

If any of the nominees for election as directors are unable to serve
as directors by reason of death or other unexpected occurrence, proxies
will be voted for a substitute nominee or nominees designated by the
Board of One Valley unless the Board of Directors adopts a resolution
pursuant to the Bylaws reducing the number of directors. The Board of
Directors is unaware of any other matters to be considered at the
meeting, but if any other matters properly come before the meeting,
persons named in the proxy will vote such proxy in accordance with the
recommendation of the Board of Directors.

Shareholder Proposals for 1996

Any shareholder who wishes to have a proposal placed before the next
Annual Meeting of Shareholders must submit the proposal to Merrell S.
McIlwain II, Secretary of One Valley, at its executive offices, no later
than November 21, 1995, to have it considered for inclusion in the proxy
statement of the Annual Meeting in 1996.

J. Holmes Morrison
President
Charleston, West Virginia
March 20, 1995

***************************************************************************

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PROXY ONE VALLEY BANCORP OF WEST VIRGINIA, INC. PROXY
CHARLESTON, WEST VIRGINIA
This Proxy is Solicited on Behalf of The Board of Directors
for The Annual Meeting of Shareholders, April 25, 1995

Michael A. Albert, John R. Lukens and Louis S. Southworth, II, or any
one of them, are hereby authorized to represent and to vote stock of the
undersigned in One Valley Bancorp of West Virginia, Inc. at the Annual
Meeting of Shareholders to be held April 25, 1995, and any adjournment thereof.

The election of the following persons: Robert F. Baronner, C. Michael
Blair, James K. Brown, Nelle Ratrie Chilton, Ray Marshall Evans, Jr., Phillip
H. Goodwin, Robert O. Orders, Sr., John L. D. Payne and Brent D. Robinson for
three-year terms expiring at the Annual Meeting of Shareholders in 1998;
J. Holmes Morrison for a two-year term expiring at the Annual Meeting of
Shareholders in 1997; and H. Bernard Wehrle, III for a one-year term expiring
at the Annual Meeting of Shareholders in 1996, and until their successors are
chosen and qualify.

Unless otherwise specified on this Proxy, the shares represented by this
Proxy will be voted "FOR" the propositions listed above and described more
fully in the Proxy Statement of One Valley Bancorp of West Virginia, Inc.,
distributed in connection with this Annual Meeting. If any shares are voted
cumulatively for the election of Directors, the Proxies, unless otherwise
directed, shall have full discretion and authority to cumulate their votes and
vote for less than all such nominees. If any other business is presented at
said meeting, this Proxy shall be voted in accordance with recommendations of
the Board of Directors.

PLEASE MARK, SIGN, DATE AND MAIL THE PROXY CARD PROMPTLY
USING THE ENCLOSED ENVELOPE.

(Continued and to be signed on reverse side.)

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<PAGE>
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ONE VALLEY BANCORP OF WEST VIRGINIA, INC.
PLEASE MARK VOTE IN OVAL IN THE FOLLOWING MANNER USING DARK INK ONLY

The Board of Directors recommends a vote "FOR" the listed propositions.

FOR WITHHOLD FOR ALL
1. Election of Directors- (Except Nominees(s)written Below
Nominees: Robert F. Baronner, C. Michael [ ] [ ] [ ]
Blair, James K. Brown, Nelle Ratrie Chilton,
Ray Marshall Evans, Jr., Phillip H. Goodwin,
J. Holmes Morrison,Robert O. Orders, Sr.,
John L. D. Payne, Brent D. Robinson
and H. Bernard Wehrle, III.

2. Approve the appointment of Ernst & Young FOR AGAINST ABSTAIN
as independent Certified Public Accountants [ ] [ ] [ ]
for 1995.

3. Transact such other business as may properly FOR AGAINST ABSTAIN
come before the meeting and any adjournment [ ] [ ] [ ]
thereof.

Dated:__________________, 1995

Signature( s)___________________________________

_____________________________________________
When signing as attorney, executor, administrator,
trustee or guardian, please give full title. If more than
one trustee, all should sign.

_______________________________________________________________________________

<PAGE>

Exhibit 99.2

REPORT OF INDEPENDENT AUDITORS

Board of Directors and Shareholders
Mountaineer Bankshares of W. Va., Inc.
Martinsburg, West Virginia

We have audited the accompanying consolidated balance sheet of
Mountaineer Bankshares of W. Va., Inc., as of December 31, 1993 and the
related consolidated statements of income, changes in shareholders'
equity and cash flows for each of the two years in the period ended
December 31, 1993. These financial statements are the responsibility of
the Company's management. Our responsibility is to express an opinion
on these financial statements based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audits
to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the
financial statements. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe
that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements present fairly, in
all material respects, the consolidated financial position of
Mountaineer Bankshares of W. Va., Inc., as of December 31, 1993, and the
consolidated results of its operations and its cash flows for each of
the two years in the period ended December 31, 1993, in conformity with
generally accepted accounting principles.

As discussed in Notes 1 and 11 to the consolidated financial statements,
the Company changed its method of accounting for income taxes and
postretirement benefits other than pensions.

/s/ Crowe, Chizek and Company

Columbus, Ohio
February 4, 1994