FIRST OF AMERICA BANK CORP /MI/, 424B3, 1994-01-21

FIRST OF AMERICA BANK CORP /MI/
424B3, 1994-01-21
NATIONAL COMMERCIAL BANKS

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<PAGE> 1

[LGF BANCORP, INC. LETTERHEAD]

January 14, 1994

Filed Pursuant to Rule 424(b)(3)
Dear Shareholder, Registration No. 33-51537

You are cordially invited to attend a Special Meeting of Shareholders of
LGF Bancorp, Inc. ("LGF"), to be held at the Holiday Inn-Countryside located at
6201 Joliet Road, Countryside, Illinois, on February 24, 1994 at 2:00 p.m. local
time.

The purpose of the meeting is to consider and vote upon approval of an
Agreement and Plan of Reorganization and related Agreement and Plan of Merger
under which LGF will merge with a wholly owned subsidiary of First of America
Bank Corporation of Kalamazoo, Michigan. If the proposed merger is consummated,
each share of LGF Common Stock will be converted into 0.8754 shares of First of
America Common Stock as described in the accompanying Prospectus/Proxy
Statement. Such a 0.8754 fractional share of First of America Common Stock had a
market value of $36.44 on October 11, 1993, the last trading day before the
public announcement of the proposed merger, based on the closing trading price
on the New York Stock Exchange for First of America Common Stock. On January 6,
1994, such a fractional share of First of America Common Stock had a market
value of $33.05, based on the closing trading price on the New York Stock
Exchange.

Your Board of Directors believes that the proposed merger is in the best
interests of LGF and its shareholders and has unanimously approved the proposed
merger. The Board has also received the opinion of Capital Resources Group, Inc.
to the effect that the terms of the proposed merger are fair, from a financial
point of view, to LGF's shareholders. Attached are a Notice of the meeting and a
Prospectus/Proxy Statement containing information about the proposed merger and
First of America Bank Corporation. Whether or not you plan to attend the
meeting, please mark, sign, date and promptly return the enclosed proxy.

THE BOARD OF DIRECTORS UNANIMOUSLY RECOMMENDS A VOTE FOR APPROVAL OF THE
PROPOSED MERGER.

IN ORDER TO ASSURE THAT YOUR SHARES WILL BE REPRESENTED AND VOTED AT THE
MEETING, PLEASE MARK, SIGN AND DATE THE ENCLOSED PROXY, AND MAIL IT IN THE
RETURN ENVELOPE PROVIDED. A FAILURE TO VOTE WILL BE THE EQUIVALENT OF A VOTE
AGAINST THE MERGER.

Very truly yours,

J. Edward Weishel
Chairman, President
and Chief Executive Officer
<PAGE> 2

LGF BANCORP, INC.
ONE NORTH LA GRANGE ROAD
LA GRANGE, ILLINOIS 60525
(708) 352-3671

NOTICE OF SPECIAL MEETING OF SHAREHOLDERS

TO BE HELD FEBRUARY 24, 1994

A Special Meeting of Shareholders of LGF Bancorp, Inc. ("LGF") will be
held at the Holiday Inn-Countryside, located at 6201 Joliet Road, Countryside,
Illinois, on February 24, 1994 at 2:00 p.m. local time, for the following
purposes:

(1) voting upon approval of the Agreement and Plan of Reorganization
and the Agreement and Plan of Merger, both dated as of October 12, 1993, among
First of America Bank Corporation, First of America Acquisition Company and LGF
("the Merger Agreement") as described in the accompanying Prospectus/Proxy
Statement; and

(2) transacting such other business as properly may come before the
meeting or any adjournment thereof.

Only holders of record of LGF Common Stock at the close of business on
January 7, 1994, are entitled to notice of and to vote at the meeting.

In order to assure that your shares will be represented and voted at
the meeting, please mark, sign and date the enclosed proxy, and mail it in the
return envelope provided. A failure to vote will be the equivalent of a vote
against the Merger.

Dated: January 14, 1994

By order of the Board of Directors

J. Edward Weishel
Chairman, President
and Chief Executive Officer

<PAGE> 3
PROSPECTUS/PROXY STATEMENT

<TABLE>
<S> <C>
FIRST OF AMERICA LGF BANCORP, INC.
BANK CORPORATION One North La Grange Road
211 South Rose Street La Grange, Illinois 60525
Kalamazoo, Michigan 49007 (708) 352-3671
(616) 376-9000

PROSPECTUS PROXY STATEMENT
Up to 1,662,203 Shares of for the Special Meeting
First of America Bank Corporation of Shareholders
Common Stock to be held February 24, 1994
</TABLE>

This Prospectus/Proxy Statement is a proxy statement furnished at the
direction of the Board of Directors of LGF Bancorp, Inc. ("LGF") in connection
with the solicitation of proxies from its shareholders to be voted at a Special
Meeting of Shareholders of LGF to be held on February 24, 1994 (the "Special
Meeting"), and at any adjournment thereof, for the purpose of considering and
voting upon approval of the Agreement and Plan of Reorganization and the
Agreement and Plan of Merger, both dated as of October 12, 1993, among First of
America Bank Corporation ("First of America"), First of America Acquisition
Company ("Acquisition Sub") and LGF (hereinafter collectively called the
"Merger Agreement"). This Prospectus/Proxy Statement is first being released to
LGF shareholders on or about January 14, 1994.

This Prospectus/Proxy Statement is a prospectus of First of America
relating to its offering of shares of its Common Stock, $10 par value ("First
of America Common Stock"), to holders of the Common Stock of LGF, $.01 par
value ("LGF Common Stock"), and to the holders of options to purchase LGF
Common Stock, in connection with the proposed merger of LGF into Acquisition
Sub (the "Merger"). If the Merger Agreement is approved by the requisite vote
of LGF shareholders and if, following satisfaction of certain conditions, the
Merger is consummated, issued and outstanding shares of LGF Common Stock and
outstanding options to purchase LGF Common Stock will be converted into and
exchanged for shares of First of America Common Stock, as described herein and
in the Merger Agreement.

NO PERSON HAS BEEN AUTHORIZED TO GIVE ANY INFORMATION OR TO MAKE ANY
REPRESENTATION OTHER THAN AS CONTAINED HEREIN, AND IF GIVEN OR MADE, SUCH
INFORMATION OR REPRESENTATION SHOULD NOT BE RELIED UPON. THIS PROSPECTUS/PROXY
STATEMENT DOES NOT CONSTITUTE AN OFFER TO SELL OR A SOLICITATION OF AN OFFER TO
BUY ANY OF THE SECURITIES OFFERED BY THIS PROSPECTUS/PROXY STATEMENT IN ANY
STATE OR TO ANY PERSON IN WHICH OR TO WHOM IT WOULD BE UNLAWFUL TO MAKE SUCH AN
OFFER OR SOLICITATION. THE DELIVERY OF THIS PROSPECTUS/PROXY STATEMENT AT ANY
TIME DOES NOT IMPLY THAT THE INFORMATION INCLUDED HEREIN IS CORRECT AS OF ANY
TIME AFTER ITS DATE.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
NOR HAS THE SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES
COMMISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

The date of this Prospectus/Proxy Statement is January 7, 1994.

<PAGE> 4
AVAILABLE INFORMATION

First of America and LGF are subject to the informational requirements
of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and,
in accordance therewith, file reports, proxy statements and other information
with the Securities and Exchange Commission (the "Commission"). First of
America also files these reports and other information with the New York Stock
Exchange ("NYSE"), and LGF files these reports and other information with the
National Association of Securities Dealers, Inc. These reports, proxy and
information statements, and other information can be inspected and copied at
the public reference facilities maintained by the Commission at Room 1024, 450
Fifth Street, N.W., Washington, D.C. 20549, and at certain of its regional
offices located at 7 World Trade Center, 12th Floor, New York, New York 10048
and Northwestern Atrium Center, 500 West Madison Street, Suite 1400, Chicago,
Illinois 60661-2511. In addition, material filed by First of America can be
inspected at the offices of the NYSE, 20 Broad Street, New York, New York 10005
and material filed by LGF can be inspected at the offices of the National
Association of Securities Dealers, Inc. at 1735 K. Street, N.W., Washington
D.C. 20006.

First of America has filed a registration statement on Form S-4 (the
"Registration Statement") under the Securities Act of 1933, as amended (the
"Securities Act"), with respect to the First of America Common Stock issuable
in the Merger. This Prospectus/Proxy Statement does not contain all of the
information set forth in the Registration Statement, certain parts of which are
omitted in accordance with the rules and regulations of the Commission. The
Registration Statement, including the exhibits filed or incorporated by
reference as a part thereof, can be inspected at the public reference
facilities of the Commission set forth above and copies of which can be
obtained from the Public Reference Section of the Commission at prescribed
rates.

INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE

The following documents, filed with the Commission by First of America
(File No. 1-10534) pursuant to the Exchange Act, are incorporated herein by
reference:

(1) First of America's Annual Report on Form 10-K for the year ended
December 31, 1992;

(2) First of America's Quarterly Reports on Form 10-Q for the
quarters ended March 31, 1993, June 30, 1993 and September 30, 1993;
and

(3) the description of First of America Common Stock and First of
America Series A Junior Participating Preferred Stock Purchase Rights
contained in First of America's Registration Statements on Form 8-A
dated April 30, 1990 and July 18, 1990, respectively, filed with
respect to such securities pursuant to Section 12 of the Exchange Act,
and all amendments or reports filed for purposes of updating such
descriptions.

All documents filed by First of America pursuant to Sections 13(a),
13(c), 14, or 15(d) of the Exchange Act after the date of this Prospectus/Proxy
Statement and before the Special Meeting are hereby incorporated by reference,
and such documents are deemed to be a part hereof from the date of filing of
such documents. Any statement contained in a document incorporated or deemed to
be incorporated by reference herein shall be modified or superseded for the
purposes of this Prospectus/Proxy Statement to the extent that a statement
contained herein or in any other subsequently filed document which is or is
deemed to be incorporated by reference herein modifies or supersedes such
statement. Any such statement so modified or superseded shall not, except as so
modified or superseded, constitute a part of this Prospectus/Proxy Statement.

THIS PROSPECTUS/PROXY STATEMENT INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. COPIES OF THESE
DOCUMENTS, OTHER THAN EXHIBITS TO SUCH DOCUMENTS, ARE AVAILABLE WITHOUT CHARGE
ON WRITTEN OR ORAL REQUEST OF ANY PERSON, INCLUDING ANY BENEFICIAL OWNER, TO
WHOM THIS PROSPECTUS/PROXY STATEMENT IS DELIVERED, FROM RICHARD D. KLEIN, VICE
CHAIRMAN, FIRST OF AMERICA BANK CORPORATION, 211 SOUTH ROSE STREET, KALAMAZOO,
MICHIGAN 49007 (616) 376-9000. IN ORDER TO ENSURE TIMELY DELIVERY OF THE
DOCUMENTS, ANY REQUEST SHOULD BE MADE BY FEBRUARY 17, 1994.

<PAGE> 5
TABLE OF CONTENTS

<TABLE>
<CAPTION>
<S> <C>
SUMMARY OF THE PROSPECTUS/PROXY STATEMENT . . . . . . . . . . . . . . . . . . . . . . . v
The Parties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Background of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Related Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . v
Consideration to be Received in the Merger . . . . . . . . . . . . . . . . . . vi
Fairness Opinion to LGF . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
Interests of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . vi
First of America Common Stock . . . . . . . . . . . . . . . . . . . . . . . . vi
Market for First of America and LGF Common Stock . . . . . . . . . . . . . . . vii
Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Recommendation of LGF Board of Directors . . . . . . . . . . . . . . . . . . . vii
No Rights of Dissenting Shareholders . . . . . . . . . . . . . . . . . . . . vii
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . vii
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . vii
Other Conditions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . viii
Termination, Modification, Amendment, and Waiver . . . . . . . . . . . . . . . viii

SELECTED FINANCIAL INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . ix

EQUIVALENT PER SHARE DATA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . x

THE SPECIAL MEETING, PROXIES, VOTING, AND CERTAIN SHAREHOLDERS . . . . . . . . . . . . 1
The Special Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Voting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
Certain Shareholders. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Parties to the Merger Agreement . . . . . . . . . . . . . . . . . . . . . . . 4
Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Background of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Related Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Consideration to be Received in the Merger . . . . . . . . . . . . . . . . . . 6
Fairness Opinion to LGF . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Interests of Management . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Shareholder Approval . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
Recommendation of LGF Board of Directors . . . . . . . . . . . . . . . . . . . 11
No Rights of Dissenting Shareholders . . . . . . . . . . . . . . . . . . . . 11
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . 12
Other Conditions to the Merger . . . . . . . . . . . . . . . . . . . . . . . . 13
Business of LGF Pending the Merger . . . . . . . . . . . . . . . . . . . . . . 14
Termination, Modification, Amendment, and Waiver . . . . . . . . . . . . . . . 15
Effectiveness of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . 15
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Surrender of Stock Certificates . . . . . . . . . . . . . . . . . . . . . . . 15
Surrender of Option Rights . . . . . . . . . . . . . . . . . . . . . . . . . . 15
Resale of the First of America Common Stock . . . . . . . . . . . . . . . . . 16
</TABLE>

ii
<PAGE> 6
<TABLE>
<CAPTION>
DESCRIPTION AND COMPARISON OF
<S> <C> <C>
FIRST OF AMERICA CAPITAL STOCK AND LGF CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
First of America Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
First of America Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
First of America Shareholder Rights Plan . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
LGF Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
LGF Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18

COMPARISON OF CERTAIN PROVISIONS OF FIRST OF AMERICA'S ARTICLES OF
INCORPORATION AND BYLAWS AND LGF'S CERTIFICATE OF INCORPORATION AND BYLAWS . . . . . . . . . . . . . . . . . . . . . . . . 18
Board of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Action By Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
Supermajority Approval of Certain Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Amendment or Repeal of Certain Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Other Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Overall Comparison and Effects of First of America Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . 21

COMPARISON OF THE MICHIGAN BUSINESS CORPORATION ACT
AND THE DELAWARE GENERAL CORPORATION LAW . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Dissenters' Rights of Appraisal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Supermajority Voting Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Action Without a Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Transactions with Interested Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
Control Share Acquisitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23

INFORMATION ABOUT FIRST OF AMERICA . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Incorporation of Certain Information by Reference . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

INFORMATION ABOUT LGF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
General. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Market Area . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Lending Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
Non-performing and Problem Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
Investment Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
Sources of Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
Borrowings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Subsidiary . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
Competition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Personnel . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47

LGF'S MANAGEMENT DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Asset/Liability Management. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
Interest Rate Sensitivity Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 49
Average Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50
Rate/Volume Analysis . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52
Comparison of Operating Results for the Nine Months Ended September 30, 1993 and 1992 . . . . . . . . . . . . . . 53
Comparison of Operating Results For the Years Ended December 31, 1992 and 1991 . . . . . . . . . . . . . . . . . . 54
Comparison of Operating Results For the Years Ended December 31, 1991 and December 31, 1990 . . . . . . . . . . . 55
Liquidity and Capital Resources . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56
Impact of Inflation and Changing Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57
</TABLE>

iii

<PAGE> 7

<TABLE>
<CAPTION>
<S> <C> <C>
REGULATION OF FIRST OF AMERICA AND LGF . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Bank Holding Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Savings and Loan Holding Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58
Banks . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Savings Associations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59
Transactions with Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Capital Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 60
Prompt Corrective Action . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Standards for Safety and Soundness . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Other Limitations Based on Capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Audit and Reporting Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
Reserve Requirements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Deposit Insurance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Dividend Regulation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Monetary Policy and Economic Conditions . . . . . . . . . . . . . . . . . . . . . . . . . 67

OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Fees and Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Sources of Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

LEGAL MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF
LGF BANCORP, INC. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1

EXHIBIT A
Opinion of Capital Resources Group, Inc. . . . . . . . . . . . . . . . . . . . . . . . . . A-1

EXHIBIT B
Agreement and Plan of Reorganization and Agreement and Plan of Merger Among First
of America Bank Corporation, First of America Acquisition Company and LGF
Bancorp, Inc., Dated as of October 12, 1993 . . . . . . . . . . . . . . . . . . . . . . . B-1

</TABLE>

iv
<PAGE> 8
SUMMARY OF THE PROSPECTUS/PROXY STATEMENT

This Prospectus/Proxy Statement contains information about the Special
Meeting, the Merger, First of America Common Stock, LGF Common Stock, First of
America, and LGF. The following summary does not purport to be complete and is
qualified in its entirety by the specific provisions of the full text of this
Prospectus/Proxy Statement, the documents incorporated herein by reference, and
the exhibits attached hereto.

THE PARTIES. First of America is a Michigan corporation and a
registered bank holding company under the federal Bank Holding Company Act of
1956, as amended (the "Bank Holding Company Act"). Its corporate headquarters
are located at 211 South Rose Street, Kalamazoo, Michigan 49007. Its telephone
number is (616) 376-9000. At September 30, 1993, it owned 20 banks located in
Michigan, Indiana, and Illinois (the "FOA Banks"). At September 30, 1993, the
consolidated assets of First of America totaled $21.1 billion. See
"Information About First of America."

Acquisition Sub is a Delaware corporation wholly owned by First of
America. Its sole purpose is to facilitate First of America's acquisition of
LGF through the Merger.

LGF is a Delaware corporation and a unitary savings and loan holding
company under the federal Home Owners Loan Act of 1933, as amended ("HOLA").
Its corporate headquarters are located at One North La Grange Road, La Grange,
Illinois 60525. Its telephone number is (708) 352-3671. LGF owns 100 percent
of the stock of and operates La Grange Federal Savings and Loan Association
("La Grange Federal"). At September 30, 1993, LGF's consolidated assets totaled
$412.0 million. See "Information About LGF."

THE MERGER. The Merger Agreement provides for the merger of LGF into
Acquisition Sub, with Acquisition Sub designated as the surviving corporation.
On the effective date of the Merger, First of America will continue its
existing business, LGF will be merged into Acquisition Sub and cease to exist,
and Acquisition Sub will continue to be a wholly owned subsidiary of First of
America. The Merger Agreement also provides that immediately following
effectiveness of the Merger, La Grange Federal will be merged with First of
America Bank -Kankakee/Will County, N.A. ("First of America-Kankakee"), an
existing national bank subsidiary of First of America (the "Bank Merger"). The
main office and the branch facilities of La Grange Federal will be maintained
as branch facilities of First of America-Kankakee. See "The Merger--Merger."

BACKGROUND OF THE MERGER. LGF, through its financial advisor, Capital
Resources Group, Inc. ("Capital Resources"), solicited and received indications
of interest concerning the acquisition of LGF from First of America and other
financial institution holding companies. After consulting with Capital
Resources and legal counsel, LGF negotiated a proposed Merger Agreement with
First of America. Following an in-depth analysis, review and discussion of
such agreement by and among Capital Resources, LGF's legal counsel and its
board of directors, including Capital Resources' advice that the Merger
Agreement was fair, from a financial point of view, to holders of LGF Common
Stock, the board of directors of LGF unanimously voted to accept the Merger
Agreement proposed by First of America. See "The Merger--Background of the
Merger, Fairness Opinion to LGF."

RELATED AGREEMENTS. In fulfillment of a condition to First of
America's execution of the Merger Agreement, LGF issued a warrant (the
"Warrant") to First of America pursuant to a Warrant Agreement dated as of
October 12, 1993 (the "Warrant Agreement"). The Warrant entitles First of
America to purchase an aggregate of 439,574 shares of LGF Common Stock at a
price of $28.00 per share upon the occurrence of certain events set forth in
the Warrant Agreement, including, but not limited to, the acquisition of 10% of
or the right to acquire 10% of the outstanding LGF Common Stock by a third
party, the failure of LGF shareholders to approve the Merger Agreement
following a proposal by a third party to acquire 10% or more of the LGF Common
Stock or to otherwise acquire LGF, the execution of an agreement by LGF with
another party for the acquisition of LGF by such party, or the withdrawal,
revocation, or material modification by LGF's Board of Directors of its
approval or recommendation to shareholders of the Merger Agreement. The
Warrant terminates upon the earliest occurring of certain events set forth in
the Warrant Agreement, including, but not limited to, the date two years after
an event entitling First of America to exercise the Warrant and the date the
Merger is consummated. A copy of the Warrant

v
<PAGE> 9
Agreement and the Warrant are attached as Exhibit C to the Merger Agreement
attached to this Prospectus/Proxy Statement as Exhibit B. See "The
Merger--Related Agreements."

CONSIDERATION TO BE RECEIVED IN THE MERGER. The Merger Agreement
provides that upon effectiveness of the Merger, each issued and outstanding
share of LGF Common Stock will be converted into and exchanged for .8754 shares
(the "Exchange Ratio") of First of America Common Stock, except that cash will
be paid in lieu of issuing fractional shares of First of America Common Stock.
The Merger Agreement further provides that upon effectiveness of the Merger,
each outstanding option to purchase LGF Common Stock will be converted into and
exchanged for .6322 shares (the "Option Exchange Ratio") of First of America
Common Stock.

The Exchange Ratio and the Option Exchange Ratio were determined
through the parties' negotiation of the Merger Agreement (see "The
Merger--Background of the Merger"). These terms reflect First of America's and
LGF's judgments as to the value of the shares of LGF Common Stock relative to
the historical and anticipated market price of First of America Common Stock.
See "The Merger--Termination, Modification, Amendment and Waiver."

FAIRNESS OPINION TO LGF. LGF engaged Capital Resources, as its
financial advisor, on August 27, 1993, to assist LGF's Board of Directors in
the possible sale of LGF. In this connection, Capital Resources delivered its
oral advice on October 12, 1993 and its written opinion, dated January 4, 1994,
to LGF's Board of Directors, stating that the terms of the Merger Agreement
are fair, from a financial point of view, to holders of LGF Common Stock. LGF
shareholders are urged to read the opinion of Capital Resources, which is
attached to this Prospectus/Proxy Statement as Exhibit A, for a description of
the procedures followed, matters considered, and qualifications and limitations
on the review undertaken in connection therewith. See "The Merger--Fairness
Opinion to LGF."

INTERESTS OF MANAGEMENT. Certain members of the management and the
Board of Directors of LGF have certain interests in the Merger that are in
addition to their interests as stockholders of LGF generally. These interests
include, among others, provisions in the Merger Agreement relating to
indemnification, continuation of certain change in control and employment
contracts upon consummation of the Merger, or the receipt of benefits pursuant
to such agreements as a result of the Merger, and the appointment of all of the
members of the La Grange Federal Board of Directors to the First of America -
Kankakee Board of Directors. In addition, the outside directors of the La
Grange Federal board will be considered retired at the effective date of the
Merger and will be eligible to receive benefits under La Grange Federal Savings
and Loan Association Directors' Consultation and Retirement Plan. The amounts
to be received by the various executive officers and directors of LGF pursuant
to the foregoing arrangement are described in greater detail under "The
Merger-Interests of Management."

FIRST OF AMERICA COMMON STOCK. Subject to the rights of the holders of
any First of America preferred stock when outstanding (the "First of America
Preferred Stock") to vote in event of dividend arrearages and when specifically
required by the Michigan Business Corporation Act, as amended (the "Michigan
Act"), holders of First of America Common Stock have exclusive voting rights.
Holders of First of America Common Stock elect approximately one-third of the
Board of Directors for a three year term at each annual meeting. Subject to the
rights of the holders of First of America Preferred Stock when outstanding,
holders of First of America Common Stock are entitled to receive dividends if
and when declared by First of America's Board of Directors out of any funds
legally available therefor. Subject to the rights of the holders of First of
America Preferred Stock when outstanding, holders of First of America Common
Stock are entitled to receive pro rata upon liquidation all of the assets of
First of America remaining after provision for the payment of creditors.
Holders of First of America Common Stock have no preemptive rights to
subscribe to any additional shares which First of America may issue. Under the
Michigan Act, holders of First of America Common Stock generally have no
dissenters' rights of appraisal because First of America Common Stock is held
of record by more than 2,000 persons. See "Description and Comparison of First
of America Capital Stock and LGF Common Stock--First of America Common Stock."

Certain provisions of First of America's Articles of Incorporation and
Bylaws and First of America's Shareholder Rights Plan may have the effect of
rendering more difficult or discouraging a merger proposal involving First of
America, a tender offer for the voting stock of First of America, or a proxy
contest for control of First of

vi
<PAGE> 10
America's Board of Directors. LGF's Certificate of Incorporation and Bylaws
generally contain provisions that may have similar anti-takeover effects. LGF
does not, however, have a shareholder rights plan. See "Comparison of Certain
Provisions of First of America's Articles of Incorporation and Bylaws and LGF's
Articles of Incorporation and Bylaws" and "Description and Comparison of First
of America Capital Stock and LGF Common Stock--First of America Shareholder
Rights Plan."

MARKET FOR FIRST OF AMERICA AND LGF COMMON STOCK. First of America
Common Stock is listed for trading on the NYSE (symbol FOA). The high, low, and
closing sales prices for First of America Common Stock on December 31, 1993
were $39.375, $39.125 and $39.25, respectively. On October 11, 1993 the last
full trading day before public announcement of the Merger, the high, low, and
closing sales prices were $41.75, $41.50 and $41.625, respectively.

Price quotations for LGF Common Stock are reported on the Nasdaq
National Market (symbol LGFB). The last sale price reported on December 31,
1993, was $32.75. On October 11, 1993, the last full trading day before public
announcement of the Merger Agreement, the reported last sale price was $28.50.
See "Description and Comparison of First of America Capital Stock and LGF
Capital Stock--First of America Common Stock,--LGF Common Stock."

SHAREHOLDER APPROVAL. At the Special Meeting, LGF shareholders will
vote on approval of the Merger Agreement. Under the Delaware General
Corporation Law, as amended (the "Delaware Law"), and under LGF's Certificate
of Incorporation, the affirmative vote of holders of a simple majority of the
outstanding shares of LGF Common Stock entitled to vote is required for
approval of the Merger Agreement. Therefore, a failure to return a properly
executed proxy card, or to vote in person at the Special Meeting will have the
same effect as a vote against the Merger. At January 7, 1994, the record date
for the Special Meeting, there were 1,762,990 shares of LGF Common Stock
outstanding and entitled to vote at the Special Meeting. Therefore, the
affirmative vote of holders of at least 881,496 shares of LGF Common Stock
is required for approval of the Merger Agreement. As of December 31, 1993, all
directors and executive officers of LGF as a group beneficially owned 326,086
shares of LGF Common Stock (or 17.7 percent of the outstanding shares). See
"The Merger--Shareholder Approval." None of First of America's executive
officers or directors own any shares of LGF Common Stock.

RECOMMENDATION OF LGF BOARD OF DIRECTORS. The Board of Directors of
LGF has unanimously approved the Merger Agreement and unanimously recommends
that shareholders vote for approval of the Merger Agreement. See "The
Merger--Recommendation of LGF Directors."

NO RIGHTS OF DISSENTING SHAREHOLDERS. Holders of LGF Common Stock who
do not vote in favor of approval of the Merger Agreement or who otherwise
object to the Merger have no right to demand appraisal of or cash payment for
their shares in the event the Merger is consummated. See "The Merger--No Rights
of Dissenting Shareholders."

FEDERAL INCOME TAX CONSEQUENCES. The Merger Agreement provides, as a
condition to the parties' obligations to consummate the Merger, that the
parties shall have received an opinion from counsel to First of America that
the Merger will qualify as a tax-free reorganization under the Internal Revenue
Code of 1986, as amended ("the Code"), and, except with respect to any cash
received in lieu of fractional shares or for shares of LGF Common Stock with
respect to which dissenters' rights have been exercised, no gain or loss will
be recognized by the holders of LGF Common Stock upon receipt of shares of
First of America Common Stock in exchange for their shares. See "The
Merger--Federal Income Tax Consequences."

REGULATORY APPROVALS. Consummation of the Merger is conditioned upon
obtaining the prior approval of the Board of Governors of the Federal Reserve
System (the "FRB") and the Office of Thrift Supervision (the "OTS").
Consummation of the Merger is further conditioned upon obtaining the prior
approval of the Comptroller of the Currency of the United States (the "OCC"),
the OTS and the FRB with respect to the Bank Merger. First of America is
preparing to submit or has submitted to these regulatory agencies applications
for approval of the

vii
<PAGE> 11
Merger and the Bank Merger. There can be no assurances that such regulatory
approvals will be obtained or as to the timing or conditions of such approvals.
See "The Merger--Regulatory Approvals".

OTHER CONDITIONS. Under the Merger Agreement, consummation of the
Merger is also subject to other conditions including, without limitation, the
absence of any material adverse change in the capitalization, business,
properties or financial condition of the parties. See "The Merger--Other
Conditions to the Merger,--Business of LGF Pending the Merger."

TERMINATION, MODIFICATION, AMENDMENT, AND WAIVER. The Merger
Agreement may be terminated and the Merger abandoned before the effectiveness
of the Merger as follows: (1) by agreement between First of America and LGF
authorized by a majority of the entire Board of Directors of each; (2) by First
of America or LGF if any condition to effectiveness of the Merger is not
fulfilled and not waived by the party adversely affected; (3) by First of
America or LGF in the event of a material breach by the opposite party of any
representation, warranty, covenant, or agreement contained in the Merger
Agreement which has not been cured within 30 days after written notice has been
given to the breaching party; (4) by First of America or LGF if the Merger is
not consummated on or before July 31, 1994; or (5) by LGF in the event that the
average closing trade prices of First of America Common Stock on the NYSE
during the last fifteen trading days on which reportable sales of First of
America Common Stock took place immediately prior to, but not including, the
third business day prior to the effective date of the Merger is less than
$34.95.

