ONE VALLEY BANCORP OF WEST VIRGINIA INC, 10-K, 1996-03-20

ONE VALLEY BANCORP OF WEST VIRGINIA INC
10-K, 1996-03-20
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, 1995
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)

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

124 Total pages Continued . . .

<PAGE>

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

$410,464,426 March 5, 1996

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 5, 1996

Common Stock ($10.00 par value) 16,580,306

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
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Portions of One Valley Bancorp of West Virginia, Inc., Part I, Item 1; Part II, Items 5, 6, 7 and 8;
1995 Annual Report to Shareholders for the year ended Part III, Item 13; and Part IV, Item 14
December 31, 1995

Portions of One Valley Bancorp of West Virginia, Inc., Part III, Items 10, 11, 12 and 13
Proxy Statement for the 1996 Annual Meeting of
Shareholders

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

INDEX
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Page
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Part I
Item 1. Business........................................................... 4
Item 2. Properties......................................................... 16
Item 3. Legal Proceedings ................................................. 16
Item 4. Submission of Matters to a Vote of Security Holders ............. 17
Item 4A. Executive Officers of the Registrant ............................. 17
Condition and Results of Operations

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 ...................... 20
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 ..................................................................... 27
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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, 1995, 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, Inc.; One Valley Bank of Summersville, Inc.; One Valley Bank - North,
Inc.; and One Valley Bank of Clarksburg, National Association. One Valley also
owns 100% of the stock of One Valley Thrift, Inc., which in turn owns 100% of
the stock of One Valley Bank, F.S.B., a federally chartered savings bank. 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, 1995, One Valley had consolidated assets of
$3,858,296,000, deposits of $3,048,336,000, and shareholders' equity of
$366,302,000.

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 January 26, 1996, One Valley announced the execution of an Agreement
and Plan of Merger to acquire CSB Financial Corporation ("CSB"). CSB owns 100%

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of the outstanding shares of common stock of Co-operative Savings Bank, a
federally-chartered savings bank headquartered in Lynchburg, Virginia. It is
anticipated that the transaction will be consummated by June 30, 1996. As of
December 31, 1995, assets of CSB were $328,880,000 and its deposits were
$253,245,000. Following consummation of the CSB acquisition, the name of the
federal savings bank will be changed to One Valley Bank - Central Virginia,
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, Inc. 1911 State

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

One Valley Bank - East 1865 National

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Year in Currently
Name Which Organized Chartered As

One Valley Bank of 1903 National
Clarksburg

One Valley Bank - North 1903 State

One Valley Bank, FSB 1892 Federally-chartered
savings bank

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. One Valley Securities Corporation, a wholly-owned subsidiary of One
Valley Bank, provides discount brokerage services and also sells, as agent,
mutual funds and annuities. 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. Seven of the twenty-three 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 also make deposits or withdrawals at any of One Valley's
79 statewide main office and branch locations.

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As of March 1, 1996, One Valley and its Subsidiaries had approximately
1900 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 anticipated that the
West Virginia Legislature will not take action to restrict the provisions of
that Act, and, on March 9, 1996, the West Virginia Legislature adopted
legislation pursuant to which interstate branching will become effective
on and after May 31, 1997.

<PAGE>

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, "critically undercapitalized" institutions are subject to
appointment of a receiver or conservator.

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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.

The Federal Deposit Insurance Act, as amended by FDICIA and the Riegle
Community Development and Regulatory Improvement Act of 1994, requires the
federal bank regulatory agencies to prescribe standards, by regulations or
guidelines, relating to internal controls, information systems and internal
audit systems, loan documentation, credit underwriting, interest rate risk
exposure, asset growth, asset quality, earnings, stock valuation and
compensation, fees and benefits and such other operational and managerial
standards as the agencies deem appropriate. The federal bank regulatory agencies
have adopted, effective August 9, 1995, a set of guidelines prescribing safety
and soundness standards pursuant to FDICIA, as amended. The guidelines establish
general standards relating to internal controls and information systems,
internal audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth and compensation, fees and benefits. In general, the
guidelines require, among other things, appropriate systems and practices to
identify and manage the risks and exposures specified in the guidelines. The
guidelines prohibit excessive compensation as an unsafe and unsound practice and
describe compensation as excessive when the amounts paid are unreasonable or
disproportionate to the services performed by an executive officer, employee,
director or principal stockholder. The federal banking agencies determined that
stock valuation standards were not appropriate. In addition, the agencies
adopted regulations that authorize, but do not require, an agency to order an
institution that has been given notice by an agency that it is not satisfying
any of such safety and soundness standards to submit a compliance plan. If,
after being so notified, an institution fails to submit an acceptable compliance
plan or fails in any material respect to implement an accepted compliance plan,
the agency must issue an order directing action to correct the deficiency and
may issue an order directing other actions of the types to which an
undercapitalized association is subject under the prompt corrective action
provisions of FDICIA. If an institution fails to comply with such an order,
the agency may seek, to enforce such order in judicial proceedings and
to impose civil money penalties. The federal bank regulatory agencies
also proposed guidelines for asset quality and earnings standards.

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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.

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. As the owner of a federal
savings bank, One Valley has 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.

10
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As of December 31, 1995, there were 14 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.

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

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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 all depository institutions in the State of West
Virginia. The total deposits of the Banking Subsidiaries were approximately 16%
of the total deposits in the State of West Virginia. In 1996, the West Virginia
Legislature raised the cap on total deposits from 20% to 25%.

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. Effective June 1, 1995, the BIF
assessment rate was substantially decreased from 23.5 cents per $100 of deposits
to four cents, and effective January 1, 1996, assessments were temporarily
eliminated due to the BIF funding status. It is likely that at some point in
the future the BIF insurance assessments will again be increased. A large
special assessment or substantial increase in the assessment 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 0.235%. As a result of its prior
acquisitions of assets of Savings and Loan institutions, One Valley has over
$400 million in deposits insured by the SAIF fund. It has been proposed that
during 1996 there be a special one-time assessment on thrift based deposits
to replenish the SAIF fund, however, there is no certainty that the proposal
will become effective. For One Valley this assessment, if adopted, would be
approximately $2,800,000.

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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.

In addition, the operations of One Valley Securities Corporation are also
subject to regulation by the Securities and Exchange Commission, the National
Association of Securities Dealers and the West Virginia Securities Division.

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

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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 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, 1995, 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
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Tier 1 Risk-Based Ratio 4.00% 14.9%
Total Risk-Based Ratio 8.00% 16.1%
Total Assets Leverage Ratio 3.00% 9.1%
</TABLE>

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As of December 31, 1995 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.

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.

15
<PAGE>

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 five through 21 of One Valley's 1995 Annual
Report to Shareholders for the fiscal year ended December 31, 1995. 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 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 20 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.

16
<PAGE>

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
<S> <C> <C>
Robert F. Baronner 69 1991 to Present, Chairman of the Board, One Valley.
1971 to 1991, One Valley Bank. Previously, President
and Chief Executive Officer, One Valley.

J. Holmes Morrison 55 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 47 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.

</TABLE>

<PAGE>

Name Age Banking Experience and Qualifications
<S> <C> <C>

Frederick H. Belden, Jr. 57 1968 to present, One Valley Bank. Senior Vice
President and Senior Trust Officer, 1982; Executive
Vice President, 1986. Executive Vice President, One
Valley, 1994.

Laurance G. Jones 49 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.

Brent D. Robinson 48 1978 to 1994, Mountaineer Bankshares, Inc. and its
predecessors; President and Chief Executive Officer,
One Valley Bank of Huntington, Inc., 1995. Executive
Vice President, One Valley, 1994.

James A. Winter 43 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.

</TABLE>

<PAGE>

PART II

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

During 1995, One Valley Common Stock was traded over the counter on the
Nasdaq National Market under the symbol "OVWV" by Merrill Lynch, Pierce, Fenner
& Smith, Inc.; Keefe, Bruyette & Woods; Robinson Humphrey Co., Inc.; Legg,
Mason, Wood, Walker, Inc.; Wheat First Securities, Inc.; Herzog, Heine, Geduld,
Inc.; Mayer & Schweitzer, Inc.; McDonald & Company Sec., Inc.; Sandler O'Neill &
Partners; Ferris, Baker, Watts, Inc.; and Punk, Ziegel & Knoell. At March 5,
1996, the total number of holders of One Valley Common Stock was approximately
8,900, 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 17 of One Valley's
1995 Annual Report to Shareholders is incorporated herein by reference.

Notes C and R of Notes to the Consolidated Financial Statements
appearing at pages 27 and 38 of One Valley's 1995 Annual Report to Shareholders
are incorporated herein by reference. Table 1 "Six-Year Selected Financial
Summary" on page five of One Valley's 1995 Annual Report to Shareholders is
incorporated herein by reference.

Item 6. Selected Financial Data

Table 1 "Six-Year Selected Financial Summary" on page five of One
Valley's 1995 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 five through 21 of One Valley's 1995
Annual Report to Shareholders is incorporated herein by reference.

19
<PAGE>

Item 8. Financial Statements and Supplementary Data

The information contained on pages 22 through 39 of One Valley's 1995
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 LLP, independent auditors of Mountaineer Bankshares of
W.Va., Inc., and subsidiaries, for the year ended December 31, 1993, is included
as Exhibit 99.2 and incorporated herein by reference.

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 18 of One
Valley's definitive Proxy Statement dated March 18, 1996, 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 Arrangements", and "Compensation of Directors"
on pages 11 through 14 and page 18 of One Valley's definitive Proxy Statement
dated March 18, 1996, 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 seven through 11 of One Valley's definitive Proxy Statement
dated March 18, 1996, 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 pages 18 and 19 of One
Valley's definitive Proxy Statement dated March 18, 1996, and Note G of the
Notes to the Consolidated Financial Statements appearing at page 31 of One
Valley's 1995 Annual Report to Shareholders is incorporated herein by reference.

<PAGE>

PART IV

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

1995 Annual Report
to Shareholders
Index Page(s)

<S> <C>

(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.

Consolidated Balance Sheets at 22
December 31, 1995 and 1994

Consolidated Statements of Income 23
for the years ended December 31,
1995, 1994 and 1993

Consolidated Statements of Share- 24
holders' Equity for the years ended
December 31, 1995, 1994 and 1993

Consolidated Statements of Cash Flows 25
for the years ended December 31, 1995,
1994 and 1993

Notes to Consolidated Financial 26-38
Statements

Report of Independent Auditors 39

Report of Crowe, Chizek and Company LLP, Exhibit 99.2
independent auditors of Mountaineer Bankshares (Form 10-K)
of W.Va., Inc., and subsidiaries, for the year ended
December 31, 1993

</TABLE>

(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 27

(b) Reports on Form 8-K:

By Form 8-K dated October 19, 1995, One Valley reported adoption of a
shareholder protection rights agreement.

See Item 14(a)3 above.

(d) Financial Statement Schedules

See Item 14(a)2 above.

</TABLE>
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 15, 1996

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> <C> <C>

/s/ Phyllis H. Arnold Director March 19, 1996
PHYLLIS H. ARNOLD

/s/ Charles M. Avampato Director March 19, 1996
CHARLES M. AVAMPATO

/s/ Robert F. Baronner Director March 19, 1996
ROBERT F. BARONNER

Director March , 1996
C. MICHAEL BLAIR, IV

/s/ James K. Brown Director March 19, 1996
JAMES K. BROWN

24
<PAGE>

/s/ John T. Chambers Director March 19, 1996
JOHN T. CHAMBERS

/s/ Nelle Ratrie Chilton Director March 19, 1996
NELLE RATRIE CHILTON

/s/ Ray M. Evans, Jr. Director March 19, 1996
RAY M. EVANS, JR.

Director March __, 1996
JAMES GABRIEL

/s/ Phillip H. Goodwin Director March 19, 1996
PHILLIP H. GOODWIN

Director March __, 1996
THOMAS E. GOODWIN

Director March __, 1996
CECIL B. HIGHLAND, JR.

/s/ Laurance G. Jones Treasurer and Chief March 15, 1996
LAURANCE G. JONES Financial Officer
(Principal Financial
Officer)

/s/ Robert E. Kamm, Jr. Director March 14, 1996
ROBERT E. KAMM, JR.

Director March __, 1996
DAVID E. LOWE

Director March __, 1996
JOHN D. LYNCH

/s/ Edward H. Maier Director March 19, 1996
EDWARD H. MAIER

/s/ J. Holmes Morrison Chief Executive Officer March 15, 1996
J. HOLMES MORRISON Director and President

25
<PAGE>

Director March __, 1996
CHARLES R. NEIGHBORGALL, III

/s/ Robet O. Orders, Sr. Director March 19, 1996
ROBERT O. ORDERS, SR.

/s/ John L. D. Payne Director March 19, 1996
JOHN L. D. PAYNE

/s/ Angus E. Peyton Director March 19, 1996
ANGUS E. PEYTON

Director March __, 1996
LACY I. RICE

Director March __, 1996
BRENT D. ROBINSON

Director March __, 1996
JAMES W. THOMPSON

Director March __, 1996
J. LEE VAN METRE, JR.

Director March __, 1996
RICHARD B. WALKER

Director March __, 1996
H. BERNARD WEHRLE, III

/s/ John H. Wick, III Director March 19, 1996
JOHN H. WICK, III

Director March __, 1996
THOMAS D. WILKERSON

/s/ Jame A. Winter Vice President and March 14, 1996
JAMES A. WINTER Chief Accounting
Officer (Principal
Accounting Officer)

</TABLE>

<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 Amendments to the Bylaws of One Valley dated
October 18 and December 20, 1995, and a complete copy
of One Valley's Bylaws as amended.

Exhibit 4.1 Shareholder Protection Rights Agreement, filed as
a part of One Valley's current report on Form 8-K,
dated October 19, 1995, and incorporated herein
reference.

27
<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.

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

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

28
<PAGE>

(13) 1995 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 LLP -- found at page 99 herein.

(27) Financial Data Statement -- Edgar filing only

(99.1) Proxy Statement for the 1996 Annual Meeting of One Valley -- found at
page 100 herein.

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

<PAGE>

Exhibit 3.7

Amendment of December 20, 1995

ARTICLE III. BOARD OF DIRECTORS

Section 12. Committees. (a) Appointment. The Board of Directors, by
resolution adopted by a majority of the full board, may establish an Executive
Committee, Audit 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.

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, General Auditor 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.

Amendment of October 18, 1995

ARTICLE III. BOARD OF DIRECTORS

<PAGE>

customers; (4) the Corporation's creditors; (5) the development and general
welfare of the Corporation's current employees; (6) the Corporation's retired
employees and other beneficiaries receiving or entitled to receive retirement,
welfare or similar benefits from or pursuant to any plan sponsored, or agreement
entered into, by the Corporation; and (7) the ability of the Corporation to
provide, as a going concern, services, employment opportunities and benefits,
and otherwise to contribute to the communities in which it does business.

<PAGE>

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 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

<PAGE>

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 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

<PAGE>

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.

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.

<PAGE>

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 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.

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

<PAGE>

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
matter of law or (ii) as inappropriate as a personal grievance, 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.

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

<PAGE>

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.

Section 6. Quorum. A majority of the number of directors fixed by
Section 2 of this Article m 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 Q 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.

<PAGE>

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 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, Audit
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.

<PAGE>

(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
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.

<PAGE>

(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 Means Q 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.

Section 15. Considerations in the Event of Merger, Consolidation, etc.
In acting upon any proposed merger, consolidation, sale or other
disposition of all or substantially all the assets of the Corporation,
or any proposal by any person or group to acquire a controlling interest
in the Corporation, whether by tender or exchange offer or otherwise, or
any similar proposal regarding a potential change in control of the
Corporation, the Board of Directors shall take into account the effects
that the Corporation's actions and any such transaction may have in the
short-term and in the long-term upon the following: (l) the prospects
for potential growth, productivity and profitability of the Corporation;
(2) maximizing shareholder value; (3) the Corporation's ability to offer
a complete range of services and products to its customers; (4) the
Corporation's creditors; (5) the development and general welfare of the
Corporation's current employees; (6) the Corporation's retired employees
and other beneficiaries receiving or entitled to receive retirement,
welfare or similar benefits from or pursuant to any plan sponsored, or
agreement entered into, by the Corporation; and (7) the ability of the
Corporation to provide, as a going concern, services, employment
opportunities and benefits, and otherwise to contribute to the
communities in which it does business.

<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, General Auditor 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 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,

<PAGE>

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 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

<PAGE>

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.

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.

<PAGE>

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 make 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 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.

<PAGE>

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 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

<PAGE>

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.

<TABLE>
Exhibit 11

Statement Re: Computation of Earnings per Share
<CAPTION>
For The Three Months For The Year
Ended December 31 Ended December 31
1995 1994 1995 1994
<S> <C> <C> <C> <C>
PRIMARY:

Average Shares Outstanding 17,061,000 17,009,000 17,174,000 17,132,000

Net effect of the assumed exercise
of stock options - based on the
treasury stock method 121,000 112,000 113,000 118,000
------------ ------------ ------------ ------------
Total 17,182,000 17,121,000 17,287,000 17,250,000
============ ============ ============ ============
Net Income $13,190,000 $11,532,000 $49,106,000 $46,211,000

Per Share Amount $0.77 $0.67 $2.84 $2.68
============ ============ ============ ============

FULLY DILUTED:

Average Shares Outstanding 17,061,000 17,009,000 17,174,000 17,132,000

Net effect of the assumed exercise
of stock options - based on the
treasury stock method 131,000 114,000 154,000 105,000
------------ ------------ ------------ ------------
Total 17,192,000 17,123,000 17,328,000 17,237,000
============ ============ ============ ============
Net Income $13,190,000 $11,532,000 $49,106,000 $46,211,000

Per Share Amount $0.77 $0.67 $2.83 $2.68
============ ============ ============ ============
</TABLE>

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 divided by net income per share.

One Valley
Bancorp

1995
ANNUAL REPORT

<PAGE>

SHAREHOLDER INFORMATION

STOCK LISTING

Current market quotations for the common stock of One
Valley Bancorp are available on the Nasdaq Stock Market
electronic quotation system under the symbol OVWV.

Registered Nasdaq market makers in One Valley stock include: Ferris Baker
Watts, Inc. 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. Punk Ziegel & Knoell Robinson-
Humphrey Co. 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, Financial Accountant One Valley Bancorp P.O. Box 1793
Charleston, West Virginia 25326

INDEPENDENT AUDITOR

Ernst & Young, LLP 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, 1995, there were approximately 5,095 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 ...................... 5
Consolidated Financial Statements .........................22

Six-Year Financial Summaries.............................. 40
One Valley Bancorp Directors.............................. 43
Quality Council and Affiliate Markets..................... 44
Directors of Affiliate Banks....................... Inside Back Cover

FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>

(Dollars in thousands, except per share data) 1995 1994 % CHANGE
<S> <C> <C> <C>
FOR THE YEAR
Net interest income.... $ 161,292 $ 156,486 3.07%
Net income............. 49,106 46,211 6.26
Average Balances
Total loans - net... 2,392,572 2,199,686 8.77
Total assets........ 3,689,211 3,540,451 4.20
Deposits............ 3,006,906 2,930,555 2.61
Equity.............. 348,273 315,724 10.31

AT YEAR-END
Year-end Balances
Total loans - net... $ 2,472,428 $ 2,335,519 5.86%
Total assets........ 3,858,296 3,673,241 5.04
Deposits............ 3,048,336 2,926,479 4.16
Equity.............. 366,302 321,867 13.81

PER SHARE
Net income............. $ 2.86 $ 2.70 5.93%
Cash dividends......... 1.04 0.94 10.64
Book value............. 21.47 18.93 13.42
</TABLE>

<PAGE>

REPORT TO CUSTOMERS, EMPLOYEES, OWNERS, AND FRIENDS

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

In a year in which the banking industry experienced rapid change and
consolidation, One Valley Bancorp continued its consistent growth and
profitability. As previously announced, One Valley reached record levels in net
income per share, net income, loans, deposits and shareholders' equity. Key
asset quality measures remain among the best in the industry.