At any time before effectiveness of the Merger (including the time
after shareholder approval of the Merger Agreement), the time for performance
may be extended and the covenants, agreements, and conditions of the Merger
Agreement may be modified, amended, or waived by the appropriate officers or
directors of First of America and LGF. However, after approval of the Merger
Agreement by LGF shareholders, any such waiver shall be made by LGF only if, in
the opinion of the appropriate officers or directors of LGF, such waiver will
not have any material adverse affect on the benefits intended under the Merger
Agreement for the shareholders of LGF and will not require resolicitation of
any proxies for such shareholders.

viii
<PAGE> 12
SELECTED FINANCIAL INFORMATION

($ in millions, except per share data) September 30, December 31,
-------------------------- ------------------------
FIRST OF AMERICA BANK CORPORATION 1993 1992 1992 1991
--------------------------------- ---- ---- ---- ----
<S> <C> <C> <C> <C>
BALANCE SHEET SUMMARY AT PERIOD END
Investment securities (a) $ 4,856 4,700 3,490 4,261
Net loans 14,000 13,454 13,516 13,053
Total assets 21,083 19,894 20,147 19,470
Deposits 18,466 17,764 18,036 17,483
Long-term debt 251 242 254 260
Total shareholders' equity 1,451 1,320 1,335 1,267
Book value per common share - primary 24.08 21.85 22.12 20.58

SUMMARY OF OPERATIONS FOR THE PERIOD (b)
Net interest income $ 674 648 875 751
Provision for loan losses 64 58 79 71
Net income 182 111 148 159
Net income applicable to common stock 177 100 135 144
Net income per common share:
Primary 3.08 1.86 2.46 2.69
Fully diluted 3.04 1.86 2.46 2.69
Cash dividends declared per common share 1.15 0.99 1.34 1.24

LGF BANCORP, INC. (c)
-----------------

BALANCE SHEET SUMMARY AT PERIOD END
Investment securities and mortgage backed
securities (a) $ 155 87 106 31
Net loans 197 212 206 227
Total assets 412 411 412 393
Deposits 363 366 367 367
Total shareholders' equity 42 40 40 22
Book value per common share 23.92 21.47 21.95 --

SUMMARY OF OPERATIONS FOR THE PERIOD (b)
Net interest income $ 9 7 10 9
Provision for loan losses 0 0 0 0
Net income (loss) 3 2 3 4
Net income per common share:
Primary 1.61 1.08 1.38 --
Fully diluted 1.59 1.08 1.35 --
Cash dividends declared per common
share (d) -- -- -- --

($ in millions, except per share data) December 31,
-------------------------------------------
FIRST OF AMERICA BANK CORPORATION 1990 1989 1988
--------------------------------- ---- ---- ----
<S> <C> <C> <C>
BALANCE SHEET SUMMARY AT PERIOD END
Investment securities (a) 3,775 3,604 3,603
Net loans 11,091 9,824 9,033
Total assets 16,790 15,507 14,661
Deposits 15,016 13,828 12,982
Long-term debt 180 171 202
Total shareholders' equity 1,176 1,118 1,035
Book value per common share - primary 18.97 17.52 16.03

SUMMARY OF OPERATIONS FOR THE PERIOD (b)
Net interest income 679 641 568
Provision for loan losses 45 44 38
Net income 155 152 122
Net income applicable to common stock 138 133 102
Net income per common share:
Primary 2.62 2.52 2.08
Fully diluted 2.62 2.52 2.08
Cash dividends declared per common share 1.15 1.08 0.95

LGF BANCORP, INC. (c)
-----------------

BALANCE SHEET SUMMARY AT PERIOD END
Investment securities and mortgage backed
securities (a) 94 104 135
Net loans 231 210 194
Total assets 366 352 352
Deposits 347 328 323
Total shareholders' equity 17 17 15
Book value per common share -- -- --

SUMMARY OF OPERATIONS FOR THE PERIOD (b)
Net interest income 7 7 7
Provision for loan losses 0 0 0
Net income (loss) (1) (1) 3
Net income per common share:
Primary -- -- --
Fully diluted -- -- --
Cash dividends declared per common -- -- --
share (d)
- -------------------------------------
</TABLE>
(a) Excludes securities held for sale.
(b) The interim period presented is for the nine months ended September 30.
(c) Information for periods prior to 1992 is given for LGF's subsidiary, La
Grange Federal, which was in mutual form prior to June 18, 1992, when it
was acquired by LGF.
(d) LGF has not declared any dividends since its inception in 1992.

ix
<PAGE> 13
EQUIVALENT PER SHARE DATA (a)

<TABLE>
<CAPTION>
First of America Pro Forma LGF LGF Pro Forma
Historical First of America (b) Historical Equivalent (c)
---------- -------------------- ---------- --------------
<S> <C> <C> <C> <C>
Book value at September 30, 1993 $24.08 $24.12 $23.92 $21.11

Cash dividends declared per share:
Year ended December 31, 1990 1.15 1.15 -- 1.01
Year ended December 31, 1991 1.24 1.24 -- 1.09
Year ended December 31, 1992 1.34 1.34 -- 1.17
Nine months ended September 30, 1993 1.15 1.15 -- 1.01

Net income per share - primary:
Year ended December 31, 1990 2.62 n/a -- --
Year ended December 31, 1991 2.69 n/a -- --
Year ended December 31, 1992 2.46 2.43 1.38 2.13
Nine months ended September 30, 1993 3.08 3.04 1.61 2.66

Net income per share - fully diluted:
Year ended December 31, 1990 2.62 n/a -- --
Year ended December 31, 1991 2.69 n/a -- --
Year ended December 31, 1992 2.46 2.43 1.35 2.13
Nine months ended September 30, 1993 3.04 3.00 1.59 2.63

Market value per common share (d) 41.625 41.625 28.50 36.44
</TABLE>

NOTES TO EQUIVALENT PER SHARE DATA

(a) Equivalent per share data presents selected comparative unaudited per
share data for First of America and LGF on a historical basis and on
a pro forma combined basis, reflecting the pooling of interests method
of accounting and assuming the combination had been effective during
the periods presented. The pro forma results are not necessarily
indicative of the results which would have actually been attained if
the acquisition had been consummated in the past or what may be
attained in the future.

(b) Pro forma amounts per share assume that LGF Common Stock will be
converted and exchanged for First of America Common Stock based on an
Exchange Ratio of 0.8754 and that each outstanding option to purchase
LGF Common Stock will be converted and exchanged for 0.6322 shares of
First of America Common Stock.

(c) Pro forma equivalent amounts reflect the pro forma amount of 0.8754
shares of First of America Common Stock, the number of shares of such
common stock into which each share of LGF Common Stock will be
converted. See "The Merger - Consideration to be Received on the
Merger."

The LGF pro forma equivalent market value per common share assumes the
Merger was consummated on a hypothetical date in the past with an
Exchange Ratio of 0.8754 and is intended to show the value of the
First of America Common Stock hypothetically received, assuming a
market value of First of America Common Stock of $41.625. Based on
the trading market price of First of America Common Stock on the NYSE
on December 31, 1993, the LGF pro forma equivalent market value per
common share would be $34.36.

(d) The market value per share of First of America Common Stock
(Historical) represents the closing trade price on the NYSE on
October 11, 1993, the last trading day on which sales of First of
America Common Stock took place before public announcement of the
Merger Agreement. The market value per share of LGF Common Stock
(Historical) represents the last sale price as reported by Nasdaq
National Market on October 11, 1993, the last trading day on which
sales of the stock took place before public announcement of the Merger
Agreement. See Note (c) above for a discussion of the calculation of
the LGF pro forma equivalent market value.

x
<PAGE> 14
THE SPECIAL MEETING, PROXIES, VOTING, AND CERTAIN SHAREHOLDERS

THE SPECIAL MEETING. The Special Meeting will be held at the Holiday
Inn-Countryside, located at 6201 Joliet Road, Countryside, Illinois, on
February 24, 1994, at 2:00 p.m. local time. The purpose of the Special Meeting
is for holders of LGF Common Stock to vote on approval of the Merger Agreement.

PROXIES. Proxies are solicited on behalf of the Board of Directors of
LGF in connection with the Special Meeting and any adjournment thereof. Shares
of LGF Common Stock represented at the Special Meeting by properly executed
proxies will, unless such proxies have been previously revoked, be voted in
accordance with the instructions made in such proxies. If no instructions are
made, such shares will be voted for approval of the Merger Agreement. If any
other matter is properly presented at the Special Meeting for action, the
persons named in the proxies and acting thereunder will have discretion to vote
on such matter in accordance with their best judgment as to the best interests
of LGF and its shareholders. A shareholder may revoke his or her proxy by
executing and delivering to LGF a proxy bearing a later date, by giving LGF
written notice of revocation before such proxy is voted, or by attending the
Special Meeting and voting in person. Attendance at the Special Meeting will
not in and of itself constitute the revocation of a proxy. LGF's management
currently does not know of any other matter to be presented at the Special
Meeting. The cost of soliciting proxies will be borne by LGF. Proxies may be
solicited by mail, in person, or by telephone by directors, officers or regular
employees of LGF and La Grange Federal. These persons will not be specially
compensated for soliciting proxies. In addition, Morrow & Co., Inc., a proxy
solicitation firm, will assist LGF in soliciting proxies for the Special
Meeting and will be paid a fee estimated to be $4,500, plus out of pocket
expenses.

VOTING. The record date for determining shareholders entitled to
notice of and to vote at the Special Meeting has been fixed as of the close of
business on January 7, 1994. At the close of business on that date, there were
1,762,990 shares of LGF Common Stock outstanding and entitled to vote at the
Special Meeting. Each share of LGF Common Stock is entitled to one vote except
as described below. The favorable vote of the holders of at least 881,496
shares of LGF Common Stock is required for approval. See "The Merger -
Shareholder Approval."

As provided in LGF's Certificate of Incorporation, record holders of
LGF Common Stock who beneficially own in excess of 10% of the outstanding
shares of LGF Common Stock (the "Limit") are not entitled to any vote in
respect to the shares held in excess of the Limit. A person or entity is
deemed to beneficially own shares owned by an affiliate of, as well as persons
acting in concert with, such person or entity.

The presence, in person or by proxy, of a majority of the outstanding
shares of LGF Common Stock entitled to vote (after subtracting any shares in
excess of the Limit) is necessary to constitute a quorum of the shareholders in
order to take action at the Special Meeting. For these purposes, shares of LGF
Common Stock which are present, or represented by proxy, at the Special Meeting
will be counted for quorum purposes regardless of whether the holder of the
shares or proxy fails to vote on the Merger Agreement or whether a broker with
discretionary authority fails to exercise its discretionary voting authority.
Once a quorum is established, approval of the Merger Agreement requires the
affirmative vote of holders of a majority of the outstanding shares of LGF
Common Stock. For voting purposes therefore, abstentions and "broker
non-votes" will have the same effect as votes against the Merger.

CERTAIN SHAREHOLDERS. The following table presents information about
the shares of LGF Common Stock held as of December 31, 1993, by persons known
by LGF to be beneficial owners of more than five percent of the outstanding LGF
Common Stock, each director of LGF, and all directors and officers of LGF as a
group based on information supplied by such persons.

First of America also holds a warrant entitling it to purchase up to
439,574 additional shares of LGF Common Stock upon the occurrence of certain
events. If purchased pursuant to exercise of the warrant, the 439,574 shares
would constitute approximately 19.99 percent of the LGF Common Stock then
outstanding. See "The Merger--Related Agreements."

1
<PAGE> 15
AMOUNT AND NATURE OF BENEFICIAL OWNERSHIP OF LGF COMMON STOCK (1)

<TABLE>
<CAPTION>
Percent of
Name and Address of Beneficial Owners; Shares of Common
Names of Directors and Executive Officers Beneficially Owned Stock
- ------------------------------------------ ------------------ -----------
<S> <C> <C>
La Grange Federal Savings and Loan 111,090 6.3%
Association Employee Stock Ownership Plan
and Trust ("ESOP") (2)
One North La Grange Road
La Grange, Illinois 60525

First Manhattan Company 171,613 9.7%
437 Madison Avenue
New York, New York 10022

Edward L. Breen 54,769 3.1%
Director; Treasurer of Breen's, Inc., a (3) (4) (5)
local dry cleaner

J. Edward Weishel 78,898 4.4%
Director; Chairman of the Board of LGF and (4) (6) (7)
La Grange Federal; Chief Executive Officer
and President of LGF and La Grange Federal

Lee M. Burkey 40,735 2.3%
Director; Attorney and Executive Vice (4) (7) (8)
President of Asher, Gittler, Greenfield et.
al.

Howard A. Graening 18,050 1.0%
Director; Retired Comptroller and Corporate (4) (8)
Secretary for Illinois Bell Telephone

Daniel R. Metzger 45,583 2.6%
Director; Secretary of LGF and La Grange (4) (8) (9)
Federal; President of D.R. Metzger, Inc.

Herbert R. Pohl 53,225 3.0%
Director; H.R. Pohl & Co., Inc. Independent (4) (8)
consultant to publishing industry

Stock Ownership of directors 326,086 17.7%
and executive officers as a group (11 (7) (10) (11)
persons)

</TABLE>

__________________________________

(1) The numbers of shares presented include shares owned of record by each
person and shares which, under applicable regulations of the
Commission, are deemed to be beneficially owned by each person. Under
these regulations, a beneficial owner of a security includes any
person, who, directly or indirectly, through any contract,
arrangement, understanding, relationship, or otherwise has or shares
voting power or

2
<PAGE> 16
investment power with respect to the security or has the power to
acquire the security within 60 days. Voting power includes the
power to vote or to direct the voting of the security. Investment
power includes the power to dispose or to direct the disposition of
the security.

(2) Lee M. Burkey, J. Edward Weishel, Ruth E. Hayman, Howard A. Graening
and Edward Bilka administer the ESOP as a committee (the "ESOP
Committee"). Nationar has been appointed as the corporate trustee for
the ESOP ("ESOP Trustee"). The ESOP Trustee, subject to its fiduciary
duty, must vote all allocated shares held in the ESOP in accordance
with the instructions of the participating employees. Under the ESOP,
unallocated shares held in the suspense account will be voted by the
ESOP Trustee in a manner calculated to most accurately reflect the
instructions received from participants regarding the allocated stock
so long as such vote is in accordance with the provisions of the
Employee Retirement Income Security Act of 1974, as amended ("ERISA").

(3) Includes 5,000 shares held by Breen's, Inc., of which Mr. Breen is a
20% owner and for which he disclaims beneficial ownership.

(4) Includes 4,297, 11,579, 1,285, 1,285, 1,285, and 1,285 shares awarded
to Messrs. Breen, Weishel, Burkey, Graening, Metzger and Pohl,
respectively, under the La Grange Federal Savings and Loan Association
Recognition and Retention Plan and Trust (the "RRP") and as to which
voting may be directed by them. Under the RRP, the awards vest at
rates of 33-1/3% and 20% annually beginning on June 18, 1992, for
outside directors and officers, respectively. All awards become 100%
vested upon a change in control of LGF or La Grange Federal.

(5) Includes 11,176 shares subject to options granted under the LGF 1992
Stock Option Plan for Outside Directors ("Directors' Option Plan")
which are currently exercisable and excludes the remaining 5,589
shares subject to options granted which will vest on the earlier of
June 18, 1994, or a change in control of LGF or La Grange Federal.

(6) Includes 22,218 shares subject to options granted under the LGF 1992
Incentive Stock Option Plan ("Incentive Option Plan") which are
currently exercisable and excludes the remaining 33,327 shares subject
to options which will vest annually each June 18 at a rate of 20% of
the original number of options granted. All options become
immediately exercisable upon a change in control of LGF or La Grange
Federal. Also includes 981 shares which have been allocated to Mr.
Weishel pursuant to the La Grange Federal ESOP.

(7) Includes 21,400 shares held by La Grange Federal's Retirement Plan
over which Messrs. Weishel and Burkey have voting and dispositive
power as trustees.

(8) Includes 7,980 shares subject to options granted under the Directors'
Option Plan which are currently exercisable for each outside director
and excludes the remaining 3,990 shares subject to options granted to
each director which will vest on the earlier of June 18, 1994, or a
change in control of LGF or La Grange Federal.

(9) Includes 31,548 shares held in D.R. Metzger, Inc. Profit Sharing
Trust. Mr. Metzger is the beneficial owner of such trust.

(10) Includes 31,489 shares (including 21,016 shares set forth in footnote
4 above) subject to awards under the RRP and as to which voting
may be directed and 80,128 shares subject to options which are
currently exercisable including those set forth in footnotes 5, 6, and
8.

(11) Includes 2,928 shares which have been allocated to executive officers
pursuant to the La Grange Federal ESOP.

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<PAGE> 17
THE MERGER

GENERAL. The following is a summary of the material features of the
Merger Agreement and the Merger. The Merger Agreement contains all the terms of
and conditions to consummation of the Merger including the manner and basis for
converting and exchanging the outstanding shares of LGF Common Stock into and
for First of America Common Stock. This description of the Merger and the
Merger Agreement and all other references herein are qualified in their
entirety by provisions of the Merger Agreement, which is incorporated herein by
reference and a copy of which is attached to this Prospectus/Proxy Statement as
Exhibit B.

PARTIES TO THE MERGER AGREEMENT. First of America is a Michigan
corporation and a registered bank holding company with its corporate
headquarters located in Kalamazoo, Michigan. At September 30, 1993, its
consolidated assets totaled $21.1 billion.

Acquisition Sub is a Delaware corporation wholly owned by First of
America. Its sole purpose is to facilitate First of America's acquisition of
LGF.

LGF is a Delaware corporation and a unitary savings and loan holding
company located in La Grange, Illinois. At September 30, 1993, LGF's
consolidated assets totaled $412.0 million. LGF owns 100 percent of and
operates La Grange Federal.

MERGER. The Merger Agreement provides that the affiliation of LGF with
First of America is to be effected by the merger of LGF into Acquisition Sub,
with Acquisition Sub designated as the surviving corporation. Upon
effectiveness of the Merger, First of America will continue its existing
business, LGF will be merged into Acquisition Sub and cease to exist, and
Acquisition Sub will remain a wholly owned subsidiary of First of America. The
Merger Agreement also provides that immediately following effectiveness of the
Merger, La Grange Federal will be merged with First of America-Kankakee in the
Bank Merger. The main office and branch facilities of La Grange Federal will
be maintained as branch facilities of First of America-Kankakee.

REASONS FOR MERGER AND AFFILIATION. The LGF Board, with the
assistance of outside financial and legal advisors, has evaluated the
financial, legal and market considerations bearing on the decision to recommend
the Merger. The terms of the Merger, including the purchase price, are a
result of arms-length negotiations between representatives of LGF and First of
America. In reaching its determination that the Agreement is fair to, and in
the best interest of, LGF and holders of LGF Common Stock, the LGF Board
considered a number of factors, both from a short term and a long term
perspective, including, without limitation, the following: (1) LGF Board's
familiarity with and review of LGF's business, financial condition, results of
operations, management and prospects, including, but not limited to, its
potential growth, development, productivity and profitability; (2) the current
and prospective environment in which LGF operates, including national and local
economic conditions, the competitive environment for savings and other
financial institutions generally and the trend toward consolidation in the
financial services industry; (3) information concerning the business financial
condition, results of operations and prospects of First of America, including
recent acquisitions and the recent performance of First of America Common
Stock; (4) the value to be received by holders of LGF Common Stock pursuant to
the Merger in relation to the historical trading prices and book value of LGF
Common Stock; (5) the oral presentation of Capital Resources and the opinion of
Capital Resources orally expressed to the LGF Board on October 12, 1993 that
the consideration is fair to the holders of LGF Common Stock from a financial
point of view (See "The Merger--Fairness Opinion to LGF"); (6) the financial
and other significant terms of the First of America offer compared to the other
offers; (7) the potential upside value offered in connection with the First of
America offer compared to the other offers, and downside protection associated
with the First of America offer compared to the other offers; (8) the review by
the LGF Board with its legal and financial advisors of the provisions of the
proposed Agreement and Warrant Agreement; (9) LGF Board's belief that the terms
of the proposed form of merger agreement with First of America were attractive
in that it would allow LGF's shareholders to receive stock in the Merger thus
permitting shareholders to defer any tax liability associated with the increase
in the value of their stock as a result of the merger and to become
shareholders in First of America, an institution with strong operations,
management and earnings performance; (10) the expectation that First of America
will continue to provide quality service to the community and customers served
by LGF; and (11) the compatibility of the respective business and management
philosophies of LGF and First of

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<PAGE> 18
America. The importance of these factors relative to one another cannot
precisely be determined or stated here. Accordingly, the LGF Board has
unanimously approved the Merger Agreement and unanimously recommends that LGF
shareholders vote for approval of the Merger Agreement.

First of America's management believes that the affiliation of LGF
with First of America will provide First of America with an attractive means of
expanding its presence in the financial institutions market in and around La
Grange, Illinois. This market complements the other banking markets currently
served by First of America's affiliate banks.

BACKGROUND OF THE MERGER. The terms of the Merger Agreement are the
result of arm's length negotiations between LGF and First of America and their
respective representatives. In negotiating the terms of the Merger Agreement,
LGF and First of America reviewed many factors, including various of the
following: the general business philosophies of First of America and LGF, the
benefit to LGF stockholders including the market price of First of America
Common Stock and LGF Common Stock respectively, historical earnings records,
book and market values of assets, the nature of the markets in which LGF and
First of America operate, dividend histories, deposit growth prospects,
managements, and judgments with regard to the future earnings prospects of LGF
and First of America, separately and combined.

Originally chartered in 1925, La Grange Federal converted to the stock
form of organization in June of 1992. The period since such conversion has
been a period of continued, substantial and rapid change in the banking
industry, characterized by intensifying competition and consolidation.
Management and the Board of Directors focused on these changes and sought to
best position LGF in light of this industry consolidation.

In light of general expressions of interest in LGF from other entities
and recognizing the imminent expiration of the conditions generally prohibiting
combination transactions during the first year after Conversion imposed by the
OTS in connection with La Grange's conversion to stock form, LGF's Board, in
May of 1993, appointed a committee (the "Special Committee"), to evaluate the
position LGF should take in reference to possible mergers, acquisitions and
combinations, and in general any efforts which might enhance shareholder value.
After discussing with legal counsel the considerations involved in selling LGF
and hearing presentations from several financial advisory firms, the LGF Board
engaged Capital Resources Group, Inc. to furnish financial advisory services
pertaining to the possible sale of LGF. Capital Resources prepared
confidential information packets regarding LGF, which were distributed to
potential buyers in August and September of 1993.

On September 21, 1993, Mr. Weishel presented to the LGF Board
information concerning institutions which had expressed interest in the
possible acquisition of LGF. On September 24, 1993, a special meeting of the
LGF Board was held, with representatives of Capital Resources in attendance, to
consider a proposed letter of intent from a possible acquiror which had
conducted a preliminary due diligence investigation of LGF. The LGF Board
decided to delay any action on the proposed letter of intent until all the
institutions contacted by Capital Resources had a chance to respond.

On September 30, 1993, First of America made a presentation to the
Special Committee, regarding First of America's history, business philosophy
and operations and outlined a preliminary offer for the acquisition of LGF.
The Special Committee determined to allow First of America to perform a
preliminary due diligence investigation of LGF. At a meeting on October 7,
1993, the Special Committee evaluated proposals from three different
institutions, such evaluation included a report by Capital Resources regarding
the various proposals and the proposed acquirors. The Special Committee
determined that the First of America offer, compared to the other available
offers, incorporated the best features for long term value to LGF's
stockholders and, based on current market conditions, reflected the highest
price available to LGF stockholders. Therefore, the Special Committee decided
that the First of America offer would be in the best interests of LGF and its
stockholders. The Special Committee instructed Capital Resources and LGF's
legal counsel to finalize negotiations with First of America regarding the
First of America proposal.

On October 12, 1993, a special meeting of the LGF Board was held, with
representatives of Capital Resources in attendance, to consider the First of
America offer. The LGF Board was presented with the proposed

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<PAGE> 19
Agreement and the Warrant Agreement setting forth the terms and conditions of
First of America's proposal to acquire LGF. The LGF Board discussed the
financial and legal implications of the proposal and the provisions of the
Agreement and the Warrant. At such time, Capital Resources rendered oral
advice as to the fairness of the consideration, from a financial point of view,
to be paid to holders of LGF Common Stock. Following further discussion, the
LGF Board approved the Agreement and Warrant Agreement and authorized their
execution. Subsequently, the Agreement and Warrant were executed and LGF and
First of America issued a press release that same day announcing the proposed
Merger.

RELATED AGREEMENTS. In fulfillment of a condition to First of
America's execution of the Merger Agreement, LGF issued the Warrant to First of
America pursuant to the Warrant Agreement. In the course of negotiation of the
Merger Agreement (See "The Merger--Background of the Merger"), First of America
advised LGF that LGF's execution of the Warrant Agreement and issuance of the
Warrant were conditions precedent to First of America's execution of the Merger
Agreement. Having been so advised and believing it had conducted a fair
process intended to produce the best available transaction for LGF shareholders
and further believing that the First of America offer was such an offer, LGF's
Board determined to execute the Warrant Agreement and issue the Warrant in
order to induce First of America's entry into the Merger Agreement and to
protect the value to LGF shareholders represented by the First of America
offer.

The Warrant entitles First of America to purchase an aggregate of
439,574 shares of LGF Common Stock at a price of $28.00 per share subject to
certain adjustments on the occurrence of certain events set forth in the
Warrant Agreement, including, but not limited to, the acquisition of 10% of or
the right to acquire 10% of the outstanding LGF Common Stock by a third party,
the failure of LGF shareholders to approve the Merger Agreement following a
proposal by a third party to acquire 10% or more of the LGF Common Stock or to
otherwise acquire LGF, the execution of an agreement by LGF with another party
for the acquisition of LGF by such party, or the withdrawal, revocation, or
material modification by LGF's Board of its approval or recommendation to LGF's
shareholders of the Merger Agreement. The Warrant terminates upon the earliest
occurring of certain events set forth in the Warrant Agreement, including, but
not limited to, the date two years after an event entitling First of America to
exercise the Warrant, failure of LGF shareholders to approve the Merger (other
than as described in the Merger Agreement), valid termination of the Merger
Agreement and the date the Merger is consummated. A copy of the Warrant
Agreement and the Warrant are attached as Exhibit C to the Merger Agreement
attached to this Prospectus/Proxy Statement as Exhibit B.

At December 31, 1993, there were outstanding options for the
purchase of 92,575 shares of LGF Common Stock at an exercise price of $10.00
per share granted to certain employees of LGF pursuant to the Incentive Option
Plan and there are outstanding options for the purchase of 64,645 shares of LGF
Common Stock at an exercise price of $10.00 per share granted to directors of
LGF pursuant to the Directors' Option Plan (collectively "Option Rights"). The
Merger Agreement provides that upon effectiveness of the Merger, each Option
Right which has not been previously exercised will be converted into and
exchanged for .6322 shares of First of America Common Stock.

The Exchange Ratio and the Option Exchange Ratio were determined
through the parties' negotiation of the Merger Agreement (see "The
Merger--Background of the Merger"). These terms reflect First of America's and
LGF's judgments as to the value of the shares of LGF Common Stock relative to
the historical and anticipated market price of First of America Common Stock.
The terms of the consideration may be altered pursuant to the terms of the
Merger Agreement. See "The Merger--Termination, Modification, Amendment, and
Waiver."

FAIRNESS OPINION TO LGF. LGF engaged Capital Resources on August 27,
1993, as its financial advisor to assist with the possible sale of LGF, to
assist in the negotiation and structuring of possible merger proposals, and

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<PAGE> 20
to render an opinion on the fairness of the Merger Agreement as discussed
below. Pursuant to its engagement, Capital Resources assisted LGF in
negotiating and structuring the Merger Agreement, particularly the terms of the
Merger Agreement described herein under the caption "The Merger-- Consideration
to be Received in the Merger," which terms include the Exchange Ratio and the
Option Exchange Ratio. Additionally, prior to the execution of the Merger
Agreement, Capital Resources advised the LGF Board orally that, based upon its
review and analysis, the terms of the Merger Agreement were fair from a
financial point of view to LGF's shareholders as of October 12, 1993. See "The
Merger--Background of the Merger."

Capital Resources is an investment banking and financial consulting
firm which, as part of its specialization in financial institutions, is
regularly engaged in assisting institutions in the search for investors and
merger partners, in the negotiation and structuring of merger transactions, and
in providing financial valuations and analyses of business enterprises and
securities in connection with mergers, acquisitions, mutual-to-stock
conversions, initial and secondary stock offerings and other corporate
transactions. LGF has utilized the services of Capital Resources in the past.
The LGF Board chose Capital Resources because of their expertise, experience
and familiarity with LGF and the financial institution industry. Capital
Resources reviewed the terms of the Merger, the related financial data and
reviewed these issues with the LGF Board and with LGF's executive management.
No limitations were imposed on Capital Resources by the LGF Board with respect
to the investigation made or procedures followed by it in rendering its
opinion. Capital Resources participated in discussions and negotiations among
representatives of LGF, First of America and legal advisors.

Capital Resources has rendered a written opinion dated January 4, 1994,
stating that the terms of the Merger Agreement are fair, from a financial point
of view, to the holders of LGF Common Stock. The full text of the opinion of
Capital Resources dated January 4, 1994, which sets forth certain assumptions
made, matters considered and limitations on the reviews undertaken, is attached
as Exhibit A to this Prospectus/Proxy Statement, and should be read in its
entirety in connection with this Prospectus/Proxy Statement. The Summary of
the opinion of Capital Resources set forth in this Prospectus/Proxy Statement
is qualified in its entirety by reference to the opinion. In the course of
rendering its fairness opinion, the following factors were considered by
Capital Resources: (1) the Merger Agreement; (2) the audited financial
statements of LGF for the fiscal years ended December 31, 1987 through 1992,
the unaudited financial statements of LGF for the nine months ended September
30, 1993, as reported in its Report on Form 10-Q, the OTS quarterly reports
covering the period through September 30, 1993, the latest available
asset/liability reports, business plan, other miscellaneous
internally-generated management information reports and, latest summary budget
report; (3) the Annual Report to Stockholders and Form 10-K for 1992 which
provides a discussion of LGF's business and operations and reviews various
financial data and trends; (4) discussions with executive management of LGF
regarding the business, operations, recent financial condition and operating
results and future prospects of LGF; (5) comparisons of LGF's financial
condition and operating results with those similarly-sized thrift institutions
operating in the Midwest and the U.S.; (6) comparisons of LGF's financial
condition and operating performance with the published financial statements and
market price data of publicly-traded thrift institutions in general and
publicly-traded thrift institutions in LGF's region of the U.S. specifically;
(7) the relevant market information regarding shares of LGF Common Stock
including trading activity, volume and options to purchase LGF Common Stock;
(8) other financial analyses and investigations as deemed necessary, including
a comparative financial analysis and review of the financial terms of other
pending and completed acquisitions of companies considered to be generally
similar to LGF; (9) examination of LGF's economic operating environment and the
competitive environment of LGF's market area; (10) available financial reports
and financial data for First of America, including annual reports to
shareholders, Form 10-K reports covering the fiscal years ended 1988 through
1992, quarterly reports, Form 10-Q reports, internal and regulatory financial
reports provided by management of First of America and other published
financial data; (11) First of America's banking office network; (12) the
pricing trends of First of America Common Stock and dividend payment history;
and (13) visited First of America's administrative offices and interviewed
senior management regarding First of America's business and prospects. In
addition, Capital Resources also considered the following factors: (1) the
extent of LGF's revenue diversification and asset, deposit and earnings growth
prospects relative to that of First of America; and (2) the size and geographic
reach of LGF's office network relative to that of First of America.

Capital Resources assumed and relied upon without independent
verification the accuracy and completeness of the information reviewed by it
for the purposes of its opinion. Capital Resources did not make any
independent

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<PAGE> 21
valuation or appraisal of the assets or liabilities of LGF or First of America.
Capital Resources assumed without independent verification, that the aggregate
allowances and reserves for loan losses of LGF and First of America are
adequate to cover such losses. Capital Resources' opinion was necessarily
based on economic, market and other conditions as in effect on, and the
information made available to it as of, the date of the opinion.

In preparing its fairness opinion, Capital Resources has evaluated
whether the financial proposal for acquisition is fair from a financial point
of view to the stockholders of LGF. The fairness of the acquisition offer is
determined by comparing the offer to acquisition offers received by other
comparable types of companies over a time-frame that reflects a similar
economic environment. The comparison included an examination of key financial
characteristics of the comparative acquisition companies, including balance
sheet, earnings and credit risk characteristics.

LGF's key operating statistics and ratios were compared to a select
group of thrift institutions, which have also been the subject of a proposed or
completed acquisition. It is important to note that the comparative groups
utilized in the fairness opinion were comprised only of thrift institutions
(rather than commercial banks), given the distinctive financial, operating, and
regulatory characteristics of the thrift industry. These thrift institutions
were divided into two broad categories for purposes of the analysis: (1)
institutions which have recently completed an acquisition; and (2) institutions
subject to a pending acquisition. Capital Resources reviewed relevant
acquisition pricing ratios, notably offer price-to-book value (and
price-to-tangible book value), offer price-to-earnings, offer price-to-market
value (or trading price, before the announcement, where available) offer
price-to-deposits and offer price-to-assets of the comparative group and
compared these ratios to those of LGF. The analysis included a review and
comparison of the mean and median pricing ratios represented by a sample of
comparative group thrifts concentrated in the midwestern United States as well
as other parts of the country.

Based on an assumed offer price of $34.02 for each outstanding share of
LGF Common Stock (which is based on First of America's average closing trading
price during the last 30 trading days preceding January 4, 1994, as quoted on
NYSE, of $ 38.86 per share), the following acquisition pricing ratios resulted
for LGF relative to comparative acquisition group: (1) LGF's price/earnings
ratio of 17.81 x exceeded the mean and median price/earnings ratios of the
comparative group. The mean and median price/ earnings ratios of the
comparative group were 13.77 and 13.37 x, respectively; (2) LGF's price/book
value ratio of 149.5 percent was moderately higher than the mean and median
price/book value ratios of 141.6 and 140.9 percent, respectively, for the
comparative group. LGF's tangible price/book value ratio of 149.5 percent,
compared with the mean and median ratio of 145.3 and 149.6 percent,
respectively, for the comparative group; (3) LGF's price/assets ratio of 15.86
percent compared to a mean and median price/assets ratio of 12.95 and 12.34
percent, respectively, for the comparative group; (4) LGF's price/deposits
ratio of 18.01 percent compared to a mean and median price/deposits ratio of
15.74 and 14.27 percent, respectively, for the comparative group; and (5) LGF's
offer price/trading price ratio of 132.1 percent fell below the mean and median
offer price/market value (or trading price) ratios of the comparative group of
146.7 and 134.5 percent, respectively.

Based on its comparative financial analysis and given the factors
noted above, Capital Resources concluded that the financial terms of the First
of America offer to LGF's stockholders resulted in pricing ratios which were
reasonable when compared to the pricing ratios stemming from the comparative
acquisition group proposals. This conclusion was also supported by the
significant premium being offered to LGF stockholders relative to LGF's stock
trading price levels since conversion.

The summary set forth above does not purport to be a complete
description of the review and analyses performed by Capital Resources. The
preparation of a fairness opinion is not necessarily susceptible to partial
analysis or summary description. Capital Resources believes that its analyses
must be considered as a whole. Capital Resources may have given various
analyses more or less weight than other analyses, and may have deemed various
assumptions more or less probable than other assumptions.

In performing its analyses, Capital Resources made numerous
assumptions with respect to industry performance, general business and economic
conditions and other matters, many of which are beyond the control of First of
America and LGF. Such analyses were prepared solely as part of Capital
Resources' analysis of the fairness, from a financial point of view, of the
exchange ratios to the holders of LGF Common Stock and were

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<PAGE> 22
provided to the LGF Board in connection with the delivery of Capital Resources'
opinion. The terms "fair from a financial point of view" is a standard phrase
contained in investment banker fairness opinions and refers to the fact that
Capital Resources' opinion as to the fairness of the terms of the Merger
Agreement are addressed solely to the financial attributes of the Merger
Agreement.

As described above, Capital Resources' opinion and presentation to the
LGF Board was one of many factors taken into consideration by the LGF Board in
making its determination to approve the Merger Agreement. Consequently, the
Capital Resources analyses described above should not be viewed as
determinative of the LGF Board's conclusions with respect to the value of LGF
or of the decision of the LGF Board to agree to the Exchange Ratio and the
Option Exchange Ratio.

LGF retained Capital Resources pursuant to an agreement dated August
27, 1993 in accordance with which LGF has paid or will pay to Capital Resources
fees of $20,000 and $50,000 for the preparation of an investor Information
Report and Fairness Opinion, respectively, which fees shall be applied against
an additional fee equal to the sum of 1.00 percent of the aggregate
consideration received in an amount less than or equal to 100 percent of
tangible book value of LGF on a consolidated basis as of the month end
preceding the closing of the Merger ("TBV"), and 1.25 percent of the additional
aggregate consideration received in an amount in excess of 100 percent of TBV
but less than or equal to 135 percent of TBV, and 3.0 percent of the additional
aggregate consideration received in an amount in excess of 135 percent of TBV.
Pursuant to the August 27, 1993 engagement agreement, Capital Resources would
have been entitled only to the fees for preparation of the Information Report
and Fairness Opinion if a transaction were effected with certain specifically
identified entities, who previously had expressed a general interest in LGF.
The two other entities which submitted proposals to LGF were included among
such identified entities. Capital Resources is also to be reimbursed for its
reasonable out-of-pocket expenses plus travel expenses in rendering its
services and is to be indemnified against certain liabilities to which Capital
Resources may become subject in connection with rendering its services.

INTERESTS OF MANAGEMENT.

At December 31, 1993, all directors and executive officers of LGF as a
group beneficially owned 326,086 shares or 17.7% of the outstanding shares of
LGF Common Stock. No director or any executive officer of LGF owns any First
of America Common Stock. None of First of America's executive officers or
directors owns any shares of LGF Common Stock.

Certain members of LGF's management and the LGF Board may be deemed to
have certain interests in the Merger that are in addition to their interests as
stockholders of LGF generally. The LGF Board was aware of these interests and
considered them, among other matters, in approving the Merger Agreement and the
transactions contemplated thereby.

EMPLOYMENT AGREEMENTS. La Grange Federal and LGF have employment
agreements with Mr. Weishel. The employment agreements provide for concurrent
three year terms. Commencing on the first anniversary date and continuing each
anniversary date thereafter, the agreements may be extended for an additional
year so that the remaining terms shall be three years. The agreements provide
that the base salary of the executive will be reviewed annually. Mr. Weishel's
base salary as of September 30, 1993 was $135,000. In addition to the base
salary, the agreements provide for, among other things, disability pay,
participation in stock benefit plans and other fringe benefits applicable to
executive personnel.

The agreements provide for termination by La Grange Federal or LGF for
cause at any time. In the event that La Grange Federal or LGF chooses to
terminate the executive's employment for reasons other than for cause, or in
the event of the executive's resignation from La Grange Federal and LGF upon
(1) failure to re-elect the executive to his current offices or board
membership, (2) a material change in the executive's functions, duties or
responsibilities, or relocation of his principal place of employment, (3)
liquidation or dissolution of La Grange Federal or LGF, or (4) a breach of the
agreement by La Grange Federal or LGF, the executive, or in the event of death,
his beneficiary would be entitled to severance pay or liquidated damages in an
amount equal to the salary to which he would be entitled for the remaining term
of the agreements.

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<PAGE> 23
If termination as described above follows a change in control of La
Grange Federal or LGF the executive or in the event of death prior to payment,
his beneficiary, would be entitled to a severance payment equal to three times
his average compensation (base salary, including bonus and any other cash or
deferred compensation paid) over the past three years of employment with La
Grange Federal or LGF. La Grange Federal and LGF would also continue the
executive's life, health, and disability coverage for 36 months following
termination. The Merger would constitute a change in control under the
agreements.

If a material change in Mr. Weishel's functions, duties or
responsibilities occurs, which change in his position would be the case
subsequent to the Merger, and Mr. Weishel terminates employment following the
change in control, based upon his current compensation, Mr. Weishel would
receive approximately $460,576 in severance payments in addition to other non
cash benefits provided under the agreement. The Merger Agreement provides that
First of America will honor Mr. Weishel's agreements. In addition, upon such
departure Mr. Weishel will be entitled to receive his retirement benefits.

CHANGE IN CONTROL AGREEMENTS. La Grange Federal and LGF have change
in control agreements ("CIC") with four executive officers (other than Mr.
Weishel). Each CIC provides for a one year term. Commencing on the first
anniversary date and continuing on each anniversary thereafter, the CIC may be
extended for an additional year by the La Grange Federal Board. Each CIC
provides that at any time following a change in control of LGF or La Grange
Federal, if the officer's employment is terminated for any reason other than
cause, or if the officer terminates his employment following his demotion, loss
of title, office or significant authority, a reduction in his compensation, or
relocation of his principal place of employment, the officer or, in the event
of death, his beneficiary, would be entitled to receive a severance payment
equal to his average annual compensation of the past year of his employment
with La Grange Federal. La Grange Federal and LGF would also continue the
officer's life, health, and disability coverage for the remaining unexpired
term of the agreement. The Merger would constitute a change in control under
the agreements.

If all the executive officers (other than Weishel) leave after the
result of the change in control and the occurrence of one of the other factors
represented above, based upon their current compensation, they would receive in
the aggregate approximately $360,931 in severance payments.

LA GRANGE BOARD. The Merger Agreement provides that La Grange
Federal's Board of Directors will be appointed to the First of America -
Kankakee Board of Directors. The La Grange Federal Board of Directors will
serve until their successors are elected and duly qualified; provided, however,
that notwithstanding the directors age qualification requirement in First of
America - Kankakee, directors of La Grange Federal will be eligible to serve
until the annual meeting of First of America - Kankakee which follows the
expiration of two (2) years from the Merger.

In addition, members of La Grange Federal's Board of Directors who
were not employed by LGF or La Grange Federal will be deemed retired from such
positions as of the consummation of the Merger and will be entitled to receive
payments under the La Grange Federal Savings and Loan Association Directors'
Consultation and Retirement Plan. Under the plan, each director will receive
ten (10) annual installments of $4,500 commencing as of the effectiveness of
the Merger, in exchange for consulting services to be provided over that
period.

INDEMNIFICATION; INSURANCE. The Merger Agreement provides that First
of America will indemnify the directors and officers of LGF against certain
liabilities following consummation of the Merger. In addition, the Merger
Agreement required First of America to obtain directors and officers' liability
insurance for the benefit of the director and officers of LGF for three (3)
years after the Merger.

OPTION PLANS AND RECOGNITION AND RETENTION PLANS. LGF maintains an
incentive option plan and a directors option plan as well as a recognition and
retention plan. Such plans provide for an acceleration of the vesting period
upon a change in control. The Merger will constitute such a change in control.
See "The Special Meeting, Proxies, Voting, and Certain Shareholders--Certain
Shareholders."

SHAREHOLDER APPROVAL. At the Special Meeting, LGF shareholders will
vote on approval of the Merger Agreement. Under Delaware Law and LGF's
Certificate of Incorporation, the affirmative vote of holders of a

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<PAGE> 24
simple majority of the outstanding shares of LGF Common Stock entitled to vote
is required for approval of the Merger Agreement. At January 7, 1994, the record
date for the Special Meeting, there were 1,762,990 shares of LGF Common Stock
outstanding and entitled to vote at the Special Meeting. Therefore, the
affirmative vote of holders of at least 881,496 shares of LGF Common Stock is
required for approval of the Merger Agreement. A failure to return a properly
executed proxy card or to vote in person at the Special Meeting will have the
same effect as a vote against the Merger Agreement. As of December 31, 1993,
all directors and executive officers of LGF as a group beneficially owned
326,086 shares of LGF Common Stock (or 17.7 percent of the outstanding shares).

RECOMMENDATION OF LGF BOARD OF DIRECTORS. The LGF Board has
unanimously approved the Merger Agreement and unanimously recommends that LGF
shareholders vote for approval of the Merger Agreement.

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<PAGE> 25

REGULATORY APPROVALS. Consummation of the Merger is contingent upon
obtaining the prior approvals of the Merger by the FRB and the OTS and the
prior approval of the Bank Merger by the OCC, the OTS, and the FRB, all without
any conditions, which, in the reasonable opinion of First of America, or in
certain cases of LGF, are materially adverse. First of America is preparing to
submit or has submitted applications for approval of the Merger and the Bank
Merger to these regulatory agencies. There can be no assurances that such
regulatory approvals will be obtained or as to the timing or conditions of such
approval.

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<PAGE> 26
cash received in lieu of fractional shares or for shares of LGF Common Stock
with respect to which dissenters' rights have been exercised, no gain or loss
will be recognized by the holders of LGF Common Stock upon receipt of shares of
First of America Common Stock in exchange for their shares.

First of America has been advised by letter from its counsel, Howard &
Howard Attorneys, P.C. ("Howard & Howard") that in its opinion the Merger would
yield the federal income tax consequences described above. Howard & Howard's
opinion also states that the Merger would yield the following additional
federal income tax consequences.

No gain or loss will be recognized to LGF shareholders who receive
First of America Common Stock in exchange for their LGF Common Stock. The basis
of the First of America Common Stock received by LGF shareholders will be the
same as the basis of the LGF Common Stock surrendered in exchange therefor. The
holding period of the First of America Common Stock received by LGF
shareholders will include the period during which the LGF Common Stock
surrendered in exchange therefor was held, provided that the LGF Common Stock
surrendered was held as a capital asset at the time of the exchange. The
payment of cash to LGF shareholders in lieu of fractional shares of First of
America Common Stock will be treated as if the fractional shares were
distributed as part of the exchange and redeemed by First of America. Provided
that the LGF Common Stock surrendered in the exchange was held as a capital
asset at the time of the exchange, capital gain or loss will be realized and
recognized to such shareholder measured by the difference between the
redemption price and the adjusted basis of the First of America Common Stock
redeemed. Where solely cash is received by a holder of LGF Common Stock who
exercises dissenters' rights of appraisal, such cash payment will be treated by
that shareholder as a distribution and redemption of his or her LGF Common
Stock. Where, as a result of such distribution, a shareholder owns no First of
America Common Stock, either directly or through attribution, the redemption
will be a complete termination of interest, and such cash will be treated as a
distribution in full payment in exchange for his or her shares. Provided that
the LGF Common Stock redeemed was held as a capital asset at the time of the
redemption, capital gain or loss will be realized and recognized to such
shareholder in an amount equal to the difference between the amount of such
cash and the adjusted basis of the shares of LGF Common Stock surrendered.

Ordinary income, in an amount equal to the fair market value of the
First of America Common Stock received, will be realized by holders of Option
Rights, whether incentive stock options or non-qualified stock options, who
receive First of America Common Stock in exchange for their Option Rights. The
basis of the First of America Common Stock received by holders of Option Rights
will be equal to the amount of ordinary income recognized and the holding
period will begin on the exchange date.

Howard & Howard's opinion letter is dated January 5, 1994, and is
based on facts, laws, regulations, and interpretations as of that date.
Therefore, receipt of an additional opinion of Howard & Howard as of a date
more proximate to effectiveness of the Merger will be required to satisfy the
condition to the parties' obligations to consummate the Merger.

THE DISCUSSION OF FEDERAL INCOME TAX CONSEQUENCES SET FORTH ABOVE IS INCLUDED
HEREIN FOR INFORMATIONAL PURPOSES ONLY. THE TAX CONSEQUENCES OF THE MERGER
WILL VARY DEPENDING ON THE CIRCUMSTANCES OF THE INDIVIDUAL SHAREHOLDER. EACH
SHAREHOLDER SHOULD CONSULT HIS OR HER TAX ADVISOR REGARDING THE SPECIFIC TAX
CONSEQUENCES OF THE MERGER, INCLUDING THE APPLICATION AND EFFECT OF STATE AND
LOCAL TAX LAWS.

OTHER CONDITIONS TO THE MERGER. Consummation of the Merger is also
contingent upon other conditions, including the following: (1) accuracy in all
material respects of all financial statements of First of America and LGF
required to be furnished to the opposite party; (2) prior receipt by LGF and
First of America of favorable opinions of legal counsel to First of America and
LGF, respectively, regarding various legal matters in connection with the
Merger; (3) compliance in all material respects by First of America and LGF
with all terms of the Merger Agreement and receipt by First of America and LGF
of officers' certificates from LGF and First of America, respectively,
certifying such compliance; (4) excluding payment of expenses and other costs
incurred in connection with this transaction, immediately before effectiveness
of the Merger, the net worth of LGF as shown by its total

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<PAGE> 27
shareholders' equity plus the allowance for loan losses, shall not be less than
such amount as set forth in its Consolidated Statement of Condition of June 30,
1993; (5) neither LGF, La Grange Federal nor First of America shall have been
made a party to or, to their respective knowledge, threatened by litigation or
other proceedings which, in their respective reasonable opinions, are likely to
materially adversely affect them, or which materially challenges the Merger;
(6) there shall have been no material adverse change in the consolidated
capitalization or business, properties, or financial condition of First of
America, La Grange Federal or LGF; (7) all documents delivered and all
proceedings undertaken by First of America and LGF shall be reasonably
satisfactory to counsel to LGF and counsel to First of America, respectively;
(8) receipt by First of America and LGF of any consents or approvals reasonably
necessary, in the respective opinions of First of America and LGF, to
consummate the Merger; (9) no stop order proceedings with respect to the
Registration Statement shall be pending or threatened; (10) First of America
shall have obtained any and all material Blue Sky permits, authorizations,
consents or approvals required for the issuance of the First of America Common
Stock; and (11) consummation of the Merger shall not violate any order, decree
or judgment of any court or governmental body having competent jurisdiction.

BUSINESS OF LGF PENDING THE MERGER. There are additional obligations
of LGF which are also conditions to consummation of the Merger. Certain of
these obligations provide that from the date of the Merger Agreement to
effectiveness of the Merger, LGF and La Grange Federal will: (1) conduct its
business in the ordinary course; (2) conduct its business and operate only in
accordance with sound banking and business practices, including charging off
all loans required to be charged off by banking regulators and regulations,
statutes and sound banking practices; (3) remain in good standing with all
applicable banking regulatory authorities; (4) maintain an allowance for loan
losses at an adequate level based on past loan loss experience and evaluation
of potential losses in current portfolios; (5) preserve its existing banking
locations; (6) use its best efforts to retain the services of such of its
officers and employees that its goodwill and business relationships with
customers and others are not materially and adversely affected; (7) maintain
insurance covering the performance of their duties by its directors, officers
and employees; and (8) consult with First of America prior to acquiring any
interest in real property.

Additional terms of the Merger Agreement provide that from the date of
the Merger Agreement to effectiveness of the Merger, subject to certain
exceptions for contemplated transactions, LGF and its subsidiaries will not,
among other things, without the prior written consent of First of America: (1)
amend its or their Certificate of Incorporation, Charter or Bylaws; (2) except
in connection with the exercise of Option Rights or the Warrant, make any
commitment requiring or permitting the issue, sale, purchase, or delivery of
its capital stock; (3) increase or reduce the number of shares of its capital
stock through a stock split, reclassification, change in par or stated value or
stock dividend; (4) close any office or transfer or lease any of its assets or
property except in the ordinary course of business; (5) except with respect to
amending the director retirement plan of LGF to permit payments to be made to
the designated beneficiary or the estate of a deceased director, and except in
connection with annual renewal of employment agreements on substantially the
same terms as currently in effect, and except in connection with the adoption
of bonus plans for 1994 which are substantially on the same terms as bonus
plans currently in effect (but which will provide for payment of prorated
bonuses for the period between January 1, 1994, and the effective date), adopt,
materially modify, or enter into certain employee benefit plans or employment
arrangements, or increase wages or salaries other than as part of its normal
salary administration plan; (6) other than with respect to sales of REO
property less than $250,000, and other than with respect to payments made with
respect to the ESOP loan in 1993 and in 1994 in an amount which does not exceed
$160,000 in 1993 or $120,000 in 1994, make or enter into any commitment or
transaction involving in excess of $50,000, other than loan transactions in the
ordinary course of business; (7) pay or declare any cash dividend or other
dividend or distribution with respect to its common stock, except that, LGF's
subsidiaries shall be permitted to make dividend payments to LGF in accordance
with past practices and as permitted by law; (8) mortgage, pledge, or otherwise
subject to material lien (except pledges required to permit La Grange Federal
to accept deposits of public funds and excluding mechanics' liens), charge,
security interest, or other encumbrance of any of its assets, except for liens
for taxes not yet due and payable; (9) invite or initiate discussions or
negotiations for the acquisition or merger of LGF with any entity other than
First of America or its affiliates; (10) cancel or compromise any debt or
claim, which has not previously been charged off, other than in the ordinary
course of business in an aggregate amount which is not materially adverse; (11)
transfer or grant any rights under any leases, licenses or agreements, other
than in the ordinary course of business; (12) incur any indebtedness for
borrowed money, except for deposit liabilities and except for indebtedness
incurred in the ordinary course of business the repayment term of which does
not exceed one year;

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<PAGE> 28
(13) enter into any transaction other than in the ordinary course of business;
and (14) take any action which constitutes a breach or default of its
obligations under the Merger Agreement or which is reasonably likely to delay
or jeopardize the receipt of any of the required regulatory approvals or is
reasonably likely to the best of LGF's knowledge to preclude the Merger from
qualifying for "pooling of interests" accounting treatment.

EFFECTIVENESS OF THE MERGER. No specific effective date for the Merger
is provided by the Merger Agreement. If the Merger Agreement is approved by LGF
shareholders, it is expected that the Merger will be consummated as soon as
practicable after the requisite regulatory approvals (see "The
Merger--Regulatory Approvals") have been received. The Merger will thereafter
become effective upon the filing of the appropriate documents with the Delaware
Secretary of State.

ACCOUNTING TREATMENT. The parties anticipate accounting for the
Merger as a pooling of interests, and it is a condition to First of America's
and LGF's respective obligations to consummate the Merger that they shall have
received a letter from KPMG Peat Marwick to the effect that the Merger will
qualify for pooling of interests accounting treatment.

SURRENDER OF STOCK CERTIFICATES. After effectiveness of the Merger,
each holder of certificates theretofore representing validly issued and
outstanding shares of LGF Common Stock will surrender his or her certificates
to Norwest Stock Transfer, the exchange agent for such shares, and each holder
will be entitled upon surrender to receive a certificate representing the whole
number of shares of First of America Common Stock into which his or her shares
of LGF Common Stock will have been converted and cash (without interest
thereon) in lieu of fractional shares of First of America Common Stock.
Following effectiveness of the Merger and until surrendered, each outstanding
certificate representing LGF Common Stock will be deemed for all corporate
purposes, other than payment of dividends previously declared and unpaid or
uncollected, to evidence ownership of only the right to receive the First of
America Common Stock (and cash in lieu of fractional shares) into which shares
of LGF Common Stock will have been converted in the Merger. Unless and until
any such certificate is surrendered, the holder thereof will not have any right
to receive First of America Common Stock (and cash in lieu of fractional
shares) or any dividends otherwise payable on First of America Common Stock.
Following surrender, there will be paid to the record holder of any LGF Common
Stock the amount of any dividends (without interest thereon) otherwise payable
except for failure to surrender.

SURRENDER OF OPTION RIGHTS. LGF and First of America have determined
that consent of the option holders will be required in order to permit the
conversion of Option Rights into First of America Common Stock. It is expected
that such consent will be obtained in advance of the Special Meeting. After
effectiveness of the

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<PAGE> 29
Merger, each holder of Option Rights will be entitled to receive a
certificate representing the whole number of shares of First of America Common
Stock (and cash in lieu of fractional shares) into which his or her Option
Rights will have been converted.

RESALE OF THE FIRST OF AMERICA COMMON STOCK. Shares of First of
America Common Stock issued to shareholders of LGF will be transferable without
restriction upon disposition, except shares issued to any person who may be
considered an "affiliate" of LGF, as defined by the rules and regulations of
the Commission under the Securities Act. LGF has agreed in the Merger Agreement
to furnish at or before the effective date of the Merger an agreement from each
such "affiliate" that such person will not make a "distribution" within the
meaning of the Commission's Rule 145 of First of America Common Stock received
in the Merger and that such stock will be held subject to all applicable
provisions of the Securities Act and the rules and regulations of the
Commission thereunder. In addition, such agreements will contain prohibitions
upon dispositions by affiliates which would prevent the Merger from being
accounted for as a pooling of interest. (See "the Merger-Accounting
Treatment").

DESCRIPTION AND COMPARISON OF
FIRST OF AMERICA CAPITAL STOCK AND LGF CAPITAL STOCK

Holders of LGF Common Stock will, upon consummation of the Merger,
become holders of First of America Common Stock. The rights of holders of First
of America Common Stock differ in some respects from the rights of holders of
LGF Common Stock. These differences are due to differences between the
provisions of First of America's Articles of Incorporation and Bylaws and LGF's
Certificate of Incorporation and Bylaws and differences between the Michigan
Act, under which First of America is incorporated, and the Delaware Law, under
which LGF is incorporated. The following discussion describes and compares the
material differences between the rights of holders of First of America Common
Stock and LGF Common Stock.

FIRST OF AMERICA COMMON STOCK. First of America is authorized to issue
100,000,000 shares of First of America Common Stock, par value $10 per share.
At December 31, 1993, there were 59,520,710 shares of First of America Common
Stock outstanding, held of record by approximately 28,400 persons. As of that
date, there were also outstanding options to purchase 965,700 shares of First
of America Common Stock, held by officers of First of America and its
subsidiaries.

Subject to the rights of the holders of any First of America Preferred
Stock when outstanding (as described below), holders of First of America Common
Stock are entitled to receive dividends if and when declared by the Board of
Directors out of any funds legally available therefor. Subject to the rights of
holders of any First of America Preferred Stock when outstanding, holders of
First of America Common Stock are entitled to receive pro rata upon
liquidation, dissolution, or winding up all of the assets of First of America
remaining after provision for the payment of creditors. Subject to the
rights of holders of any First of America Preferred Stock when outstanding to
elect additional directors in the case of dividend arrearages, holders of First
of America Common Stock are vested with exclusive voting rights, each share
being entitled to one vote. Holders of First of America Common Stock have no
cumulative voting rights in electing directors. Holders of First of America
Common Stock have no preemptive rights to subscribe for any additional shares
of capital stock which First of America may issue. First of America Common
Stock is neither convertible nor redeemable. All outstanding shares of First of
America Common Stock are fully paid and nonassessable and have tandem
shareholder rights.

First of America Common Stock is listed for trading on the NYSE
(symbol FOA). The high, low, and closing sales prices for First of America
Common Stock on December 31, 1993, were $39.375, $39.125 and $39.25,
respectively. On October 11, 1993, the last full trading day before public
announcement of the Merger, the high, low, and closing sales prices were
$41.75, $41.50 and $41.625, respectively. The First of America Common Stock
issuable upon consummation of the Merger will be listed for trading on the
NYSE.

FIRST OF AMERICA PREFERRED STOCK. First of America is authorized to
issue 10,000,000 shares of First of America Preferred Stock, $1.00 stated
value. Shares of First of America Preferred Stock are issuable in series with
designation, powers, relative rights and preferences as prescribed by First of
America's Board of Directors in the resolution providing for the issuance
thereof. There are currently no shares of First of America Preferred Stock

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outstanding.

FIRST OF AMERICA SHAREHOLDER RIGHTS PLAN. First of America has
reserved 500,000 shares of preferred stock for issuance as Series A Junior
Participating Preferred Stock ("Series A Preferred") upon the exercise of
certain preferred stock purchase rights (each a "Right") issued to holders of
and in tandem with all outstanding shares of the Common Stock. The description
and terms of the Rights are set forth in a Rights Agreement ("Rights
Agreement"), dated July 18, 1990, between First of America and First of America
Bank-Michigan, N.A., as Rights Agent. The Rights Agreement was filed with the
Securities and Exchange Commission as an exhibit to the First of America's
Registration Statement dated July 18, 1990 on Form 8-A under the Securities
Exchange Act of 1934. This summary description of the Rights does not purport
to be complete and is qualified in its entirety by reference to the Rights
Agreement which is incorporated herein by reference.

Generally, the Rights Agreement provides as follows. The Rights are
not exercisable until a Distribution Date, which occurs ten days after a person
or group (an "Acquiring Person") publicly announces acquisition of or commences
a tender offer which may result in the acquisition of beneficial ownership of
10 percent or more of the outstanding shares of First of America Common Stock
(a "Stock Acquisition Date"). If, following a Stock Acquisition Date, First of
America is merged with or engages in a business combination transaction with
the Acquiring Person or the Acquiring Person increases its beneficial ownership
of First of America Common Stock by more than one percent or engages in self
dealing, then holders of Rights, other than the Acquiring Person, will receive
upon exercise of each Right, common stock of First of America or of the entity
surviving the merger or business combination or other consideration with a
value of two times the exercise price of the right.

First of America may, at its option, at any time after a Stock
Acquisition Date and before an Acquiring Person becomes the beneficial owner of
more than 50 percent of the outstanding shares of First of America Common
Stock, elect to exchange all outstanding Rights for shares of First of America
Common Stock at an exchange ratio of one share of First of America Common Stock
per Right, subject to adjustment to prevent dilution. At any time until twenty
days following the Stock Acquisition Date, First of America may redeem the
Rights in whole, but not in part, at a price of $.01 per Right. Until a Right
is exercised, the holder thereof, as such, will have no right as a shareholder
of First of America, including, without limitation, the right to vote or to
receive dividends. Other than those provisions relating to the principal
economic terms of the Rights, any of the provisions of the Rights Agreement may
be amended by First of America's Board of Directors prior to the Distribution
Date.