Net income per share increased to $2.86 in 1995, up 5.9% from the $2.70
earned in 1994. Net income for the year amounted to $49.1 million, compared to
the $46.2 million earned in 1994, which provided a record annual return on
average assets of 1.33%. Return on shareholders' equity was 14.10% which was
down from the 14.64% earned in 1994 due to a 10.3% increase in average
shareholders' equity to $348.3 million. Year-end shareholders' equity rose to
$366.3 million, giving One Valley a strong 9.5% equity-to-asset ratio at year-
end. One Valley's risk based capital ratio, a regulatory measure of
capitalization, ended the year at 16.1% which was two times the regulatory
requirement of 8.0%. Cash dividends declared in 1995 were $1.04 per share, a
10.6% increase over the $0.94 declared in 1994.

The record earnings achieved by One Valley in 1995 were primarily
attributable to higher net interest income, increased non-interest income, and
slightly lower non-interest expense. Although the net interest margin declined
slightly in 1995 to 4.91% from 4.98% in 1994, net interest income rose $4.8
million or 3.1% due to a higher level of earning assets. Non-interest income
rose 2.7% due to an increase in trust income, service charges on deposit
accounts, and other fees as a result of new business and changes in customers'
account mix. Non-interest expense declined in 1995 due to lower staff costs and
FDIC expenses. The increase in net interest income and non-interest income
together with the control of non-interest expense more than offset the increase
in the loan loss provision in 1995.

A core tenet of One Valley's culture is sound asset quality, and this was
exemplified in the 1995 asset quality ratios. Net charge-offs remained
relatively low for the year at $3.8 million, or 0.16% of average total loans,
which equaled the $3.8 million in net charge-offs for 1994. Non-performing
assets plus loans 90 days past due at December 31, 1995, amounted to $14.3
million or 0.57% of total loans, which also equaled the 0.57% of total loans
ratio in 1994. The $14.3 million of non-performing assets and
loans past due was covered 276% by the $39.5 million allowance for loan
losses at year-end 1995, which was once again a very strong coverage.

The "Management's Discussion and Analysis" section on pages 5 through 21
provides a thorough analysis of the financial condition and results of
operations of One Valley for 1995 and prior years and should be read in its
entirety. Some of the highlights include:

(Bullet) Net income grew at a 15.7% compound annual rate over the past five
years, while net income per share grew at a 13.0% compound growth rate during
this same period. Moreover, the return on average assets averaged 1.15% for
the five years ending December 31, 1995, while the return on average equity
averaged 13.50%.

(Bullet) During this same time period, net interest income grew at a 10.1%
compound annual rate. In addition, non-interest income (excluding security
transactions) had a five-year compound annual growth rate of 14.3% while
non-interest expense grew at a compound rate of 8.7% during the same period.

<PAGE>

(Bullet) One Valley's efficiency ratio, which is used to evaluate its
operational efficiency, was 58.1% in 1995 versus 59.9% in 1994 and compares
favorably to peer group banks which had a 1995 ratio of 61.9%.

(Bullet) Other major components of the balance sheet also reflect the continued
solid growth of One Valley over the past five years with compound annual
growth rates as follows: average total assets 8.2%; average net loans 11.6%;
average deposits 7.4%; and average equity 12.1%.

(Bullet) One Valley continued to reflect a very strong capital position
relative to the industry as equity-to-average assets averaged 8.5% over the
past five years.

(Bullet) Importantly for shareholders, cash dividends per share grew at a
12.0% compound annual rate for the five-year period ending December, 1995.

Year-end 1995 was an important milestone for One Valley as it was the
end of its three-year long range strategic plan and the beginning of a new
three-year plan that will position One Valley to compete in the future as an
integrated financial services company. The value of long range strategic
planning is exhibited in the results achieved for One Valley's customers,
employees and owners from 1993 to 1995.

Through the quality process that One Valley began in 1992, a company culture
has been created that is customer focused resulting in:

(Bullet) A common menu of products;

(Bullet) Upgraded computer and management information systems to provide better
internal and external customer service; and

(Bullet) Expansion of the ATM network with the addition of automated banking
services to provide more convenience to the customer.

An independent, anonymous survey of our employees in 1995, in which
92% of One Valley's employees participated, reflected accomplishments for the
employee constituency over the past three years as:

(Bullet) 85% of One Valley's employees agreed that the company's commitment to
quality is apparent in what they do on a day-to-day basis;

(Bullet) 79% of One Valley's employees felt that they have a clear
understanding of the goals and objectives of the company; and

NET INCOME AND DIVIDENDS PER SHARE

(Chart - Net Income and Dividends Chart appears here)
1990 1991 1992 1993 1994 1995
Net Income $1.55 $1.72 $2.13 $2.20 $2.70 $2.86
Dividends $ .59 $ .62 $ .70 $ .84 $ .94 $1.04

<PAGE>

REPORT TO CUSTOMERS, EMPLOYEES, OWNERS, AND FRIENDS

(Bullet) 80% of One Valley's employees responded they would recommend One
Valley as a good place to work, which is a good measure of employee
satisfaction.

Focusing on the type of performance that would deliver a reasonable
return on the investment made by its owners, One Valley set financial targets
in the categories of profitability, asset quality, capital, liquidity, and
operational efficiency from 1993 to 1995. The financial results reviewed
earlier in this report for 1995 met or exceeded One Valley's targets in all
five financial categories which placed One Valley as a high performing company
among its peer group banking companies.

One Valley will continue to focus on its three main constituencies of
customers, employees and owners in the future. However, after an assessment
of the business environment and competitive opportunities through the use of
surveys and focus groups, a new three year strategic long range plan has been
developed that repositions One Valley as a high-performing integrated
financial services company.

An integrated financial services company is one which presents itself
as a single, full service provider of financial services and products through
which all customer transactions flow quickly and conveniently. The litmus test
of One Valley as a successful integrated financial services company is when the
customer thinks of the complete range of their financial services needs, they
think of One Valley. To accomplish this goal, One Valley must be committed to
establishing long-term, comprehensive and mutually beneficial relationships
with its customers. The approach to sales at One Valley must be one of
consultation with the customer, and all One Valley employees must continue to
take a collaborative approach of working together for the good of the customer.

Successfully becoming an integrated financial services company will
depend in a very large part on the performance and development of One Valley's
employees. Each employee will need to create a personal development plan that
will outline the steps required for future growth and success at One Valley,
as the company, managers and employees share responsibilities to develop each
employee's plan. These shared responsibilities will enable One Valley's
employees to streamline the way they work together while enhancing customer
service. The ultimate objective for the employee constituency is to maintain
and improve upon the 80% favorable response in the employee opinion survey
relative to recommending One Valley as a good place to work.

For its owners, One Valley will continue to emphasize the financial
targets of profitability, asset quality, operational efficiency, capital
adequacy, liquidity and sound management of interest rate risk during the next
three year planning horizon. The financial targets are designed to place One
Valley in the top 25% of composite quality ratings for peer group holding
companies over the next three years.

One Valley's revised mission statement for the planning period from
1996 through 1998 summarizes the company's focus and direction as follows:

"At One Valley Bancorp, it is our mission :

(Bullet) to establish MUTUALLY BENEFICIAL RELATIONSHIPS with our customers by
offering a complete range of services and products that meet or exceed their
expectations;

(Bullet) to SHARE RESPONSIBILITY as employees for the success of our company
and ourselves by committing to continuous improvement and self-development,
and;

(Bullet) to deliver LONG-TERM VALUE on the investment made by our owners.

As we act on our mission, we recognize our responsibilities for stewardship
in the communities we serve. We intend to act on that responsibility in the
belief that it is not just good business, it is the right thing to do."

Respectfully yours,

J. Holmes Morrison
President and CEO

<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 $52 million to $1.8 billion. Through
these banks, One Valley serves 51 cities and towns with a full range of banking
services in 80 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 office
location of its lead bank. At December 31, 1995, One Valley had approximately
$3.9 billion in total assets, $2.5 billion in total loans, and $3.0 billion in
total deposits.

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.

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.

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

5-Year
Compound
Growth
1995 1994 1993 1992 1991 1990 Rate
<S> <C> <C> <C> <C> <C> <C> <C>
Summary of Operations
Interest income................. $ 282,372 $ 251,383 $ 247,699 $ 263,484 $ 242,792 $ 234,025 3.83%
Interest expense................ 121,080 94,897 99,786 120,039 130,913 134,462 (2.07)
Net interest income............. 161,292 156,486 147,913 143,445 111,879 99,563 10.13
Provision for loan losses....... 5,632 4,788 5,788 11,389 6,671 7,884 (6.51)
Non-interest income............. 37,639 37,445 39,192 36,801 24,703 19,327 14.26
Gross securities transactions... (65) (867) 113 (35) (730) (37)
Non-interest expense............ 119,591 120,156 125,150 115,538 92,046 78,858 8.69
Net income...................... 49,106 46,211 37,954 36,638 26,392 23,709 15.68

Per Share Data
Net income...................... $ 2.86 $ 2.70 $ 2.20 $ 2.13 $ 1.72 $ 1.55 13.03%
Cash dividends.................. 1.04 0.94 0.84 0.70 0.62 0.59 12.00
Book value...................... 21.47 18.93 17.70 16.29 14.83 13.44 9.82

Selected Average Balances
Net loans....................... $2,392,572 $2,199,686 $2,026,748 $1,926,773 $1,557,230 $ 1,384,035 11.57%
Investment securities........... 997,269 1,050,980 1,074,467 1,049,459 834,820 745,063 6.00
Total assets.................... 3,689,211 3,540,451 3,467,261 3,373,245 2,771,901 2,483,158 8.24
Deposits........................ 3,006,906 2,930,555 2,895,131 2,829,263 2,343,404 2,101,377 7.43
Long-term borrowings............ 11,416 22,931 36,088 25,703 15,653 21,342 (11.76)
Equity.......................... 348,273 315,724 294,733 269,007 215,273 196,500 12.13

Selected Ratios
Average equity to assets........ 9.44% 8.92% 8.50% 7.97% 7.77% 7.91%
Return on average assets........ 1.33 1.31 1.09 1.09 0.95 0.95
Return on average equity........ 14.10 14.64 12.88 13.62 12.26 12.07
Dividend payout ratio........... 36.36 34.81 38.18 32.86 36.05 38.06
</TABLE>

<PAGE>

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

SUMMARY FINANCIAL RESULTS

One Valley earned $49.1 million in 1995, a 6.3% increase over the $46.2
million earned in 1994. The increase is primarily due to increased net interest
income and lower net overhead. This increase in earnings follows an increase in
1994 of 21.8% over the $38.0 million earned in 1993. Earnings in 1993 were
significantly impacted by expenses related to the merger with Mountaineer
Bankshares of W.Va., Inc. (Mountaineer) and expenses associated with the
conversion to an outsourced data processing system. Earnings per share were
$2.86 in 1995, an increase of 5.9% over the $2.70 earned in 1994, which compares
to the 22.7% increase in 1994 over the $2.20 earned in 1993. As shown in Table
1, the five-year compound growth rate in earnings per share since 1990 has been
13.0%.

Table 1, Six-Year Selected Financial Summary, presents summary financial
data for the past six years, 1990 through 1995, 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. This is a result of
record earnings performances and a judicious acquisition strategy. Table 2,
Summary Statement of Net Income, presents three years of comparative income
statement information.

Table 8 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 1995 ROA of
1.33% was a slight increase over the 1.31% ROA reported in 1994 and a
significant increase over the 1.09% ROA in 1993. As shown in Table 8, the rise
in ROA is attributed primarily to the increase in net credit income and the
consistent decline in net operating costs. Net credit income (net interest
income less the provision for loan losses) as a percent of average earning
assets while declining slightly in 1995, has significantly improved over the
past five years from 4.34% in 1991 to 4.75% in 1995. This trend highlights One
Valley's ability to manage interest rate risk and credit risk. As a percent of
average earning assets, both non-interest income and non-interest expense have
declined in 1995 and 1994 from their previous years' result. One Valley's net
overhead ratio (non-interest expense less non-interest income as a percent of
average earning assets) has steadily declined to 2.39% in 1995, down from 2.52%
in 1994 and 2.68% in 1993.

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 1995 ROE was 14.10%, compared to the 14.64%
earned in 1994 and 12.88% reported in 1993. ROE declined in 1995, primarily due
a 10.3% increase in average shareholder's equity.

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

Increase (Decrease) From Prior Year
1995 1994 1993 1995 1994
AMOUNT PERCENT AMOUNT PERCENT

<S> <C> <C> <C> <C> <C> <C> <C>
Interest income *........................... $ 282,372 $ 251,383 $ 247,699 $ 30,989 12.33 $ 3,684 1.49
Interest expense............................ 121,080 94,897 99,786 26,183 27.59 ( 4,889) (4.90)
Net interest income......................... 161,292 156,486 147,913 4,806 3.07 8,573 5.80
Other operating income...................... 37,639 37,445 39,192 194 0.52 (1,747) (4.46)
Gross securities transactions............... (65) (867) 113 802 (92.50) (980) (867.26)
Total operating income...................... 198,866 193,064 187,218 5,802 3.00 5,846 3.12
Provision for loan losses................... 5,632 4,788 5,788 844 17.63 (1,000) (17.28)
Other operating expenses.................... 119,591 120,156 125,150 (565) (0.47) (4,994) (3.99)
Income before taxes......................... 73,643 68,120 56,280 5,523 8.11 11,840 21.04
Income taxes................................ 24,537 21,909 18,326 2,628 12.00 3,583 19.55

Net income.................................. $ 49,106 $ 46,211 $ 37,954 $ 2,895 6.26 $ 8,257 21.76

* FULLY TAX-EQUIVALENT INTEREST INCOME USING
THE RATE OF 35%............................. $ 289,272 $ 258,073 $ 252,344 $ 31,199 12.09 $ 5,729 2.27

</TABLE>

<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 optimal
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, 1995, is provided in Table 3,
Average Balance Sheet / Net Interest Income Analysis.

In 1995, average earning assets grew by 4.4% or $144.4 million over 1994,
following a 2.4% or $76.5 million increase in 1994 over 1993. Average interest
bearing liabilities, the primary source of funds supporting earning assets,
increased 5.1% or $142.7 million over 1994, which follows a $34.8 million or
1.3% increase in 1994 over 1993. The increases in 1995 were partially due to
the purchase of Point Bancorp, Inc. (Point), a $57.1 million thrift holding
company located in Point Pleasant, West Virginia, on March 15, 1995. Accounted
for as a purchase, the acquisition of Point by One Valley added $55.9 million of
interest earning assets and $43.0 million of interest bearing

AVERAGE BALANCE SHEET / NET INTEREST INCOME ANALYSIS TABLE 3
(DOLLARS IN THOUSANDS)

1995 1994 1993
Average Yield/ Average Yield/ Average Yield/
Balance Interest(1) Rate(1) Balance Interest(1) Rate(1) Balance Interest(1) Rate (1)
Assets
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans(2)
Taxable......................... $2,397,405 $217,034 9.05% $2,202,716 $189,040 8.58% $2,032,527 $179,971 8.85%
Tax-exempt...................... 33,977 3,774 11.11 34,430 3,618 10.51 31,153 3,255 10.45
Total loans.................... 2,431,382 220,808 9.08 2,237,146 192,658 8.61 2,063,680 183,226 8.88
Less: Allowance for losses...... 38,810 37,460 36,932
Total loans-net................ 2,392,572 9.23 2,199,686 8.76 2,026,748 9.04
Investment securities
Taxable......................... 810,089 50,693 6.26 874,901 48,881 5.59 973,890 55,868 5.74
Tax-exempt...................... 187,180 15,941 8.52 176,079 15,497 8.80 100,577 10,146 10.09
Total securities............... 997,269 66,634 6.68 1,050,980 64,378 6.13 1,074,467 66,014 6.14
Federal funds sold & other........ 32,595 1,830 5.61 27,363 1,037 3.79 100,270 3,104 3.10
Total earning assets........... 3,422,436 289,272 8.45 3,278,029 258,073 7.87 3,201,485 252,344 7.88
Other assets...................... 266,775 262,422 265,776
Total assets................... $3,689,211 $3,540,451 $3,467,261

Liabilities and Equity
Interest bearing liabilities:
Interest bearing demand
deposits....................... $ 480,528 11,018 2.29 $ 451,718 10,832 2.40 $ 451,321 13,642 3.02
Savings deposits................ 695,603 19,349 2.78 816,739 22,021 2.70 799,784 25,505 3.19
Time deposits................... 1,449,779 76,126 5.25 1,250,082 52,368 4.19 1,247,315 51,660 4.14
Total interest bearing
deposits.................... 2,625,910 106,493 4.06 2,518,539 85,221 3.38 2,498,420 90,807 3.63
Short-term borrowings........... 289,103 13,899 4.81 242,304 8,491 3.50 214,460 6,270 2.92
Long-term borrowings............ 11,416 688 6.03 22,931 1,185 5.17 36,088 2,709 7.51
Total interest bearing
liabilities.................. 2,926,429 121,080 4.14 2,783,774 94,897 3.41 2,748,968 99,786 3.63
Demand deposits................... 380,996 412,016 396,711
Other liabilities................. 33,513 28,937 26,849
Shareholders' equity.............. 348,273 315,724 294,733
Total liabilities and equity... $3,689,211 $3,540,451 $3,467,261
Net interest earnings............. $168,192 $163,176 $152,558
Net yield on earning assets....... 4.91% 4.98% 4.77%
</TABLE>

(1) FULLY TAX-EQUIVALENT USING THE RATE OF 35%.
(2) NON-ACCRUAL LOANS ARE INCLUDED IN AVERAGE BALANCES.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

LOAN SUMMARY TABLE 4
(DOLLARS IN THOUSANDS)

As of December 31
1995 1994 1993 1992 1991

<S> <C> <C> <C> <C> <C>
Summary of Loans by Type
Commercial, financial,
agricultural, and other loans............... $ 348,761 $ 398,105 $ 334,068 $ 301,155 $ 274,436
Real estate:
Construction loans........................... 46,967 42,746 33,682 43,108 37,307
Revolving home equity........................ 128,754 113,142 102,648 93,092 70,927
Single family residentials................... 1,016,983 936,698 869,502 777,428 801,525
Apartment buildings and complexes............ 44,830 37,475 41,465 45,798 37,490
Commercial................................... 364,913 311,691 320,668 282,728 252,557
Bankers' acceptances.......................... 0 849 2,123 560 26,887
Consumer installment loans.................... 560,754 532,251 465,216 454,032 432,941
Subtotal..................................... 2,511,962 2,372,957 2,169,372 1,997,901 1,934,070
Less: Allowance for loan losses.............. 39,534 37,438 36,484 35,679 30,567
Net loans.................................... $2,472,428 $2,335,519 $2,132,888 $1,962,222 $1,903,503

Percent of Loans by Category
Commercial, financial,
agricultural, and other...................... 13.88% 16.78% 15.40% 15.07% 14.19%
Real estate:
Construction loans........................... 1.87 1.80 1.55 2.16 1.93
Revolving home equity........................ 5.13 4.77 4.73 4.66 3.67
Single family residentials................... 40.49 39.46 40.09 38.91 41.44
Apartment buildings and complexes............ 1.78 1.58 1.91 2.29 1.94
Commercial................................... 14.53 13.14 14.78 14.15 13.06
Bankers' acceptances.......................... 0.00 0.04 0.10 0.03 1.39
Consumer installment loans.................... 22.32 22.43 21.44 22.73 22.38
Total........................................ 100.00% 100.00% 100.00% 100.00% 100.00%

Non-Performing Assets
Non-accrual loans............................. $ 7,174 $ 7,664 $ 8,819 $ 14,125 $ 18,202
Other real estate owned....................... 1,565 1,436 3,124 8,853 10,630
Restructured loans............................ 0 552 597 131 1,964
Total non-performing assets.................. $ 8,739 $ 9,652 $ 12,540 $ 23,109 $ 30,796

Non-performing assets as a % of total loans... 0.35% 0.41% 0.58% 1.16% 1.59%

Loans Past Due Over 90 Days..................... $ 5,582 $ 3,827 $ 3,180 $ 4,139 $ 3,628
As a % of total loans......................... 0.22% 0.16% 0.15% 0.21% 0.19%

Allocation of Loan Loss Reserve
by Loan Type
Commercial, financial, and
unallocated portion.......................... $ 15,638 $ 14,765 $ 16,698 $ 13,899 $ 12,873
Real estate construction loans................ 250 220 180 224 209
Real estate loans - other..................... 8,298 8,036 8,277 9,179 7,411
Consumer installment loans.................... 15,348 14,417 11,329 12,377 10,074
Total........................................ $ 39,534 $ 37,438 $ 36,484 $ 35,679 $ 30,567
</TABLE>

<PAGE>

liabilities. As a purchase, the assets, liabilities, and results of
operations are included in One Valley's financial statements only since the date
of acquisition. The remaining increase in interest bearing assets and
liabilities was the result of an increase in banking operations more fully
explained below.