If issued upon exercise of the Rights, shares of the Series A
Preferred will rank junior to the Convertible Preferred. Each share of Series
A Preferred shall be entitled to 100 votes on all matters submitted to a vote
of the shareholders of First of America. Additionally, in the event First of
America fails to pay dividends on the Series A Preferred for four full
quarters, holders of the Series A Preferred have certain rights to elect
additional directors of First of America. Except as described above, holders
of the Series A Preferred have no preemptive rights to subscribe for additional
securities which First of America may issue. The Series A Preferred will not
be redeemable. Each share of Series A Preferred will, subject to the rights of
the Convertible Preferred and any other preferred stock First of America may
issue ranking senior to the Series A Preferred, if any, be entitled to
preferential quarterly dividends equal to the greater of $10.00, or subject to
certain adjustments, 100 times the dividend declared per share of Common Stock.
Upon liquidation of First of America, holders of Series A Preferred will,
subject to the rights of senior securities, be entitled to a preferential
liquidation payment equal to $95.00 per share, plus accrued and unpaid
dividends. In the event of any merger, consolidation, or other transaction in
which shares of Common Stock are exchanged, each share of Series A Preferred
will, subject to the rights of senior

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securities, be entitled to receive 100 times the amount received per share of
Common Stock. The rights of the Series A Preferred are protected by customary
antidilution provisions.

The Rights have certain anti-takeover effects. The Rights will cause
substantial dilution to a person or group that attempts to acquire First of
America without conditioning the offer on a substantial number of Rights being
acquired. The Rights should not interfere with any merger or other business
combination approved by First of America's Board of Directors since the Board
of Directors may, at its option, at any time until 20 days following the stock
acquisition date redeem all but not less than all of the then outstanding
Rights at the redemption price.

LGF COMMON STOCK. LGF is authorized to issue 5,000,000 shares of LGF
Common Stock, $.01 par value. At December 31, 1993, there were 1,762,990 shares
of LGF Common Stock outstanding, held of record by 754 holders. As of that date,
there were also outstanding 157,220 Option Rights and the Warrant to purchase
up to 439,574 shares of LGF Common Stock. (See "The Merger--Related
Agreements, Consideration to be Received in the Merger.")

Price quotations of LGF Common Stock are reported on Nasdaq National
Market (symbol LGFB). The last sale price reported on December 31, 1993, was
$32.75. On October 11, 1993, the last full trading day before public
announcement of the Merger, the reported last sale price was $28.50.

Subject to the rights of the holders of any LGF Preferred Stock when
outstanding (as described below), holders of LGF Common Stock are entitled to
receive dividends when, as, and if declared by the LGF Board out of any funds
legally available therefor. Subject to the rights of the holders of any LGF
Preferred Stock when outstanding, in the event of liquidation, holders of LGF
Common Stock are entitled, after payment of the claims of creditors, to receive
pro rata the net assets of LGF. Subject to the rights of the holders of any LGF
Preferred Stock when outstanding, holders of LGF Common Stock are vested with
all voting power of LGF and are entitled to one vote for each share held.
LGF's shareholders do not have cumulative voting rights with respect to the
election of directors. Holders of LGF Common Stock do not have any preemptive
rights to subscribe for additional shares of capital stock of LGF. LGF Common
Stock is neither convertible nor redeemable. All outstanding shares of LGF
Common Stock are fully paid and nonassessable.

LGF PREFERRED STOCK. LGF is authorized to issue 1,000,000 shares of
preferred stock, $.01 par value ("LGF Preferred Stock"). The LGF Board is
authorized to provide for the issuance of the shares of LGF Preferred Stock in
series, to establish from time to time the number of shares to be included in
each such series, and to fix the designation, powers, preferences, and rights
of the shares of each such series and any qualifications, limitations or
restrictions thereof. There are currently no shares of LGF Preferred Stock
outstanding.

COMPARISON OF CERTAIN PROVISIONS OF FIRST OF AMERICA'S ARTICLES OF
INCORPORATION AND BYLAWS AND LGF'S CERTIFICATE OF INCORPORATION AND BYLAWS

The following discussion describes provisions of First of America's
Articles of Incorporation and Bylaws and LGF's Certificate of Incorporation and
Bylaws relating to the topics indicated by the captions and then compares the
provisions. The discussion is intended to show the similarities and differences
in the rights of holders of First of America Common Stock and LGF Common Stock
and illustrate the effect of the Merger on LGF shareholders who become First of
America shareholders.

BOARD OF DIRECTORS.

FIRST OF AMERICA. The Articles of Incorporation ("Articles") of
First of America provide that directors of First of America are divided into
three classes, and at each annual meeting of shareholders, one class is elected
for a three year term. Under the Articles, the number of directors is fixed
from time to time by resolution adopted by a number of directors constituting
not less than 80 percent of First of America's full Board of Directors. Subject
to the rights of holders of any particular class or series of equity securities
of First of America, any newly created directorship resulting from an increase
in the total number of authorized directors may be filled by an 80 percent vote
of the directors then in office, or by a sole remaining director, or by a
majority vote of the shareholders. Any vacancy resulting from death,
resignation, retirement, disqualification, removal from office, or other cause
may be filled only by an 80 percent

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vote of the directors then in office, or by a sole remaining director, or by a
majority of the shareholders. Any vacancy resulting from death, resignation,
retirement, disqualification, removal from office, or other cause may be filled
only by 80 percent vote of the directors the in office, or by a sole remaining
director. Any director elected to fill any newly created directorship or
vacancy shall serve for the remainder of the full term of the class to which
such director has been elected. The Articles provide that directors may be
removed only for cause and only by the affirmative vote of holders of not less
than 66-2/3 percent of the outstanding shares of capital stock of First of
America entitled to vote generally in the election of directors ("Voting
Stock"). First of America's Bylaws provide that nomination of directors by
shareholders may be made only in person or by proxy at a meeting at which the
nominating shareholder is entitled to vote, and only if written notice of such
shareholder's intent to make such nomination has been received by First of
America at least 30 days but not more than 90 days before the anniversary date
of the record date for determination of shareholders entitled to vote at the
immediately preceding annual meeting of shareholders. The notice must contain
certain information as specified in First of America's Bylaws. First of
America's Bylaws set forth certain qualifications for any nominee to be
eligible to be elected or to serve on its Board of Directors. These
qualifications include the requirement that the nominee have a history of
conducting his or her own personal and business affairs in a safe and sound
manner, in a safe and sound condition, and in accordance with applicable laws
and regulations, and without substantial conflicts of interest. The Bylaws
require that all nominees complete a qualification, eligibility and disclosure
questionnaire in the form approved by First of America's Board of Directors.
The Bylaws also set forth procedures pursuant to which the Directors Nominating
and Management Succession Committee of the Board of Directors shall determine
whether nominees are eligible to serve as directors pursuant to the
qualifications set forth in the Bylaws.

LGF. The Certificate of Incorporation ("Certificate") of LGF provides
that directors of LGF are divided into three classes, and at each annual
meeting of shareholders, one class is elected for a three year term. Under the
Certificate, the number of directors is fixed from time to time by resolution
adopted by a majority of the then authorized directors. Subject to the rights
of holders of any particular class or series of equity securities of LGF, any
newly created directorship resulting from an increase in the authorized number
of directors may be filled only by a majority vote of the directors then in
office. Any vacancy resulting from death, resignation, retirement,
disqualification, removal from office, or other cause may be filled only by a
majority vote of the directors then in office. Any director elected to fill
any newly created directorship or vacancy shall serve for the remainder of the
full term of the class to which such director has been elected. The
Certificate provides that directors may be removed only for cause and only by
the affirmative vote of holders of not less than 80 percent of the outstanding
shares of capital stock of LGF entitled to vote generally in the election of
directors. LGF's Bylaws provide that nomination of directors may be made by
shareholders entitled to vote thereon, only if written notice of such
shareholder's nomination has been received by LGF not less than 90 days prior
to the date of the annual meeting; provided, however, in the event that less
than 100 days notice or prior public disclosure of the date of the meeting is
given or made to shareholders, notice by the shareholders must be received not
later than the close of business on the 10th day following the day on which
such notice of the date of the annual meeting was mailed or such public
disclosure was made. The notice must contain certain information as specified
in LGF's Bylaws.

COMPARISON. The First of America and LGF provisions regarding number,
election, appointment and removal of directors are very similar. These
provisions could have the effect of making removal of incumbent management more
difficult, and, therefore, may discourage accumulation of a substantial block
of common stock by a shareholder and discourage assumption of control by such a
shareholder.

ACTION BY SHAREHOLDERS.

FIRST OF AMERICA. First of America's Articles provide that First of
America shareholders may not act by written consent without a shareholder
meeting. Special meetings called by shareholders may be called only by holders
of not less than 66-2/3 percent of the Voting Stock, and such meetings require
30 days prior notice stating all purposes of the meeting. First of America's
Bylaws provide that only such business as set forth in a notice of a special
meeting of shareholders shall be conducted at the meeting. First of America's
Bylaws set forth procedures for shareholders to give notice of matters proposed
to be brought before the annual meeting of shareholders. These procedures
require that the shareholder's notice be received by First of America's
Secretary at least 30 but not more than 90 days before the anniversary of the
record date for determination of shareholders entitled to vote at the

19
<PAGE> 33
immediately preceding annual meeting of shareholders. The notice must include
information about the business desired to be brought before the annual meeting,
and any material interest of the shareholder therein, and the shareholder's
beneficial ownership of First of America's securities.

LGF. LGF's Certificate provides that LGF shareholders may not act by
written consent. Further, LGF's Certificate and Bylaws provide that a special
shareholders' meeting may be called only by LGF's Board pursuant to a
resolution adopted by a majority of the total number of directors then
authorized. LGF's Bylaws provide that at any special meeting of the
shareholders, only such business shall be conducted as shall have been brought
before the meeting by or at the direction of the LGF Board. LGF's Bylaws set
forth procedures for shareholders to give notice of matters proposed to be
brought before the annual meeting of shareholders. These procedures require
that the shareholders' notice be received by LGF's secretary at least 90 days
prior to the date of the annual meeting; provided, however, that in the event
that less than 100 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 received no later then the close of business on the 10th day
following the day on which such notice of the date of the annual meeting was
mailed or such public disclosure was made. The notice must include information
about the business desired to be brought before the annual meeting, any
material interest of the shareholder therein, and the shareholders' beneficial
ownership of LGF securities.

COMPARISON. First of America's Articles require the affirmative vote
of 66-2/3 percent of the Voting Stock to call a special shareholder's meeting;
LGF's Certificate provides that a special shareholder's meeting may be called
only by LGF's Board. The First of America and LGF provisions relating to
matters to be brought before the annual meeting of shareholders both require
significant advanced notice and information regarding the matter. These
provisions may have the effect of assisting incumbent management in retaining
their positions and discouraging business combination transactions, such as a
merger, which management does not first approve.

SUPERMAJORITY APPROVAL OF CERTAIN TRANSACTIONS.

FIRST OF AMERICA. Under First of America's Articles, except where a
greater vote is required by the Fair Price Act (as defined below, see
"Comparison of The Michigan Business Corporation Act and The Delaware General
Corporation Law--Transactions with Interested Shareholders"), the affirmative
vote of 66-2/3 percent of the Voting Stock and a majority of the Voting Stock
not held by the beneficial owner of 10 percent or more of the Voting Stock of
First of America (an "Interested Shareholder") is required to approve certain
business combination transactions with an Interested Shareholder not approved
by First of America's Board of Directors, unless the price per share to be
received by all shareholders is at least equal to the price paid for shares of
Voting Stock purchased by the Interested Shareholder within the preceding two
years. The Articles also provide that any merger with another corporation other
than a subsidiary, sale or disposition of substantially all assets, or
liquidation or dissolution requires the affirmative vote of at least 66-2/3
percent of the Voting Stock, unless it is approved by a majority of the First
of America's Directors, other than those affiliated with the other party to the
transaction.

LGF. Under LGF's Certificate, an affirmative vote of 80 percent of
the then outstanding shares of stock of LGF entitled to vote in the election of
directors ("LGF Voting Stock") is required to approve certain business
combination transactions with a beneficial owner of 10 percent or more of the
LGF Voting Stock when the combination has not been approved by LGF's Board.
Voting requirements for business combinations with disinterested parties are
not provided in either of LGF's Certificate or Bylaws, and, therefore, the
Delaware Law's requirement of an affirmative vote of the majority of all shares
entitled to vote and of each class entitled to vote as a class would apply to
such a transaction.

COMPARISON. The First of America and LGF provisions relating to
business combinations with interested shareholders may have the effect of
giving a minority shareholder or group of shareholders, including management,
the ability to defeat a transaction which may be desired by or viewed as
beneficial to other shareholders. The provisions of LGF's Certificate
establish a higher shareholder approval requirement, 80 percent for LGF versus
66-2/3 percent for First of America, make it more difficult for an interested
shareholder of LGF than for an interested shareholder of First of America to
force a business combination without management approval. First of America's
provisions relating to business combinations not involving an interested
shareholder, however, are more restrictive

20
<PAGE> 34
than LGF's provisions, as the First of America provisions require a 66-2/3
percent approval from shareholders unless management approves whereas the LGF
provisions simply require approval by a majority of all shares entitled to vote
and a majority of each class entitled to vote.

AMENDMENT OR REPEAL OF CERTAIN PROVISIONS.

FIRST OF AMERICA. The provisions of First of America's Articles
described herein may be amended or repealed only by the affirmative vote of at
least 66-2/3 percent of the Voting Stock. The provisions of First of America's
Bylaws described above and certain other by-law provisions may be amended or
repealed only by the affirmative vote of at least 66-2/3 percent of the Voting
Stock or 80 percent of First of America's full Board of Directors.

LGF. The certain provisions of LGF's Certificate described herein may
be amended only by the affirmative vote of at least 80 percent of the
outstanding shares entitled to vote on the proposed amendment. The LGF Bylaws
may be amended by a majority of the LGF Board and by the affirmative vote of at
least 80 percent of the outstanding shares entitled to vote generally in the
election of directors.

COMPARISON. The First of America and LGF provisions regarding
amendments to their respective Articles, Certificate and Bylaws are similar
except for the amount of vote required.

OTHER PROVISIONS.

FIRST OF AMERICA. First of America's Articles provide that when the
Board of Directors is evaluating a tender or exchange offer of another person,
an offer to merge, or to purchase all the assets of First of America, it shall
consider all relevant factors including the social and economic effects on
employees, customers, suppliers, and other constituencies and on the
communities in which First of America operates or is located. This provision of
First of America's Articles may allow First of America's Board of Directors to
use the factors stated as a basis for rejecting an offer that, judged strictly
on its financial terms, may be desirable by First of America shareholders.

LGF. LGF has a similar provision in its Certificate.

OVERALL COMPARISON AND EFFECTS OF FIRST OF AMERICA PROVISIONS.

LGF's Certificate and Bylaws and First of America's Articles and
Bylaws both generally contain provisions that may have the effect of
discouraging, delaying, deterring, or preventing a change in control through a
business combination transaction or otherwise. These provisions may also have
the effect of making incumbent management more difficult to remove and may
discourage accumulations of significant blocks of common stock. However, First
of America's intent in implementing the provisions described above was not to
discourage proposals involving a change in control of First of America, but to
encourage the makers of such proposals to negotiate with First of America's
management and Board of Directors so that they can act in the best interest of
shareholders.

COMPARISON OF THE MICHIGAN BUSINESS CORPORATION ACT
AND THE DELAWARE GENERAL CORPORATION LAW

If the Merger is consummated, LGF shareholders will become
shareholders of First of America. First of America is a Michigan corporation
incorporated under the Michigan Act. LGF is a Delaware corporation incorporated
under the Delaware Law. The following discussion summarizes material
differences between the Michigan Act and the Delaware Law with respect to
rights of shareholders.

DISSENTERS' RIGHTS OF APPRAISAL.

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<PAGE> 35
In both Michigan and Delaware, a shareholder who does not vote in
favor of certain corporate actions has the right to receive cash in exchange
for such shareholder's stock. This right is known as the "right to dissent" in
Michigan or "appraisal rights" in Delaware.

MICHIGAN ACT. The Michigan Act recognizes rights to dissent in
connection with certain amendments to the articles if incorporation, mergers,
consolidation, and sales or other dispositions of all or substantially all of
the assets of a corporation. Under the Michigan Act, rights to dissent from a
corporate action (including a merger or consolidation) are not available as to
shares listed on a national securities exchange (such as First of America
Common Stock) or held of record by not less than 2,000 persons on the record
date fixed to determine the shareholders entitled to vote on the corporate
action. Further, rights to dissent are not available in connection with
mergers or consolidations pursuant to which shareholders receive cash or shares
of stock which shares of stock to be received are listed on a national
securities exchange or are held of record by not less than 2,000 persons on the
record date fixed to determine the shareholders entitled to vote on the merger
or consolidation.

DELAWARE LAW. Under the Delaware Law, appraisal rights are available
for the shares of stock of a constituent corporation in certain mergers. Unless
the corporate charter otherwise provides, appraisal rights are not available
under Delaware Law as a result of an amendment to a corporation's certificate
of incorporation or the sale of all or substantially all of the assets of the
corporation. Under the Delaware Law, no appraisal rights are available for the
shares of any stock which, at the record date fixed to determine the
stockholder entitled to receive notice of and to vote at the meeting of
stockholders to act upon the agreement of merger or consolidation, were listed
on a national securities exchange, designated as a Nasdaq National Market
security or held of record by more than 2,000 stockholders. Notwithstanding
the foregoing, appraisal rights are available for the shares of any class of
stock of a constituent corporation if the holders thereof are required by the
terms of an agreement of merger or consolidation to accept in exchange anything
except (1) shares of stock of the corporation surviving or resulting from such
merger or consolidation; (2) shares of stock of any other corporation which at
the effective date of the merger or consolidation will be either listed on a
national securities exchange, designated as a Nasdaq National Market security
or held of record by more than 2,000 stockholders; (3) cash in lieu of
fractional shares of the corporations described in the foregoing clauses (1)
and (2); or (4) any combination of the foregoing. LGF shareholders do not have
dissenters' rights with respect to the Merger. See "The Merger--No Rights of
Dissenting Shareholders."

SUPERMAJORITY VOTING PROVISIONS.

MICHIGAN ACT. Under the Michigan Act, supermajority voting provisions
(which require a greater-than-majority vote in order to take certain actions)
may be included in a corporation's articles of incorporation. Adding a
supermajority voting provision to the articles of incorporation requires a
simple majority vote of approval by shareholders. Changing or eliminating a
supermajority voting provision, however, requires the same supermajority
shareholder approval as contained in the provision being changed or eliminated.

DELAWARE LAW. Under Delaware Law, supermajority voting provisions
(which require a vote greater than that required by statute in order to take
certain actions) may be included in a corporation's certificate of
incorporation. Adding a supermajority voting provision to the certificate of
incorporation requires a simple majority vote by shareholders. Changing or
eliminating a supermajority voting position requires the same simple majority
shareholder approval unless the certificate of incorporation specifically
requires a higher vote.

ACTION WITHOUT A MEETING.

MICHIGAN ACT. Under the Michigan Act, a corporation's articles of
incorporation may provide that shareholders may take action without a meeting
and without a vote if consent in writing to the action taken is given by
holders of at least the minimum number of shares that would be required to vote
for approval of such action at a meeting. If a corporation's articles do not
contain a provision such as that described above, then unanimous consent by
holders of all shares that would be entitled to vote on the action at a meeting
is required to take action without a meeting and a vote.

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<PAGE> 36
DELAWARE LAW. Under the Delaware Law, unless the certificate of
incorporation otherwise provides, an action required by law to be taken at an
annual or special meeting of the stockholders may be taken without a meeting,
without prior notice and without a vote, if the holders of outstanding shares
having the minimum number of votes that would be necessary to take the action
at a meeting have consented in writing to the action.

TRANSACTIONS WITH INTERESTED SHAREHOLDERS.

MICHIGAN ACT. The Fair Price Act, which forms a part of the Michigan
Act, provides that a supermajority of 90 percent of the shareholders and no
less than two-thirds of the votes of noninterested shareholders must approve a
"business combination." The Fair Price Act defines a "business combination" to
encompass any merger, consolidation, share exchange, sale of assets, stock
issue, liquidation, or reclassification of securities involving an "interested
shareholder" or certain "affiliates." An "interested shareholder" is generally
defined as any person who owns 10 percent or more of the outstanding voting
shares of the corporation. An "affiliate" is a person who directly or
indirectly controls, is controlled by, or is under common control with, a
specified person.

The supermajority vote required by the Fair Price Act does not apply
to business combinations that satisfy certain conditions. These conditions
include, among others, that (1) the purchase price to be paid for the shares of
the corporation is at least equal to the highest of either (a) the market value
of the shares or (b) the highest per share price paid by the interested
shareholder within the preceding two-year period or in the transaction in which
the shareholder became an interested shareholder, whichever is higher; and (2)
once becoming an interested shareholder, the person does not become the
beneficial owner of any additional shares of the corporation except as part of
the transaction which resulted in the interested shareholder becoming an
interested shareholder or by virtue of proportionate stock splits or stock
dividends.

The requirements of the Fair Price Act do not apply to a business
combination with the interested shareholder that the board of directors has
approved or exempted from the requirements of the Fair Price Act by resolution
at any time prior to the time that the interested shareholder first became an
interested shareholder.

DELAWARE LAW. The Delaware Law provides that if a person acquires 15
percent or more of a Delaware corporation's voting stock (thereby becoming an
"interested stockholder"), such stockholder may not engage for three years
after such acquisition in certain enumerated transactions with the corporation
(a "business combination") unless one of three exceptions is satisfied: (1)
prior to the date such person became an interested shareholder, the board of
directors approved either the business combination or the transaction which
resulted in the stockholder becoming an interested stockholder; (2) upon
consummation of the transaction which resulted in such person becoming an
interested stockholder, such person owned at least 85 percent of the
corporation's voting stock outstanding at the time the transaction commenced
(excluding shares owned by directors who are also officers and shares owned by
employee stock plans in which participants do not have the right to determine
confidentially whether shares will be tendered in a tender or exchange offer);
or (3) the business combination is approved by the board and authorized by the
affirmative vote of a stockholder's meeting (a written consent cannot be used
for this purpose) of at least 66-2/3% of the outstanding voting stock not owned
by the interested stockholder.

CONTROL SHARE ACQUISITIONS.

MICHIGAN ACT. Under the Shareholder Equity Act, which forms a part of
the Michigan Act, "Control Shares" of an "issuing public company" purchased by
a shareholder or group of shareholders may be voted only to the extent approved
(1) by a majority of the outstanding voting shares and (2) a majority of the
outstanding voting shares excluding shares held by the acquiring person or
group and shares held by officers and employees/directors of the issuing public
company. "Control Shares'' are shares that, when added to other shares owned by
the person or group, would entitle such person or group to exercise voting
power of an issuing public company in the election of directors within any of
the following ranges of voting power: (1) one-fifth or more but less than
one-third of all voting power; (2) one-third or more but less than a majority
of all voting power; or (3) a majority of all voting power. An "issuing public
company" is one that has (1) 100 or more shareholders of record, (2) its
principal place of business, its principal office or substantial assets in
Michigan and (3) either (a) more than 10 percent of its

23
<PAGE> 37
shareholders of record reside in Michigan, (b) more than 10 percent of its
shares owned of record by Michigan residents or (c) 10,000 shareholders of
record residing in Michigan.

The Board of Directors of First of America has amended its Bylaws to
provide, as authorized by the Shareholder Equity Act, that Control Shares held
by a Control Shares acquiror who has not filed an acquiring person statement
with First of America are subject to redemption and that Control Shares which
have not been accorded full voting rights after a vote, as provided in the Act,
are subject to redemption. The redemption price is the highest price per share
which the Control Share acquiror has paid for the Control Shares.

DELAWARE LAW. The Delaware Law does not contain any provision similar
to those of the Michigan Act with respect to control share acquisitions other
than as discussed above under "Transactions with Interested Shareholders."

INFORMATION ABOUT FIRST OF AMERICA

GENERAL. First of America is a corporation organized under the
Michigan Act and a bank holding company registered under the Bank Holding
Company Act. Its principal activity consists of owning and supervising 20
affiliate financial institutions which operate general commercial banking
businesses from 574 offices and facilities located in Michigan, Illinois, and
Indiana. First of America owns 9 banks located in Michigan with combined
assets of $12.8 billion at September 30, 1993. First of America owns 9 banks
located in Illinois with combined assets of $7.0 billion at September 30, 1993.
First of America also owns two banks in Indiana with combined assets of $1.3
billion at September 30, 1993. First of America also has divisions and
non-banking subsidiaries which provide mortgage, trust, data processing,
pension consulting, discount securities brokerage, revolving credit and
investment advisory services. First of America owns all of the outstanding
stock of Acquisition Sub. At September 30, 1993, First of America had
consolidated assets of $21.1 billion, deposits of $18.5 billion, and
shareholders' equity of $1.5 billion.

First of America is frequently in the process of examining potential
acquisitions or merger candidates. Several potential acquisitions or mergers
are often at different stages of development and negotiation at any one time.
No assurance can be given that First of America will or will not consummate any
such acquisitions or mergers.

First of America was incorporated in 1971 by its lead bank, First of
America Bank-Michigan, N.A., Kalamazoo, Michigan, which was established in
1863. It became a bank holding company in 1972 in a transaction in which First
of America Bank-Michigan, N.A. and two other banks became wholly owned
affiliates. First of America became a savings and loan holding company on July
31, 1990, through the acquisition of a federally chartered stock savings
association which has since been merged with one of First of America's
affiliate commercial banks.

As the parent company, First of America provides certain management
functions to its affiliate financial institutions relating to loan policies and
procedures, profit planning and accounting, external and internal audit, legal
advice and compliance with government regulations, and general coordination of
investment, trust, and human resources administration, data processing, and
product development activities.

First of America's affiliate financial institutions offer a broad
range of lending, depository, and related financial services to individual,
commercial, industrial, financial, and governmental customers, including
demand, savings, and time deposits, secured and unsecured loans, lease
financing, letters of credit, money transfers, corporate and personal trust
services, cash management, and other financial services.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE. Additional
information about First of America, including certain financial information,
information about voting securities of First of America and principal holders
thereof, and information about directors and executive officers of First of
America, is included in the documents

24
<PAGE> 38
filed by First of America with the Commission and the NYSE under the Exchange
Act and incorporated herein by reference. See "Incorporation of Certain
Documents by Reference."

25
<PAGE> 39
INFORMATION ABOUT LGF

GENERAL. LGF was incorporated in 1992 in Delaware and is a savings
and loan holding company subject to regulation by the OTS, the Federal Deposit
Insurance Corporation ("FDIC") and the SEC. LGF was organized, for the purpose
of acquiring all of the capital stock of La Grange Federal subsequent to La
Grange Federal's conversion from a mutual to stock form of ownership. This
event was completed on June 18, 1992. Currently, LGF does not transact any
material business other than through its sole subsidiary, La Grange Federal.
La Grange Federal was founded in 1925 as an Illinois chartered savings and loan
association headquartered in La Grange, Illinois. In 1934, the institution
converted to a federally chartered and insured savings and loan association.
La Grange Federal is a member of the Federal Home Loan Bank System and its
deposit accounts are insured up to applicable limits by the FDIC. At September
30, 1993, La Grange Federal had total assets of $405.2 million and
stockholders' equity of $35.9 million (8.87% of total assets).

La Grange Federal's principal business is attracting retail deposits
from the general public and investing these deposits, together with funds
generated from operations and borrowings, primarily in one- to four-family
residential mortgage loans and, to a lesser extent, consumer loans,
mortgage-backed securities, U.S. Government and federal agency securities and
other marketable securities. La Grange Federal's revenues are derived
principally from interest on its mortgage loan and mortgage-backed securities
portfolio and earnings on its investment securities. La Grange Federal's
primary sources of funds are deposits, principal and interest payments on loans
and mortgage-backed securities and, to a lesser extent, borrowings.

MARKET AREA. La Grange Federal is a community-oriented financial
institution offering a variety of financial services to meet the needs of the
communities it serves. La Grange Federal currently operates out of its main
office located in La Grange and its branch offices located in Cook and DuPage
Counties, Illinois. La Grange Federal's deposit-gathering base is concentrated
in the communities surrounding its offices while its lending base extends
throughout west suburban Cook County and central DuPage County. La Grange
Federal also on occasion purchases loans outside of its lending area. La
Grange Federal's offices are located in middle- to upper-class communities,
consisting of residential neighborhoods of predominantly one- to four-family
residences.

LENDING ACTIVITIES.

LOAN AND MORTGAGE-BACKED SECURITIES PORTFOLIO COMPOSITIONS. La Grange
Federal's loan portfolio composition consists primarily of conventional
fixed-rate and adjustable-rate first mortgage loans secured by one- to
four-family residences. Although La Grange Federal does not usually originate,
purchase or participate in construction loans, it loans funds to the real
estate development joint venture of its subsidiary for the purpose of
constructing residential homes.

LGF on a consolidated basis also invests in mortgage-backed
securities. All of the mortgage-backed securities in the portfolio at December
31, 1992 were insured or guaranteed by either the Government National Mortgage
Association ("GNMA"), the Federal National Mortgage Association ("FNMA") or the
Federal Home Loan Mortgage Corporation ("FHLMC").

26
<PAGE> 40
The following table sets forth the composition of LGF's mortgage and
other loan portfolios and mortgage-backed securities portfolios in dollar
amounts and in percentages at the dates indicated.

<TABLE>
<CAPTION>
At December 31,
-----------------------------------------------------------------
1992 1991 1990
-----------------------------------------------------------------
Percent Percent Percent
of of of
Amount Total Amount Total Amount Total
------ ----- ------ ----- ------ -----
<S> <C> <C> <C> <C> <C> <C>
($ in thousands)

Mortgage loans:
One- to four family . . . . . $197,025 94.04% $216,245 94.32% $220,378 94.68%
Other mortgage loans:
Commercial real estate . . 1,168 .57 1,199 .52 1,386 .60
Multi-family . . . . . . . 593 .28 906 .39 967 .41
Land . . . . . . . . . . . 195 .09 195 .09 - -
-------- ------ -------- ------ -------- ------
Total mortgage loans . . 198,981 94.98 218,545 95.32 222,731 95.69
-------- ------ -------- ------ -------- ------

CONSUMER AND OTHER LOANS:
Home equity . . . . . . . . . 7,004 3.34 6,556 2.86 5,727 2.46
Credit cards . . . . . . . . 1,248 .60 1,259 .55 998 .43
Home improvement . . . . . . 353 .17 697 .30 922 .39
Student loans . . . . . . . . 484 .23 669 .29 768 .33
Share . . . . . . . . . . . . 428 .20 471 .21 464 .20
Automobile . . . . . . . . . 208 .10 275 .12 444 .19
Commercial and other . . . . 796 .38 795 .35 715 .31
-------- ------ -------- ------ -------- ------
Total other loans . . . . . 10,521 5.02 10,722 4.68 10,038 4.31
-------- ------ -------- ------ -------- ------

Gross loans receivable . . . 209,502 100.00% 229,267 100.00% 232,769 100.00%
------- ------- -------
------- ------- -------

LESS:
Loans in process . . . . . . 123 10 90
Unearned discounts, premiums
and deferred loan fees, net 2,289 2,138 1,858
Allowance for possible loan
losses . . . . . . . . . . . 723 450 60
-------- -------- --------

Loan receivable, net . . . . $206,367 $226,669 $230,761
-------- -------- --------
-------- -------- --------

MORTGAGE-BACKED SECURITIES:
FHLMC . . . . . . . . . . . . $ 12,299 $ 6,240 $ 24,140
FNMA . . . . . . . . . . . . 17,703 2,223 -
GNMA . . . . . . . . . . . . 24,427 5,706 2,018
-------- -------- --------
Total mortgage-backed
securities . . . . . . . 54,429 14,169 26,158
Net premiums (discounts) . 334 233 (173)
-------- -------- ---------
Net mortgage-backed
securities . . . . . . . $ 54,763 $ 14,402 $ 25,985
-------- -------- --------
-------- -------- --------

MORTGAGE-BACKED SECURITIES HELD
FOR SALE:
FNMA . . . . . . . . . . . . $ 13,967 - -
FHLMC . . . . . . . . . . . . 11,963 $ 21,591 -
-------- --------
Total mortgage-backed
securities held for sale 25,930 21,591 -
Net premiums (discounts) . (125) (147) -
Valuation allowance . . . . (94) - -
--------- --------
Net mortgage-backed
securities
held for sale . . . . . . $ 25,711 $ 21,444 -
-------- --------
-------- --------

</TABLE>

<TABLE>
<CAPTION>
At December 31,
-----------------------------------------------
1989 1988
-----------------------------------------------
Percent Percent
of of
Amount Total Amount Total
------ ------ ------ -----
<S> <C> <C> <C> <C>
($ in thousands)

Mortgage loans:
One- to four family . . . . . $200,352 94.75% $185,219 95.17%
Other mortgage loans:
Commercial real estate . . 2,119 1.00 1,638 .84
Multi-family . . . . . . . 1,047 .50 1,121 .58
Land . . . . . . . . . . . - - - -
-------- ------ -------- ------
Total mortgage loans . . 203,518 96.25 187,978 96.59
-------- ------ -------- ------
-------- ------ -------- ------

CONSUMER AND OTHER LOANS:
Home equity . . . . . . . . . 3,875 1.84 2,585 1.33
Credit cards . . . . . . . . 370 .17 - -
Home improvement . . . . . . 1,011 .48 805 .41
Student loans . . . . . . . . 976 .46 1,209 .62
Share . . . . . . . . . . . . 537 .25 694 .36
Automobile . . . . . . . . . 711 .34 870 .44
Commercial and other . . . . 452 .21 483 .25
-------- ------ -------- ------
Total other loans . . . . . 7,932 3.75 6,646 3.41
-------- ------ -------- ------

Gross loans receivable . . . 211,450 100.00% 194,624 100.00%
------- -------
------- -------

LESS:
Loans in process . . . . . . 62 201
Unearned discounts, premiums
and deferred loan fees, net 1,346 676
Allowance for possible loan
losses . . . . . . . . . - -
-------- --------
Loan receivable, net . . . . $210,042 $193,747
-------- --------
-------- --------

MORTGAGE-BACKED SECURITIES:
FHLMC . . . . . . . . . . . . $ 26,582 $ 29,329
FNMA . . . . . . . . . . . . - -
GNMA . . . . . . . . . . . . 2,173 2,226
-------- --------
Total mortgage-backed
securities . . . . . . . 28,755 31,555
Net premiums (discounts) . (189) (209)
-------- --------
Net mortgage-backed
securities . . . . . . . $ 28,566 $ 31,346
-------- --------
-------- --------

MORTGAGE-BACKED SECURITIES HELD
FOR SALE:
FNMA . . . . . . . . . . . . - -
FHLMC . . . . . . . . . . . . - -
Total mortgage-backed
securities held for sale - -
Net premiums (discounts) . - -
Valuation allowance . . . . - -
Net mortgage-backed securities
held for sale . . . . . - -

</TABLE>

27
<PAGE> 41
LOAN ORIGINATIONS AND LOAN AND MORTGAGE-BACKED SECURITIES PURCHASES,
SALES AND SERVICING. La Grange Federal originates primarily fixed-rate loans
and to a lesser extent ARM loans, the amount of which is dependent upon
relative customer demand as well as current and expected future levels of
interest rates. La Grange Federal has not experienced a significant demand for
ARMs in its lending area and has consequently purchased ARMs originated outside
of its lending area. La Grange Federal purchases loans that generally meet La
Grange Federal's underwriting standards, which are secured by first mortgages
on owner-occupied one- to four-family residences located primarily in New
England and California. At December 31, 1992, the amount of purchased loans
secured by property outside La Grange Federal's lending area was $19.2 million.

During 1991, La Grange Federal swapped $15.0 million in fixed rate
mortgage loans originated in 1988 and 1989 for FHLMC participation certificates
which were subsequently sold. During 1992 and 1990, La Grange Federal did not
sell any of its loans. Prior to 1990, La Grange Federal sold loans with a
remaining outstanding balance of approximately $9.6 million at December 31,
1992 to the FHLMC with recourse to La Grange Federal. In the event the
borrowers default on such loans, the FHLMC has the right to return them to La
Grange Federal. At December 31, 1992, the amount of residential mortgage loans
serviced for others totaled $14.2 million.

28
<PAGE> 42
The following table sets forth the loan originations and loan and
mortgage-backed securities purchases, sales and principal repayments for the
periods indicated:

<TABLE>
<CAPTION>
Year Ended December 31,
----------------------------------------
1992 1991 1990
---- ---- ----

(in thousands)
<S> <C> <C> <C>
Mortgage loans (gross):
At beginning of period . . . . . . . . $218,545 $222,731 $203,518
-------- -------- --------
Mortgage loans originated:
One- to four-family . . . . . . . . 58,999 43,715 41,856

Commercial real estate . . . . . . . 901 - -
Land . . . . . . . . . . . . . . . . - 195 -
-------- -------- --------
Total mortgage loans originated . 59,900 43,910 41,856
-------- -------- --------

Mortgage loans purchased:
One- to four-family . . . . . . . . - 2,799 2,008
-------- -------- --------
Total mortgage loans originated
and purchased . . . . . . . . 59,900 46,709 43,864
-------- -------- --------
Principal repayments . . . . . . . . . (79,464) (35,912) (24,651)
Mortgage loans swapped for
mortgage-backed securities . . . . . - (14,983) -
-------- -------- --------

At end of period . . . . . . . . . . . $198,981 $218,545 $222,731
-------- -------- --------
-------- -------- --------

Consumer and other loans (gross):
At beginning of period . . . . . . . . $ 10,722 $ 10,038 $ 7,932
Other loans originated . . . . . . . . 4,905 3,821 4,329

Principal repayments . . . . . . . . . (5,106) (3,137) (2,223)
-------- -------- --------
At end of period . . . . . . . . . . . $ 10,521 $ 10,722 $ 10,038
-------- -------- --------
-------- -------- --------

Mortgage-backed securities (net):
At beginning of period . . . . . . . . $ 14,402 $25,985 $ 28,566

Purchases . . . . . . . . . . . . . . . 44,565 15,341 -
Mortgage loans swapped for mortgage-
backed securities . . . . . . . . . - 14,983 -
Transferred to held for sale . . . . . - (21,444) -
Amortization of (premiums) and
discounts, net . . . . . . . . . . . (7) 259 17

Sales(1) . . . . . . . . . . . . . . . - (16,992) -
Principal repayments . . . . . . . . . (4,197) (3,730) (2,598)
-------- -------- --------
At end of period . . . . . . . . . . . $ 54,763 $ 14,402 $ 25,985
-------- -------- --------
-------- -------- --------
</TABLE>

_______________________________________
(1) Includes $14,983 of mortgage loans swapped for mortgage-backed securities.

29
<PAGE> 43
The following table sets forth at December 31, 1992, the dollar amount
of all loans and mortgage-backed securities due after December 31, 1993, and
whether such loans or mortgage-backed securities have fixed interest rates or
adjustable interest rates.

<TABLE>
<CAPTION>
Due After December 31, 1993
-----------------------------------------
(In thousands) Fixed(1) Adjustable Total
-------- ---------- -----
<S> <C> <C> <C>
Mortgage loans . . . . . . . . . . . $166,531 $ 32,330 $198,861

Consumer and other loans . . . . . . 3,016 6,940 9,956
-------- -------- --------
Total loans receivable . . . . . . 169,547 39,270 208,817

Mortgage-backed securities(2) . . . . 30,354 50,120 80,474
-------- -------- --------
Total loans receivable and
mortgage-backed securities . . $199,901 $ 89,390 $289,291
-------- -------- --------
-------- -------- --------
- ----------------------

</TABLE>
(1) Includes loans with rates that adjust once during the life of the loan
("two-step loans").
(2) Includes $25.8 million of fixed interest rate mortgage-backed securities
held for sale.

LOAN MATURITY AND REPRICING. The following table shows the maturity
or period to repricing of the loan and mortgage-backed securities portfolio at
December 31, 1992, except for mortgage-backed securities held for sale which
are categorized based on the earlier of maturity or period of planned
disposition. Loans that have adjustable rates are shown as being due in the
period during which the interest rates are next subject to change. The table
does not include prepayments or scheduled principal amortization. Principal
repayments on loans receivable and mortgage-backed securities totaled $88.8
million, $42.8 million and $29.5 million, for the years ended December 31,
1992, 1991 and 1990, respectively.

30
<PAGE> 44
<TABLE>
<CAPTION>
At December 31, 1992
--------------------------------------------------------
Mortgage Loans
--------------------------------------------------------
One- to Land and Consumer and
Four- Commercial Multi- Other
Family Real Estate Family Loans
------ ----------- ------ ------------
(In thousands)
<S> <C> <C> <C> <C>
Amounts due:
Within 1 year . . . . . . $ 30,153 $ 406 $165 $ 8,060
-------- ------ ---- -------

After 1 year:
1 to 3 years . . . . . . 1,850 250 92 1,768
3 to 5 years . . . . . . 4,357 551 20 144
5 to 10 years . . . . . 14,992 48 316 225
10 to 20 years . . . . . 61,847 -- -- 324
Over 20 years . . . . . 83,826 108 -- --
-------- ------ ---- -------
Total due after 1 year . 166,872 957 428 2,461
-------- ------ ---- -------

Total amounts due . . . $197,025 $1,363 $593 $10,521
-------- ------ ---- -------
-------- ------ ---- -------

</TABLE>

<TABLE>
<CAPTION>
At December 31, 1992
-----------------------------------------------------------------
Totals
-----------------------------------------------------------------

Total Loans Mortgage-Backed Mortgage-Backed
Receivable, Securities Held Securities Held
Gross for Sale, Net for Investment, Net Total
-----------------------------------------------------------------
(In thousands)
<S> <C> <C> <C> <C>
Amounts due:
Within 1 year . . . . . . $ 38,784 $ 5,995 $ -- $ 44,779
-------- ------- ------- --------

After 1 year:
1 to 3 years . . . . . . 3,960 19,716 9 23,685
3 to 5 years . . . . . . 5,072 1,987 7,059
5 to 10 years . . . . . 15,581 105 15,686
10 to 20 years . . . . . 62,171 943 63,114
Over 20 years . . . . . 83,934 -- 51,719 135,653
-------- ------- ------- --------
Total due after 1 year . 170,718 25,711 54,763 245,197
-------- ------- ------- --------

Total amounts due . . . $209,502 $25,711 $54,763 $289,976
-------- ------- ------- --------
-------- ------- ------- --------

</TABLE>

31
<PAGE> 45
ONE- TO FOUR-FAMILY MORTGAGE LOANS. La Grange Federal offers first
mortgage loans secured by one- to four-family residences in La Grange Federal's
lending area. Typically, such residences are single-family homes that serve as
the primary residence of the owner. La Grange Federal offers a minimum one- to
four-family residential loan of $10,000, which may be waived under certain
circumstances, and a maximum loan of $500,000. La Grange Federal generally
originates one- to four-family residential mortgage loans in amounts up to 80%
of the appraised value or selling price of the mortgaged property. Loans may
be originated in amounts up to 90% of the appraised value or selling price of
the mortgaged property, provided that the loan amount does not exceed $203,100,
the property is owner occupied, and private mortgage insurance is provided on
the amount in excess of 80%.

Loan originations are generally obtained from existing or past
customers, members of the local community, and referrals from established
builders and realtors within La Grange Federal's lending area. Mortgage loans
originated and held by La Grange Federal in its portfolio generally include
due-on-sale clauses which provide La Grange Federal with the contractual right
to deem the loan immediately due and payable in the event that the borrower
transfers ownership of the property without La Grange Federal's consent.

La Grange Federal currently offers ARM loans, which adjust every one
or three years. La Grange Federal's ARM loans may carry an initial interest
rate which is slightly less than the fully-indexed rate for the loan. The
initial discounted rate is determined by La Grange Federal in accordance with
market and competitive factors and as of December 31, 1992 was below the fully
indexed rate. La Grange Federal's one-year and three-year ARM loans generally
adjust by a maximum of 2.00% per adjustment, with a lifetime cap of 6% on
increases. ARM loans are originated for a term up to 30 years. La Grange
Federal currently charges origination fees of 1.00% for one- to four-family
residential ARM loans in addition to nominal service charges.

Generally, ARM loans pose credit risks different than the risks
inherent in fixed-rate loans, primarily because as interest rates rise, the
underlying payments of the borrower rise, thereby increasing the potential for
default. At the same time, the marketability of the underlying property may be
adversely affected by higher interest rates. To minimize risks, borrowers of
one-year ARM loans are qualified at the fully-indexed rate. La Grange Federal
does not originate ARM loans which provide for negative amortization.

La Grange Federal currently originates primarily fixed-rate mortgage
loans. Interest rates and origination fees charged on fixed-rate loans are
competitively priced based on the term of the loan, market conditions and the
cost of funds. La Grange Federal's origination fees range from 0.00% to 2.50%
on fixed-rate one- to four-family residential mortgage loans in addition to
nominal service charges. La Grange Federal's fixed-rate mortgage loans
currently are made for terms of 15 and 30 years.

La Grange Federal presently offers a "two-step" mortgage loan program:
a "5/25" loan. The initial interest rate for the five-year period is
determined by market conditions. At the end of the fifth year, the interest
rate for the remaining 25 years is adjusted at .50% over the FHLMC secondary
market rate.

La Grange Federal also originates a limited number of loans secured by
second liens on one- to four-family residences. These loans generally are
originated as a fixed-rate loan with terms up to 10 years. An origination fee
is charged. Such loans are only made on owner-occupied, one- to four-family,
residences and the property may not be encumbered by other than a first
mortgage. These loans are generally subject to an 80% combined loan-to-value
limitation, including any other outstanding mortgages or liens.

OTHER MORTGAGE LOANS. La Grange Federal also originates to a limited
extent commercial real estate, multi-family, construction, and land loans.
These loans are not a significant part of La Grange Federal's lending
activities. In connection with construction loans, La Grange Federal has
issued certain letters of credits.

CONSUMER AND OTHER LOANS. La Grange Federal also offers consumer
loans in the form of home equity lines of credit, credit cards, home
improvement loans, student loans, automobile loans and unsecured personal
loans. These loans totalled $10.5 million or 5.0% of total loans receivable at
December 31, 1992. In addition, La Grange Federal had unsecured commercial
loans to one borrower totalling approximately $492,000 at December 31, 1992.

32
<PAGE> 46
LOAN APPROVAL AUTHORITY AND UNDERWRITING. All loans secured by real
estate must have the approval of a member of the Loan Committee which currently
consists of two loan officers and the Vice President/Lending. The Loan
Committee meets on an as-needed basis. All loans in excess of $250,000 require
prior Board approval. Prior Board approval is also required for purchases and
sales of loans and the origination of commercial loans.

One- to four-family residential mortgage loans are generally
underwritten according to FHLMC guidelines. For all loans originated by La
Grange Federal, upon receipt of a completed loan application from a prospective
borrower, a credit report is ordered, income and certain other information is
verified and, if necessary, additional financial information is requested. An
appraisal of the real estate intended to secure the proposed loan is required
which currently is performed by an independent appraiser designated and
approved by La Grange Federal. It is La Grange Federal's policy to obtain
title insurance on all real estate first mortgage loans. Borrowers must also
obtain hazard insurance prior to closing the loan. Borrowers generally are
required to advance funds on a monthly basis together with each payment of
principal and interest to an escrow account from which La Grange Federal makes
disbursements for items such as real estate taxes and hazard insurance
premiums.

MORTGAGE-BACKED SECURITIES. LGF on a consolidated basis also invests
in mortgage-backed securities. All of the mortgage-backed securities are
insured or guaranteed by the GNMA, FNMA or the FHLMC, and have coupon rates as
of December 31, 1992, ranging from 4.46% to 10.00% with a weighted average
yield of 6.36% at December 31, 1992. At December 31, 1992, mortgage-backed
securities totalled $80.5 million or 20.0% of total assets of which $54.8
million were held for investment and $25.7 million were held for sale. In
addition, $15.3 million (3.8% of total assets) of the investment in mutual fund
securities are invested in mortgage-backed securities. The mortgage-backed
securities held directly contain 62.3% of ARM loans and 37.7% of fixed-rate
mortgage loans. The market value of such mortgage-backed securities totalled
approximately $80.6 million of which $25.7 million were held for sale at
December 31, 1992.

NON-PERFORMING AND PROBLEM ASSETS.

COLLECTION PROCEDURES. With respect to originated mortgage loans, La
Grange Federal's collection procedures include sending a past due notice at 15
days and a late notice after payment is 30 days past due. In the event that
payment is not received, letters are sent or phone calls are made to the
borrower. When contact is made with the borrower at any time prior to
foreclosure, La Grange Federal will attempt to obtain full payment or work out
a repayment schedule with the borrower to avoid foreclosure. Generally,
foreclosure notices are sent when a loan is over 90 days delinquent.

La Grange Federal had $19.2 million in purchased mortgage loans at
December 31, 1992. La Grange Federal has no recourse against the seller on
whole mortgage loans and loan participations purchased. La Grange Federal
receives monthly reports from the loan servicers which it uses to closely
monitor its purchased mortgage loan and loan participation portfolio. Where
loans are delinquent 60 days or more, La Grange Federal contacts the loan
servicer to determine the reason for the delinquency and whether or not contact
has been made with the borrower. On purchased loans, La Grange Federal uses
the servicer to commence foreclosure proceedings.

La Grange Federal generally has experienced only insignificant losses
on its delinquent loans. Mortgage loans are placed on non-accrual status when,
in management's judgement, the probability of collection of interest is deemed
to be insufficient to warrant further accrual. The accrual of interest income
is discontinued on real estate and consumer loans which are past due 90 or more
days as to principal or interest payments. When loans are placed on
non-accrual status, interest accrued is charged against interest income. Loans
may be reinstated to accrual status when all payments are brought current and,
in the opinion of management, collection of the remaining balance can be
reasonably expected. In La Grange Federal's experience where mortgage loans
have been foreclosed upon, La Grange Federal typically has been outbid at the
sheriff's sale upon foreclosure and experienced no losses. The loan losses
experienced in the past five years by La Grange Federal are attributable to
installment and other consumer loans.

33
<PAGE> 47
DELINQUENT LOANS. At December 31, 1992, 1991 and 1990, delinquencies
in La Grange Federal's portfolio were as follows:

<TABLE>
<CAPTION>
At December 31, 1992 At December 31, 1991
-------------------------------------- --------------------------------------
60-89 Days 90 Days or More 60-89 Days 90 Days or More
----------------- ----------------- ----------------- ------------------
Number Principal Number Principal Number Principal Number Principal
of Balance of Balance of Balance of Balance
Loans of Loans Loans of Loans Loans of Loans Loans of Loans
----- -------- ----- -------- ----- -------- ----- --------
($ in thousands)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
MORTGAGE LOANS:
One- to four-family
(originated) . . . . 9 $ 598 9 $459 11 $ 674 1 $ 55

One- to four-family
(purchased) . . . . 4 491 2 113 7 665 4 343
Consumer and other loans 7 11 3 3 9 21 13 68
-- ------ -- ----- -- ------ -- -----

Total . . . . . . . 20 $1,100 14 $575 27 $1,360 18 $466
-- ------ -- ----- -- ------ -- -----
-- ------ -- ----- -- ------ -- -----

Delinquent loans to
total gross loans . . . . .53% .27% .59% .20%
</TABLE>

<TABLE>
<CAPTION>
At December 31, 1990
-------------------------------------------------
60-89 Days 90 Days or More
-------------------- ----------------------
Nunmber Principal Number Principal
of Balance of Balance
Loans of Loans Loans of Loans
----- -------- ----- --------
($ in thousands)
<S> <C> <C> <C> <C>
MORTGAGE LOANS:
One- to four-family
(originated) . . . . 36 $1,402 12 $507

One- to four-family
(purchased) . . . . 5 603 2 156
Consumer and other loans 5 68 1 35
-- --- -- ----

Total . . . . . . . 46 $2,073 15 $698
-- --- -- ----
-- --- -- ----

Delinquent loans to
total gross loans . . . . 89% .30%

</TABLE>
34
<PAGE> 48
NON-PERFORMING ASSETS. The following table sets forth information
regarding non-performing loans (loans delinquent 90 days or more) and real
estate owned by La Grange Federal at the dates indicated. At September 30,
1993, La Grange Federal had no restructured loans within the meaning of
Financial Accounting Standards Board Statement No. 15.

<TABLE>
<CAPTION>
At September 30, At December 31,
----------------- -------------------------------------------------------------------
($ in thousands) 1993 1992 1992 1991 1990 1989 1988
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Accruing mortgage loans
delinquent more than 90 days . . . $ -- $ 715 $ -- $ 398 $ 663 $1,492 $ 954

Accruing consumer loans and other
delinquent more than 90 days . . . -- -- -- -- -- 143 27

Non-accruing mortgage loans
and other delinquent more than 90
days . . . . . . . . . . . . . . 348 281 572 -- -- -- --

Non-accruing consumer loans and
other delinquent more than 90 days 41 91 3 68 35 -- --
------ ------ ------ ------ ---- ------ ------

Total non-performing loans . . . . . 389 1,087 575 466 698 1,635 981

Total real estate owned, net
of related allowances(1) . . . . . 3,246 3,254 3,326 3,385 3,752 3,314 3,336
------ ------ ------ ------ ------ ------ ------

Total non-performing assets . . . . . $3,635 $4,341 $3,901 $3,851 $4,450 $4,949 $4,317
------ ------ ------ ------ ------ ------ ------
------ ------ ------ ------ ------ ------ ------

Non-performing loans to
total gross loans . . . . . . . . .20% .46% .27% .20% .30% .77% .50%

Total non-performing assets to total
assets . . . . . . . . . . . . . .88% 1.06% .95% .98% 1.22% 1.41% 1.22%

Gross interest income that would have
been recorded, if loans had been
current . . . . . . . . . . . . . $ 7 $ 24 $ 26 $ 2 $ 2 $ -- $ --

Interest income from non-accruing
loans included in income . . . . . -- -- -- 5 2 -- --
- ------------------------------------------
</TABLE>
(1) Includes real estate acquired in foreclosure of mortgage loans and
improvements thereto including approximately $3.0 million attributable to
an industrial park consisting of five lots and improvements of a warehouse
constructed by La Grange Federal with a lease running to 1996 that is
current with respect to payments.

35
<PAGE> 49
CLASSIFIED ASSETS. Federal regulations provide for the classification
of loans and other assets such as debt and equity securities considered to be
of lesser quality as "substandard," "doubtful" or "loss" assets. Assets which
do not currently expose the insured institution to sufficient risk to warrant
classification in one of the aforementioned categories but possess weaknesses
are required to be designated "special mention" by management.

A classification of either substandard or doubtful, requires the
establishment of general allowances for loan losses in an amount deemed prudent
by management. Assets classified as "loss," require either a specific
allowance for losses equal to 100% of the amount of the asset so classified or
a charge off of such amount. An institution's determination as to the
classification of its assets and the amount of its valuation allowances is
subject to review by the OTS which can order the establishment of additional
general or specific loss allowances. All classified assets of La Grange
Federal are included in non-performing loans delinquent 90 days or more.

ALLOWANCE FOR POSSIBLE LOAN LOSSES. The allowance for possible loan
losses is established through a provision for possible loan losses based on
management's evaluation of the risk inherent in its loan portfolio and the
general economy. Such evaluation, which includes a review of all loans on
which full collectibility may not be reasonably assured, considers among other
matters, the estimated net realizable value of the underlying collateral,
economic conditions, historical loan loss experience and other factors that
warrant recognition in providing for an adequate loan loss allowance.

The amount of this allowance at September 30, 1993, was $902,000 and
at December 31, 1992, 1991 and 1990, it was $723,000, $450,000 and $60,000,
respectively, and was determined based on an evaluation of the above-mentioned
factors including the current regulatory and national economic environment.
The amount provided for the nine months ending September 30, 1993 was $195,000
and the amounts provided for the years 1992, 1991 and 1990 were $310,000,
$419,000 and $82,000, respectively. For the year ended December 31, 1992,
there were net charge-offs of $37,000 and for the nine months ending September
30, 1993, there were net charge-offs of $16,000.

36
<PAGE> 50
The following table sets forth LGF's allowance for possible loan
losses at or for the dates indicated. All charge-offs during the period shown
were from consumer loans.

<TABLE>
<CAPTION>
At or For the Nine Months
Ended September 30,
-------------------------
1993 1992
($ in thousands) ---- ----
<S> <C> <C>
Balance at beginning of period . . . . . $723 $450
Provision for possible loan losses . . . 195 262
Charge-offs . . . . . . . . . . . . . . . (20) (28)
Recoveries . . . . . . . . . . . . . . . 4 3
---- ----
Balance at end of period . . . . . . . . $902 $687
---- ----
---- ----

Ratio of allowance for possible loan
losses to net loans receivable at
the end of period . . . . . . . . . . .46% .32%

Ratio of allowance for possible loan
losses to total non-performing loans
at end of period . . . . . . . . . . . 231.88% 63.20%

Ratio of net charge-offs to average
loans at the end of period . . . . . . .01% .01%
</TABLE>

<TABLE>
<CAPTION>
At or for the Year
Ended December 31,
------------------------------------------------------------------
1992 1991 1990 1989 (1) 1988 (1)
($ in thousands) ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
Balance at beginning of period . . . . . $450 $ 60 $ -- $ -- $ --
Provision for possible loan losses . . . 310 419 82 15 5
Charge-offs . . . . . . . . . . . . . . . (41) (40) (33) (17) (33)
Recoveries . . . . . . . . . . . . . . . 4 11 11 2 28
----- ----- ----- ---- -----
Balance at end of period . . . . . . . . $723 $450 $ 60 $ - $ -
---- ---- ---- ----- -----
---- ---- ---- ----- -----

Ratio of allowance for possible loan
losses to net loans receivable at
the end of period . . . . . . . . . . .35% .20% .03% - -

Ratio of allowance for possible loan
losses to total non-performing loans
at end of period . . . . . . . . . . . 125.74% 96.57% 8.60% - -

Ratio of net charge-offs to average
loans at the end of period . . . . . . 0.02% .01% .01% .01% -
</TABLE>

_________________________
(1) La Grange Federal had no allowance for possible loan losses prior to 1990
and has incurred no losses on the disposition of foreclosed properties during
the period from January 1, 1988 to September 30, 1993.

<TABLE>
<CAPTION>
At September 30,
---------------------------------------
1993 1992
---------------- ----------------
Amount Percent(1) Amount Percent(1)
------ --------- ------ ---------
($ in thousands)
<S> <C> <C> <C> <C>
Allowance at end of
period applicable to:
Mortgage loans . . . . . . $855 94.79% $610 88.79%

Consumer loans and
other loans . . . . . . 47 5.21 77 11.21
---- ------ ---- ------
Total . . . . . . . . $902 100.00% $687 100.00%
---- ------- ---- -------
---- ------- ---- -------
</TABLE>

<TABLE>
<CAPTION>
At December 31,
--------------------------------------------------------------
1992 1991 1990
---------------- ----------------- ------------------
Amount Percent(1) Amount Percent(1) Amount Percent(1)
------ --------- ------ --------- ------ ----------
($ in thousands)
<S> <C> <C> <C> <C> <C> <C>
Allowance at end of
period applicable to:
Mortgage loans . . . . . $660 91.29% $350 95.32% $30 95.69%

Consumer loans and
other loans . . . . . 63 8.71 100 4.68 30 4.31
---- ------ ---- ----- --- -----
Total . . . . . . . $723 100.00% $450 100.00% $60 100.00%
---- ------- ---- ------- --- ------
---- ------- ---- ------- --- ------
</TABLE>

___________________________
(1) Percent of type of loans in each category to total gross loans at the dated
indicated.

37
<PAGE> 51
INVESTMENT ACTIVITIES.

Federally chartered savings institutions have the authority to invest
in various types of liquid assets, including U.S. Treasury obligations,
securities of various federal agencies, certain certificates of deposit of
insured banks and savings institutions, certain bankers' acceptances,
repurchase agreements and federal funds sold. Subject to various restrictions,
federally chartered savings institutions may also invest a portion of their
assets in commercial paper, corporate debt securities and asset-backed
securities. LGF's (on a consolidated basis) investment policy is established
by the Board of Directors and is implemented by the Asset Liability Management
Committee. It is designed primarily to provide and maintain liquidity, to
generate a favorable return on investments without incurring undue interest
rate and credit risk, and to complement and fund La Grange Federal's lending
activities.