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

AVERAGE EARNING ASSETS

Dollars in millions
(Chart - Average Earning Assets chart appears here)

1990 1991 1992 1993 1994 1995
Loans 1,384 1,557 1,927 2,027 2,200 2,393
Investments 894 981 1,169 1,175 1,078 1,030
Combined 2,278 2,539 3,096 3,201 3,278 3,422

LOAN PORTFOLIO

One Valley's loan portfolio is its largest and most profitable component of
average earning assets, totaling 69.9% of average earning assets during 1995.
One Valley continued to emphasize increasing its loan portfolio in 1995.
Average net loans increased by $192.9 million or 8.8% in 1995, following an
8.5% or $172.9 million increase in 1994. The increase in 1995 average loans
was fueled primarily by increases in residential and commercial real estate
loans, and consumer installment loans. The increase in 1994 average loans was
due to a balanced increase in all three major types of loans: commercial, real
estate and consumer installment. As a result of these increases in loan
activity, average net loans have increased as a percentage of average earning
assets, from 63.3% in 1993 to 69.9% in 1995. Similarly, One Valley's loan-to-
deposit ratio continued its upward trend in 1995, ending the year at 81.1%.
This ratio compares to 79.8% at December 31, 1994 and 72.6% at December 31,
1993. Expanding affiliate market share, as well as One Valley's carefully
planned acquisition activity, have greatly contributed to the growth in the
loan portfolio.

TOTAL LOANS
Dollars in millions

(Chart - Total Loans Chart appears here)

1990 1991 1992 1993 1994 1995
Commercial, Financial & Other 325 339 345 370 442 396
Commercial Real Estate 233 290 329 362 349 410
Residential Real Estate 512 872 871 972 1,050 1,146
Consumer 396 433 454 465 532 561
1,465 1,934 1,998 2,169 2,373 2,512

Total loans at December 31, 1995, increased by $139.0 million or 5.9% over
the total at December 31, 1994. This increase compares to a $203.6 million or
9.4% increase in 1994 over total loans at December 31, 1993. As mentioned
above, the increase in lending was primarily in real estate loans. Residential
real estate loans including revolving home equity loans increased by $95.9
million or 9.1% during 1995, compared to a $77.7 million or 8.0% increase in
1994. Commercial real estate loans, including apartment buildings and complexes,
increased by $60.6 million or 17.3% in 1995, following a $13.0 million or 3.6%
decline in 1994 from year-end 1993. Commercial real estate loans have
historically 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.
Loans for commercial ventures decreased in 1995 by $49.3 million or 12.4%. This
decline compares to an increase during 1994 of $64.0 million or 19.2%. These
fluctuations partially reflect levels of credit line usage by large commercial
customers. Consumer installment loans increased by $28.5 million or 5.4% in
1995, following a $67.0 million or 14.4% increase during 1994.

Table 4, 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 a
material volume of highly leveraged transaction lending. Over the past four
years, total loans have increased $578 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
64% of One Valley's loan portfolio at December 31, 1995, 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 1995,
$52.4 million of loans were originated to be sold in the secondary market. This
compares to $50.8 million of new loan volume originated for sale in the
secondary market in 1994 and $163.8 million in 1993. This activity generates
considerable processing and servicing fee income for One Valley, as discussed
further in the "Income Statement Analysis" section of this report. Volumes of
loans originated for sale fluctuate inversely with mortgage interest rates.
Due to a higher interest rate environment in 1994 and 1995, a lower volume of
mortgage refinancings was realized when compared to 1993. As mortgage rates
began to decline in the latter part of 1995, a slight increase occurred in the
volume of loans originated for resale.

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

In addition to the loans reported in Table 4, 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 Q
to the consolidated financial statements.

Also reported in Table 4 is a five-year comparison of the level of non-
performing assets and loans contractually past due over 90 days. 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 $8.7 million or 0.35% of total loans at year-end 1995. While levels
of non-performing assets are susceptible to increases resulting from
fluctuations in the economy, One Valley diligently works to keeps its level of
non-performing assets at a relatively low level as demonstrated in Table 4. The
amount of loans contractually past due over 90 days, but which continue to
accrue interest, increased in dollars and as a percentage of year-end total
loans at December 31, 1995. At year-end, these loans constituted 0.22% of total
year-end loans, a slight increase over the 0.16% at December 31, 1994 and the
0.15% at December 31, 1993.

COMPARATIVE LOAN LOSS INFORMATION TABLE 5
(DOLLARS IN THOUSANDS)

For the Year Ended December 31
1995 1994 1993 1992 1991

<S> <C> <C> <C> <C> <C>
Allowance for Loan Losses, Beginning of Period ..... $ 37,438 $ 36,484 $ 35,679 $ 30,567 $ 20,290
Charge-offs:
Commercial, financial, and agricultural loans..... 726 1,207 2,644 2,756 2,801
Real estate construction loans.................... 0 0 0 0 0
Real estate loans - other......................... 574 1,118 1,320 1,525 961
Consumer installment loans........................ 4,311 3,660 3,417 4,280 3,826
Total charge-offs................................ 5,611 5,985 7,381 8,561 7,588

Recoveries:
Commercial, financial, and agricultural loans..... 519 793 930 821 954
Real estate construction loans.................... 0 0 0 0 0
Real estate loans - other......................... 224 274 373 394 168
Consumer installment loans........................ 1,097 1,084 1,095 1,069 988
Total recoveries................................. 1,840 2,151 2,398 2,284 2,110
Net charge-offs..................................... 3,771 3,834 4,983 6,277 5,478
Provision for loan losses........................... 5,632 4,788 5,788 11,389 6,671
Balance of acquired subsidiaries.................... 235 0 0 0 9,084
Allowance for Loan Losses, End of Period............ $ 39,534 $ 37,438 $ 36,484 $ 35,679 $ 30,567

Average total loans................................. $2,431,382 $2,237,146 $2,063,680 $1,959,943 $1,581,829
Total loans at year-end............................. 2,511,962 2,372,957 2,169,372 1,997,901 1,934,070

As a Percent of Average Total Loans:
Net charge-offs................................... 0.16% 0.17% 0.24% 0.32% 0.35%
Provision for loan losses......................... 0.23 0.21 0.28 0.58 0.42
Allowance for loan losses......................... 1.63 1.67 1.77 1.82 1.93

As a Percent of Total Loans at Year-end:
Allowance for loan losses......................... 1.57% 1.58% 1.68% 1.79% 1.58%

As a Multiple of Net Charge-offs:
Allowance for loan losses......................... 10.48X 9.76X 7.32X 5.68X 5.58X
Income before tax and provision for loan losses... 21.02 19.02 12.46 10.30 8.00
</TABLE>

<PAGE>

NON-PERFORMING ASSETS
AND LOANS 90 DAYS PAST DUE
As a % of total loans

(Graph appears here with the following plot points:)

1990 1991 1992 1993 1994 1995
Non-Performing Assets 1.72% 1.59% 1.16% 0.58% 0.41% 0.35%
Loans 90 Days Past Due 0.27% 0.19% 0.21% 0.15% 0.16% 0.22%

PROVISION FOR LOAN LOSSES
AND NET CHARGE-OFFS
As a % of average total loans

(Graph appears here with the following plot points:)

1990 1991 1992 1993 1994 1995
Net Charge-Offs 0.47% 0.35% 0.32% 0.24% 0.17% 0.16%
Provision 0.56% 0.42% 0.58% 0.28% 0.21% 0.23%

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 $4.0 million or 2.6% in 1995 and $9.6 million or 6.7% in 1994.

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, 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 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, 1995. During 1995, 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 1995 in accordance with their original terms. Similarly, during
1994, less than $0.1 million was recognized on non-accrual loans, while
approximately $0.7 million would have been recognized in accordance with their
original terms.

Effective January 1, 1995, One Valley adopted Financial Accounting Standards
Board (FASB) Statement No. 114, "Accounting by Creditors for Impairment of a
Loan," as amended by FASB Statement No. 118. 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. In determining whether a loan
is impaired, management considers such factors as past payment history, recent
economic events, current and projected financial condition and other relevant
information that is available. Impairment is determined on a loan-by-loan
basis and generally consists of large commercial loans. A loan is categorized
and reported as impaired when it is probable that the creditor will be unable
to pay all of the principal and interest amounts according to the contractual
terms of the loan agreement. The adoption of this standard did not have a
material effect on One Valley's financial position, results of operations,
accounting policies, or the determination of the adequacy of the allowance of
the allowance for loan losses. Additional information on impaired loans is
contained in Note H to the consolidated 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
and impaired 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,
1995, the allowance for loan losses was $39.5 million or 1.57% of total year-
end loans. This ratio is a slight decrease from the prior year's 1.58% and a
further decline from the 1.68% at the end of 1993. In management's opinion,
the allowance for loan losses is adequate to absorb the current estimated risk
of loss in the existing loan portfolio. A summary of the allowance for loan
losses allocated by loan type is also included in Table 4. Table 5, 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 1995 was $5.6 million, up from the $4.8
million provision in 1994 but relatively the same as the $5.8 million provision
in 1993. The increased provision in 1995 was in response to growth in the loan
portfolio, increased consumer delinquencies in the latter part of 1995, and One
Valley's continual evaluation of the adequacy of the allowance

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

for loan losses. While One Valley experienced considerable loan growth
during 1995, 1994 and 1993, the credit quality of the portfolio has improved
significantly over eariler years, 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,
compared to earlier years, and still maintain a relatively high ratio of the
allowance for loan losses to non-performing assets.

Net charge-offs in 1995 decreased by 1.6% from 1994 net charge-offs. This
decrease follows a $1.1 million or 23.1% decrease in 1994 from 1993 net charge-
offs. Net charge-offs as a percentage of average total loans declined slightly
to 0.16%, which compares to 0.17% in 1994 and 0.24% in 1993. All three of these
ratios compare favorably to peer group banks across the country. Although the
dollar amount of net charge-offs has remained historically low, charge-offs
could increase in the coming months due to the increase in the total dollar
amount of loans and adverse changes in economic conditions. These factors are
considered in determining the adequacy of the allowance for loan losses, which
at December 31, 1995, was sufficient to absorb nearly ten and one-half times the
amount of net charge-offs experienced during 1995.

INVESTMENT PORTFOLIO AND OTHER EARNING ASSETS

Investment securities averaged $997.3 million in 1995, a 5.1% decrease from
the $1,051.0 million averaged in 1994. This decrease follows a 2.2% decrease
from the $1,074.5 million averaged in 1993. The decrease in the average balance
during 1995 and 1994 is primarily in response to the increased loan demand
during those years, as One Valley was able to place maturing investments in its
more profitable loan portfolio. The higher level 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 7). At
the time of purchase, management determines whether securities will be
classified as available-for-sale or held-to-maturity. 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 the 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.

One Valley adopted the provisions of 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 $630 million.

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.
On November 15, 1995, the FASB staff issued a Special Report, "A Guide to
Implementation of

REMAINING MATURITIES OF LOANS TABLE 6
(DOLLARS IN THOUSANDS)

Balance Projected Maturities*
December 31 One Year One to Five Over Five
1995 or Less Years Years
<S> <C> <C> <C> <C>
Commercial, financial, and agricultural loans... $319,432 $165,738 $114,348 $ 39,346
Real estate construction loans.................. 46,967 25,697 14,496 6,774
Commercial real estate loans.................... 409,743 76,154 210,578 123,011

Loans with:
Floating rates................................ $419,604 $165,398 $159,879 $ 94,327
Predetermined rates........................... 356,538 102,191 179,543 74,804
</TABLE>

*BASED ON SCHEDULED OR APPROXIMATE REPAYMENTS.

<PAGE>

Statement 115 on Accounting for Certain Investments in Debt and Equity
Securities." In accordance with provisions in that Special Report, One Valley
chose to reclassify certain securities from held-to-maturity to available-for-
sale and thus increase the potential liquidity of the investment portfolio. At
the date of transfer, the amortized cost of those securities was $264.8 million
and the net unrealized holding gain on those securities was approximately $3.3
million. As a result, at year-end 1995, approximately 81% of the total
investment portfolio was classified as available-for-sale, while 19% was
classified as held-to-maturity.

This reclassification also resulted in a longer average maturity period of
securities available-for-sale. As shown in Table 7, Securities Maturity and
Yield Analysis, the average maturity period of securities available-for-sale was
6 years 7 months while the average maturity period of securities held-to-
maturity was 10 years 9 months at the end of 1995. The average maturity of the
investment portfolio is managed at a level to maintain a proper matching with
interest rate risk guidelines. In addition, Table 7 uses a final maturity
method to report the average maturity of mortgage backaged securities which
excludes the effect of monthly payments and prepayments. During 1995, One

<TABLE>
<CAPTION>
SECURITIES MATURITY AND YIELD ANALYSIS TABLE 7
(DOLLARS IN THOUSANDS)

As of December 31, 1995
Average Taxable
AVAILABLE-FOR-SALE Market Maturity Equivalent
Value (Years/ Months) Yield*
<S> <C> <C> <C>
U. S. Treasury Securities
Within one year............................... $151,371 5.58%
After one but within five years............... 177,065 6.46
After five but within ten years............... 16,481 7.01
Over ten years................................ 6,200 7.21
Total U.S. Treasury Securities.............. 351,117 1/10 6.12

U. S. Government Agencies Securities
Within one year............................... 48,168 5.86
After one but within five years............... 194,876 6.07
After five but within ten years............... 39,976 7.16
Over ten years................................ 1,018 7.49
Total U.S. Government Agencies Securities... 284,038 3/8 6.19

Mortgage-Backed Securities**
Within one year............................... 1,332 6.26
After one but within five years............... 8,500 6.59
After five but within ten years............... 22,706 6.97
Over ten years................................ 178,883 7.20
Total Mortgage-Backed Securities............ 211,421 14/3 7.10

Other Securities............................... 25,123
Total Securities Available-for-Sale............ $871,699 6/7 6.21%

As of December 31, 1995
Average Taxable
HELD-TO-MATURITY Book Maturity Equivalent
Value (Years/ Months) Yield*
States and Political Subdivisions Securities
Within one year................................ $ 7,442 9.88%
After one but within five years................ 15,041 10.88
After five but within ten years................ 44,316 7.65
Over ten years................................. 137,895 8.11
Total States and Political Subdivisions
Securities................................. 204,694 10/9 8.28

Other Securities................................ 459
Total Securities Held-to-Maturity............... $205,153 10/9 8.28%
</TABLE>

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

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

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. Other
information regarding investment securities may be found in Table 7, and in
Note F 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 1995,
One Valley increased its tax-exempt securities by $25.3 million, or 14.1%, over
the level of tax-exempt securities held at December 31, 1994. This increase
followed an increase in 1994 of $41.7 million, or 30.3%, over the level held at
December 31, 1993. Future investments in tax-exempt securities will generally
be made if the related yield is greater than that available with a similar
taxable investment.

One Valley's average investment in federal funds sold and other short-term
investments increased 19.1% in 1995 after declining over the previous two years.
Averaging $32.6 million in 1995, federal funds sold and other short-term
investments increased $5.2 million over the $27.4 million averaged in 1994, but
was significantly less than the $100.3 million averaged during 1993.
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 and in other
sections of this report.

FUNDING SOURCES

After a three-year period of declining market interest rates which forced
banks to reduce their rates paid on interest bearing deposits, in 1995 One
Valley increased the rates paid on interest bearing liabilities. The average
rate paid on interest bearing liabilities increased to 4.14% in 1995, up from
the 3.41% average rate paid in 1994 and the 3.63% average rate paid in 1993.
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

AVERAGE DEPOSITS
Dollars in millions

(Graph appears here with the following plot points:)

1990 1991 1992 1993 1994 1995
Demand Deposits 273 296 373 397 412 381
Time Deposits 1,148 1,265 1,401 1,247 1,453 1,613
Savings Regular 450 511 692 800 614 532
Savings Checking 230 271 363 451 452 481
Total Deposits 2,101 2,343 2,829 2,895 2,931 3,007

<TABLE>
<CAPTION>
ANALYSIS OF RETURN ON ASSETS AND EQUITY TABLE 8

1995 1994 1993 1992 1991
As a percent of average earning assets:
<S> <C> <C> <C> <C> <C>
Fully taxable-equivalent net
interest income *.................. 4.91% 4.98% 4.77% 4.77% 4.60%
Provision for loan losses........... (0.16) (0.15) (0.18) (0.37) (0.26)
Net credit income.................. 4.75 4.83 4.59 4.40 4.34
Non-interest income................. 1.10 1.12 1.22 1.19 0.94
Non-interest expense................ (3.49) (3.67) (3.91) (3.73) (3.62)
Tax equivalent adjustment........... (0.20) (0.20) (0.15) (0.13) (0.20)
Applicable income taxes............. (0.72) (0.67) (0.57) (0.54) (0.42)
Return on average earning assets...... 1.44 1.41 1.18 1.19 1.04
Multiplied by average earning assets
to average total assets............ 92.77 92.59 92.33 91.78 91.59
Return on average assets.............. 1.33% 1.31% 1.10% 1.09% 0.95%
Multiplied by average assets
to average equity.................. 10.59X 11.21X 11.76X 12.54X 12.88X
Return on average equity.............. 14.10% 14.64% 12.88% 13.62% 12.26%
</TABLE>

*FULLY TAX-EQUIVALENT USING THE RATE OF 35% FOR 1995 THROUGH 1993 AND 34%
FOR EARLIER YEARS.