At December 31, 1992, investment securities held for sale consisted of
long-term U.S. Treasury securities and holdings of mutual funds that have
investments in U.S. government securities, mortgage-backed securities and
corporate debt. One mutual fund, with a carrying and market value of $2.0
million at December 31, 1991, included, non-investment grade securities which,
under the FIRREA, must be divested prior to July 1, 1994. Under an agreement
with its regulatory agencies, La Grange Federal was required to sell and did
sell its investment in non-investment grade mutual funds by August, 1992.
Accordingly, effective as of August 1989 such marketable equity securities were
transferred to investments held for sale. In late 1991, La Grange Federal,
consistent with management's goal of reducing La Grange Federal's one year and
one to three year negative gap positions, determined to reclassify U.S.
treasury securities in the amount of $3.4 million and all mutual fund
securities as held for sale. Securities held for sale are accounted for at the
lower of cost or market.

The key elements of management's plans to reduce the level of such
securities held for sale and the anticipated effect on the results of
operations, although no assurances can be given, are as follows. LGF
management plans to sell its mutual funds, consisting of investments in U.S.
government securities, mortgage-backed securities and corporate debt, which
have a carrying value of approximately $47.0 million and weighted average yield
of 4.54% at December 31, 1992. Sales of these funds will occur over the next
two years. Other securities held for sale include U.S. Treasury securities of
approximately $2.2 million and a weighted average current yield of 7.55% and
mortgage-backed securities with a balance of approximately $25.7 million and a
weighted average current yield of 7.44% at December 31, 1992 which will be sold
over the next two years. As of December 31, 1992, management anticipates a
decline in the rate of return on the reinvested proceeds. Although the effects
of a lower rate of return on the above reinvested proceeds cannot be estimated,
management expects that this will be offset, in part, by a decline in the cost
of funding over the same period.

38
<PAGE> 52
The following table sets forth certain information regarding the
carrying and market values of LGF's investment and securities held for sale
portfolios at the dates indicated:

<TABLE>
<CAPTION>
At December 31,
------------------------------------------------------
1992 1991
-------------------- ------------------------
($ in thousands) Carrying Market Carrying Market
Value Value Value Value
------- ------- ------- -------
<S> <C> <C> <C> <C>
Interest-bearing deposits . . . . . . . . $ 2,087 $ 2,087 $ 4,364 $ 4,364
------- ------- ------- -------
------- ------- ------- -------

Federal funds sold . . . . . . . . . . . $ 1,200 $ 1,200 $ 4,100 $ 4,100
------- ------- ------- -------
------- ------- ------- -------

Investment securities:
Mutual fund investments . . . . . . . $ - $ - $ - $ -
U.S. Government agency securities . . 34,357 34,601 10,013 10,287
U.S. Treasury obligations . . . . . . 16,468 16,671 6,000 6,079
Other investments . . . . . . . . . . 72 72 239 239
------- ------- ------- -------
Total investment securities . . . . $50,897 $51,344 $16,252 $16,605
------- ------- ------- -------
------- ------- ------- -------

Investment securities held for sale(1):
Mutual funds:
U.S. Government securities . . . . . $23,565 $23,584 $36,977 $37,121
Mortgage-backed securities:
ARMs . . . . . . . . . . . . . . . 11,928 11,928 15,000 15,000
Fixed rate . . . . . . . . . . . . 3,404 3,404 10,982 11,009
Corporate debt:
Investment grade . . . . . . . . . 8,084 8,084 10,019 10,019
Non-investment grade . . . . . . . - - 2,032 2,032
U.S. Treasury bonds . . . . . . . . 2,202 2,202 3,398 3,398
------- ------- ------- -------
Total investment securities
held for sale . . . . . . . . . $49,183 $49,202 $78,408 $78,579
------- ------- ------- -------
------- ------- ------- -------

Federal Home Loan Bank Stock, net . . . . $ 2,705 $ 2,705 $ 2,598 $ 2,598
------- ------- ------- -------
------- ------- ------- -------
</TABLE>
<TABLE>
<CAPTION>
At December 31,
-------------------------
1990
-------------------------
($ in thousands) Carrying Market
Value Value
------- -------
<S> <C> <C>
Interest-bearing deposits . . . . . . . . $ 4,056 $ 4,056
------- -------
------- -------

Federal funds sold . . . . . . . . . . . $ 2,300 $ 2,300
------- -------
------- -------

Investment securities:
Mutual fund investments . . . . . . . $44,388 $44,388
U.S. Government agency securities . . 14,004 14,031
U.S. Treasury obligations . . . . . . 9,409 9,067
Other investments . . . . . . . . . . 239 239
------- -------
Total investment securities . . . . $68,040 $67,725
------- -------
------- -------

Investment securities held for sale(1):
Mutual funds:
U.S. Government securities . . . . . $ - $ -
Mortgage-backed securities:
ARMs . . . . . . . . . . . . . . . - -
Fixed rate . . . . . . . . . . . . - -
Corporate debt:
Investment grade . . . . . . . . . - -
Non-investment grade . . . . . . . 15,933 15,933
U.S. Treasury bonds . . . . . . . . . - -
------- -------

Total investment securities
held for sale . . . . . . . . .
$15,933 $15,933
------- -------
------- -------

Federal Home Loan Bank Stock, net . . . . $ 2,301 $ 2,301
------- -------
------- -------
</TABLE>
- -----------------------------------
(1) Excludes mortgage-backed securities held for sale.

39
<PAGE> 53
Securities held for sale and Investment Securities (exclusive of
obligations of the U.S. Government and federal agencies) issued by any one
entity with a total carrying value in excess of 10% of retained earnings at
December 31, 1992, were $47.0 million as detailed below.

<TABLE>
<CAPTION>
($ in thousands) Carrying Value Market Value
-------------- ------------
<S> <C> <C>
Federated Investors:
Income Trust . . . . . . . . . . . . . . . . . $ 3,404 $ 3,404
Floating Rate Trust . . . . . . . . . . . . . 8,084 8,084
------- -------
Total Federated Investors . . . . . . . . . 11,488 11,488
------- -------
Asset Management Fund:
Intermediate Term Liquidity Portfolio . . . . 5,000 5,019

Adjustable-Rate Mortgage Portfolio . . . . . . 11,928 11,928
------- -------
Total Asset Management Fund . . . . . . . . 16,928 16,947
------- -------
Eaton Vance:
Short Term Treasury Fund . . . . . . . . . . . 18,565 18,565
------- -------
Total . . . . . . . . . . . . . . . . . . . $46,981 $47,000
------- -------
------- -------

</TABLE>

40
<PAGE> 54
The tables below set forth certain information regarding the maturities'
carrying value and weighted average yields of LGF's investment securities at
December 31, 1992.

<TABLE>
<CAPTION>
At December 31, 1992
------------------------------------------------------------
Weighted Annualized
Average Weighted
Life in Carrying Market Average
Years Value Value Yield
-------- ------------ --------- ------------
(Dollars in thousands)
<S> <C> <C> <C> <C>
Investment Securities:

U.S. Government agency obligations . . 1.2 $34,357 $34,601 6.01%

U.S. Treasury obligations . . . . . . . 1.5 16,468 16,671 5.03

Other . . . . . . . . . . . . . . . . . -- 72 72 4.11
------- ------- ----
Total investment securities . . . . . $50,897 $51,344 5.69%
------- ------- ----
------- ------- ----

<CAPTION>
1 Year or Less 1-5 Years 5-10 Years
------------------------ ------------------- ---------------------
Weighted Weighted Weighted
Carrying Average Carrying Average Carrying Average
Value Yield Value Yield Value Yield
----- ----- ----- ----- ----- -----

(Dollars in thousands)
<S> <C> <C> <C> <C> <C> <C>
U.S. Government securities and
obligations . . . . . . . . . $23,354 5.94% $26,492 5.68% $ 979 6.39%

Other . . . . . . . . . . . . . . 25 5.50 -- -- 47 3.36
------- ---- ------- ---- ------ ----
Total . . . . . . . . . . . $23,379 5.94% $26,492 5.68% $1,026 6.25%
------- ------- ------
------- ------- ------
</TABLE>

41
<PAGE> 55
SOURCES OF FUNDS.

GENERAL. La Grange Federal's primary sources of funds are deposits,
repayments on loans and mortgage-backed securities, and, to a lesser extent in
the past, FHLB-Chicago advances and reverse repurchase agreements.

DEPOSITS. La Grange Federal offers a variety of deposit accounts
having a range of interest rates and terms. Deposits principally consist of
fixed-term certificates, passbook and statement savings, money market, Keogh
accounts, individual retirement accounts ("IRAs") and NOW (checking) accounts.
The flow of deposits is influenced significantly by general economic
conditions, the restructuring of the thrift industry, changes in money market
and prevailing interest rates and competition. La Grange Federal's deposits
are typically obtained from the area in which its offices are located. La
Grange Federal relies primarily on customer service and long-standing
relationships with customers to attract and retain these deposits. La Grange
Federal has no brokered deposits.

La Grange Federal seeks to maintain a high level of stable core
deposits by providing extended hours of service - both early and late - through
its Branch Offices and Drive-Thru facility. When pricing deposits,
consideration is given to local competition, Treasury offerings and the need
for funds. Management's strategy is to price competitively contingent upon the
need for funds and to stratify the pricing system to attract deposits and
maintain a controlled gap position.

42
<PAGE> 56

The following table sets forth the distribution of LGF's deposit
accounts at the dates indicated and the weighted average nominal interest rates
on each category of deposits presented. Management does not believe that the
use of year end balances instead of average balances resulted in any material
difference in the information presented.

<TABLE>
<CAPTION>
At December 31,
------------------------------ ------------------------------
1992 1991
------------------------------ ------------------------------
Weighted Weighted
Percent Average Percent Average
of Total Nominal of Total Nominal
($ in thousands) Amount Deposits Rate Amount Deposits Rate
------ -------- ---- ------ -------- ----
<S> <C> <C> <C> <C> <C> <C>
Demand accounts:
Money market accounts . . $ 29,136 7.94% 2.83% $ 31,082 8.46% 3.96%
NOW accounts . . . . . . . 27,098 7.39 2.22 23,142 6.30 3.49
-------- ------ -------- ------
Total demand accounts . . . . 56,234 15.33 2.53 54,224 14.76 3.76
-------- ------ -------- ------
Passbook and statement accounts 78,603 21.42 3.25 59,985 16.32 5.00
-------- ------ -------- ------
Certificate accounts:
Ninety-one day and under . 5,043 1.37 3.37 2,925 .80 5.12
Six month . . . . . . . . 27,588 7.52 3.63 29,295 7.97 5.54
One year . . . . . . . . . 53,358 14.54 4.33 59,990 16.33 6.26
Eighteen month . . . . . . 7,303 1.99 4.93 7,217 1.96 6.65
Two year . . . . . . . . . 31,705 8.64 5.97 39,158 10.66 7.34
Three year . . . . . . . . 6,369 1.74 6.52 9,159 2.49 7.86
Four year . . . . . . . . 4,921 1.34 7.39 4,855 1.32 8.11
Five to ten year . . . . . 15,017 4.09 7.94 14,336 3.90 8.31
IRA and Keogh accounts . . 69,602 18.96 7.72 66,084 17.98 8.30
Jumbo(1) . . . . . . . . . 11,246 3.06 3.83 20,232 5.51 6.27
-------- ------ -------- ------
Total certificate accounts . 232,152 63.25 5.83 253,251 68.92 7.08
-------- ------ -------- ------
Total deposits . . . . . . . $366,989 100.00% 4.77 $367,460 100.00% 6.25
-------- ------ -------- ------
-------- ------ -------- ------

<CAPTION>
At December 31,
------------------------------
1990
------------------------------
Weighted
Percent Average
of Total Nominal
($ in thousands) Amount Deposits Rate
------ -------- ----
<S> <C> <C> <C>
Demand accounts:
Money market accounts . . $ 31,049 8.96% 6.19%
NOW accounts . . . . . . . 19,949 5.75 5.53
-------- ------
Total demand accounts . . . . 50,998 14.71 5.93
-------- ------
Passbook and statement accounts 48,459 13.99 5.50
-------- ------

Certificate accounts:
Ninety-one day and under . 2,798 .81 5.26
Six month . . . . . . . . 28,569 8.24 5.66
One year . . . . . . . . . 58,596 16.91 6.38
Eighteen month . . . . . . 8,619 2.49 6.71
Two year . . . . . . . . . 37,930 10.94 7.40
Three year . . . . . . . . 9,893 2.85 7.87
Four year . . . . . . . . 4,721 1.36 8.11
Five to ten year . . . . . 18,036 5.20 8.27
IRA and Keogh accounts . . 58,732 16.95 8.33
Jumbo(1) . . . . . . . . . 19,225 5.55 6.57
-------- ------
Total certificate accounts . 247,119 71.30 7.16
-------- ------
Total deposits . . . . . . . $346,576 100.00% 6.75
-------- ------
-------- ------

</TABLE>

____________________________
(1) Certificates with deposit balances of $100,000 or more

43
<PAGE> 57
At December 31, 1992, LGF had outstanding $44.1 million in jumbo
certificates and other deposit accounts in amounts of $100,000 or more maturing
as follows:

<TABLE>
<CAPTION>
Amount
------

(In thousands)
Maturity Period
---------------
<S> <C>
Three months or less . . . . . . . . . . . . . . . $24,591

Over three through six months . . . . . . . . . . . 4,388

Over six through 12 months . . . . . . . . . . . . 2,869

Over 12 months . . . . . . . . . . . . . . . . . . 12,257
-------
Total . . . . . . . . . . . . . . . . . . $44,105
-------
-------
</TABLE>

The following table presents the deposit activity of LGF for the
periods indicated.

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------
1992 1991 1990
---- ---- ----
(In thousands)
<S> <C> <C> <C>
Deposits . . . . . . . . . . . . . . $379,381 $324,054 $303,330

Withdrawals . . . . . . . . . . . . . (397,416) (324,379) (306,298)

Interest credited on deposits . . . . 17,564 21,209 21,514
-------- --------- ---------

Total (decrease) increase in
deposits . . . . . . $ (471) $ 20,884 $ 18,546
-------- --------- ---------
-------- --------- ---------
</TABLE>

44
<PAGE> 58
The following table presents, by various rate categories, the amount
of certificate accounts outstanding at December 31, 1992, 1991, and 1990, and
the periods to maturity of the certificate accounts outstanding at December 31,
1992.

<TABLE>
<CAPTION>
At December 31, Period to Maturity from December 31, 1992
-------------------------------------- -----------------------------------------------------------
Within One to Two Two to
($ in thousands) 1992 1991 1990 One Year Years Three Years Thereafter Total
--------- --------- -------- ---------- ---------- ----------- ---------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Certificate accounts:

3.00% to 3.99% . . . $ 55,138 $ -- $ -- $ 53,507 $ 1,631 $ -- $ -- $ 55,138

4.00% to 4.99% . . . 65,226 978 -- 56,135 8,174 838 79 65,266
5.00% to 5.99% . . . 19,760 63,786 -- 4,964 8,071 1,596 5,129 19,760

6.00% to 6.99% . . . 16,968 60,030 1,094 12,394 1,115 83 3,376 16,968

7.00% to 7.99% . . . 31,291 77,776 147,143 8,714 2,871 7,249 12,457 31,291
8.00% to 8.99% . . . 22,513 30,019 72,045 8,668 6,672 2,059 5,114 22,513

9.00% to 9.99% . . . 4,136 4,132 11,414 1,177 30 689 2,240 4,136
10.00% to 10.99% . . 7,904 7,483 7,033 39 940 6,925 -- 7,904

11.00% to 11.99% . . 9,216 9,047 8,390 1 9,067 31 117 9,216
-------- -------- -------- -------- ------- -------- -------- ---------

Total . . . . . . . $232,152 $253,251 $247,119 $145,599 $38,571 $19,470 $28,512 $232,152
-------- -------- -------- -------- ------- ------- ------- --------
-------- -------- -------- -------- ------- ------- ------- --------
</TABLE>

45
<PAGE> 59
BORROWINGS.

Although deposits are La Grange Federal's primary source of funds, La
Grange Federal's policy has been to utilize borrowings as an alternative or
less costly source of funds. La Grange Federal obtains advances from the
Federal Home Loan Bank of Chicago ("FHLB-Chicago"). These advances are
collateralized by the capital stock of the FHLB-Chicago held by La Grange
Federal and certain of La Grange Federal's mortgage loans and mortgage-backed
securities. See "Regulation and Supervision--Federal Home Loan Bank System."
Such advances are made pursuant to several different credit programs, each of
which has its own interest rate and range of maturities. The maximum amount
that the FHLB-Chicago will advance to member institutions, including La Grange
Federal, for purposes other than meeting withdrawals, fluctuates from time to
time in accordance with the policies of the OTS and the FHLB-Chicago. The
maximum amount of FHLB-Chicago advances to a member institution generally is
reduced by borrowings from any other source. There were no sales of securities
under agreements to repurchase ("reverse repurchase agreements") or federal
funds purchased at any time during the three years ended December 31, 1992.
Management may, in the future, borrow funds and enter into reverse repurchase
agreements, if needed, in light of liquidity needs and asset/liability
management strategy.

<TABLE>
<CAPTION>
At or for the year ended December 31
------------------------------------
(In thousands) 1992 1991 1990
---- ---- ----
<S> <C> <C> <C>
FHLB advances:

Average balance outstanding . . . . . . . . $-- $-- $ 265
Maximum amount outstanding at any
month-end during the period . . . . . . . . . . -- -- 2,000
Balance outstanding at end of period . . . -- -- --
Weighted average interest rate during the
period (1) . . . . . . . . . . . . . . . . . . -- -- 7.16%
Weighted average interest rate at end of
period . . . . . . . . . . . . . . . . . . . . -- -- --
- ----------------------
(1) Computed on the basis of daily balances.
</TABLE>

SUBSIDIARY.

WEST SUBURBAN FINANCIAL CORPORATION. West Suburban Financial
Corporation ("West Suburban") is a wholly-owned subsidiary of La Grange
Federal. West Suburban has three divisions. The insurance division, LaFed
Insurance Agency, is engaged in selling general insurance. The real estate
division is engaged in a joint venture to develop single-family residential
real estate. The stock brokerage and annuity insurance division offers
investment opportunities to La Grange Federal's customers through the
INVEST/INSURE programs. For the year ended December 31, 1992 net income (loss)
to La Grange Federal from the insurance, real estate and brokerage divisions
was approximately $(1,600), $(63,000) and $20,000, respectively.

REAL ESTATE DEVELOPMENT JOINT VENTURE. West Suburban entered into
this joint venture in 1988 with a limited partnership. The limited partnership
and West Suburban act as the general partners. The purpose of the joint
venture is to acquire, develop and construct approximately 129 townhouses in
the village of Western Springs, Illinois. West Suburban has a 50% interest in
the joint venture. La Grange Federal has a loan outstanding to West Suburban
in the amount of $3.2 million at September 30, 1993 and a line-of-credit to the
joint venture in the amount of $50,000 of which $41,116 was outstanding as of
September 30, 1993. LGF's total investment in and advances to the joint
venture were $3.7 million as of September 30, 1993. Construction commenced in
1992 and management anticipates it will be completed within four years. La
Grange Federal has issued a commitment to fund the development costs of this
real estate joint venture in an amount up to La Grange Federal's regulatory
limit not to exceed $5.0 million. The Village of Western Springs has issued
approval of the project. La Grange Federal has

46
<PAGE> 60
guaranteed certain irrevocable letters of credit totaling $490,000 at September
30, 1993, issued by the Federal Home Loan Bank of Chicago on behalf of the real
estate joint venture. As security for these letters of credit, La Grange
Federal has pledged its stock in the Federal Home Loan Bank of Chicago and is
required to maintain certain qualifying first mortgage loans in an amount equal
to at least 170 percent of the outstanding advances.

Real estate development and investment activities involve varying
degrees of risk. In the case of increases in expenses, declines in the
underlying value of the project or in its general market area, adverse changes
in local, regional and/or national economic conditions, or a combination of
these or other factors can have a negative effect on the profitability and
value of the project. La Grange Federal's investment in and advances to the
real estate joint venture causes a reduction to its regulatory capital.

COMPETITION. The Chicago metropolitan area has a high density of
financial institutions, many of which are significantly larger and have greater
financial resources than La Grange Federal, and all of which are competitors of
La Grange Federal to varying degrees. La Grange Federal's competition for
loans comes principally from savings and loan associations, savings banks,
mortgage banking companies, insurance companies, and commercial banks. Its
most direct competition for deposits has historically come from savings and
loan associations, savings banks, commercial banks, and credit unions. La
Grange Federal faces additional competition for deposits from short-term money
market funds and other corporate and government securities funds. La Grange
Federal also faces increased competition from other financial institutions such
as brokerage firms and insurance companies for deposits. Competition may also
increase as a result of the lifting of restrictions on the interstate
operations of financial institutions.

La Grange Federal is a community-oriented financial institution
serving its market area with a wide selection of residential loans and retail
financial services. Management considers La Grange Federal's reputation for
financial strength and customer service as its major competitive advantage in
attracting and retaining customers in its market area. Management also
believes it benefits from its community orientation as well as its relatively
high core deposit base.

PERSONNEL. As of September 30, 1993, La Grange Federal had 105
full-time employees and 40 part-time employees. The employees are not
represented by a collective bargaining unit, and La Grange Federal considers
its relationship with its employees to be good.

PROPERTIES. La Grange Federal conducts its business through its main
office and drive-through facility located in La Grange, Illinois and branch
offices in Countryside, La Grange Park and Naperville, Illinois, all of which
are owned by La Grange Federal. At December 31, 1992, the net book value for
such property was $3.1 million.

LEGAL PROCEEDINGS. La Grange Federal is involved in various legal
actions arising in the normal course of its business. In the opinion of
management, the resolutions of these legal actions are not expected to have a
material adverse effect on La Grange Federal's results of operations.

47
<PAGE> 61

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

ASSET/LIABILITY MANAGEMENT.

Asset/liability management is a daily function of LGF's management and is
continually changing as interest rates fluctuate. The matching of assets and
liabilities may be analyzed by examining the extent to which such assets and
liabilities are interest rate sensitive, and by monitoring LGF's interest rate
sensitivity "gap."

The interest rate sensitivity gap is defined as the difference between the
amount of interest-earning assets anticipated, based on certain assumptions, to
mature or reprice within a specific time period and the amount of
interest-bearing liabilities anticipated to mature or reprice within that time
period. A gap is considered positive when the amount of interest rate
sensitive assets exceeds the amount of interest rate sensitive liabilities, and
conversely a gap is considered negative when the amount of interest rate
sensitive liabilities exceeds the amount of interest rate sensitive assets.
During a period of rising interest rates, a negative gap would tend to
adversely affect net interest income, while a positive gap would tend to result
in an increase in net interest income. During a period of falling interest
rates, a negative gap would tend to result in an increase in net interest
income, while a positive gap would tend to adversely affect net interest
income.

Management's strategy has been to reduce LGF's risk to rising interest rates
and to maintain a cumulative one year gap ratio of between negative 20% to
positive 20%. This ratio was positive 3.6% at December 31, 1992, as compared
to a ratio of negative 11.0% at December 31, 1991.

The table below sets forth the amounts of interest-earning assets and
interest-bearing liabilities outstanding at December 31, 1992, which are
expected to reprice or mature in each of the future time periods shown. The
amount of assets and liabilities shown which reprice or mature during a
particular period were determined using assumptions prepared by the OTS for its
quarterly gap report for December 31, 1992. The assumptions used at the dates
indicated may not be indicative of the actual prepayments and withdrawals
experienced by LGF.

The office of OTS issued final regulations which set forth the methodology for
calculating an interest rate risk component that will be incorporated in the
OTS regulatory capital rules. Under the new regulations, only savings
associations with "above normal" interest rate risk exposure would be required
to maintain additional capital. The dollar amount of capital would be an
addition to a savings association's existing risk-based capital requirement.
The final rule becomes effective January 1, 1994; implementation begins July 1,
1994.

OTS issues a quarterly interest rate risk exposure report. The most recent
issuance, with data as of June 30, 1993, measured La Grange Federal's risk,
with a 200 basis point rate shock, at 1.91%. This percentage representing the
change in the net portfolio value as a percent of the portfolio value of
assets, is below the minimum requirement of 2.00%, which would increase the
capital requirement for risk based assets. Management anticipates that this
regulation, when implemented, will not have a significant effect on its capital
position.

48
<PAGE> 62
INTEREST RATE SENSITIVITY ANALYSIS.
<TABLE>
<CAPTION>
At December 31, 1992
--------------------------------------------------------
More Than More Than More than
One Year One Year to Three Years 5 Years
($ in thousands) or Less Three Years to 5 Years to 10 Years
------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
Interest-earning assets:
Mortgage loans(1) . . . . . . . . . . . . . $ 69,448 $54,005 $30,547 $32,345
Consumer and other loans(1) . . . . . . . . 8,059 1,766 144 225
Mortgage-backed securities . . . . . . . . 50,408 1,786 1,044 1,111
Mortgage-backed securities held for sale . 5,995 19,716 -- --
Interest-bearing deposits,
federal funds sold, investment securities
and FHLB stock . . . . . . . . . . . . . . 29,370 25,493 1,000 1,026
Investment securities held for sale . . . . 43,346 5,837 -- --
------- ------ ------ ------
Total interest-earning assets . . . . . 206,626 108,603 32,735 34,707
------- ------- ------ ------

Interest-bearing liabilities:
Passbook and statement accounts . . . . . . 13,363 20,296 13,232 16,794
Money market accounts . . . . . . . . . . . 23,017 3,206 1,526 1,170
NOW accounts . . . . . . . . . . . . . . . 10,001 9,192 2,460 3,301
Certificate accounts . . . . . . . . . . . 145,599 58,041 20,987 7,525
------- ------ ------ ------
Total interest-bearing liabilities . . . 191,980 90,735 38,205 28,790
------- ------ ------ ------
Interest sensitivity gap per period . . . . . . . . . $ 14,646 $17,868 $(5,470) $ 5,917
-------- ------- ------- -------
-------- ------- ------- -------

Cumulative interest sensitivity gap . . . . . . . . . $ 14,646 $32,514 $27,044 $32,961
-------- ------- ------- -------
-------- ------- ------- -------
Cumulative interest sensitivity gap as
a percentage of total assets . . . . . . . . . . . 3.56% 7.90% 6.57% 8.01%
Cumulative net interest-earning assets as a
percentage of net interest-bearing
liabilities . . . . . . . . . . . . . . . . . . . 107.63% 111.50% 108.43% 109.43%
------ ------ ------ ------
------ ------ ------ ------

</TABLE>
<TABLE>
<CAPTION>
At December 31, 1992
-----------------------------------
More Than
10 Years More Than
($ in thousands) to 20 Years 20 Years Total
----------- -------- -----
<S> <C> <C> <C>
Interest-earning assets:
Mortgage loans(1) . . . . . . . . . . . . . $11,077 $ 987 $198,409
Consumer and other loans(1) . . . . . . . . 324 -- 10,518
Mortgage-backed securities . . . . . . . . 381 33 54,763
Mortgage-backed securities held for sale . -- -- 25,711
Interest-bearing deposits,
federal funds sold, investment securities
and FHLB stock . . . . . . . . . . . . . . -- -- 56,889
Investment securities held for sale . . . . -- -- 49,183
------ ------- --------
Total interest-earning assets . . . . . 11,782 1,020 395,473
------ ------- --------

Interest-bearing liabilities:
Passbook and statement accounts . . . . . . 11,617 3,301 78,603
Money market accounts . . . . . . . . . . . 212 5 29,136
NOW accounts . . . . . . . . . . . . . . . 1,812 332 27,098
Certificate accounts . . . . . . . . . . . -- -- 232,152
------ ------- --------
Total interest-bearing liabilities . . . 13,641 3,638 366,989
------ ------- --------
Interest sensitivity gap per period . . . . . . . . . $(1,859) $(2,618) $ 28,484
------- -------- --------
------- -------- --------

Cumulative interest sensitivity gap . . . . . . . . . $31,102 $28,484 $ 28,484
------- ------- -------
------- ------- -------
Cumulative interest sensitivity gap as
a percentage of total assets . . . . . . . . . . . 7.56% 6.92% 6.92%
Cumulative net interest-earning assets as a
percentage of net interest-bearing
liabilities . . . . . . . . . . . . . . . . . . . 108.56% 107.76% 107.76%
------- ------ ------
------- ------ ------

_____________________________
</TABLE>
(1) For purposes of the gap analysis, gross mortgage and other loans are
reduced for non-performing loans but are not reduced for allowance for loan
losses. Non-performing loans equal $572,000 for mortgage loans and $3,000
for other loans, for a total of $575,000.

49
<PAGE> 63
Certain shortcomings are inherent in the method of analysis presented
in the foregoing table. For example, although certain assets and liabilities
may have similar maturities or periods in repricing, they may react in
different degrees to changes in market interest rates. Also, the interest
rates on certain types of assets and liabilities may fluctuate in advance of
changes in market interest rates, while interest rates on other types may lag
behind changes in market rates. Additionally, certain assets, such as
Adjustable Rate Mortgage ("ARM") loans, have features which restrict changes in
interest rates on a short-term basis and over the life of the asset. Further,
in the event of a change in interest rates, prepayment and early withdrawal
levels would likely deviate from those assumed in calculating the table.
Finally, the ability of many borrowers to service their debt may decrease in
the event of an interest rate increase.

AVERAGE BALANCE SHEET.

The following table sets forth certain information relating to LGF's
consolidated statements of financial condition and the consolidated statements
of operations averaged for the nine months ended September 30, 1993 and the
years ended December 31, 1992, 1991, and 1990 and reflects the average yield on
assets and average cost of liabilities for the periods indicated. Such yields
and costs are derived by dividing income or expense by the average balance of
assets or liabilities, respectively, for the periods shown. Average balances
are derived from average monthly balances except on federal funds sold and
other borrowings which, because of high balance fluctuations within the
accounts during the months, used average daily balances. Management does not
believe that the use of average monthly balances instead of average daily
balances on all other accounts has caused any material differences in the
information presented. The average balance of loans receivable includes loans
on which LGF has discontinued accruing interest. Total interest-earning assets
are net of discounts and premiums. The yields and costs include fees which are
considered adjustments to yields.