<PAGE>

increasingly more intense. One Valley has offered new core deposit products
as well as periodic special rate products to attract additional deposits. One
Valley's deposits, on average, increased by 2.6% or $76.4 million in 1995.
Approximately

$33.6 million of this increase was acquired through the Point purchase. The
remaining increase compares to a 1.2% or $35.4 million increase in 1994 and a
2.3% or $65.9 million increase in 1993. During 1995, non-interest bearing
deposits decreased on average by 7.5% or $31.0 million from 1994, while interest
bearing deposits increased by 4.3% or $107.4 million over 1994. This trend is
reflective of customer trends to keep more funds in interest bearing accounts,
thus reducing their balances in checking and other non-interest bearing deposit
products, and the stiff competition for interest bearing investments in a lower
interest rate environment.

Short-term borrowings increased, on average, by $46.8 million or 19.3% from
1994, following a 13.0% or $27.8 million increase in 1994 over 1993. Pass-
through federal funds purchased from correspondent banks decreased, on average,
by $0.5 million or 1.9% in 1995. This increase follows a 30.0% increase in 1994.
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 $47.3 million or 21.8% in 1995,
primarily to fund loan growth. This increase follows a $22.1 million or 11.3%
increase in 1994. Increasingly, One Valley has turned to short-term borrowings
as a resource to

fund loan growth, as deposit growth has not kept pace with the growth in
loans.

Long-term borrowings, on average, decreased by $11.5 million, or 50.2%, in
1995, following a $13.2 million or 36.5%

decrease in 1994. As a result, One Valley now has $13.4 million of long-
term debt, primarily Federal Home Loan Bank (FHLB) borrowings, with repayment
schedules from one to eight years. Other information regarding short- and long-
term borrowings is contained in Notes J and K 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.

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,

RETURN ON AVERAGE ASSETS

(Graph appears here with the following plot points:)

1990 1991 1992 1993 1994 1995
Return on Assets 0.95% 0.95% 1.09% 1.09% 1.31% 1.33%

RETURN ON AVERAGE EQUITY

(Graph appears here with the following plot points:)

1990 1991 1992 1993 1994 1995
Return on Average Equity 12.07% 12.26% 13.62% 12.88% 14.64% 14.10%

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

As of December 31, 1995 As of December 31, 1994
Amount Percent Amount Percent
<S> <C> <C> <C> <C>
Three months or less........ $ 91,277 42.71% $ 83,923 44.90%
Three through six months.... 29,405 13.76 28,531 15.27
Six through twelve months... 45,922 21.49 32,919 17.61
Over twelve months.......... 47,102 22.04 41,530 22.22
Total...................... $213,706 100.00% $186,903 100.00%
</TABLE>

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

Comparative Rate Sensitivity Summary, shows One Valley's gap position as of
December 31, 1995. The information presented in the gap report represents a
static view of One Valley and includes various assumptions and estimates by
management regarding maturity and repayment patterns.

In addition to the gap report, One Valley uses computer simulations of the
next twelve months 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. Based on current simulations, One Valley anticipates that
over the next twelve months a rising rate scenario would have a slight positive
influence on net interest income whereas declining rates would have a slight
negative influence on net interest income.

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.

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.

COMPARATIVE RATE SENSITIVITY SUMMARY TABLE 10
(DOLLARS IN THOUSANDS)
December 31, 1995 0-3 Months 3-6 Months 6-12 Months Over 1 Year Total
<S> <C> <C> <C> <C> <C>
Earning Assets
Loans................................. $ 930,384 $ 168,482 $ 309,722 $ 1,103,374 $2,511,962
Investments........................... 62,785 25,870 153,004 835,193 1,076,852
Other earning assets.................. 25,059 0 0 0 25,059
Total earning assets................. 1,018,228 194,352 462,726 1,938,567 3,613,873
Interest Bearing Liabilities
Interest bearing deposits............. 682,321 218,587 342,733 1,415,181 2,658,822
Short-term borrowings................. 381,593 3,098 2,920 2,169 389,780
Long-term borrowings.................. 508 3,006 2,014 7,883 13,411
Total interest bearing liabilities... 1,064,422 224,691 347,667 1,425,233 3,062,013
Interest sensitivity gap for period... (46,194) (30,339) 115,059 513,334 551,860
Cumulative interest sensitivity gap... (46,194) (76,533) 38,526 551,860
Cumulative rate sensitivity ratio..... 0.96 0.94 1.02 1.18

December 31, 1994
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
</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.

<PAGE>

One Valley generated $65.7 million of cash from operations in 1995, which
compares to $76.3 million in 1994 and $64.4 million in 1993. Additional cash of
$57.9 million was generated through net financing activities in 1995, which
compares to $120.3 million in 1994 and $48.5 million in 1993. 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 $166.0 million in 1995, which compares to $168.9 million in
1994 and $224.0 million in 1993. Details on the sources and uses of cash can be
found in the Consolidated Statements of Cash Flows in the consolidated financial
statements.

CAPITAL RESOURCES

One Valley's average equity-to-asset ratio increased to 9.44% during 1995,
up from 8.92% during 1994 and 8.50% in 1993. The increases primarily resulted
from the record earnings performances of One Valley. At year-end 1995, One
Valley's primary capital ratio was 10.41% compared to 9.68% at year-end 1994.
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 1995, One Valley's risk adjusted capital-to-assets ratio was 16.1% compared
to 15.5% at December 31, 1994. 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, 1995 was 9.1% compared to 8.8% at
December 31, 1994. 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 C to the
consolidated financial statements.

Simultaneous with the Point purchase in March 1995, the Board of Directors
authorized management to purchase 411,600 shares of One Valley Bancorp common
stock in the open market. During 1995, 420,700 shares were repurchased under
this program and earlier authorizations. At December 31, 1995, One Valley held
954,200 shares in its treasury. In January 1996, simultaneous with the
announced merger agreement between One Valley Bancorp and CSB Financial, the
Board of Directors authorized management to purchase an additional 1.8 million
shares of One Valley common stock. Any purchases under this or previous
authorizations will depend upon future market conditions.

NET INTEREST MARGIN
Percent of earning assets
Fully taxable equivalent

(Graph appears here with the following plot points:)

1990 1991 1992 1993 1994 1995
Yield on Assets 10.52 9.76 8.64 7.88 7.87 8.45
Net Margin 4.62 4.60 4.77 4.77 4.98 4.91
Cost of Funds 5.90 5.16 3.87 3.11 2.89 3.54

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

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 $168.2 million in 1995, up 3.1% over the 1994 level,
following a 7.0% increase in 1994 over 1993. 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 of 35%. The increase in net interest income in 1995 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 1995 and 1994 have provided a significant increase in net interest income.
In 1995, the increase in the volume of earning assets increased interest income
by $14.6 million. This increase was complemented by increases in interest
yields on earning assets due to increases in the overall interest rate
environment on average for the entire year. As a result, total interest income
increased by $31.2 million in 1995 over 1994. Similarly, an increased volume of
interest bearing liabilities boosted interest expense by $7.6 million, and the
higher cost of interest bearing liabilities resulted in an overall increase in
total interest expense of $26.2 million. However, the increase in total
interest income exceeded the increase in overall interest expense by $5.0
million on a fully tax-equivalent basis in 1995 over 1994. In 1994, the decline
in the interest rate environment reduced total interest expense to less than the
previous year, while increases in loan volume resulted in higher interest
income. Therefore, net interest income increased in 1994 over 1993. During both
years, the increase in loan volume has been the most significant factor
contributing to increased net interest income.

In 1995, even though net interest income increased due to increased
investment in higher yielding loans, the increase in overall interest rates had
a slight dampening effect on the net interest margin percentage on a fully tax-
equivalent basis. The increase in rates paid on interest bearing liabilities
exceeded the increase in the yield on average earning assets for the year. As a
result, the net interest margin in 1995 declined to 4.91%, down from the 4.98%
earned in 1994, but higher than the 4.77% earned in 1993. 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."

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

1995 vs 1994 1994 vs 1993
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................................ $ 17,274 $ 10,720 $ 27,994 $ 14,730 $ (5,661) $ 9,069
Tax-exempt............................. (48) 204 156 344 19 363
Total loans.......................... 17,226 10,924 28,150 15,074 (5,642) 9,432
Investment Securities:
Taxable................................ (3,787) 5,599 1,812 (5,561) (1,426) (6,987)
Tax-exempt............................. 956 (512) 444 6,786 (1,435) 5,351
Total investment securities.......... (2,831) 5,087 2,256 1,225 (2,861) (1,636)
Federal funds sold & other.............. 225 568 793 (2,644) 577 (2,067)
Total earning assets................. 14,620 16,579 31,199 13,655 (7,926) 5,729

Interest Bearing Liabilities
Time and savings deposits............... 6,387 14,885 21,272 662 (6,248) (5,586)
Short-term borrowings................... 1,848 3,560 5,408 878 1,343 2,221
Long-term borrowings.................... (599) 102 (497) (822) (702) (1,524)
Total interest bearing liabilities... 7,636 18,547 26,183 718 (5,607) (4,889)
Net Interest Earnings..................... $ 6,984 $ (1,968) $ 5,016 $ 12,937 $ (2,319) $ 10,618
</TABLE>

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

<PAGE>

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. As shown in Table 12,
non-interest income increased by $1.0 million or 2.7% in 1995 compared to 1994.
The increase is primarily due to an increase in service charges on deposit
accounts. Late in 1994, One Valley introduced a new fee structure for its
deposit accounts. As a result, service charges increased $2.4 million or 21.3%
in 1995 over 1994. Also as a result, revenue from checkbook sales decreased by
20.4% or $0.6 million in 1995 from 1994. The increase in non-interest income
in 1995 follows a 6.9% decrease in 1994 over 1993.

In 1995, trust income increased to $8.2 million, a $0.3 million or 3.9%
increase over 1994. This increase follows an 8.5% increase in 1994 over 1993.
Trust revenues are increasing primarily due to new business over the past
several years. Real estate servicing fees declined by $0.4 million or 6.8% in
1995, which compares to a $2.9 million or 35.9% decrease in 1994 from the level
earned in 1993. As mortgage loan refinancings and sales in the secondary market
have significantly declined from the level experienced in 1993, One Valley's
processing and servicing fees have also declined. In 1995, One Valley realized
$65,000 in losses on securities sales. This compares to $867,000 in losses
realized in 1994. These securities were sold as part of a plan to reinvest the
proceeds in higher yielding investments. Other operating income decreased by
$1.8 million or $24.6% in 1995 primarily due to a lower level of income
recognized on the disposition of other real estate owned and other loan
payoffs.

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 1995, additional efficiencies were achieved
in combining the operations of One Valley and Mountaineer Bankshares. One
Valley's 1995 net overhead ratio, or non-interest expense less non-interest
income excluding securities transactions to average earning assets, was 2.39%,
a decrease from the 2.52% realized in 1994, and down further still from the
2.68% ratio realized in 1993. For the year 1995, net overhead was $82.0
million, a decrease of 0.9% from the 1994 overhead of $82.7 million. This
follows a decrease of 3.8% in 1994 from the 1993 net overhead of $86.0
million. 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 6.6% whereas net interest income has grown by 10.1%.

Total non-interest expense decreased by $0.6 million, or 0.5% from 1994.
This compares to a $5.0 million or 4.0% decrease in 1994 versus 1993. Total
staff costs declined by 1.5% in 1995, compared to a 2.5% increase in 1994.
Staff costs decreased in 1995 primarily due to fewer employees and decreases in
the cost of employee benefits primarily resulting from lower pension expense.
Additional information on employee benefits is discussed in Note M to the
consolidated financial statements.

Advertising expense decreased by 5.8% in 1995 and 15.0% in 1994 compared to
prior years, primarily due to operating efficiencies after the merger of
Mountaineer Bankshares. FDIC insurance decreased by 41.0% in 1995, following a
1.9% increase in 1994, as the rate assessed on banking deposits was decreased
during the middle of 1995 from 23.5 cents per $100 of deposit to four cents.
The lower rate on banking deposits is expected to continue through 1996 but the
savings is anticipated to be substantially offset by a special one-time
assessment on thrift based deposits to replentish the Savings Association
Insurance Fund (SAIF). At December 31, 1995, One Valley had over $400 million
in thrift based deposits resulting from prior acquisitions of Savings and Loan
institutions, which, under proposals currently being considered by Congress,
would result in an additional $2.8 million of expense to One Valley in 1996.
Additional information on FDIC expense is detailed in the Summary Results of
Operations of the Fourth Quarter of 1995 below.

Net occupancy expense increased in 1995, up 4.8% from 1994, which follows a
3.1% decline in 1994 from 1993. Equipment expenses increased by 3.5% in 1995
primarily due to increases in equipment rental and property taxes. In 1994
equipment expense declined by 20.1% or $2.1 million, primarily due to realized
savings from ceasing internal data processing operations. Outside data
processing costs decreased by 2.6% in 1995 which compares to

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

(Graph appears here with the following plot points:)

1990 1991 1992 1993 1994 1995
Net Overhead 2.63% 2.67% 2.56% 2.68% 2.52% 2.39%

EFFICIENCY RATIO
Non-interest expense as a % of total adjusted revenues*
(Graph appears here with the following plot points:)

1990 1991 1992 1993 1994 1995
Efficiency Ratio 63.33% 65.03% 62.66% 65.27% 59.89% 58.10%

*Tax-equivalent net interest income plus other income

<PAGE>

MANAGEMENT'S DISCUSSION AND ANALYSIS

a 2.8% increase in 1994 compared to 1993. The decrease in 1995 is largely
due to the conversion of three banks to one data processing system. Taxes not
on income increased by $0.3 million or 12.6% in 1995 compared to an 8.0%
increase in 1994, primarily due to increases in gross receipts and equity, which
are taxed at the local level. Supplies and postage expense increased by 2.9% in
1995 following a decline of 3.0% in 1994. Other expenses increased by $2.2
million or 11.3% in 1995, primarily due to operating expenses associated with
the new deposit products discussed above and increased amortization of purchased
mortgage servicing rights. This follows a decrease of 16.9% in 1994, partially
due to expenses in 1993 related to the merger of One Valley and Mountaineer and
operating synergies realized after the merger.

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 Analysis
of this report.

APPLICABLE INCOME TAXES

Income tax expense in 1995 was $24.5 million compared to $21.9 million in
1994 and $18.3 million in 1993. The increase in 1995 is primarily due to
increases in pretax earnings, which was compounded by an increase in non-
deductible goodwill amortization. One Valley's effective tax rate was 33.3% in
1995, up from the 32.1% in 1994, and the 32.6% in 1993. Additional information
regarding income taxes is contained in Note L to the consolidated financial
statements.

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

Increase (Decrease) Over Prior Year
1995 1994 1993 1995 1994
Amount Percent Amount Percent

<S> <C> <C> <C> <C> <C> <C> <C>
Service Charges and Other
Operating Income
Trust income................................... $ 8,203 $ 7,892 $ 7,272 $ 311 3.94 $ 620 8.53
Credit card fees............................... 2,011 2,008 1,792 3 0.15 216 12.05
Service charges on deposit accounts............ 13,877 11,441 11,963 2,436 21.29 (522) (4.36)
Insurance service fees......................... 998 840 819 158 18.81 21 2.56
Real estate loan processing & servicing fees... 4,826 5,176 8,080 (350) (6.76) (2,904) (35.94)
Checkbook sales................................ 2,228 2,798 2,957 (570) (20.37) (159) (5.38)
Securities transactions........................ (65) (867) 113 802 92.50 (980) (867.26)
Miscellaneous.................................. 5,496 7,290 6,309 (1,794) (24.61) 981 15.55
Total Non-Interest Income................... $ 37,574 $ 36,578 $ 39,305 $ 996 2.72 $ (2,727) (6.94)

Staff and Other Operating Expenses
Salaries & wages............................... $ 49,184 $ 49,149 $ 48,906 $ 35 0.07 $ 243 0.50
Employee benefits.............................. 12,942 13,893 12,605 (951) (6.85) 1,288 10.22
Total staff expenses.......................... 62,126 63,042 61,511 (916) (1.45) 1,531 2.49
Other Operating Expenses
Advertising................................... 2,159 2,293 2,697 (134) (5.84) (404) (14.98)
FDIC insurance................................ 3,916 6,642 6,519 (2,726) (41.04) 123 1.89
Occupancy, net................................ 6,305 6,014 6,206 291 4.84 (192) (3.09)
Equipment..................................... 8,761 8,468 10,604 293 3.46 (2,136) (20.14)
Outside data processing....................... 4,583 4,705 4,575 (122) (2.59) 130 2.84
Taxes not on income........................... 2,861 2,542 2,354 319 12.55 188 7.99
Supplies and postage.......................... 6,778 6,588 6,793 190 2.88 (205) (3.02)
All other..................................... 22,102 19,862 23,891 2,240 11.28 (4,029) (16.86)
Total other operating expenses................ 57,465 57,114 63,639 351 0.61 (6,525) (10.25)
Total Non-Interest Expense.................. $119,591 $120,156 $125,150 $ (565) (0.47) $ (4,994) (3.99)
</TABLE>

<PAGE>

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 1995

Net income for the three months ended December 31, 1995 was $13.2 million,
an increase of 14.4% over the $11.5 million earned during the fourth quarter of
1994. On a per share basis, 1995 fourth quarter earnings were $0.77 compared to
$0.68 in 1994, an increase of 13.2%.

Net interest income increased by 3.2% when compared to the same three months
of 1994. The provision for loan losses increased by $0.4 million when compared
to the fourth quarter of 1994. Non-interest income, excluding securities gains
(losses), was relatively unchanged as increases in trust income and service
charges on deposit accounts offset decreases in other operating income.
However, non-interest expense decreased by 7.7% when compared to the same
quarter last year. The decrease was primarily due to lower FDIC expense which
includes the reversal of a $1.4 million accrual for potential assessments on
SAIF insured deposits. The expense was accrued during the third quarter of 1995
in anticipation of legislation requiring a one-time special assessment on SAIF
insured deposits. While it is still anticipated that this special SAIF
assessment will be included as part of the final budget bill, current accounting
rules and regulatory requirements will not permit the accrual of this expense
until the legislation is enacted.

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

PENDING ACQUISITION

In January 1996, One Valley entered into a definitive agreement with CSB
Financial Corporation, headquartered in Lynchburg, Virginia, to acquire the
federally chartered savings banking company. Under terms of the agreement, One
Valley will exchange 0.6774 shares of its common stock for each share of CSB
Financial Corporation's common stock outstanding. The transaction, valued at
approximately $57.5 million, is expected to be accounted for under the purchase
method of accounting and is subject to, among other things, approval by
regulatory authorities and the stockholders of CSB Financial Corporation. CSB
had $329 million of total assets, $253 million in deposits, and $157 million in
loans at December 31, 1995.

<PAGE>

CONSOLIDATED BALANCE SHEETS

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

December 31
1995 1994
<S> <C> <C>
ASSETS
Cash and due from banks-Note B............................ $ 140,617 $ 178,900
Interest-bearing deposits in other banks.................. 8,259 4,297
Federal funds sold........................................ 16,800 24,875
Cash and cash equivalents................................ 165,676 208,072

Securities-Note F:
Available-for-sale, at fair value........................ 871,699 541,201
Held-to-maturity (fair value approximated $212,040
and
$422,381 at December 31, 1995 and 1994)................ 205,153 445,158
Loans, net-Notes G and H.................................. 2,472,428 2,335,519
Premises and equipment-Note I............................. 80,688 82,853
Accrued interest receivable............................... 32,307 28,404
Other assets.............................................. 30,345 32,034

Total Assets.......................................... $3,858,296 $3,673,241

LIABILITIES
Deposits:
Non-interest bearing..................................... $ 389,514 $ 378,512
Interest bearing......................................... 2,658,822 2,547,967
Total deposits......................................... 3,048,336 2,926,479
Short-term borrowings-Note J:
Federal funds purchased.................................. 54,005 53,145
Securities sold under agreements to repurchase and
other.................................................. 335,775 322,194
Total short-term borrowings............................ 389,780 375,339
Long-term borrowings-Note K............................... 13,411 19,450
Other liabilities......................................... 40,467 30,106
Total Liabilities..................................... 3,491,994 3,351,374

SHAREHOLDERS' EQUITY
Preferred Stock-$10 par value; authorized 1,000,000
shares;
none issued
Common Stock-$10 par value; authorized 40,000,000
shares;
18,016,584 and 17,538,368 shares outstanding at
December 31,
1995 and 1994, respectively, including 954,200 and
533,500
shares in treasury at December 31, 1995 and 1994......... 180,166 175,384
Capital surplus........................................... 34,603 25,954
Retained earnings......................................... 168,625 137,437
Unrealized gain (loss) on available-for-sale
securities,
net of deferred income taxes............................. 6,252 (6,535)
Treasury stock............................................ (23,344) (10,373)
Total Shareholders' Equity............................ 366,302 321,867

Total Liabilities and Shareholders' Equity............ $3,858,296 $3,673,241
</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
1995 1994 1993
<S> <C> <C> <C>
INTEREST INCOME
Interest and fees on loans:
Taxable............................................ $217,034 $189,040 $179,971
Tax-exempt......................................... 2,453 2,352 2,122
Total............................................ 219,487 191,392 182,093
Interest and dividends on securities:
Taxable............................................ 50,693 48,881 55,868
Tax-exempt......................................... 10,362 10,073 6,634
Total............................................ 61,055 58,954 62,502
Other............................................... 1,830 1,037 3,104
Total interest income............................ 282,372 251,383 247,699

INTEREST EXPENSE
Deposits............................................ 106,493 85,221 90,807
Short-term borrowings-Note J........................ 13,899 8,491 6,270
Long-term borrowings-Note K......................... 688 1,185 2,709
Total interest expense........................... 121,080 94,897 99,786
Net Interest Income................................... 161,292 156,486 147,913
Provision For Loan Losses-Note H...................... 5,632 4,788 5,788
Net Interest Income After Provision For Loan Losses... 155,660 151,698 142,125

OTHER INCOME
Trust Department.................................... 8,203 7,892 7,272
Service charges on deposit accounts................. 13,877 11,441 11,963
Real estate loan processing and servicing fees...... 4,826 5,176 8,080
Other service charges and fees...................... 5,013 4,745 4,083
Securities (losses) gains........................... (65) (867) 113
Other-Note N........................................ 5,720 8,191 7,794
Total other income............................... 37,574 36,578 39,305

OTHER EXPENSES
Salaries and employee benefits-Note M............... 62,126 63,042 61,511
Net occupancy-Note I................................ 6,305 6,014 6,206
Equipment........................................... 8,761 8,468 10,604
Federal deposit insurance assessments............... 3,916 6,642 6,519
Outside data processing............................. 4,583 4,705 4,575
Other-Note N........................................ 33,900 31,285 35,735
Total other expenses............................. 119,591 120,156 125,150

Income Before Income Taxes............................ 73,643 68,120 56,280
Applicable Income Taxes-Note L........................ 24,537 21,909 18,326

NET INCOME............................................ $ 49,106 $ 46,211 $ 37,954

NET INCOME PER COMMON SHARE........................... $ 2.86 $ 2.70 $ 2.20

Average common shares outstanding..................... 17,174 17,132 17,237
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.
23

<PAGE>

CONSOLIDATED STATEMENTS OF SHAREHOLDERS' EQUITY

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

Unrealized
Gain
(Loss) on
Available
Common Capital Retained Treasury for Sale
Stock Surplus Earnings Stock Securities

<S> <C> <C> <C> <C> <C>
Balances at January 1, 1993............................. $174,935 $ 25,352 $ 83,380 $ (3,129) $ 0

Net income.............................................. 37,954
Sale of treasury stock by Mountaineer................... 420
Stock options exercised (24,280 shares) and
adjustment for fractional shares-Note M............... 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

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

Balances at December 31, 1994........................... 175,384 25,954 137,437 (10,373) (6,535)

Change in unrealized gains and losses, net of
deferred income taxes of $(8,524)..................... 12,787
Net income.............................................. 49,106
Issuance of common stock (411,602 shares)-Note D........ 4,116 8,130
Purchase of treasury stock (420,700 shares)............. (12,971)
Stock options exercised (66,614 shares) and
adjustment for fractional shares-Note M............... 666 519
Cash dividends on One Valley shares ($1.04 per share)... (17,918)

Balances at December 31, 1995........................... $180,166 $ 34,603 $168,625 $ (23,344) $ 6,252
</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
1995 1994 1993
<S> <C> <C> <C>
OPERATING ACTIVITIES
Net income................................................ $ 49,106 $ 46,211 $ 37,954
Adjustments to reconcile net income to
net cash provided by operating activities:
Provision for loan losses.............................. 5,632 4,788 5,788
Depreciation........................................... 8,049 7,633 7,492
Amortization, net of accretion......................... 3,544 2,776 7,390
Deferred income tax benefit............................ (9) (107) (2,142)
Net (gains) losses from sales of assets................ (270) 585 (544)
Loans originated for sale.............................. (52,440) (50,806) (163,800)
Proceeds from loans sold............................... 49,523 66,067 170,220
Net change in accrued interest receivable.............. (3,727) (1,504) 1,844
Net change in accrued interest payable................. 4,738 1,497 (2,978)
Net change in other assets and other
liabilities.......................................... 1,531 (852) 3,141
Net cash provided by operating activities............ 65,677 76,288 64,365

INVESTING ACTIVITIES
Proceeds from sales of available-for-sale
securities.............................................. 103,279 138,922
Proceeds from maturities of available-for-sale
securities.............................................. 222,599 206,013
Purchases of available-for-sale securities................ (338,306) (256,556)
Proceeds from maturities of held-to-maturity
securities.............................................. 30,141 61,742
Purchases of held-to-maturity securities.................. (55,796) (93,169)
Proceeds from sales of securities held-for-
investment.............................................. 35,604
Proceeds from maturities of securities held-for-
investment.............................................. 504,582
Purchase of securities held-for-investment................ (581,210)
Purchase of subsidiary, net of cash received.............. 4,454
Net increase in loans..................................... (127,053) (215,615) (175,424)
Purchases of premises and equipment....................... (5,301) (10,253) (7,524)
Net cash used in investing activities................ (165,983) (168,916) (223,972)

FINANCING ACTIVITIES
Net change in deposits.................................... 79,712 (10,256) 55,123
Net change in federal funds purchased..................... 860 39,133 (3,706)
Net change in other short-term borrowings................. 13,581 117,786 17,850
Repayment of long-term borrowings......................... (11,539) (18,037) (19,586)
Proceeds from long-term borrowings........................ 5,000 14,699 12,156
Proceeds from issuance of common stock.................... 1,185 340 291
Purchase of treasury stock................................ (12,971) (7,244)
Sale of treasury stock by Mountaineer..................... 420
Cash dividends............................................ (17,918) (16,089) (14,019)
Net cash provided by financing activities............ 57,910 120,332 48,529

(Decrease) increase in cash and cash equivalents............ (42,396) 27,704 (111,078)
Cash and cash equivalents at beginning of year.............. 208,072 180,368 291,446

Cash and cash equivalents at end of year.................... $ 165,676 $ 208,072 $ 180,368
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

ONE VALLEY BANCORP OF WEST VIRGINIA, INC. AND SUBSIDIARIES DECEMBER 31, 1995
(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
preparation of the financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions that
affect the amounts reported in the financial statements and accompanying notes.
Actual results could differ from those estimates. The following is a summary of
the more significant accounting and reporting 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
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.

On January 1, 1995, One Valley adopted Financial Accounting Standards Board
(FASB) Statement No. 114, "Accounting by Creditors for Impairment of a Loan," as
amended by FASB No. 118. Under this standard, the 1995 allowance for loan losses
related to loans that are identified for evaluation in accordance with Statement
No. 114 is based on discounted cash flows using the loan's initial effective
interest rate or the fair value of the collateral for certain collateral
dependent loans. Prior to 1995, the allowance for loan losses related to these
loans was based on undiscounted cash flows or the fair value of the collateral
on collateral dependent loans. The adoption of this standard did not have, and
is not expected to have, a material effect on One Valley's financial position,
results of operations, accounting policies or the determination of the adequacy
of the allowance for loan losses.

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.

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.

<PAGE>

SUMMARY OF SIGNIFICANT ACCOUNTING AND REPORTING POLICIES-CONTINUED NOTE A

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.

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 the
contractual payment of principal or interest has become 90 days past due. When
interest accruals are discontinued, unpaid interest recognized in income in the
current year is reversed, and interest accrued in prior years is charged against
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. Interest received on nonaccrual loans generally is either applied
against principal or reported as interest income, according to management's
judgment as to the collectibility of principal. Generally, a loan is restored to
accrual status when it is brought current, has performed in accordance with the
contractual terms for a reasonable period of time, and the collectibility of the
total contractual principal and interest is no longer in doubt.

STOCK-BASED COMPENSATION

The FASB issued Statement of Financial Accounting Standards No. 123,
"Accounting for Stock Based Compensation," which is applicable to One Valley in
1996. The Statement provides companies with the option of accounting for stock-
based compensation under APB Opinion No. 25, "Accounting for Stock Issued to
Employees," or applying the provisions of Statement 123. As a result, One Valley
has decided to continue to apply the provisions of APB No. 25 to account for
stock-based compensation.

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.

RECLASSIFICATIONS

Certain amounts in the 1994 and 1993 financial statements have been
reclassified to conform to the 1995 presentation. Such reclassifications had no
impact on net income or shareholders' equity.

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, 1995, was approximately $26,400.

RESTRICTIONS ON SUBSIDIARY DIVIDENDS NOTE C

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 1996, the retained net profits available for
distribution to One Valley Bancorp as dividends without regulatory approval are
approximately $21,800, plus retained net profits for the interim periods through
the date of declaration.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

MERGERS AND ACQUISITIONS NOTE D

In January 1994, One Valley acquired all of the outstanding common stock of
Mountaineer Bankshares of W.Va., Inc. and subsidiaries (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 of the separate companies.

Net Net Income
Interest Net Per
Income Income Common Share
One Valley..... $116,912 $32,469 $2.52
Mountaineer.... 31,001 5,485 1.89
Consolidated... $147,913 $37,954 2.20

On March 15, 1995, One Valley acquired all of the outstanding stock of Point
Bancorp, Inc., the parent company of a $57 million Federal Savings Bank.
Pursuant to the merger agreement, One Valley exchanged 0.6 shares of its common
stock and $7.10 cash for each share of Point Bancorp common stock. A total of
411,602 shares was issued in this transaction. This combination was accounted
for under the purchase method of accounting. Accordingly, consolidated results
include the operations of Point Bancorp only from the date of acquisition.

In years prior to 1993, One Valley acquired several financial institutions
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 $2,100 and $1,300 at December 31, 1995 and 1994. Deposit intangible
amortization approximated $555 in 1995, $500 in 1994, and $800 in 1993. 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 $6,500 and $4,000 at December 31, 1995 and 1994. Goodwill
amortization approximated $467 in 1995 and $300 in 1994 and 1993.

In January 1996, One Valley entered into a definitive agreement with CSB
Financial Corporation, headquartered in Lynchburg, Virginia, to acquire the
federally chartered savings banking company. Under terms of the agreement, One
Valley will exchange 0.6774 shares of its common stock for each share of CSB
Financial Corporation's common stock outstanding. This will result in the
issuance of approximately 1,790,000 shares. The transaction is valued at
approximately $57.5 million and is expected to be accounted for under the
purchase method of accounting. CSB had $329 million of total assets, $253
million in deposits, and $157 million in loans at December 31, 1995.

SHAREHOLDER RIGHTS PLAN NOTE E

On October 18, 1995, the Board of Directors approved a Shareholder
Protection Rights Plan (the Plan). The Plan provides that each share of common
stock carries with it one right. The rights would be exercisable only if a
person or group, as defined, acquired 10% or more of One Valley's common stock,
or after a person commences a tender offer for such stock. If a person or group
acquires 10% or more of One Valley's common stock, holders of rights, other than
the 10% holder, could acquire shares of One Valley's common stock at half price
or the board could exchange each such right for one share of common stock. In
addition, under certain circumstances, holders of rights could acquire shares of
common stock of the 10% holder at half price.

<PAGE>

SECURITIES NOTE F

The following is a summary of available-for-sale and held-to-maturity
securities as of December 31, 1995 and 1994:

Available-for-Sale Held-to-Maturity
Estimated Estimated
Amortized Gross Unrealized Fair Amortized Gross Unrealized Fair
Cost Gains Losses Value Cost Gains Losses Value

<S> <C> <C> <C> <C> <C> <C> <C> <C>
December 31, 1995
U.S. Treasury securities
and obligations of
U.S. government agencies
and corporations........... $627,471 $ 8,254 $ (570) $635,155 $ 0 $ 0 $ 0 $ 0
Obligations of states and
political subdivisions..... 204,694 7,334 (447) 211,581
Mortgage-backed securities... 208,883 3,479 (940) 211,422
Other securities............. 24,919 203 25,122 459 1 (1) 459

Total securities........... $861,273 $11,936 $ (1,510) $871,699 $205,153 $7,335 $ (448) $212,040

December 31, 1994
U.S. Treasury securities
and obligations of
U.S. government agencies
and corporations........... $501,001 $ 409 $ (9,280) $492,130 $126,442 $ 206 $ (2,883) $123,765
Obligations of states and
political subdivisions..... 179,346 1,348 (14,781) 165,913
Mortgage-backed securities... 36,881 195 (2,234) 34,842 138,931 656 (7,315) 132,272
Other securities............. 14,210 19 14,229 439 10 (18) 431

Total securities........... $552,092 $ 623 $ (11,514) $541,201 $445,158 $2,220 $ (24,997) $422,381
</TABLE>

Gross realized gains and losses on available-for-sale securities
approximated $87 and $152 in 1995 and $284 and $1,167 in 1994.

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

<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
</TABLE>

One Valley adopted the provisions of FASB No. 115, "Accounting for Certain
Investments in Debt and Equity Securities," as of January 1, 1994. 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.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

SECURITIES-CONTINUED NOTE F

On November 15, 1995, the FASB staff issued a Special Report, A GUIDE TO
IMPLEMENTION OF STATEMENT 115 ON ACCOUNTING FOR CERTAIN INVESTMENTS IN DEBT AND
EQUITY SECURITIES. In accordance with provisions in that Special Report, the
Company chose to reclassify securities from held-to-maturity to available-for-
sale. At the date of transfer, the amortized cost of those securities was
$264,842 and the unrealized gain on those securities was $1,996 (net of $1,330
in deferred income taxes), which is included in shareholders' equity.

The amortized cost and estimated fair value of debt securities at December
31, 1995, 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.

Estimated
Amortized Fair
Cost Value
Available-For-Sale
Due in one year or less.................. $ 198,830 $ 199,539
Due after one year through five years.... 365,407 371,941
Due after five years through ten years... 56,466 56,457
Due after ten years...................... 6,768 7,218
627,471 635,155
Mortgage-backed securities............... 208,883 211,422
Other.................................... 24,919 25,122

Total securities....................... $ 861,273 $ 871,699

Estimated
Amortized Fair
Cost Value
Held-to-Maturity
Due in one year or less.................. $ 7,442 $ 7,519
Due after one year through five years.... 15,041 16,180
Due after five years through ten years... 44,316 47,144
Due after ten years...................... 137,895 140,738
204,694 211,581
Other.................................... 459 459

Total securities....................... $ 205,153 $ 212,040

At December 31, 1995 and 1994, securities carried at $450,200 and $420,700
were pledged to secure public deposits, repurchase agreements, and for other
purposes as required or permitted by law.

<PAGE>

LOANS NOTE G
Loans are summarized as follows:

December 31
1995 1994
Commercial, financial
and agricultural................. $ 319,432 $ 373,583
Real estate:
Revolving home equity............ 128,754 113,142
Single family residential........ 1,016,983 936,698
Apartment buildings
and complexes.................. 44,830 37,475
Commercial....................... 364,913 311,691
Construction..................... 46,967 42,746
Installment loans to individuals... 560,754 532,251
Other.............................. 29,329 25,371
Total loans net of
unearned income................ 2,511,962 2,372,957
Less allowance for loan losses..... 39,534 37,438
Loans - net.................... $2,472,428 $2,335,519

Unearned income approximated $600 and $1,800 at December 31, 1995 and 1994.

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:

1995 1994
Balance, January 1..... $ 73,493 $ 72,846
Additions.............. 24,562 35,009
Amount collected....... (26,128) (34,362)
Balance, December 31... $ 71,927 $ 73,493

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, 1995, One Valley
held loans for sale of approximately $6,700 and had commitments to originate and
sell loans of approximately $5,750.

The mortgage loan portfolio serviced by One Valley for the benefit of others
approximated $967,700, $896,500, and $842,000 at December 31, 1995, 1994, and
1993. Custodial escrow balances maintained in connection with the foregoing loan
servicing and One Valley's own mortgage loan portfolio were approximately $9,600
and $10,800 at December 31, 1995 and 1994.

The FASB issued Statement of Financial Accounting Standards No. 122,
"Accounting for Mortgage Servicing Rights," which is applicable to One Valley in
1996. The Statement requires that mortgage servicing rights be capitalized,
regardless of how those rights were acquired. One Valley will adopt this
Statement on January 1, 1996, and it is not expected to have a material effect
on One Valley's financial statements.