50
<PAGE> 64
<TABLE>
<CAPTION>
At
September 30, Year Ended December 31,
------------------- -------------------------
1993 1992
------------------- -------------------------
Average
Weighted Average Yield/
($ in thousands) Balance Yield Balance Interest Cost
------- ----- ------- -------- ----
<S> <C> <C> <C> <C> <C>
Assets:
Interest-earning assets:
Loans receivable . . . . . . $197,311 8.03% $215,716 $20,779 9.63%
Mortgage-backed securities . 78,291 5.82 39,935 2,134 5.34
Interest-earning deposits, 8,009 4.19
federal funds sold and
FHLB stock . . . . . . . . 25,015 884 3.53
Investment securities . . . 76,518 5.49 33,853 2,062 6.09
Securities held for sale . . 30,374 4.70 73,391 4,394 5.99
-------- -------- -------
Total interest-earning assets 390,503 6.75 387,910 30,253 7.80
-------- -------
Non interest-earning assets 21,491 15,723
-------- --------
Total assets . . . . . . $411,994 $403,633
-------- --------
-------- --------

Liabilities and stockholders'
equity:
Interest-earning liabilities:
Now accounts . . . . . . . . 25,787 2.07 $ 25,324 $ 749 2.96%
Money market accounts . . . 25,409 2.52 29,395 1,067 3.63
Passbook and statement
accounts . . . . . . . . . 83,663 2.75 70,965 2,699 3.80
Certificate accounts . . . . 227,814 5.35 240,838 15,590 6.47
Borrowed funds . . . . . . . 5,000 4.59 -- -- --
-------- -------- -------
Total interest-bearing
liabilities . . . . . . . . . . 367,673 4.32 366,522 20,105 5.49
--------
Other liabilities . . . . . . . 2,254 4,593
-------- --------
Total liabilities . . . . 369,927 371,115
-------- --------

Stockholders' equity . . . . . $ 42,067 32,518
-------- --------

Total liabilities and
stockholders' equity . $411,994 $403,633
-------- --------
-------- --------

Net interest income/interest
rate spread(1) . . . . . . 2.43% $10,148 2.31%
----- ------- -----
----- ------- -----
Net interest-earning assets/net
interest margin(2) . . . . . $22,830 $ 21,388 2.62%
------- -------- -----
------- -------- -----

Ratio of interest-earning
assets to interest-bearing
liabilities . . . . . . . . 1.06x 1.06x
----- -----
----- -----

</TABLE>
<TABLE>
<CAPTION>

Year Ended December 31,
----------------------------------------------------------
1991 1990
----------------------------------------------------------
Average Average
Average Yield/ Average Yield/
($ in thousands) Balance Interest Cost Balance Interest Cost
------- -------- ---- ------- -------- ----
Assets:
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable . . . . . . $230,893 $22,863 9.90% $222,413 $22,212 9.99%
Mortgage-backed securities . 33,906 3,014 8.89 27,135 2,475 9.12
Interest-earning deposits,
federal funds sold and
FHLB stock . . . . . . . . 15,459 1,021 6.60 5,838 624 10.69
Investment securities . . . 67,939 5,153 7.58 70,499 5,611 7.96
Securities held for sale . . 19,789 1,503 7.60 16,972 1,806 10.64
-------- ------- -------- -------
Total interest-earning assets 367,986 33,554 9.12 342,857 32,728 9.55
-------- ------- -------- -------
Non interest-earning assets 15,567 15,387
-------- --------
Total assets . . . . . . $383,553 $358,244
-------- --------
-------- --------

Liabilities and stockholders'
equity:
Interest-earning liabilities:
Now accounts . . . . . . . . $ 21,544 $ 1,028 4.77% $ 19,415 $ 1,017 5.24%
Money market accounts . . . 31,936 1,697 5.31 31,404 1,906 6.07
Passbook and statement
accounts . . . . . . . . . 53,317 2,855 5.35 47,476 2,627 5.53
Certificate accounts . . . . 252,814 19,418 7.68 239,315 19,821 8.28
Borrowed funds . . . . . . . -- -- -- 265 20 7.55
--------- ------- -------- -------
Total interest-bearing
liabilities . . . . . . . . . 359,611 24,998 6.95 337,875 25,391 7.51
Other liabilities . . . . . . . 4,593 4,240
-------- --------
Total liabilities . . . . 364,204 342,115
-------- --------

Stockholders' equity . . . . . 19,349 16,129
-------- --------
Total liabilities and
stockholders' equity . $383,553 $358,244
-------- --------
-------- --------

Net interest income/interest
rate spread(1) . . . . . . $ 8,556 2.17% $ 7,337 2.04%
------- ----- ------- -----
------- ----- ------- -----
Net interest-earning assets/net
interest margin(2) . . . . . $ 8,375 2.33% $ 4,982 2.14%
-------- ----- -------- -----
-------- ----- -------- -----

Ratio of interest-earning
assets to interest-bearing
liabilities . . . . . . . . 1.02x 1.01x
----- -----
----- -----

- --------------------------------------
</TABLE>
(1) Interest rate spread represents the difference between the average rate on
interest-earning assets and the average cost of interest-bearing
liabilities.
(2) Net interest margin represents net interest income divided by average
interest-earning assets.

51
<PAGE> 65
RATE/VOLUME ANALYSIS.

The following table presents the extent to which changes in interest
rates and changes in the volume of interest-earning assets and interest-bearing
liabilities have affected LGF's interest income and interest expense during the
periods indicated. Information is provided in each category with respect to
(1) changes attributable to changes in volume (changes in volume multiplied by
prior rate), (2) changes attributable to changes in rate (changes in rate
multiplied by prior volume), and (3) the net change. The changes attributable
to the combined impact of volume and rate have been allocated proportionately
to the changes due to volume and the changes due to rate.

<TABLE>
<CAPTION>
Year Ended December 31, 1992 Year Ended December 31, 1991
Compared to Compared to
Year Ended December 31, 1991 Year Ended December 31, 1990
Increase (Decrease) Increase (Decrease)
---------------------------- ----------------------------
($ in thousands) VOLUME RATE NET VOLUME RATE NET
------ ---- --- ------ ---- ---
<S> <C> <C> <C> <C> <C> <C>
Interest-earning assets:
Loans receivable . . . . . . . . $(1,503) $ (581) $(2,084) $ 847 $ (196) $ 651
Mortgage-backed securities . . . 536 (1,416) (880) 618 (79) 539
Interest-earning deposits,
federal 631 (768) (137) 1,028 (631) 397
funds sold, and other . . . .
Investment securities . . . . . (2,585) (506) (3,091) (204) (254) (458)
Securities held for sale . . . . 4,071 (1,180) 2,891 300 (603) (303)
------ ------- ------ ------ ------- -------
Total . . . . . . . . . . . . 1,150 (4,451) (3,301) 2,589 (1,763) 826
------ ------- ------- ------ ------- ------

Interest-bearing liabilities:
NOW accounts . . . . . . . . . . 180 (459) (279) 112 (101) 11
Money market accounts . . . . . (135) (495) (630) 32 (241) (209)
Passbook and statement accounts 945 (1,101) (156) 323 (95) 228
Certificate accounts . . . . . . (920) (2,908) (3,828) 1,118 (1,521) (403)
Borrowed funds . . . . . . . . . - - - (20) - (20)
------ -------- ------- ------- ------- -------
Total . . . . . . . . . . . . 70 (4,963) (4,893) 1,565 (1,958) (393)
------ ------- ------- ------ ------- -------

Net change in interest income . . . $1,080 $ 512 $1,592 $1,024 $ 195 $1,219
------ ------ ------ ------ ------- ------
------ ------ ------ ------ ------- ------

</TABLE>
52
<PAGE> 66
COMPARISON OF OPERATING RESULTS FOR THE NINE MONTHS ENDED SEPTEMBER 30, 1993
AND 1992.

GENERAL. Net income for the nine months ended September 30, 1993 was
$2,998,000 as compared to $2,003,000 for the nine months ended September 30,
1992. The increase was due primarily to improved net interest margin and the
positive effect on earnings in 1993 from the use of the $17 million in net
proceeds from the stock conversion which occurred in June, 1992.

INTEREST INCOME. Interest income decreased to $21.0 million for the
nine months ended September 30, 1993 from $22.7 million for the nine months
ended September 30, 1992. Interest income was positively effected by the
effects of the stock conversion proceeds which increased average earning assets
in the first nine months of 1993 compared to the same 1992 period. Interest
income declined due to a reduction in the average yield on all interest-earning
assets to 7.22% in 1993 from 7.96% in 1992. The decrease in the average yield
of interest-earning assets was attributable, in part, to the reinvestment of
proceeds from loan refinancing into lower yielding earning assets.

INTEREST EXPENSE. Interest expense for the nine months ended
September 30, 1993 was $12.3 million as compared to $15.5 million of the nine
months ended September 30, 1992. The decrease was attributable primarily to
the reduction in the average cost of deposits resulting from a transfer in term
certificates of deposit to passbook accounts. The average cost of deposits and
borrowed funds for the first nine months of 1993 was 4.53% as contrasted to
5.65% in the comparable period in 1992.

NET INTEREST INCOME. Net interest income increased to $8.7 million
for the nine months ended September 30, 1993, from $7.2 million earned in the
nine months ended September 30, 1992. The increase resulted primarily from the
decline in market interest rates. Average earning assets increased in the
first nine months of 1993 to $388.4 million in comparison to $381.1 million in
the first nine months of 1992. The excess of interest-earning assets over
interest-bearing liabilities increased to $26.4 million in the first nine
months of 1993 from $14.5 million in the comparable 1992 period.

PROVISION FOR POSSIBLE LOAN LOSSES. During the nine month period
ended September 30, 1993, the provision for possible loan losses was $195,000
as compared to $262,000 during the comparable 1992 period. The provision is
not related to any specific loan delinquency or problem loans during the nine
month period. The provision reflects management's policy of evaluating the
loan portfolio in view of the relative composition of the loan portfolio and
general, local and national economic conditions.

OTHER INCOME. Other income increased to $1.5 million for the nine
months ended September 30, 1993 from $1.2 million in the comparable 1992
period. The increase was due primarily to the reduction in net losses from the
sales of securities held for sale in 1993 of $70,000 as compared with $448,000
net losses in the comparable 1992 period.

OTHER EXPENSES. Other expenses for the nine month period ended
September 30, 1993 were $5.7 million as compared to $5.3 million for the nine
months ended September 30, 1992. The increase was primarily due to higher
occupancy, advertising, legal and holding company costs offset in part by a
reduction in federal deposit insurance premiums resulting from a final credit
given by FDIC to thrifts who had prepaid premiums in prior years.

FEDERAL INCOME TAXES. Federal income taxes increased to $1,315,000
for the nine months ended September 30, 1993 from $783,000 in the comparable
1992 period. LGF implemented SFAS No. 109 "Accounting for Income Taxes" in the
first quarter of 1993. The effective tax rate for the first nine months of
1993 was 30.5% as compared to 28.1% in the comparable 1992 period. In adopting
SFAS No. 109, LGF has recorded no valuation allowance with respect to the
deferred asset recorded for capital losses. This determination is based upon
management's evaluation that such deferred assets will, on a more likely than
not basis, be recognized within the carryforward period.

53
<PAGE> 67
COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 1992 AND 1991.

GENERAL. Net income for the year ended December 31, 1992, was $2.6
million as compared to $4.4 million in 1991. This $1.8 million decline in net
income was despite a $1.6 million increase in net interest income. Improved
net interest income was, in part attributable to the infusion of $17 million of
net proceeds from LGF's initial public offering. Lower overall earnings were
primarily a result of a $1.7 million decrease in the favorable lower of cost or
market adjustment on securities held for sale, a $760,000 increase in
compensation and benefit expense due in part to expenses associated with the
new Employee Stock Ownership Plan and Recognition and Retention Plan and a
$888,000 increase in the provision for income taxes arising in part from a
non-recurring favorable Internal Revenue Service ("IRS") settlement of $898,000
recorded in 1991.

INTEREST INCOME. Interest income decreased from $33.6 million in 1991
to $30.3 million in 1992. This decrease was caused by lower yields on earning
assets, offset by an $18.1 million increase in average assets primarily due to
the proceeds from the initial public offering. Interest on loans decreased
$2.1 million to $20.8 million for 1992, from $22.9 million in 1991. The
average yield of the loan portfolio declined to 9.63% in 1992, from 9.90% in
1991, which resulted primarily from lower market interest rates and the
refinancing of adjustable rate and higher-yielding fixed rate mortgage loans to
lower-yielding fixed rate loans. Interest on mortgage-backed securities,
investment securities and securities held for sale decreased $1.1 million to
$8.6 million for 1992 from $9.7 million for 1991. This decrease was primarily
due to a decline in the average yield on these assets to 5.84% in 1992, from
7.95% in 1991.

INTEREST EXPENSE. Interest expense decreased $4.9 million to $20.1
million in 1992, from $25.0 million in 1991. This decline was due to a lower
average cost of interest-bearing liabilities from 6.95% in 1991 to 5.49% in
1992, offset in part by a $6.9 million increase in the average balance of
deposits.

NET INTEREST INCOME BEFORE PROVISION FOR POSSIBLE LOAN LOSSES. Net
interest income increased $1.5 million or 14.85% to $10.1 million in 1992, from
$8.6 million in 1991. The increase resulted primarily from a combination of
growth in the average balance of interest-earning assets to $387.9 million in
1992 from $368.0 million in 1990 and a reduction in the average cost of
interest-bearing liabilities to 5.49% in 1992, from 6.95% in 1991, due to
generally lower levels of interest rates for such liabilities.

PROVISION FOR POSSIBLE LOAN LOSSES. The allowance for possible loan
losses is maintained at a level which management considers to be adequate to
absorb possible losses on existing loans that may become uncollectible. The
adequacy of the allowance is based upon prior loan loss experience, which has
been historically very low for LGF, and an overall evaluation of the
collectibility of loans. This evaluation takes into consideration such factors
as the nature and volume of the loan portfolio, a review of specific problem
loans, and current economic conditions that may affect the borrower's ability
to pay. LGF's allowance for possible loan losses increased to $723,000 at
December 31, 1992, from $450,000 at December 31, 1991. Non-performing loans to
total gross loans increased to .27% at December 31, 1992, from .20% at December
31, 1991. Loans delinquent 90 days or more increased to $575,000 at December
31, 1992, from $466,000 at December 31, 1991. Net charge-offs totaled $37,000
in 1992 and $29,000 in 1991. The allowance for possible loan losses is
established through a provision for possible loan losses charged to expense.
In 1992, LGF recorded a provision for possible loan losses of $310,000 as
compared to $419,000 for 1991. Such evaluation includes a review of all loans
on which full collectibility may not be reasonably assured and considers, among
other matters, the estimated net realizable value of the underlying collateral,
economic conditions, historical loan loss experience, and other factors that
warrant recognition in providing for an adequate loan loss provision. LGF will
continue to monitor its allowance for possible loan losses and make future
provisions to the allowance in consideration of the amount and types of loans
in its portfolio and as economic conditions dictate. In addition, LGF's
determination as to the amount of its allowance for possible loan losses is
subject to review by its regulatory agencies, the OTS and Federal Deposit
Insurance Corporation ("FDIC"), which can order the establishment of additional
general or specific reserves.

OTHER INCOME. Other income totalled $1.2 million in 1992 as compared
to $2.9 million in 1991 primarily as a result of favorable lower of cost or
market adjustments of $590,000 in 1992 and $2.3 million in 1991 relating to
securities held for sale.

54
<PAGE> 68

Securities held for sale consist of securities that management either
intends to sell or to use as part of its asset/liability management strategy
and that may be sold in response to changes in interest rates, resultant
prepayment risk and other factors related to interest rates and resultant
prepayment risk changes. Subsequent to designation as held for sale,
reductions of cost to market value are recorded through a valuation allowance
with a corresponding charge to operations. Subsequent recoveries in market
values reduce the valuation allowance up to the lower of cost or current market
value at date of designation with a corresponding credit to operations. To the
extent the market value of these securities is a function of fluctuations in
market prices, LGF's future earnings could be significantly affected by lower
of cost or market adjustments.

OTHER EXPENSES. Other expenses increased approximately $900,000 or
13.99%, to $7.2 million for 1992, from $6.3 million for 1991. Salaries and
employee benefits increased $760,000 during 1992 which resulted primarily from
greater employee benefit costs associated with the new Employee Stock Ownership
Plan and Recognition and Retention Plan. Holding company expenses were $72,000
in 1992. There were no holding company expenses in 1991 as LGF was not
established until 1992.

FEDERAL INCOME TAX. The federal income tax provision increased
$888,000 to $1,172,000, from $284,000 for the years ended December 31, 1992,
and 1991 respectively. During 1991 a settlement was reached with the IRS
relating to certain issues covering the period from 1970 to 1988, which had the
effect of reducing the income tax provision by $898,000. Exclusive of the IRS
settlement, LGF experienced a 25.10% effective tax rate in 1991. In 1992 the
effective tax rate was 31.02%. The effective tax rate for financial statement
purposes differed from the statutory federal income tax rate of 34% primarily
due to the net effect of non-deductible realized capital losses and non-taxable
unrealized capital gains on mutual funds held for sale.

COMPARISON OF OPERATING RESULTS FOR THE YEARS ENDED DECEMBER 31, 1991 AND
DECEMBER 31, 1990.

GENERAL. Net income increased in 1991 to $4.4 million from a net loss
of $688,000 in 1990. Results for both years included significant lower of cost
or market adjustments relative to certain mutual fund securities which were
held for sale. The positive lower of cost or market adjustment of $2.3 million
in 1991 compared to a negative adjustment of $1.9 million in 1990.
Additionally, an $898,000 federal income tax benefit (plus $225,000 of related
interest recorded as other income) was recorded in 1991 due to an IRS
settlement agreed to in 1991. Absent these adjustments, net income would have
decreased to $1.1 million for the year ended 1991 and increased to $1.2 million
for the year ended 1990.

INTEREST INCOME. Interest income increased $826,000 to $33.6 million
for 1991, from $32.7 million for 1990. This increase resulted primarily from
an increase of 9.74% in the average balance of loans receivable,
mortgage-backed securities, interest-bearing deposits, federal funds sold and
Federal Home Loan Bank ("FHLB") stock, offset by a decrease in the average
yield of total interest-earning assets to 9.12% in 1991, from 9.55% in 1990.

INTEREST EXPENSE. Interest expense for 1991 was $25.0 million as
compared to $25.4 million for 1990. The decrease resulted primarily from the
reduction in the average cost of deposits due to general market conditions to
6.95% in 1991, from 7.51% in 1990.

NET INTEREST INCOME BEFORE PROVISION FOR POSSIBLE LOAN LOSSES. Net
interest income increased $1.3 million or 17.81% to $8.6 million in 1991, from
$7.3 million in 1990. The increase resulted primarily from a combination of an
increase in the average balance of interest-earning assets to $368.0 million
in 1991 from $342.9 million in 1990, and a decrease in the average cost of
interest-bearing liabilities to 6.95% in 1991 from 7.51% in 1990, due to
generally lower levels of interest rates for such liabilities.

PROVISION FOR POSSIBLE LOAN LOSSES. In 1991, LGF recorded a provision
for possible loan losses of $419,000 as compared to $82,000 for 1990. The
increase in the provision during 1991 is not related to any increase in
identifiable loan delinquencies or specific problem loans during such period,
but resulted from management's evaluation of the risk inherent in its loan
portfolio and the general economy. Non-performing loans to total gross loans
decreased to .20% at December 31, 1991, from .30% at December 31, 1990. Loans
delinquent 90 days or

55
<PAGE> 69

more declined to $466,000 at December 31, 1991, from $698,000 at
December 31, 1990. The company generally has recorded only insignificant losses
on its delinquent loans. Net charge-offs totaled $29,000 and $22,000 for the
years ended December 31, 1991, and 1990, respectively.

OTHER INCOME. Other income totalled $2.9 million in 1991, as compared
to a net expense of $1.3 million in 1990 primarily as a result of lower of cost
or market adjustments of a positive $2.3 million in 1991, and a negative $1.9
million in 1990 relating to securities held for sale. Excluding these
adjustments, other income increased $107,000 to $639,000 during 1991, from
$532,000 during 1990.

The remaining $107,000 increase to other income results primarily from
recording approximately $225,000 of interest income received from the IRS for a
settlement, discussed below, in favor of LGF over prior years' federal income
tax payments. The effect of the settlement was partially offset by net losses
of $150,000 on sales of investment and mortgage-backed securities and
securities held for sale. There were no such net gains or losses on sales in
1990.

OTHER EXPENSE. Other expenses increased $400,000 to $6.3 million in
1991, from $5.9 million in 1990. Salaries and employee benefits increased
$177,000 or 7.05% in 1991. Premiums paid for federal deposit insurance
totalled $745,000 in 1991 as compared to $608,000 in 1990.

FEDERAL INCOME TAX PROVISION. The federal income tax provision
decreased by $459,000 to $284,000, from $743,000 for the years ended December
31, 1991, and 1990, respectively. During 1991, a settlement was reached with
the IRS relating to certain issues covering the period from 1970 to 1988, which
had the effect of reducing the income tax provision by $898,000. Exclusive of
the IRS settlement, the 1991 effective tax rate was 25.10%. The effective tax
rate differed from the statutory federal income rate of 34% primarily due to
the net effect of realized capital losses and unrealized capital gains on
mutual funds held for sale. In 1990, the provision for income taxes was
significantly in excess of the 34% statutory federal income tax rate primarily
due to $1.9 million of unrealized capital losses for which no tax benefit could
be recorded for financial statement reporting purposes. In addition, an IRS
settlement had the effect of increasing 1990 income tax expense by $195,000.

LIQUIDITY AND CAPITAL RESOURCES.

LGF's primary sources of funds are deposits, proceeds from principal
in interest payments on loans and mortgage-backed securities, maturities of
investment securities, proceeds from sales of securities held for sale and
funds provided by operations. While maturities and scheduled amortization of
loans and mortgage-backed securities are a predictable source of funds, deposit
flows and mortgage prepayments are greatly influenced by general interest
rates, economic conditions, competition and restructuring of the thrift
industry.

La Grange Federal is required to maintain minimum levels of liquid
assets as defined in existing OTS regulations. These requirements, which may
be varied at the direction of the OTS depending upon economic conditions and
deposit flows, are based upon a percentage of deposits and borrowings. The
required ratio is currently 5%. La Grange Federal's total liquidity was $58.9
million or 16.1% at December 31, 1992 and $89.6 million or 24.5% at September
30, 1993. Liquidity management is both a daily and long-term function of
management strategy. Excess funds are generally invested in short-term
investments. In the event that LGF should require funds beyond its ability to
generate them internally, additional sources of funds are available through the
use of FHLB advances and reverse repurchase agreements.

LGF's net liquid assets are cash and cash equivalents, which include
investments in highly liquid, short-term investments. The levels of these
assets are dependent on LGF's operating, financing and investing activities
during any given period. At December 31, 1992, and 1991 and at September 30,
1993, cash and cash equivalents totalled $10.5 million, $14.9 million and $12.4
million, respectively.

LGF's primary investing activity is the origination and purchase of
loans and the purchase of investment and mortgage-backed securities and
securities held for sale. During the years ended December 31, 1991 and 1992
and the nine months ended September 30, 1993, LGF originated and purchased
loans in the amounts of $46.7

56
<PAGE> 70

million, $64.7 million, and $59.1 million. In those same periods,
purchases of mortgage-backed securities totalled $15.3 million, $44.6 million,
and $31.0 million, respectively. Purchases of investment securities, primarily
U.S. government and agency securities, totalled $47.8 million and $26.0 million
for the year ended December 31, 1992 and 1991 and $39.0 million for the nine
months ended September 31, 1993. During fiscal 1992 purchases of securities held
for sale, consisting of mortgage-backed securities and investments in mutual
funds totalled $93.5 million. The majority of these purchases were made to
acquire a mutual fund investment whose purpose is to generate capital gains for
income tax purposes. Purchases of securities held for sale totalled $33.2
million in fiscal 1991. During the nine months ended September 30, 1993, there
were no purchases of securities held for sale. These activities were funded
primarily by principal repayments on loans and mortgage-backed securities,
maturities of investment securities and proceeds from the sale of securities
held for sale.

At September 30, 1993, LGF had outstanding commitments to originate
loans and unused lines of credit of $19.2 million and to fund its subsidiary's
real estate investment joint venture in an amount up to $5.0 million.
Management anticipates that sufficient funds will be available to finance on a
timely basis its short- and long-term loan commitments. Certificates of
deposit which are scheduled to mature in one year or less at September 30,
1993, totalled $133.2 million. Management believes that a significant portion
of such deposits will remain with LGF.

In fiscal 1992, LGF used $8.5 million of the net proceeds from the
initial public offering to purchase all of the common stock of La Grange
Federal and retained the remainder for its own operations. The remaining
proceeds were invested in daily funds, government and federal agency securities
and other short term or adjustable rate investments.

In November 1992, LGF received approval from the OTS to repurchase up
to 5% of LGF's outstanding common stock. Through December 31, 1992, 30,000
shares had been repurchased at a cost of $480,000.

At September 30, 1993, La Grange Federal's capital exceeded all of the
capital requirements of the OTS as mandated by FIRREA on both a current and
fully phased-in basis.

IMPACT OF INFLATION AND CHANGING PRICES.

The Consolidated Financial Statements and Notes thereto presented
herein have been prepared in accordance with generally accepted accounting
principles, which require the measurement of financial position and operating
results in terms of historical dollars without considering the changes in the
relative purchasing power of money over time due to inflation. The impact of
inflation is reflected in the increased cost of LGF's operations. Unlike most
industrial companies, nearly all the assets and liabilities of LGF are monetary
in nature. As a result, interest rates have a greater impact on LGF's
performance than do the effects of general levels of inflation. Interest rates
do not necessarily move in the same direction or to the same extent as the price
of goods and services.

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REGULATION OF FIRST OF AMERICA AND LGF

Various federal and state banking laws and regulations affect the
businesses of First of America and its affiliate financial institutions and of
LGF and La Grange Federal. First of America and its affiliate financial
institutions are subject to supervision, regulation, and periodic examination
by various federal and state financial institution regulatory agencies,
including the FRB, the OCC, the FDIC, the Illinois Commissioner, the Michigan
FIB and the Indiana Department of Financial Institutions (the "Indiana DFI").
LGF and La Grange Federal are subject to supervision, regulation, and periodic
examination by the FDIC and the OTS.

The following is a summary of certain statutes and regulations
affecting First of America, its affiliate financial institutions, and LGF and
La Grange Federal. This summary is qualified in its entirety by such statutes
and regulations, which are subject to change based on pending and future
legislation and action by regulatory agencies.

BANK HOLDING COMPANIES. First of America is a bank holding company
under the Bank Holding Company Act (the "BHC Act") and as such is subject to
regulation by the FRB. A bank holding company is required to file with the FRB
annual reports and other information regarding its business operations and
those of its subsidiaries. A bank holding company and its subsidiary banks are
also subject to examination by the FRB. The non-banking activities of a bank
holding company and its subsidiaries are limited to certain activities
specified in the BHC Act and such other activities as the FRB, by regulation or
order, determines to be closely related, and a proper incident, to the business
of banking. The FRB has determined that owning, controlling or operating a
savings association is a permissible activity for bank holding companies if the
savings association engages only in activities that are permissible for bank
holding companies. Prior FRB approval may be required for a bank holding
company to acquire new subsidiaries, including savings associations, or
commence new lines of business.

The BHC Act requires every bank holding company to obtain the prior
approval of the FRB before acquiring substantially all the assets of any bank
or bank holding company or ownership or control of any voting shares of any
bank or bank holding company, if, after such acquisition, it would own or
control, directly or indirectly, more than five percent of the voting shares of
such bank or bank holding company. Bank holding companies are also prohibited
from acquiring shares of any bank located outside the state in which the
operations of the bank holding company's banking subsidiaries are principally
conducted unless such an acquisition is specifically authorized by statute of
the state of the bank whose shares are to be acquired.

Under a Michigan statute applicable to First of America, a Michigan
bank holding company may acquire a bank located in any state in the United
States if the laws of the other state permit ownership of banks located in that
state by a Michigan bank holding company. Under the same Michigan statute, a
Michigan bank or bank holding company may be acquired by a bank holding company
located in any state in the United States subject to approval of the Michigan
FIB and the existence of a reciprocal law in such other state.

A bank holding company which acquires a savings association and holds
it as a separate subsidiary becomes a savings and loan holding company subject
to laws and regulations applicable to such holding companies (See "Regulation
of First of America and LGF-Savings and Loan Holding Companies"). The
acquisition of a savings association by a bank holding company which is not
also a savings and loan holding company is not subject to approval of the
Michigan FIB.

SAVINGS AND LOAN HOLDING COMPANIES. LGF is a savings and loan holding
company and subject to the jurisdiction of the OTS with regard to certain
matters. Among other things, a savings and loan holding company is required
to: (1) file and cause all of its subsidiaries which are not savings
associations to file such periodic reports as may be required by the OTS; (2)
maintain books and records as prescribed by the OTS; and (3) be subject to
examination by the OTS. LGF is a unitary savings and loan holding company and
generally is not restricted under existing laws as to the types of business
activities in which it may engage, provided that La Grange continues to be a
qualified thrift lender ("QTL") as defined in HOLA. Multiple savings and loan
holding companies which own or control more than one savings association are
subject to extensive limitations on the types of business activities in which
they can engage. The HOLA limits the activities of multiple savings and loan
holding companies primarily

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<PAGE> 72

to activities permissible for bank holding companies under the BHC Act and
activities authorized by OTS regulations.

Under the Financial Institutions Reform, Recovery and Enforcement Act
of 1989 ("FIRREA"), the OTS is granted broad power to impose restrictions on
savings and loan holding company activities if the OTS Director determines
there is reasonable cause to believe that the continuation by the holding
company of any activity constitutes a serious risk to the financial safety,
soundness or stability of a subsidiary savings association. The restrictions,
issued in the form of a directive, may limit: (1) the payment of dividends by
the savings association to the holding company; (2) transactions between the
savings association, the holding company, and the subsidiaries or affiliates of
either; and (3) any activities of the savings association that might create a
serious risk that the liabilities of the holding company or its other
affiliates may be imposed on the savings association.

Finally, a savings and loan holding company must obtain prior written
approval from the OTS before acquiring substantially all the assets of any
savings association or savings and loan holding company or any ownership or
control of any voting shares of any savings association or savings and loan
holding company if, after such acquisition, it would own or control, directly
or indirectly, more than five percent of the voting shares of such savings
association or savings and loan holding company. Savings and loan holding
companies also are prohibited from controlling savings associations in more
than one state unless such acquisition is specifically authorized by federal
law as an emergency acquisition or by statute of the state of the savings
association whose shares are to be acquired.