ALLOWANCE FOR LOAN LOSSES NOTE H

Changes in the allowance for loan losses for each of the three years in the
period ended December 31, 1995, were as follows:

1995 1994 1993
Balance, January 1............... $37,438 $36,484 $35,679
Charge-offs...................... (5,611) (5,985) (7,381)
Recoveries....................... 1,840 2,151 2,398
Net charge-offs................ (3,771) (3,834) (4,983)
Provision for loan losses........ 5,632 4,788 5,788
Balance of acquired subsidiary... 235
Balance, December 31............. $39,534 $37,438 $36,484

At December 31, 1995, the recorded investment in loans that are considered
to be impaired under FASB No. 114 was $10,100 (of which $2,600 was on a
nonaccrual basis). Included in this amount is $8,100 of impaired loans for which
the related allocated allowance for loan losses was $200, and $2,000 of impaired
loans that as a result of write-downs or being well secured do not have an
allowance for loan losses. The average recorded investment in impaired loans
during the year ended December 31, 1995 was approximately $9,500. For the year
ended December 31, 1995, One Valley recognized interest income on those impaired
loans of $780, which included less than $100 of interest income recognized using
the cash basis method of income recognition.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

PREMISES AND EQUIPMENT NOTE I

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

December 31
1995 1994
Land.............................. $ 15,655 $ 15,229
Buildings and improvements........ 76,993 76,486
Equipment......................... 56,193 53,592
Total............................. 148,841 145,307
Less accumulated depreciation... (68,153) (62,454)

Premises and equipment-net........ $ 80,688 $ 82,853

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: 1996-$4,500;
1997-$4,100; 1998-$3,500; 1999-$1,600, and 2000-$400, with $2,500 of commitments
extending beyond 2000.

Total expense under these lease agreements, including cancelable and
noncancelable leases, was $3,500 in 1995 and 1994, and $3,100 in 1993.

SHORT-TERM BORROWINGS NOTE J

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:

Federal Repurchase
Funds Agreements
Purchased and Other
1995
Average amount outstanding during year........ $ 24,642 $ 264,461
Maximum amount outstanding at any month-end... 54,005 357,501
Weighted average interest rate:
During year................................. 5.89% 4.71%
End of year................................. 5.76 4.71

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

Several of One Valley's banking subsidiaries are members of the Federal Home
Loan Bank (FHLB). A benefit of membership in the FHLB is the availability of
short-term and long-term borrowings, in the form of collateralized advances. The
available lines of credit for short-term borrowings, at prevailing market
interest rates, as of December 31, 1995, approximates $206 million.

Interest paid on deposits, short-term borrowings, and long-term borrowings
approximated $116,000 in 1995, $93,000 in 1994, and $103,000 in 1993.

<PAGE>

LONG-TERM BORROWINGS NOTE K

Long-term borrowings of $13,411 and $19,450 at December 31, 1995 and 1994,
primarily consist of Federal Home Loan Bank advances. The advances mature as
follows: 1996 - $5,500; 1997 - $5,000; and 2003 - $2,900. The weighted average
interest rate of these advances at December 31, 1995, was 5.70%.

INCOME TAXES NOTE L

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

1995 1994 1993
Current:
Federal.................... $20,822 $18,772 $18,100
State...................... 3,724 3,244 2,480
Deferred Federal and State... (9) (107) (2,254)

Total.................... $24,537 $21,909 $18,326

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:

1995 1994 1993
<S> <C> <C> <C> <C> <C> <C>
Computed tax at statutory federal rate...... $25,775 35.0% $23,842 35.0% $19,698 35.0%
Plus: State income taxes,
net of federal tax benefits............... 2,450 3.3 1,986 2.9 1,511 2.7
28,225 38.3 25,828 37.9 21,209 37.7
Increase (decrease) in taxes resulting from:
Tax-exempt interest...................... (4,484) (6.1) (4,348) (6.4) (2,931) (5.2)
Other-net................................. 796 1.1 429 .6 48 .1

Actual tax expense...................... $24,537 33.3% $21,909 32.1% $18,326 32.6%

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

December 31
1995 1994
Deferred tax assets:
Available-for-sale securities...... $ 0 $ 4,356
Allowance for loan losses.......... 15,559 14,877
Accrued employee benefits.......... 3,355 3,157
Other.............................. 1,541 2,473
Total deferred tax assets........ 20,455 24,863

Deferred tax liabilities:
Loans.............................. 5,909 5,328
Available-for-sale securities...... 4,168 0
Premises and equipment............. 3,239 2,780
Other.............................. 87 1,188
Total deferred tax liabilities... 13,403 9,296

Net deferred tax assets........ $ 7,052 $15,567

Income taxes (benefit) related to securities gains (losses) approximated
$(26), $(347), and $45 in 1995, 1994, and 1993.

One Valley made tax payments of approximately $26,000 in 1995, $21,000
in 1994, and $22,000 in 1993.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

EMPLOYEE BENEFIT PLANS NOTE M

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>
<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Actuarial present value of accumulated benefit obligation,
including vested benefits of
$23,921 in 1995 and $17,210 in 1994....................... $ 25,632 $ 18,370

Actuarial present value of projected benefit obligation
for services rendered to date............................. $ (34,944) $ (26,294)
Plan assets at fair value, consisting primarily of cash,
listed stocks, and U.S. bonds............................. 27,851 21,923
Projected benefit obligation in excess of plan assets....... (7,093) (4,371)
Unrecognized net asset at November 1, 1987, net of
amortization.............................................. (2,117) (2,363)
Unrecognized net loss from past experience different from
that assumed and
effects of changes in assumptions......................... 6,662 3,144
Unrecognized prior service cost............................. 694 764
Accrued pension cost included in other liabilities.......... $ (1,854) $ (2,826)
</TABLE>

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

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost-benefits earned during the period... $ 1,529 $ 1,883 $ 1,445
Interest cost on projected benefit obligation.... 2,088 1,991 1,740
Actual (return) loss on plan assets.............. (4,332) 1,524 (2,640)
Net amortization and deferral.................... 2,209 (3,249) 893

Net periodic pension cost...................... $ 1,494 $ 2,149 $ 1,438
</TABLE>

The weighted-average discount rate used in determining the actuarial present
value of projected benefit obligations was 7% and 8.25% at December 31, 1995 and
1994. The rate of increase in future compensation levels used in determining the
actuarial present value of projected benefit obligations was 5.5% in 1995 and
1994. The expected long-term rate of return on plan assets in 1995, 1994, and
1993 was 8.5%. The unrecognized net loss increased in 1995 due to the change in
the weighted-average discount rate.

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.

<PAGE>

EMPLOYEE BENEFIT PLANS-CONTINUED NOTE M

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

<TABLE>
<CAPTION>
1995 1994
<S> <C> <C>
Accumulated postretirement benefit obligation:
Active plan participants fully eligible for
benefits................................................ $ 0 $ (71)
Other active participants................................. (3,064) (2,150)
Current retirees.......................................... (2,889) (2,639)
(5,953) (4,860)
Plan assets................................................. 0 0
Accumulated postretirement benefit obligation in excess of
plan assets............................................... (5,953) (4,860)
Unrecognized transition obligation.......................... 3,714 3,932
Unrecognized prior service cost............................. 221 233
Unrecognized net loss from past experience different from
that assumed and
effects of changes in assumptions......................... 401 (361)

Accrued postretirement benefit cost included in other
liabilities............................................. $ (1,617) $ (1,056)
</TABLE>

Net periodic postretirement benefit cost included the following components:

<TABLE>
<CAPTION>
1995 1994 1993
<S> <C> <C> <C>
Service cost.......................................... $ 188 $ 260 $ 141
Interest cost......................................... 403 377 350
Amortization of transition obligation over 20 years... 230 230 218

Net periodic postretirement benefit cost............ $ 821 $ 867 $ 709
</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 10% for 1996 and is
assumed to decrease gradually to 5% in 2001 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, 1995, by $362
and the aggregate of the service and interest cost components of net periodic
postretirement benefit cost for 1995 by $50.

The weighted-average discount rate used in determining the accumulated
postretirement benefit obligation was 7% and 8.25% at December 31, 1995 and
1994.

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
plus prior year carryovers may be issued in any calendar year. At December 31,
1995, there were outstanding and exercisable options for the purchase of 420,950
shares at prices ranging from $10.28 to $31.88 per share. During 1995, 66,614
shares were exercised at prices ranging from $10.28 to $30.25.

OTHER INCOME AND EXPENSES NOTE N

Included in other income are checkbook sales which approximated $2,228 in
1995, $2,798 in 1994, and $2,957 in 1993. Included in other expenses are
supplies expense which approximated $3,619 in 1995, $3,447 in 1994, and $3,771
in 1993; postage expense which approximated $3,162 in 1995, $3,141 in 1994, and
$3,022 in 1993; and professional fees which approximated $2,804 in 1995, $2,858
in 1994, and $3,799 in 1993.

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands)

PARENT COMPANY CONDENSED FINANCIAL INFORMATION NOTE O

CONDENSED BALANCE SHEETS
December 31
Assets 1995 1994
Repurchase agreement with a
subsidiary bank.............. $ 26,130 $ 21,328
Securities:
Available-for-sale........... 12,820 6,426
Held-to-maturity............. 883 909
Premises and equipment......... 750 777
Investment in subsidiaries:
Commercial and
federal savings banks....... 325,224 288,801
Non-banks.................... 6,027 5,683
Other assets................... 4,865 3,363
Total assets................. $376,699 $327,287

Liabilities
Other liabilities.............. $ 10,397 $ 5,420
Total liabilities............ 10,397 5,420

Shareholders' Equity
Common stock................... 180,166 175,384
Capital surplus................ 34,603 25,954
Retained earnings.............. 168,625 137,437
Unrealized gain (loss)......... 6,252 (6,535)
Treasury stock................. (23,344) (10,373)
Total shareholders' equity... 366,302 321,867
Total liabilities and
shareholders' equity........ $376,699 $327,287

CONDENSED STATEMENTS OF INCOME

Year Ended December 31
1995 1994 1993
Income:
Dividends from bank subsidiaries... $47,290 $35,426 $31,869
Other income....................... 3,788 3,078 2,825
Total income..................... 51,078 38,504 34,694

Expenses:
Salaries and employee benefits..... 6,749 7,200 5,279
Other expenses..................... 5,028 3,268 5,940
Interest expense................... 18 14 54
Total expenses................... 11,795 10,482 11,273
Income before income taxes and
equity in undistributed earnings
of subsidiaries.................... 39,283 28,022 23,421
Applicable income tax (benefit)...... (3,034) (2,927) (3,074)
Income before equity in undistributed
earnings of subsidiaries.......... 42,317 30,949 26,495
Equity in undistributed earnings
of subsidiaries.................... 6,789 15,262 11,459
Net income....................... $49,106 $46,211 $37,954

CONDENSED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>

Year Ended December 31
1995 1994 1993
Operating Activities:
<S> <C> <C> <C>
Net income............................ $ 49,106 $ 46,211 $37,954
Adjustments to reconcile net
income to net cash provided
by operating activities:
Depreciation & amortization....... 238 220 430
Equity in undistributed
earnings of subsidiaries......... (6,789) (15,262) (11,459)
Net change in other assets
and other liabilities............ 3,396 (3,531) (188)
Net cash provided by
operating activities........... 45,951 27,638 26,737

Investing Activities:
Purchase of securities:
Available-for-sale................ (6,210) (5,108)
Held-to-maturity.................. (912)
Proceeds from maturities and
sale of investment securities..... 196
Purchase of investment securities... (78)
Investment in subsidiaries.......... (5,139) (2,500) (3,000)
Purchase of equipment............... (292) (638) (142)
Proceeds from sale of
other real estate................. 600
Net cash used in
investing activities............. (11,445) (9,158) (2,620)

Financing Activities:
Repayment of long-term
borrowings........................ (1,326)
Proceeds from issuance of
common stock...................... 1,185 340 291
Purchase of treasury stock.......... (12,971) (7,244)
Sale of treasury stock by
Mountaineer....................... 420
Cash dividends paid................. (17,918) (16,089) (14,019)
Net cash used in
financing activities............. (29,704) (22,993) (14,634)

Increase (decrease) in
cash and cash equivalents........... 4,802 (4,513) 9,483

Cash and cash equivalents at
beginning of year................... 21,328 25,841 16,358

Cash and cash equivalents at
end of year......................... $ 26,130 $ 21,328 $25,841
</TABLE>

<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 of 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 of 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 non-interest bearing
checking, regular savings, and other types of money market demand accounts) are,
by definition, equal to their carrying values. Fair values of 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, 1995
and 1994.

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 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, 1995 and 1994, approximate their carrying value.

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

December 31, 1995 December 31, 1994
Carrying Fair Carrying Fair
Amount Value Amount Value

<S> <C> <C> <C> <C>
Cash and cash equivalents..... $ 140,606 $ 140,606 $ 208,072 $ 208,072
Securities.................... 1,076,852 1,083,739 986,359 963,582
Loans......................... 2,472,428 2,502,771 2,335,519 2,319,848
Accrued interest receivable... 32,307 32,307 28,404 28,404
Deposits...................... 3,048,336 3,053,777 2,926,479 2,914,411
Short-term borrowings......... 389,780 389,780 375,339 375,339
Long-term borrowings.......... 13,411 13,449 19,450 18,788
Accrued interest payable...... 15,332 15,332 10,353 10,353
</TABLE>

<PAGE>

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Dollars in thousands, except per share data)

COMMITMENTS AND CONTINGENT LIABILITIES NOTE Q
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 $32,000 as of December 31, 1995. 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, 1995, the Bank had commitments outstanding to extend
credit at prevailing market rates approximating $432,000. 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, 1995, there was approximately $37,000 in
outstanding loans sold with recourse. Pursuant to the terms of an Indemnity
Agreement with the Federal Deposit Insurance Corporation (FDIC), successor to
the obligations of the Resolution Trust Corporation, the FDIC is obligated to
indemnify any and all costs, losses, liabilities and expenses, including legal
fees, resulting from certain third-party claims.

QUARTERLY FINANCIAL DATA (UNAUDITED) NOTE R

Quarterly financial data for 1995 and 1994 is summarized below:

1995 1994
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............................. $ 67,301 $ 70,742 $ 71,817 $ 72,512 $ 60,126 $ 61,294 $ 64,339 $ 65,624
Interest expense............................ 27,995 30,422 31,057 31,606 22,351 22,414 24,156 25,976
Net interest income....................... 39,306 40,320 40,760 40,906 37,775 38,880 40,183 39,648
Provision for loan losses................... 1,113 1,113 1,762 1,644 1,179 1,213 1,185 1,211
Net interest income after provision for
loan losses............................... 38,193 39,207 38,998 39,262 36,596 37,667 38,998 38,437
Other income, excluding securities
gains..................................... 8,796 9,676 9,666 9,501 8,651 10,510 8,853 9,431
Securities transactions .................... 7 13 (86) 1 197 (504) (410) (150)
Other expenses.............................. 30,364 30,462 30,061 28,704 29,356 29,771 29,918 31,111
Income before income taxes.................. 16,632 18,434 18,517 20,060 16,088 17,902 17,523 16,607
Applicable income taxes..................... 5,344 6,137 6,187 6,869 5,257 5,853 5,724 5,075
Net Income.............................. $ 11,288 $ 12,297 $ 12,330 $ 13,191 $ 10,831 $ 12,049 $ 11,799 $ 11,532

Per Share Data:
Average shares outstanding (in
thousands).............................. 17,079 17,354 17,159 17,061 17,250 17,165 17,105 17,009
Net income per share...................... $ .66 $ .71 $ .72 $ .77 $ .63 $ .70 $ .69 $ .68
Dividends per share....................... .25 .25 .27 .27 .22 .22 .25 .25
High bid/share............................ 31.00 31.13 33.50 34.63 28.50 29.00 29.75 30.25
Low bid/share............................. 28.00 28.75 30.50 31.13 24.75 24.25 27.75 28.00
</TABLE>

<PAGE>

REPORT OF ERNST & 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,
1995 and 1994, and the related consolidated statements of income, shareholders'
equity, and cash flows for each of the three years in the period ended December
31, 1995. 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 1993 consolidated financial
statements of Mountaineer Bankshares of W.Va., Inc. and subsidiaries
(Mountaineer) which reflected total interest income of $52,645 in its income
statement for the year ended December 31, 1993. 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, 1995 and 1994,
and the consolidated results of their operations and their cash flows for each
of the three years in the period ended December 31, 1995, in conformity with
generally accepted accounting principles.

Charleston, West Virginia
January 18, 1996

<PAGE>

SIX-YEAR NET INTEREST INCOME SUMMARY

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

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990
% 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.................. 217,034 75.0 189,040 73.2 179,971 71.3 186,681 69.7 165,539 66.8 155,243 64.8
Tax-exempt............... 3,774 1.3 3,618 1.4 3,255 1.3 3,133 1.2 3,866 1.6 4,111 1.7
Total loans............. 220,808 76.3 192,658 74.6 183,226 72.6 189,814 70.9 169,405 68.4 159,354 66.5
Securities
Taxable.................. 50,693 17.6 48,881 19.0 55,868 22.2 64,466 24.1 58,483 23.6 55,201 23.0
Tax-exempt............... 15,941 5.5 15,497 6.0 10,146 4.0 9,059 3.4 10,721 4.3 12,467 5.2
Total securities........ 66,634 23.1 64,378 25.0 66,014 26.2 73,525 27.5 69,204 27.9 67,668 28.2
Funds sold & other......... 1,830 0.6 1,037 0.4 3,104 1.2 4,290 1.6 9,142 3.7 12,640 5.3

Total interest
income ................. 289,272 100.0 258,073 100.0 252,344 100.0 267,629 100.0 247,751 100.0 239,662 100.0
Interest Expense:
Deposits................... 106,493 36.8 85,221 33.0 90,807 36.0 109,713 41.0 120,437 48.6 122,284 51.0
Short-term borrowings...... 13,899 4.8 8,491 3.3 6,270 2.5 8,203 3.1 8,947 3.6 10,003 4.2
Long-term borrowings....... 688 0.3 1,185 0.5 2,709 1.1 2,123 0.8 1,529 0.6 2,175 0.9
Total interest expense... 121,080 41.9 94,897 36.8 99,786 39.6 120,039 44.9 130,913 52.8 134,462 56.1
Tax equivalent
net interest income........ 168,192 58.1 163,176 63.2 152,558 60.4 147,590 55.1 116,838 47.2 105,200 43.9
Tax equivalent adjustment.... 6,900 2.4 6,690 2.6 4,645 1.8 4,145 1.5 4,959 2.0 5,637 2.4

Net interest income ......... 161,292 55.7 156,486 60.6 147,913 58.6 143,445 53.6 111,879 45.2 99,563 41.5

Summary of Average Rates
Earned & Paid*
Taxable loans................ 9.05% 8.58% 8.85% 9.67% 10.68% 11.30%
Tax-exempt loans............. 11.11 10.51 10.45 10.32 11.92 13.56
Net loans.................. 9.23 8.76 9.04 9.85 10.88 11.51
Taxable securities........... 6.26 5.59 5.74 6.67 7.89 8.70
Tax-exempt securities........ 8.52 8.80 10.09 10.88 11.42 11.26
Total securities........... 6.68 6.13 6.14 7.01 8.29 9.08
Funds sold & deposits........ 5.61 3.79 3.10 3.58 6.24 8.49
Total earning assets....... 8.45% 7.87% 7.88% 8.64% 9.76% 10.52%
Time & savings deposits...... 4.06 3.38 3.63 4.47 5.88 6.69
Short-term borrowings........ 4.81 3.50 2.92 3.70 5.32 7.19
Long-term borrowings......... 6.03 5.17 7.51 8.26 9.77 10.19
Total interest cost........ 4.14 3.41 3.63 4.44 5.87 6.76
Total cost of all funds.... 3.54 2.89 3.11 3.87 5.16 5.90
Net interest margin...... 4.91% 4.98% 4.77% 4.77% 4.60% 4.62%
</TABLE>

* YIELDS ARE COMPUTED ON A FULLY TAXABLE EQUIVALENT BASIS USING THE RATES OF
35% FOR 1995 THROUGH 1993 AND 34% FOR 1992 THROUGH 1990.

<PAGE>

SIX-YEAR OPERATING INCOME SUMMARY

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

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990
% 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............... 282,372 88.3 251,383 87.3 247,699 86.3 263,4 84 87.7 242,792 91.0 234,025 92.4

Interest expense.............. 121,080 37.8 94,897 33.0 99,786 34.8 120,0 39 39.9 130,913 49.1 134,462 53.1

Net interest income........... 161,292 50.5 156,486 54.3 147,913 51.5 143,4 45 47.8 111,879 41.9 99,563 39.3
Provision for loan losses..... 5,632 1.8 4,788 1.7 5,788 2.0 11,3 89 3.8 6,671 2.5 7,884 3.1

Net interest income after
provision for loan losses... 155,660 48.7 151,698 52.6 142,125 49.5 132,0 56 44.0 105,208 39.4 91,679 36.2

Other Income:
Trust Department income..... 8,203 2.5 7,892 2.7 7,272 2.5 6,0 41 2.0 5,327 2.0 4,838 1.9
Service charges on
deposit accounts.......... 13,877 4.3 11,441 4.0 11,963 4.2 11,2 81 3.7 8,981 3.4 6,568 2.6
Other service
charges and fees.......... 9,839 3.1 9,921 3.4 12,163 4.2 12,6 89 4.2 5,954 2.2 4,054 1.6
Other operating income...... 5,720 1.8 8,161 2.8 7,794 2.8 6,7 90 2.3 4,441 1.7 3,867 1.5
Securities transactions..... (65) (0.0) (867) (0.3) 113 0.0 ( 35) (0.0) (730) (0.3) (37) 0.0
Total other income........ 37,574 11.7 36,578 12.6 39,305 13.7 36,7 66 12.2 23,973 9.0 19,290 7.6

Operating Expenses:
Salaries & benefits......... 62,126 19.4 63,042 21.8 61,511 21.4 55,4 57 18.4 46,236 17.3 41,105 16.2
Occupancy expense........... 6,305 2.0 6,014 2.1 6,206 2.2 6,1 99 2.1 4,315 1.6 3,360 1.3
Equipment expense........... 8,761 2.7 8,468 2.9 10,604 3.7 10,5 03 3.5 8,759 3.3 4,971 2.0
External computer costs..... 4,583 1.4 4,705 1.6 4,575 1.6 2,3 51 0.8 1,864 0.7 1,549 0.6
Other expense............... 37,816 11.8 37,927 13.2 42,254 14.7 41,0 28 13.7 30,872 11.6 27,873 11.0
Total operating expenses.. 119,591 37.3 120,156 41.7 125,150 43.6 115,5 38 38.5 92,046 34.5 78,858 31.1

Income before tax............. 73,643 23.1 68,120 23.5 56,280 19.6 53,2 84 17.7 37,135 13.9 32,111 12.7
Applicable income taxes....... 24,537 7.7 21,909 7.6 18,326 6.4 16,6 46 5.5 10,743 4.0 8,402 3.3

Net income.................... 49,106 15.4 46,211 15.9 37,954 13.2 36,6 38 12.2 26,392 9.9 23,709 9.4
</TABLE>
* ADJUSTED OPERATING INCOME EQUALS INTEREST INCOME PLUS OTHER INCOME.

<TABLE>
<CAPTION>
Per Share Summary
(in dollars, except average shares) 1995 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net income.......................... 2.86 2.70 2.20 2.13 1.72 1.55
Cash dividends...................... 1.04 0.94 0.84 0.70 0.62 0.59
Stock dividends..................... 0 0 50%/20% 0 0 0
Average shares...................... 17,174,000 17,132,000 17,237,000 17,211,000 15,361,000 15,296,000
</TABLE>

<PAGE>

SIX-YEAR AVERAGE BALANCE SHEET SUMMARY

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

<TABLE>
<CAPTION>
1995 1994 1993 1992 1991 1990
% of % of % of % of % of % of
Assets $ Total $ Total $ Total $ Total $ Total $ Total
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Loans:
Taxable...................... 2,397,405 65 2,202,716 62 2,032,527 58 1,929,592 57 1,549,386 56 1.373,880 56
Tax-exempt................... 33,977 1 34,430 1 31,153 1 30,351 1 32,443 1 30,316 1
Total loans................ 2,431,382 66 2,237,146 63 2,063,680 59 1,959,943 58 1,581,829 57 1,404,196 57
Less: Allowance for losses... 38,810 1 37,460 1 36,932 1 33,170 1 24,599 1 20,161 1
Total loans-net............ 2,392,572 65 2,199,686 62 2,026,748 58 1,926,773 57 1,557,230 56 1,384,035 56
Investment Securities:
Taxable...................... 810,089 22 874,901 25 973,890 28 966,198 29 740,927 27 634,354 26
Tax-exempt................... 187,180 5 176,079 5 100,577 3 83,261 2 93,893 3 110,709 4
Total securities........... 997,269 27 1,050,980 30 1,074,467 31 1,049,459 31 834,820 30 745,063 30
Federal funds sold & other..... 32,595 1 27,363 1 100,270 3 119,696 4 146,612 5 148,837 6
Total earning assets....... 3,422,436 93 3,278,029 93 3,201,485 92 3,095,928 92 2,538,662 91 2,277,935 92
Other assets................... 266,775 7 262,422 7 265,776 8 277,317 8 233,239 9 205,223 8
Total assets............. 3,689,211 100 3,540,451 100 3,467,261 100 3,373,245 100 2,771,901 100 2,483,158 100

Liabilities &
Shareholders' Equity
Interest Bearing Liabilities:
Time & savings deposits...... 2,625,910 71 2,518,539 71 2,498,420 72 2,455,775 73 2,047,057 74 1,828,345 74
Short-term borrowings........ 289,103 8 242,304 6 214,460 6 221,601 6 168,061 6 139,215 5
Long-term borrowings......... 11,416 0 22,931 1 36,088 1 25,703 1 15,653 0 21,342 1
Total interest bearing
liabilities.............. 2,926,429 79 2,783,774 78 2,748,968 79 2,703,079 80 2,230,771 80 1,988,902 80
Demand deposits................ 380,996 10 412,016 12 396,711 11 373,488 11 296,347 11 273,032 11
Other liabilities.............. 33,513 1 28,937 1 26,849 1 27,671 1 29,510 1 24,724 1
Total liabilities.......... 3,340,938 90 3,224,727 91 3,172,528 91 3,104,238 92 2,556,628 92 2,286,658 92
Shareholders' equity........... 348,273 10 315,724 9 294,733 9 269,007 8 215,273 8 196,500 8
Total liabilities &
shareholders' equity..... 3,689,211 100 3,540,451 100 3,467,261 100 3,373,245 100 2,771,901 100 2,483,158 100
</TABLE>

<PAGE>

DIRECTORS OF ONE VALLEY BANCORP

(Photo of the Board of Directors appears here)

SEATED LEFT TO RIGHT
Robert O. Orders, Sr.
CHIEF EXECUTIVE OFFICER,
ORDERS CONSTRUCTION COMPANY

Edward H. Maier
PRESIDENT, GENERAL CORPORATION

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

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

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

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

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

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

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

Angus E. Peyton
ATTORNEY, BROWN & PEYTON
STANDING LEFT TO RIGHT
James F. Brown, III
HONORARY MEMBER

James K. Brown
ATTORNEY, JACKSON & KELLY

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

Charles M. Avampato
PRESIDENT, CLAY FOUNDATION, INC.

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

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

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

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

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

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

James R. McCartney
HONORARY MEMBER

C. Michael Blair
CHAIRMAN OF THE BOARD,PRESIDENT , AND
CHIEF EXECUTIVE OFFICER,
ONE VALLEY BANK - NORTH

James Gabriel
PRESIDENT & CEO, GABRIEL BROTHERS, INC.

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

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

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

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

NOT PICTURED
Phillip H. Goodwin
PRESIDENT, CAMCARE AND
CHARLESTON AREA MEDICAL CENTER

David E. Lowe
PRESIDENT & CHIEF EXECUTIVE OFFICER,
GLADE SPRINGS RESORT & CONFERENCE CENTER

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

Mary Price Ratrie
HONORARY MEMBER

H. Bernard Wehrle, III
PRESIDENT, MCJUNKIN CORPORATION

<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

Laurance G. Jones
EXECUTIVE VICE PRESIDENT AND CHIEF FINANCIAL OFFICER

Robert E. Kamm, Jr.
SENIOR VICE PRESIDENT, ONE VALLEY BANCORP,
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, INC.

AFFILIATE MARKETS

(Photo appears here)

<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
Mary Price Ratrie

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

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

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

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

ONE VALLEY BANK, INC.
496 HIGH STREET
MORGANTOWN, WV 26505

Iona L. Bucklew
Jeffrey B. Carpenter
Samuel Chico, Jr.
Otis G. Cox, Jr.
Laurence S. DeLynn
George R. Farmer, Jr.
Arthur Gabriel
Trevelyn F. Hall, II
Wendell G. Hardway
Benjamin H. Hayes
Kenneth Juskowich
James L. Laurita, Sr.
John D. Lynch
Paul F. Malone
David Moffa
D.J. Moore
Thomas M. Prendergast
Howard A. Shriver
James M. Stevenson
Paul T. Swanson
Kenneth R. Summers*
Robert H. Thompson
Bernard G. Westfall
Brian K. Wilson

HONORARY MEMBERS

Michael E. Basile
John R. Carpenter
Sarah L. Crayton
James R. McCartney
Jordan C. Pappas
Carl J. Snyder
Hays Webb

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
Laurance G. Jones
William M. Kidd
Larry F. Mazza*
Ronald E. Ohl
Leonard J. Timms, Jr.

ONE VALLEY BANK, FSB
610 VIAND STREET
POINT PLEASANT, WV 25550

Phyllis H. Arnold
Gary L. Brown*
Brian J. Fox
Laurance G. Jones
William M. Kidd

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

Gary M. Ambler
Thomas E. Goodwin
Norman O. Nutter
Michael O'Brien
Donald E. Parker, Jr.
Henry E. Riffe
John L. Robertson*
Paul G. Robinson
David Sebert
Marion Shiflet

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

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

HONORARY MEMBERS

James W. Anderson
John C. Anderson
W. R. Cooke
Harry Finkelman
Richard V. Lilly
Fred McKenzie
Lawrence J. Pace
Guy B. Scyphers
Joseph C. Shaffer, Jr.

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
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
Ellen M. Parsons
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
Walter B. Ridenour
Robert A. Sanders
Philip T. Siebert
Clyde E. Smith, Jr.
Paul E. Tederick
C. Vincent Townsend

* 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, 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 Clarksburg, National Association, a national banking
association organized under the laws of the United States of America.

11) One Valley Thrift, Inc., a West Virginia corporation

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
18, 1996, included in the 1995 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 18, 1996, 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, 1995.

/s/ Ernst & Young LLP

Charleston, WV
March 18, 1996

<PAGE>

<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 year ended December 31, 1993.

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, 1995.

/s/ Crowe, Chizek and Company LLP

Columbus, Ohio
March 20, 1996

<PAGE>

<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
assets 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
<RESTATED>
<MULTIPLIER> 1000

<S> <C> <C> <C>
<PERIOD-TYPE> YEAR YEAR YEAR
<FISCAL-YEAR-END> DEC-31-1995 DEC-31-1994 DEC-31-1993
<PERIOD-END> DEC-31-1995 DEC-31-1994 DEC-31-1993
<CASH> 140617 178900 141195
<INT-BEARING-DEPOSITS> 8259 4297 8028
<FED-FUNDS-SOLD> 16800 24875 31145
<TRADING-ASSETS> 0 0 0
<INVESTMENTS-HELD-FOR-SALE> 871699 541201 0
<INVESTMENTS-CARRYING> 205153 445158 1060036
<INVESTMENTS-MARKET> 212040 422381 1081742
<LOANS> 2511962 2372957 2169372
<ALLOWANCE> 39534 37438 36484
<TOTAL-ASSETS> 3858296 3673241 3512876
<DEPOSITS> 3048336 2926479 2936735
<SHORT-TERM> 389780 375339 218420
<LIABILITIES-OTHER> 40467 30106 29749
<LONG-TERM> 13411 19450 22788
0 0 0
0 0 0
<COMMON> 180166 175384 175168
<OTHER-SE> 186136 146483 130016
<TOTAL-LIABILITIES-AND-EQUITY> 3858296 3673241 3512876
<INTEREST-LOAN> 219487 191392 182093
<INTEREST-INVEST> 61055 58954 62502
<INTEREST-OTHER> 1830 1037 3104
<INTEREST-TOTAL> 282372 251383 247699
<INTEREST-DEPOSIT> 106493 85221 90807
<INTEREST-EXPENSE> 121080 94897 99786
<INTEREST-INCOME-NET> 161292 156486 147913
<LOAN-LOSSES> 5632 4788 5788
<SECURITIES-GAINS> (65) (867) 113
<EXPENSE-OTHER> 119591 120156 125150
<INCOME-PRETAX> 73643 68120 56280
<INCOME-PRE-EXTRAORDINARY> 73643 68120 56280
<EXTRAORDINARY> 0 0 0
<CHANGES> 0 0 0
<NET-INCOME> 49106 46211 37954
<EPS-PRIMARY> 2.86 2.70 2.20
<EPS-DILUTED> 2.86 2.70 2.20
<YIELD-ACTUAL> 4.91 4.98 4.77
<LOANS-NON> 7174 7664 8819
<LOANS-PAST> 5582 3827 3180
<LOANS-TROUBLED> 0 552 597
<LOANS-PROBLEM> 0 0 0
<ALLOWANCE-OPEN> 37438 36484 35679
<CHARGE-OFFS> 5611 5985 7381
<RECOVERIES> 1840 2151 2398
<ALLOWANCE-CLOSE> 39534 37438 36484
<ALLOWANCE-DOMESTIC> 39534 37438 36484
<ALLOWANCE-FOREIGN> 0 0 0
<ALLOWANCE-UNALLOCATED> 0 0 0

</TABLE>

<PAGE>

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

NOTICE OF REGULAR ANNUAL MEETING OF SHAREHOLDERS
TO BE HELD APRIL 23, 1996

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 23, 1996, for the purpose of considering and voting upon
proposals:

1. To elect ten directors to serve for a term of three years and
until their successors are chosen and qualify.

2. To approve the appointment by the Board of Directors of Ernst &
Young LLP as independent Certified Public Accountants
for the year 1996.

3. To approve an amendment to the Articles of Incorporation to
change the corporate name of One Valley from One Valley
Bancorp of West Virginia, Inc., to One Valley Bancorp, Inc.

4. 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 5,
1996, 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 18, 1996

<PAGE>

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

PROXY STATEMENT
ANNUAL MEETING OF SHAREHOLDERS -- APRIL 23, 1996

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 23, 1996, 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
18, 1996. 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 ten management nominees as
directors for the terms specified, "FOR" the approval of the appointment of
Ernst & Young LLP as independent Certified Public Accountants, and "FOR" the
amendment of One Valley's Articles of Incorporation to change its corporate
title to One Valley Bancorp, Inc. 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 5, 1996, 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, 16,580,306 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, 3,251,018 shares of stock representing 19.61%
of the shares of One Valley outstanding. Of these shares, the banks hold
2,681,540 shares as co-trustee or co-executor and 569,478 shares as sole trustee
or sole executor (other principal holders of One Valley's stock are discussed
under "Principal Holders of Securities"). The 2,681,540 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 569,478 shares held by the
banks as sole trustee or sole executor, 509,349 shares (or 3.07% of the total
shares outstanding) will be voted by the banks, as trustee or executor, "FOR"
the election of the ten management nominees as directors, "FOR" the approval of
the appointment of Ernst & Young LLP as independent Certified Public
Accountants, and "FOR" the amendment of One Valley's Articles of
Incorporation to change its corporate title to One Valley Bancorp, Inc.
The remaining 60,129 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 20, 1996, the Board's
Executive Committee fixed at 28 the number of directors to constitute the full
Board of Directors of One Valley effective April 23, 1996. The term of Mr. John
T. Chambers as a director of One Valley expires at the 1996 Annual Meeting, and,
in accordance with One Valley's Directors Retirement Policy, he will not stand
for re-election.

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 ten
nominees have been nominated for three-year terms, and until their successors
are chosen and qualify. This will result in a Board composed of three classes
with nine directors in the class of 1997, nine directors in the class of 1998,
and ten directors in the class of 1999.

MANAGEMENT NOMINEES TO THE BOARD OF ONE VALLEY

Unless otherwise directed, the proxies will be voted "FOR" the election
of the following ten directors to serve for terms expiring at the Annual Meeting
of Shareholders in 1999, and until their successors are chosen and qualify.

SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
NOMINEES AGE SINCE EXPIRES LAST FIVE YEARS
<S> <C> <C> <C> <C> <C>
Phyllis H. Arnold 47 1993 None 1999 1991 to present - President and
Chief Executive Officer - One
Valley Bank, National Association;
formerly Executive Vice President -
One Valley Bank, National
Association, Charleston, WV

Charles M. Avampato 57 1984 None 1999 President - Clay Foundation, Inc.,
Charleston, WV (Charitable
Foundation)

James Gabriel 65 1993 None 1999 President and Chief Executive
Officer - Gabriel Brothers, Inc.,
Morgantown, WV (Retail Sales)

Thomas E. Goodwin 66 1985 None 1999 Chairman of the Board - One Valley
Bank of Ronceverte, National
Association, Ronceverte, WV

John D. Lynch 55 1986 None 1999 Vice President - Davis Lynch Glass
Company, Star City, WV

<PAGE>

SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
NOMINEES AGE SINCE EXPIRES LAST FIVE YEARS

Charles R. 54 1987 None 1999 President - The Neighborgall
Neighborgall, III Construction Company, Huntington,
WV (General Contractors)

James W. Thompson 68 1983 None 1999 Chairman of the Board - One Valley
Bank of Mercer County, Inc.,
Princeton, WV

J. Lee VanMetre, Jr. 58 1986 None 1999 Attorney - Steptoe & Johnson;
Secretary of the Board - One Valley
Bank - East, National Association,
Martinsburg, WV

H. Bernard Wehrle, III 44 1991 None 1999 President - McJunkin Corporation,
Charleston, WV (Industrial
Wholesaler)

John H. Wick, III 50 1993 (1) 1999 1992 to present - Vice President -
Dickinson Fuel Co., Inc.,
Charleston, WV; 1980 to 1992 -
Harrison & Bates, Inc., Richmond,
VA (Commercial Realtor)
</TABLE>

DIRECTORS CONTINUING TO SERVE UNEXPIRED TERMS

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

SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
DIRECTORS AGE SINCE EXPIRES LAST FIVE YEARS
<S> <C> <C> <C> <C>
Robert F. Baronner 69 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

<PAGE>

SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
DIRECTORS AGE SINCE EXPIRES LAST FIVE YEARS

C. Michael Blair, IV 53 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 66 1981 None 1998 Attorney - Jackson & Kelly,
Charleston, WV

Nelle Ratrie Chilton 56 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)

R. Marshall Evans, Jr. 54 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 55 1989 None 1998 President - CAMCARE and Charleston
Area Medical Center, Charleston, WV

Cecil B. Highland, Jr. 77 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. 44 1987 None 1997 President and Chief Executive
Officer - One Valley Bank of
Summersville, Inc., Summersville, WV

<PAGE>

SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
DIRECTORS AGE SINCE EXPIRES LAST FIVE YEARS

David E. Lowe 55 1993 None 1997 1995 to present - President and
Chief Executive Officer - Glade
Springs Resort and Conference
Center, Daniels, WV; 1993 to 1995,
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

Edward H. Maier 52 1983 None 1997 President - General Corporation,
Charleston, WV (Real Estate
Investment, Natural Gas Production)

J. Holmes Morrison 55 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. 70 1989 None 1998 Chief Executive Officer - Orders
Construction Co., St. Albans, WV

John L. D. Payne 57 1981 (2) 1998 President - Payne-Gallatin Mining
Co., Charleston, WV

Angus E. Peyton (3) 69 1981 None 1997 Attorney-Brown and Peyton,
Charleston, WV

Lacy I. Rice, Jr. 64 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>

SERVED FAMILY
AS A RELATIONSHIP
DIRECTOR WITH DIRECTORS PRINCIPAL
OF ONE AND OTHER YEAR IN OCCUPATION
VALLEY NOMINEES WHICH TERM OR EMPLOYMENT
DIRECTORS AGE SINCE EXPIRES LAST FIVE YEARS

Brent D. Robinson 48 1994 None 1998 1995 to present - President and
Chief Executive Officer - One
Valley Bank of Huntington,
Huntington, WV; 1993 to present -
Executive Vice President, One Valley;
formerly President, Chief Operating
Officer and Chief Financial Officer -
Mountaineer Bankshares of W.Va., Inc.

Richard B. Walker 57 1991 None 1997 Chairman of the Board and Chief
Executive Officer - Cecil I. Walker
Machinery

Thomas D. Wilkerson 67 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.

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. Directors are
elected by a plurality of votes cast, without regard to either broker non-votes,
or proxies as to which authority to vote for one or more of the nominees being
proposed is withheld.

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.

<PAGE>

One Valley commenced business on September 4, 1981, as a bank holding
company. The financial operations of One Valley in 1995 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, Inc.; One Valley Bank of Oak Hill, Inc.; One
Valley Bank of Summersville, Inc.; One Valley Bank - East, National Association;
One Valley Bank - North, Inc.; One Valley Bank of Clarksburg, National
Association; and One Valley Bank, F.S.B. On January 26, 1996, an Agreement and
Plan of Merger was executed pursuant to which CSB Financial Corporation,
Lynchburg, Virginia, agreed to merge with and into a wholly-owned subsidiary of
One Valley. It is anticipated that this merger will be consummated by the third
quarter of 1996.

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 1995. 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 1995. 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 six members, Robert
F. Baronner, Nelle Ratrie Chilton, Phillip H. Goodwin, J. Holmes Morrison, John
L. D. Payne and Angus E. Peyton, and met once in 1995. 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.

The Board of One Valley met seven times in 1995, and there were
numerous meetings of the Committees of the Board. During 1995, Directors
Gabriel, Lynch, VanMetre, Walker 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 1,289,801 shares, representing 7.78% of the issued and
outstanding stock of One Valley. The C. C. Dickinson Family Trusts collectively
hold 866,980 shares, representing 5.23% 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 5, 1996, 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.

<PAGE>

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 980,293(2) 5.91%
Kanawha Salines
Malden, WV 25306

Common Stock Charles C. Dickinson, III 903,040(3) 5.45%
1111 City National Building
Wichita Falls, Texas 76301

Common Stock Robert F. Goldsmith 866,343(4) 5.23%
1528 Dogwood Road
Charleston, WV 25314

Common Stock Ray M. Evans, Jr. 1,435,371(5) 8.66%
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 2,477,401 shares, or 14.94% of the total 16,580,306 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 37,455 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 75,102 shares owned by Dickinson Property
Limited Partnership in which Mary Price Ratrie is a beneficial owner.

(3) Consists of 36,060 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).

(4) Consists of 26,364 shares owned of record; 2,488 shares owned of record
by his wife; 837,491 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 837,491 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 5, 1996, and indicates the percentages of common stock so owned.
There is no other class of voting securities issued and outstanding.

<PAGE>

AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP (1) CLASS

Phyllis H. Arnold 45,075 Direct (2) *
145 Indirect

Charles M. Avampato 18,597 Direct *
3,015 Indirect

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

Frederick H. Belden, Jr. 20,020 Direct (3) *
136 Indirect

C. Michael Blair, IV 60,987 Direct (4) *
3,820 Indirect

James K. Brown 2,664 Direct *
1,252 Indirect

John T. Chambers 7,067 Direct *
850 Indirect

Nelle Ratrie Chilton 43,078 Direct *

R. Marshall Evans, Jr. 28,502 Direct 8.7%
1,406,869 Indirect (5)

James Gabriel 6,482 Direct *
1,300 Indirect
Phillip H. Goodwin 1,777 Direct *

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

Cecil B. Highland, Jr. 324,691 Direct 2.0%
7,511 Indirect

Laurance G. Jones 16,900 Direct (6) *
2,500 Indirect

Robert E. Kamm, Jr. 277,817 Direct (7) 1.8%
19,252 Indirect

David E. Lowe 833 Direct *

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

Edward H. Maier 10,000 Direct

J. Holmes Morrison 61,962 Direct (8) *
782 Indirect

<PAGE>

AMOUNT AND NATURE
OF BENEFICIAL PERCENT OF
NAME OF BENEFICIAL OWNER OWNERSHIP (1) CLASS

Charles R. Neighborgall, III 1,227 Direct *
2,688 Indirect

Robert O. Orders, Sr. 16,450 Direct *

John L. D. Payne 714 Direct 2.8%
457,484 Indirect (9)

Angus E. Peyton 35,177 Direct 1.2%
166,170 Indirect

Lacy I. Rice, Jr. 149,000 Direct *

Brent D. Robinson 27,105 Direct (10) *
682 Indirect

James W. Thompson 14,540 Direct *
4,216 Indirect

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

Richard B. Walker 1,837 Direct *

H. Bernard Wehrle, III 1,180 Direct *

John H. Wick, III 10,784 Direct *
40,205 Indirect

Thomas D. Wilkerson 1,800 Direct *

All Directors, Nominees and Executive 1,229,779 Direct
Officers as a Group (32 individuals) 1,771,857 Indirect 18.1%

*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 12,420 shares pursuant to One Valley's
1983 Stock Option Plan. Includes options to purchase 15,640 shares
pursuant to One Valley's 1993 Stock Option Plan.

(3) Includes options to purchase 4,960 shares pursuant to One Valley's 1983
Stock Option Plan. Includes options to purchase 12,160 shares pursuant
to One Valley's 1993 Stock Option Plan.

(4) Includes options to purchase 6,050 shares pursuant to One Valley's 1993
Stock Option Plan. Includes options to purchase 7,312 shares pursuant
to Mountaineer Bankshares of W.Va., Inc. Stock Option Plan.

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

<PAGE>

(6) Includes options to purchase 3,420 shares pursuant to One Valley's 1983
Stock Option Plan. Includes options to purchase 11,480 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 8,370 shares
pursuant to One Valley's 1993 Stock Option Plan.

(8) Includes options to purchase 27,750 shares pursuant to One Valley's
1983 Stock Option Plan. Includes options to purchase 27,500 shares
pursuant to One Valley's 1993 Stock Option Plan.

(9) Consists of 93,606 shares held in nine trusts of which John L. D. Payne
is a co-trustee, 363,158 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 88,031 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 7,800 shares pursuant to One Valley's 1993
Stock Option Plan. Includes options to purchase 4,500 shares pursuant
to Mountaineer Bankshares of W.Va., Inc. Stock Option Plan.

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, 1995, 1994, and 1993, of those persons who were, as of December 31, 1995,
(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
Award 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 1995 340,000 140,080 0 0 9,500 0 3,750
President & CEO 1994 315,000 110,250 0 0 9,000 0 5,476
1993 275,000 114,297 0 0 9,000 0 5,263

Phyllis H. Arnold 1995 205,000 78,925 0 0 5,500 0 3,750
Exec. Vice President 1994 190,000 63,840 0 0 5,100 0 4,531
1993 170,000 63,750 0 0 5,040 0 4,553

Frederick H. Belden, Jr.1995 164,000 54,858 0 0 4,200 0 3,750
Exec. Vice President 1994 156,000 47,190 0 0 4,000 0 4,691
1993 148,000 50,875 0 0 3,960 0 4,550

Laurance G. Jones 1995 160,000 49,440 0 0 4,200 0 3,750
Exec. Vice President 1994 150,000 43,313 0 0 3,800 0 4,687
1993 132,000 43,560 0 0 3,480 0 4,462

Brent D. Robinson 1995 156,000 46,800 0 0 4,000 0 3,750
Exec. Vice President 1994 150,000 41,250 29,311 0 3,800 0 49,121
1993 138,900 27,754 0 0 0 0 8,813
</TABLE>

<PAGE>

(1) The amount included for Mr. Robinson in "Other Annual Compensation" in
1994 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 participating employees receive a matching
contribution of 50% from One Valley for up to 5% of pay contributed to
the 401(k) Plan by the employee, to a maximum of $3,750 which
represents One Valley's matching share times $150,000, the maximum
compensation allowed for benefit calculation in a qualified plan. 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.

The following table sets forth further information on grants of stock
options during 1995 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
<TABLE>
<CAPTION>

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 ($/Sh) Date ($) ($) ($)
---- ----------- ----------- --------- -------- ----- -------- -------

J. Holmes Morrison 9,500 9.6% 30.25 4/28/05 0 180,880 458,280
Phyllis H. Arnold 5,500 5.6% 30.25 4/28/05 0 104,720 265,320
Frederick H. Belden, Jr. 4,200 4.2% 30.25 4/28/05 0 79,968 202,608
Laurance G. Jones 4,200 4.2% 30.25 4/28/05 0 79,968 202,608
Brent D. Robinson 4,000 4.0% 30.25 4/28/05 0 76,160 192,960

28 Optionees (including
the five listed above) 96,000 100% 30.25 4/28/05 0 1,827,840 4,631,040
One Optionee 3,000 31.88 11/21/05 0 60,150 152,490

All Shareholders - - - - 0 515,854,829 800,994,583

Optionee Gain as % of
All Shareholders Gain - - - - 0 0.60% 0.60%

</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.

<PAGE>

(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.

The following table sets forth information concerning (i) the value
realized upon the exercise of stock options during 1995 by the listed officers,
and (ii) the number of unexercised options held by each listed officer as of
December 31, 1995, 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
<TABLE>
<CAPTION>

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 3,570 57,393 55,250 500,439
Phyllis H. Arnold 6,300 121,921 28,060 225,885
Frederick H. Belden, Jr. 2,600 48,412 17,120 91,595
Laurance G. Jones 0 0 14,900 64,762
Brent D. Robinson 4,350 80,521 12,300 77,175

</TABLE>

- -------
(1) Market value of underlying securities at exercise, minus the exercise
or base price.

Compensation covered by a 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 except that for
this qualified plan, compensation relative to benefit calculation cannot exceed
$150,000. In 1995 this plan was amended to comply with revised IRS regulations.
As of November 1, 1995, the credited years of service under the retirement plan
for the individuals named in the table shown under Executive Compensation were:
Phyllis H. Arnold, 19.667 years; J. Holmes Morrison, 28.17 years; Frederick H.
Belden, Jr., 28 years; Laurance G. Jones, 26.33 years; and Brent D. Robinson,
7.833 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, (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 employer Long-Term
Disability Plan and the employee's Social Security benefit. During 1995,
$782,954 was paid into the SERP Trust, $550,539 of which was to fund future
benefits for Mr. Baronner who is already receiving benefit payments, and
$267,787 was accrued for future payment to the Trust.

<PAGE>

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, 1995, 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

<S> <C> <C> <C> <C> <C>
$125,000 $28,056 $37,408 $66,862 $66,862 $66,862
150,000** 34,056 45,408 83,112 83,112 83,112
175,000 34,056 45,408 99,362 99,362 99,362
200,000 34,056 45,408 115,612 115,612 115,612
225,000 34,056 45,408 131,862 131,862 131,862

250,000 34,056 45,408 148,112 148,112 148,112
300,000 34,056 45,408 180,612 180,612 180,612
400,000 34,056 45,408 245,612 245,612 245,612
450,000 34,056 45,408 278,112 278,112 278,112
500,000 34,056 45,408 310,612 310,612 310,612

</TABLE>

**IRS Maximum for Qualified Plan.

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 1995 and in fixing levels of executive compensation, the Committee
considered internal equity and external competitiveness of base compensation and
total compensation 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. In 1995 the Committee independently engaged a
third party consultant, Price Waterhouse LLP, to study the compensation and
benefits of the most senior executives of the corporation and to offer an
evaluation and recommendations for 1996.

Currently base compensation for executives of One Valley, while
competitive, is maintained below the average for similar positions within
comparable financial institutions. 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.

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

<PAGE>

shareholder value, and the Committee annually 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 1995
was based in large measure on the corporate results in 1994 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 $2.70 per share
and actual earnings per share were $2.70, which was 7.1% higher than 1993
earnings of $2.52 per share.

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, 1995, 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

There follows a chart containing the following plot points.

FISCAL YEAR ENDING
COMPANY 1990 1991 1992 1993 1994 1995

ONE VALLEY BANCORP 100 202 315 300 314 359
STANDARD & POOR'S 500 100 130 140 155 157 216
ALL PUBLICLY TRADED BANKS 100 141 168 199 189 267

</TABLE>

(Performance Graph appears here. See table above for the plot points.)

<PAGE>

COMPENSATION OF DIRECTORS

During 1995, 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
1995, 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 One
Valley's directors and executive officers, and persons who own more than ten
percent of a registered class of One Valley'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 One
Valley. Officers, directors and greater than ten percent shareholders are
required by SEC regulation to furnish One Valley with copies of all Section
16(a) forms they file.

To One Valley's knowledge, based solely upon review of the copies of
such reports furnished to One Valley and written representations that no other
reports were required, during the two fiscal years ended December 31, 1994, all
Section 16(a) filing requirements applicable to its officers, directors and
greater than ten percent beneficial owners were complied with.

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 1995,
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, 1995, were, in the aggregate,
19.6% 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 1995 and will perform similar services in
1996. On the basis of information provided by Messrs. Brown, Van Metre, Rice and
Highland, One Valley believes that less than five percent of the gross revenues
of those law firms did in 1995, and will in 1996, 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 1995, One Valley's affiliate banks, and One Valley Square, Inc.,
paid $106,153 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 1995, The Neighborgall Construction Co. received
payments of $1,968 from One Valley's affiliate, One Valley Bank of Huntington,
Inc., for repair work to facilities owned by the bank. It is anticipated that
additional payments will be made in 1996 to TerraCare, Inc., and

<PAGE>

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
LLP to serve as independent auditors for One Valley for 1996 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 LLP 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 LLP 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 LLP.

3. PROPOSAL TO APPROVE CHANGE OF CORPORATE NAME

Following its incorporation in 1981, One Valley has conducted
operations under the corporate title "One Valley Bancorp of West Virginia, Inc."
By Agreement in Lieu of Meeting made as of February 20, 1996, the Board of
Directors unanimously adopted a resolution which approved for submission to a
vote of the shareholders a proposal to amend Article I of the Articles of
Incorporation of One Valley to change its corporate name to "One Valley Bancorp,
Inc."

The Board of Directors of One Valley believes that deleting the phrase
"of West Virginia" from its corporate name is consistent with One Valley's
expanding interstate activity and with the current status of banking laws and
regulations. At the time of One Valley's formation in 1981, the laws of the
State of West Virginia did not permit branch banking or interstate operations.
Since that time, banking laws have been modernized, and with the passage of the
Riegle-Neal Interstate Banking and Branching Efficiency Act of 1994,
full-fledged interstate banking will be a reality in the near future. As
previously noted, One Valley has executed an Agreement and Plan of Merger to
acquire all of the outstanding shares of CSB Financial Corporation in Lynchburg,
Virginia.

One Valley has had and continues to have discussions with various
banks, both within and outside the State of West Virginia, regarding the
possible acquisition of additional banking subsidiaries and branch facilities.
The proposed change to its corporate name should facilitate any interstate
acquisitions and will more accurately reflect the expanding scope of One
Valley's operations beyond the State of West Virginia.

The Board recommends that Article I of the Articles of Incorporation of
One Valley be amended and restated in its entirety to read as follows:

"The name of the corporation shall be One Valley Bancorp,
Inc."

and that the amendment to Article I be approved by the shareholders.

An affirmative vote of a majority of the outstanding shares of One
Valley Common Stock is required to approve the amendment. Shares voted "ABSTAIN"
and shares not voted will have the same effect as if these shares were voted
"AGAINST" approval of the amendment.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS THAT SHAREHOLDERS VOTE
"FOR" APPROVAL OF THIS PROPOSAL. The enclosed proxy will be voted "FOR" the
approval of the proposed change in corporate title unless otherwise directed.

<PAGE>

FORM 10-K ANNUAL REPORT TO THE SECURITIES AND EXCHANGE COMMISSION

Upon written request by any shareholder to Laurance G. Jones,
Treasurer, One Valley, P. O. Box 1793, Charleston, West Virginia 25326,
a copy of One Valley's 1995 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 1997

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
17, 1996, to have it considered for inclusion in the proxy statement of the
Annual Meeting in 1997.

J. Holmes Morrison
PRESIDENT
Charleston, West Virginia
March 18, 1996

<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 statements of income, changes
in shareholders' equity and cash flows for the year ended December 31, 1993
of Mountaineer Bankshares of W. Va., Inc. We also audited the December 31,
1993 balance sheet which is not presented herein. 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 audit.

We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence supporting
the amounts and disclosures in the financial statements. An audit also includes
assessing the accounting principles used and significant estimates made by
management, as well as evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.

In our opinion, the consolidated financial statements present fairly, in all
material respects the consolidated results of Mountaineer Bankshares
of W. Va., Inc.'s operations and its cash flows for the year 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 post-retirement
benefits other than pensions.

/s/ Crowe, Chizek and Company LLP

Columbus, Ohio
February 4, 1994

<PAGE>