BANKS. Fourteen of First of America's affiliate banks are national
banking associations and as such are subject to regulation and supervision and
regular examination by the OCC. Five of First of America's affiliate banks are
Michigan state banks and are subject to regulation and supervision and regular
examination by the Michigan FIB. One of First of America's affiliate banks is
an Indiana state bank and is subject to regulation and regular examination by
the Indiana DFI. Five of First of America's affiliate state banks are members
of the Federal Reserve System, and as such are subject to the applicable
provisions of the Federal Reserve Act and regulations thereunder and to
supervision, regulation and regular examination by the FRB. One of First of
America's affiliate state banks is not a member of the Federal Reserve System
and is subject to regulation, supervision and regular examination by the FDIC.
Deposits held by affiliate banks of First of America are insured, to the extent
permitted by law, by the Bank Insurance Fund ("BIF") administered by the FDIC,
and deposits held by First of America's affiliate banks are insured in part by
BIF and in part by the Savings Association Insurance Fund ("SAIF") administered
by the FDIC.

Federal law and the laws of Michigan, Indiana, and Illinois govern,
among other things, the scope of a bank's business, the investments a bank may
make, the loans a bank may make, transactions with affiliates, and a bank's
activities with respect to mergers and establishing branches.

SAVINGS ASSOCIATIONS. La Grange Federal is a federally chartered
stock savings association subject to extensive regulation, supervision and
regular examination by the OTS and to the provisions of the HOLA as amended by
FIRREA, and the Federal Deposit Insurance Corporation Improvement Act of 1991
("FDICIA"), and other federal laws including the Federal Deposit Insurance Act.
Federal law governs, among other things, the scope of the savings association's
reserves, the investments a savings association may make, the loans a savings
association may make, and transactions with affiliates. Deposits held by La
Grange Federal are insured, to the extent permitted by law, by the SAIF.

The HOLA requires savings institutions to meet a QTL test. Under the
QTL test, as modified by FDICIA, a savings association is required to maintain
at least 65% of its "portfolio assets" (total assets less (1) specified liquid
assets up to 20% of total assets, (2) intangibles, including goodwill, and (3)
the value of property used to conduct business) in certain "qualified thrift
investments" (primarily residential mortgages and related investments,
including certain mortgage-backed securities) on a monthly basis in 9 out of
every 12 months.

A savings association that fails the QTL test must either convert to
a bank charter or operate under certain restrictions. If the savings
association does not convert to a banking charter, its is generally prohibited
from: (1)

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<PAGE> 73

making an investment or engaging in any new activity not permissible
for a national bank; (2) paying dividends not permissible under national bank
regulations; (3) obtaining advances from any Federal Home Loan Bank ("FHLB");
and (4) establishing any new branch office in a location not permissible for a
national bank in the savings association's home state. In addition, beginning
three years after the savings association failed the QTL test, the savings
association would be prohibited from retaining an investment or engaging in any
activity not permissible for a national bank and would have to repay any
outstanding advances from an FHLB as promptly as possible. As of September 30,
1993, La Grange Federal maintained 89.28% of its portfolio assets in qualified
thrift investments and, therefore, met the QTL test.

TRANSACTIONS WITH AFFILIATES. Each of First of America's subsidiary
banks is subject to Sections 23A and 23B of the Federal Reserve Act, which
impose certain restrictions on loans and extensions of credit by a bank to its
affiliates, on investments by a bank in the stock or securities of its
affiliates, on acceptance of such stock or securities as collateral for loans
by the bank to any borrower and on leases and service and other contracts
between a bank and its affiliates. For purposes of sections 23A and 23B of the
Federal Reserve Act, the affiliates of a bank include its holding company and
all other companies (including other banks) controlled by the holding company.
Transactions between banks that are at least 80 percent owned by the same
holding company (such as First of America's subsidiary banks) are exempt from
certain of the restrictions of sections 23A and 23B of the Federal Reserve Act
under the so-called "sister bank" exemption.

Sections 23A and 23B of the Federal Reserve Act generally apply to
savings associations in the same manner and to the same extent as they apply to
banks but with several differences. First, a savings association may not make
any loan or extension of credit to any affiliate unless the affiliate is
engaged only in permissible bank holding company activities. Next, a savings
association is barred from investing in the securities of an affiliate other
than a subsidiary of the savings association. Finally, the "sister bank"
exemption from quantitative limitations of Section 23A, which is available to
80 percent commonly-controlled banks, generally is not available to "sister
thrifts" until January 1, 1995. However, the exemption is available on a
limited basis for banks and savings associations that are 80 percent owned by
the same holding company, provided that every bank and savings association
owned by the holding company complies with all applicable capital requirements
on a fully phased-in basis without reliance on goodwill.

Banks and savings associations are also subject to Section 22(h) of
the Federal Reserve Act, which place limitations on loans to insiders. Under
Section 22(h), a bank or savings association may extend credit to its or its
affiliates' executive officers, directors and principal shareholders or their
related interests only if the loan is made on substantially the same terms,
including interest rates and collateral, as those prevailing at the time for
comparable transactions with non-insiders and if credit underwriting standards
are followed that are no less stringent than those applicable to comparable
transactions with non-insiders. Also, loans to insiders must not involve more
than the normal risk of repayment or present other unfavorable features and
must, in certain circumstances, be approved in advance by a majority of the
entire board of directors of the lending institution. The aggregate amount
that can be lent to all insiders is limited to the institution's unimpaired
capital and surplus. No insider shall knowingly receive any extension of
credit not authorized under Section 22(h). Banks and savings associations also
are subject to Section 22(g) of the Federal Reserve Act which imposes
additional restrictions on loans to executive officers.

CAPITAL REQUIREMENTS. The FRB has adopted risk based capital
requirements applicable to bank holding companies. Under these requirements,
bank holding companies must have a minimum ratio of total capital to total
risk-weighted assets of eight percent. In addition, bank holding companies must
maintain a minimum ratio of Tier I capital to total risk-weighted assets equal
to four percent. In determining the amount of risk-weighted assets, all
assets, including certain off-balance sheet assets, are multiplied by a
risk-weight of 0 percent to 100 percent. Tier I capital includes common
shareholders' equity, qualifying perpetual preferred stock and minority
interests in equity accounts of consolidated subsidiaries less goodwill.

Based on calculations as of September 30, 1993, both First of
America's Tier I capital and total capital as a percentage of total risk-
weighted assets were in excess of the required ratios.

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As a supplement to risk based capital requirements, the FRB also
adopted a leverage measure which requires bank holding companies to maintain a
minimum of Tier I capital equal to 3 percent of total assets. All bank holding
companies except those that are most highly-rated must maintain an additional
cushion of Tier I capital of at least 100 to 200 basis points, which is a
leverage ratio of 4 to 5 percent. As of September 30, 1993, First of America's
Tier I leverage ratio, computed using period end total assets, was 6.40
percent.

All of First of America's subsidiary banks are subject to
risk-weighted capital standards which are similar, but in some cases not
identical, to the requirements for bank holding companies. The FRB, OCC and
FDIC have proposed amendments to their risk-based capital standards for banks
to take interest rate risk into account as required by FDICIA. The proposed
regulations include two alternative methods for assessing a bank's capital
adequacy for interest rate risk. Under one method, the dollar amount of
capital required for interest rate risk would be incorporated into risk-based
capital requirements by increasing a bank's risk-weighted assets, which would
lower the risk-based capital ratios. Under the second method, capital required
for interest rate risk would not be incorporated into a bank's risk-based
capital ratios. Rather, examiners would consider interest rate risk exposure
along with other factors in evaluating a bank's capital adequacy and a bank
would be expected to hold additional capital commensurate with the risks being
taken. Since final regulations have not been adopted, First of America cannot
assess the impact, if any, that such standards may have on its affiliated
banks.

The OTS has not adopted capital requirements for savings and loan
holding companies. The OTS requires savings institutions such as La Grange
Federal to maintain a minimum ratio of total capital to risk-weighted assets of
eight percent. The risk weighting requirements are similar to those discussed
above. Savings associations also must maintain a three percent leverage ratio
which is the ratio of core capital to adjusted total assets. Core capital
includes common stockholder's equity, qualifying perpetual preferred stock and
minority interests in equity accounts of consolidated subsidiaries less
intangibles other than certain qualifying supervisory intangible assets and
certain purchased mortgage servicing rights. In addition, savings associations
must maintain a 1.5 percent ratio of tangible capital to adjusted total assets.
OTS regulations require that, in meeting required capital standards, savings
institutions must deduct investments and loans to subsidiaries engaged in
activities not permissible for a national bank. At September 30, 1993, La
Grange Federal had a nonqualifying investment of $5,972,000 in its subsidiary,
West Suburban, of which $1,493,000 is deducted from capital.

The OTS has adopted a final rule to be effective January 1, 1994
pursuant to which savings associations with above normal interest rate risk
exposure will be subject to a deduction from total capital for the purpose of
calculating the risk-based capital ratio. See "Information About
LGF--Management's Discussion and Analysis of Financial Condition and Results of
Operations."

All of First of America's affiliated financial institutions and La
Grange Federal meet applicable capital requirements. LGF's risk based capital
position is discussed above under the caption "Information About
LGF--Management's Discussion and Analysis of Financial Condition and Result of
Operations." The following table shows capital requirements and current
capital levels for First of America and LGF and for combined First of America
and LGF on a pro forma basis based on FRB capital requirements for bank holding
companies.

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PRO FORMA RISK BASED CAPITAL CALCULATIONS AS OF SEPTEMBER 30, 1993

<TABLE>
<CAPTION>
Pro Forma
First of
FULLY PHASED-IN CAPITAL REQUIREMENTS First of America
($ in thousands) America LGF & LGF
- ---------------- ------- --- -----

<S> <C> <C> <C>
CAPITAL:
TIER 1:
Common Stock $ 571,462 $ 19 $ 587,879
Surplus 214,415 16,981 214,998
Retained earnings 590,225 25,067 615,292
Perpetual preferred stock 74,586 0 74,586
Less: Goodwill, core deposit intangibles
and nonqualifying investment in subsidiary 140,372 1,493 140,372
----------- -------- -----------

Tier I capital $ 1,310,316 $ 40,574 $ 1,352,383
----------- -------- -----------
----------- -------- -----------

TIER II:

Allowance for loan losses $ 175,883 $ 902 $ 177,601
Subordinated debt 171,682 0 171,682
----------- -------- -----------

Total Tier II Capital 347,565 902 349,283
----------- -------- -----------

Total Capital $ 1,657,881 $ 41,476 $ 1,701,666
----------- -------- -----------
----------- -------- -----------

TOTAL RISK-WEIGHTED ASSETS AND OFF-
BALANCE SHEET ITEMS $14,059,981 $148,083 $14,208,065
----------- -------- -----------
----------- -------- -----------

RISK-WEIGHTED CAPITAL RATIOS:

Tier I capital to risk-weighted assets 9.32% 27.40% 9.52%
Minimum fully phased-in requirement 4.00 4.00 4.00
Total capital to risk-weighted assets 11.79 28.01 11.98
Minimum fully phased-in requirement 8.00 8.00 8.00

TIER I LEVERAGE RATIO (period end) 6.40% 9.85% 6.33%
</TABLE>

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PROMPT CORRECTIVE ACTION. In addition to the existing capital
requirements discussed above, FDICIA created a new approach to supervision of
insured banks and savings associations that requires, or in some cases permits,
federal regulatory agencies to take certain actions based on an institution's
capital level. This "prompt corrective action" framework addresses capital
deficiencies and supervisory concerns of institutions with the intent of
resolving problems of institutions at the least possible long-term costs to BIF
and SAIF. FDICIA and prompt corrective action regulations adopted by the
federal regulatory agencies create five capital categories. Each insured
depository institution will be categorized based on its level of capital as
measured by specified ratios. An institution's capital category determines what
regulatory restrictions and supervisory actions, if any, must, or in some cases
may, be taken by federal regulators. These provisions became effective December
19, 1992.

The five capital categories are well-capitalized, adequately
capitalized, undercapitalized, significantly undercapitalized, and critically
undercapitalized. The specified capital ratios for determining the capital
category of all but critically undercapitalized institutions are: (1) the ratio
of total capital to risk-weighted assets (total risk based ratio); (2) the
ratio of Tier 1 or core capital to risk-weighted assets (Tier 1 risk based
ratio); and (3) the ratio of Tier 1 or core capital to total average assets
(Tier 1 leverage ratio). The sole capital measure for defining critically
undercapitalized institutions is the ratio of tangible equity to total assets.
The required ratios for each of the five capital categories are summarized in
the following table:

<TABLE>
<CAPTION>
TIER 1 TIER 1
TOTAL RISK RISK BASED LEVERAGE
CATEGORY BASED RATIO RATIO RATIO OTHER
-------- ----------- ---------- -------- -----
<S> <C> <C> <C> <C>
Well-capitalized 10% or 6% or 5% or Not subject to a
above above above directive to meet a
specific level for any
capital measure

Adequately 8% or above 4% or 4% or Does not meet
capitalized above above(1) definition of well-
capitalized
Undercapitalized Under 8% Under 4% Under
4%(2)

Significantly Under 6% Under 3% Under 3%
undercapitalized

Critically Ratio of tangible
undercapitalized equity to total assets
of 2% or under.
</TABLE>

(1) 3% or above for institutions rated CAMEL 1 or MACRO 1 in most recent
examination by federal regulators.
(2) Under 3% for institutions rated
CAMEL 1 or MACR0 1 in most recent examination by federal regulators.

FDICIA also provides that a well-capitalized institution may be
reclassified as adequately capitalized and that an adequately capitalized or
undercapitalized institution may be required to comply with restrictions and be
subjected to supervisory actions as if it were in the next lower capital
category, if the appropriate federal regulatory agency determines, after notice
and opportunity for an informal hearing, that the institution is in an unsafe
or unsound condition or is deemed to be engaging in an unsafe or unsound
practice. An institution may be deemed to be engaged in an unsafe or unsound
practice if it received a less-than-satisfactory rating in its most recent
examination. Although no restrictions apply automatically and regulatory
agencies are not required to take other supervisory action as a result of
reclassification, such a reclassification permits an institution's regulatory
agency to impose various restrictions and to take supervisory action to deal
with the institution's deficiencies.

La Grange Federal and all of First of America's affiliate financial
institutions are well capitalized. Neither First of America nor LGF currently
have reason to believe or otherwise anticipate that any of First of America's
affiliate financial institutions or La Grange Federal, respectively, will be
reclassified to a lower capital category.

FDICIA and the prompt corrective action regulations specifically
impose certain restrictions on, and require regulators to take certain
supervisory actions with respect to, less than adequately capitalized
institutions. The imposition of other restrictions and supervisory actions are
left to the regulatory agencies' discretion. Certain of the more significant
provisions are generally described below. Among the mandatory provisions are
the following. Under FDICIA all institutions are prohibited from making a
capital distribution or paying a management fee to a

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controlling person that would leave the institution undercapitalized.
All institutions which are undercapitalized or worse are subject to increased
monitoring and capital restoration requirements. Significant additional
restrictions apply to significantly and critically undercapitalized
institutions. In addition to these mandatory supervisory actions, if an
institution is undercapitalized or worse, the institution's federal regulatory
agency has the authority to, among other things, restrict the institution's
activities, growth and affiliate relationships.

STANDARDS FOR SAFETY AND SOUNDNESS. FDICIA requires each federal
banking agency to prescribe for all insured depository institutions and their
holding companies standards relating to internal controls, information systems
and audit systems, loan documentation, credit underwriting, interest rate
exposure, asset growth, and compensation, fees and benefits and such other
operational and managerial standards as the agency deems appropriate. In
addition, the federal banking regulatory agencies are required to prescribe by
regulation standards specifying: (1) maximum classified assets to capital
ratios; (2) minimum earnings sufficient to absorb losses without impairing
capital; (3) to the extent feasible, a minimum ratio of market value to book
value for publicly traded shares of depository institutions or the depository
institution holding companies; and (4) such other standards relating to asset
quality, earnings and valuation as the agency deems appropriate. Finally, each
federal banking agency is required to prescribe standards for employment
contracts and other compensation arrangements of executive officers, employees,
directors and principal stockholders of insured depository institutions that
would prohibit compensation and benefits and arrangements that are excessive or
that could lead to a material financial loss for the institution. If an
insured depository institution or its holding company fails to meet any of the
standards described above, it will be required to submit to the appropriate
federal banking agency a plan specifying the steps that will be taken to cure
the deficiency. If an institution fails to submit an acceptable plan or fails
to implement the plan, the appropriate federal banking agency will require the
institution or holding company to correct the deficiency and, until corrected,
may impose restrictions on the institution or company, including any of the
restrictions applicable under the prompt corrective action provisions of
FDICIA. The federal regulatory agencies issued a proposed rule regarding
implementation of these standards but final regulations have not been released.
Since final regulations have not yet been prescribed, First of America and LGF
cannot assess the significance of the impact, if any, such standards may have
on First of America and its affiliated banks and LGF and La Grange Federal.

OTHER LIMITATIONS BASED ON CAPITAL. FDICIA and implementing
regulations place certain limitations, based on an institution's capital
categorization, on the acceptance of brokered deposits, interest rates on
deposits, and deposit insurance coverage. Only well-capitalized institutions
may accept brokered deposits without limitation. Adequately capitalized
institutions may accept brokered deposits only upon obtaining a waiver from the
FDIC. Further, an adequately capitalized institution may not offer rates of
interest on deposits that are significantly more than relevant local or
national rates. Undercapitalized institutions may not accept brokered deposits.

Effective December 19, 1992 "pass through" deposit insurance on
employee benefit plan deposits is available only on deposits at institutions
that can accept brokered deposits. This includes well-capitalized institutions
and adequately capitalized institutions accepting brokered deposits pursuant to
an FDIC waiver.

AUDIT AND REPORTING REQUIREMENTS. FDICIA added a new section to the
Federal Deposit Insurance Act, the purpose of which is to facilitate early
identification of problems in financial institutions' management through annual
independent audits, more stringent reporting requirements, and the
establishment and maintenance of internal control structures and procedures.
Under FDICIA and implementing regulations of the FDIC, the new requirements
apply to institutions with assets of $500 million or more, with certain
exceptions for subsidiaries of holding companies, and are effective for fiscal
years beginning after December 31, 1992.

The new audit and reporting requirements under FDICIA generally
require as follows. Each insured depository institution (or its holding
company, as discussed below) must submit to the appropriate federal regulatory
agency and make publicly available an annual report including the following:
(1) financial statements audited by an independent public accounting firm; (2)
a report by the institution's management, which acknowledges responsibility for
the financial statements and compliance with safety and soundness laws and
regulations, assesses the institution's internal controls and states the
institution's compliance with laws and regulations relating to loans to
insiders and dividends; (3) an attestation and report by the independent public
accountant on management's assertions on internal control structure and
procedures for financial reporting; and (4) the independent public accountant's
findings on

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compliance with laws and regulations relating to insider loans and
dividends. Additionally, each institution (or its holding company, as
discussed below) must have an independent audit committee comprised entirely of
outside directors and subject to duties specified by FDICIA and the FDIC
regulations. For large institutions, such as First of America, the committee
must include two members with banking or financial management experience, may
not include large customers or individuals associated with large customers of
the institution, and must have access to outside legal counsel.

La Grange Federal is not subject to the audit and reporting
requirements described above. All of First of America's affiliate depository
institutions are subject to these requirements. It is currently anticipated
that the independent audit will be satisfied by the audit at the holding
company level.

RESERVE REQUIREMENTS. FRB regulations require banks and savings
institutions to maintain non-interest-earning reserves against their
transaction accounts (primarily NOW and demand accounts). The FRB regulations
generally require that reserves be maintained against aggregate transaction
accounts as follows: for accounts aggregating $51.9 million or less (subject to
adjustment by the FRB) the reserve requirement is three percent or
approximately $1.6 million. Net transaction accounts in excess of $51.9
million currently are subject to a ten percent reserve requirement which is
subject to adjustment by the FRB between eight percent and fourteen percent.
The first $4.0 million of otherwise reservable balances (subject to adjustments
by the FRB) are exempted from the reserve requirements.

DEPOSIT INSURANCE. Both banks and savings associations are insured by
the FDIC. However, under FIRREA, separate funds have been established, with BIF
(the Bank Insurance Fund) generally covering banks and SAIF (the Savings
Association Insurance Fund) generally covering savings associations. A minimum
designated reserve ratio, i.e., the ratio of the insurance fund's reserves to
total estimated insured deposits of 1.25 percent of insured deposits has been
established for both BIF and SAIF. However, the FDIC may set a higher
designated reserve ratio for either fund if circumstances raise a significant
risk of substantial future losses to the fund. Assessment rates will be
established sufficient to maintain reserves at the designated reserve ratio or,
if the reserve ratio is less than the designated reserve ratio, to increase the
reserve ratio to the designated reserve ratio within a reasonable period of
time. In order to recapitalize the BIF, the FDICIA permits the FDIC to either
set assessment rates for BIF members such that the required 1.25 percent
reserve ratio is achieved within one year or specify a series of target reserve
ratios culminating in a reserve ratio of 1.25 percent within a maximum of 15
years. The FDIC also is authorized to impose special assessments as it deems
necessary. The rates on regular assessments may be changed by the FDIC
semi-annually for each fund independent of the other . All insured financial
institutions are assessed on a semi-annual basis.

However, under FDICIA the FDIC is required to establish a system of
risk based deposit insurance premiums to be implemented no later than January
1, 1994. Under a risk based assessment system each institution's semi-annual
assessment will be based on the probability that the insurance fund will incur
a loss related to that institution, the likely amount of the loss and the
revenue needs of the deposit insurance fund. If the BIF reserve ratio is less
than 1.25 percent, under the risk based system the FDIC must collect total
premiums at least equal to the amount that would be collected if all BIF
members were paying $0.23 per $100 of deposits. For SAIF members, if the SAIF
reserve ratio is less than 1.25 percent, the minimum aggregate assessment rate
per $100 of deposits is $0.23 through December 31, 1993, $0.18 from January 1,
1994 through December 31, 1997 and $0.23 thereafter.

The FDIC adopted a transitional system, effective January 1, 1993, and
a virtually identical final risk based premium system to be effective January
1, 1994, under which higher-risk banks and thrifts pay more into the insurance
funds than other institutions. Under both the transitional and final rules, a
financial institution will pay an assessment of between 23 cents and 31 cents
per $100 of insured deposits based on its risk classification. To arrive at a
risk based assessment for each insured institution for each semi-annual period,
the FDIC places it in one of nine assessment risk classifications using a
two-step analysis based first on capital ratios and then on supervisory risk
factors.

65
<PAGE> 79

Three capital categories are used, well-capitalized, adequately
capitalized and undercapitalized, which are identical to those adopted for
prompt corrective action purposes, except the deposit insurance premium rule
excludes references to supervisory evaluations and directives included under
the prompt corrective action rule (see "Regulation of First of America and LGF
- - Prompt Corrective Action"). Each institution also is assigned to one of
three supervisory risk subgroups based on consideration of supervisory
evaluations by the institution's primary regulatory agency and other
information relevant to the institution's financial condition and the risk of
loss to the insurance fund posed by the institution. Subgroup A is for
financially sound institutions with only a few minor weaknesses. Subgroup B is
for institutions that demonstrate weakness that, if not corrected, could result
in significant deterioration. Subgroup C is for institutions that pose a
substantial probability of loss to the insurance fund unless effective
corrective action is taken. These supervisory subgroups will modify premium
rates within each of the three capital categories.

The FDIC notifies institutions of their assessment risk classification
for each semi-annual period by the first day of the month preceding each
semi-annual period (June 1 for the period beginning July 1 and December 1 for
the period beginning January 1). An institution may submit a written request
for review of its assessment risk classification.

Nine of First of America's depository institutions are covered by BIF
and are subject to assessments at the BIF rates. Eleven of First of America's
subsidiary banks have a portion of their deposits insured by BIF and subject
to assessment at the BIF rates with the remaining portion of their deposits
insured by SAIF and subject to assessment at the SAIF rates. La Grange
Federal's deposits are covered by SAIF and after the Merger the acquired
deposits will continue to be covered by SAIF subject to assessment at the SAIF
rates.

DIVIDEND REGULATION. A bank holding company which controls an
institution that is classified as undercapitalized or worse for prompt
corrective action purposes (see "Regulation of First of America and LGF -
Prompt Corrective Action") may be prohibited from making any dividend payment
without prior approval of the FRB. In addition, the ability of a bank or
savings and loan holding company to obtain funds for the payment of dividends
to its shareholders and for other cash requirements is largely dependent on the
amount of dividends which may be declared by its subsidiary banks and savings
associations. Federal and state statutes and regulations restrict the payment
of dividends by banks and savings associations. Certain of these statutes and
regulations applicable to First of America's affiliate financial institutions
and to La Grange Federal are discussed below.

Under FDICIA no insured depository institution may declare any
dividend if, following the payment of such dividend, the institution would be
undercapitalized (see "Regulation of First of America and LGF - Prompt
Corrective Action").

A national bank may not pay a dividend on its common stock if the
dividend would exceed the net undivided profits then on hand after deducting
losses and bad debts. Additionally, the prior approval of the OCC is required
for any dividend to a bank holding company by any affiliated national bank if
the total of all dividends, including any proposed dividend, declared by such
bank in any calendar year exceeds the total of its net profits for that year to
date combined with its retained net profits for the preceding two years, less
any required transfers to surplus.

Under the Federal Reserve Act, a state bank which is a member of the
Federal Reserve System cannot pay a dividend in an amount greater than its net
profits then on hand after deducting losses and bad debts. Further, the
approval of the FRB will be required if dividends declared by any subsidiary
state bank which is a member of the Federal Reserve System in any year exceeds
the total of net profits for that year to date combined with the retained net
profits for the preceding two years, less any required transfers to surplus.

Under the Michigan Banking Code, no dividend may be declared by a
Michigan State bank in an amount greater than net profits then on hand after
deducting losses and bad debts. In addition, if the surplus of the bank is
less than the amount of its capital stock, before a dividend may be declared,
the bank must transfer to surplus not less than ten percent of the net profits
of such bank for the preceding half- year in the case of quarterly or
semi-

66
<PAGE> 80

annual dividends or not less than ten percent of its net profits for the
preceding two consecutive half- year periods in the case of annual dividends.

Under the Indiana Financial Institutions Act, an Indiana state bank
may not declare or pay any dividend unless its capital is unimpaired and a
surplus fund equal to 25 percent of such capital stock has been set apart and
retained unimpaired. Dividends may be declared and paid thereafter not more
frequently than quarterly and at a rate not greater than six percent per annum
on the book value of the stock, until the bank's unimpaired surplus fund is
equal to the amount of the capital stock, and such capital shall have remained
unimpaired. This limitation does not apply if the bank's common capital is
unimpaired, its unimpaired surplus is equal to 25 percent of its common
capital, and its sound capital is in excess of 20 percent of the average daily
deposit liability computed on an annual basis. Sound capital includes paid- in
and unimpaired capital, unimpaired surplus and unimpaired proceeds of notes and
debentures. First surplus and then capital is impaired to the extent a bank
has negative retained earnings.

Under OTS regulations, a savings association that exceeds all fully
phased-in capital requirements before and after a proposed dividend and has not
been advised by the OTS that is in need of more than normal supervision, could
after thirty days prior notice, make capital distributions during a calendar
year equal to the greater of: (1) 100% of its net income to date during the
calendar year plus the amount that would reduce by one-half its "surplus
capital ratio" (the excess capital over its fully phased-in capital
requirements) at the beginning of the calendar year; or (2) 75% of its net
income for the previous four quarters. Any additional capital distributions
would require prior regulatory approval. In addition, the OTS could prohibit a
proposed capital distribution by any institution, which would otherwise be
permitted by the regulations, if the OTS determines that such distribution
would constitute an unsafe or unsound practice.

Under federal and state banking laws and regulations the term "net
profits" means the remainder of all earnings from current operations plus
actual recoveries on loans and investments and other assets, after deducting
from the total thereof all current operating expenses, actual losses, accrued
dividends on preferred stock, if any, and all federal and state taxes.

Dividends paid to First of America by its banking subsidiaries
amounted to $137.4 million in 1992 and $146.5 million during the first nine
months of 1993. Unless prior regulatory approval is obtained, banking
regulations limit the dividends First of America's banking subsidiaries can
declare during 1993 to the amount of 1993 net profits, as defined in the
Federal Reserve Act, plus retained net profits for 1992 and 1991, which
amounted to $92.0 million.

MONETARY POLICY AND ECONOMIC CONDITIONS. The business of commercial
banks and savings associations is affected by the monetary and fiscal policies
of various regulatory agencies, including the FRB. Among the regulatory
techniques available to the FRB are open market operations in United States
government securities, changing the discount rate for member bank borrowings,
and imposing and changing the reserve requirements applicable to bank and
savings association deposits and to certain borrowings by banks, savings
associations and their affiliates (including parent companies). These policies
influence to a significant extent the overall growth and distribution of bank
loans, investments, and deposits, and the interest rates charged on loans, as
well as the interest rates paid on savings and time deposits.

The monetary policies of the FRB have had a significant effect on the
operating results of commercial banks and savings associations in the past and
are expected to continue to do so in the future. In view of constantly changing
conditions in the national economy and the money market, as well as the effect
of acts by monetary and fiscal authorities, including the FRB, no definitive
predictions can be made by First of America or LGF as to future changes in
interest rates, credit availability, or deposit levels or the effect of any
such changes on First of America's or LGF's operations and financial condition.

67
<PAGE> 81
OTHER MATTERS

FEES AND EXPENSES. LGF and First of America will each pay its own fees
and expenses incident to the negotiation and performance of the Merger
Agreement including the fees and expenses of counsel, accountants, and other
experts, whether or not the Merger is consummated.

SOURCES OF INFORMATION. All information about LGF included in this
Prospectus/Proxy Statement has been prepared from information furnished by LGF
for inclusion herein, and all information about First of America has been
furnished by First of America.

LEGAL MATTERS

Legal matters in connection with the Merger, including issuance of
First of America Common Stock, will be passed upon for First of America by
Howard & Howard Attorneys, P.C., Kalamazoo, Michigan. J. Michael Kemp,
managing partner of Howard & Howard, is a director of First of America. As of
December 31, 1993, Mr. Kemp owned 29,315 shares of First of America Common Stock
jointly with his spouse, 730 shares individually, and 276 shares in a
retirement trust. As a co-trustee with two other co-trustees, Mr. Kemp has
voting and investment power over 60,000 shares of First of America Common
Stock. Other attorneys with Howard & Howard and members of their families own
shares of First of America Common Stock. Additionally, certain of Howard &
Howard's attorneys and members of their families are indebted to and have other
banking and trust relationships with certain of First of America's affiliate
banks.

Legal matters in connection with the Merger will be passed upon for
LGF by Muldoon, Murphy & Faucette of Washington, D.C.

EXPERTS

The consolidated financial statements of LGF and its subsidiaries as
of December 31, 1992 and 1991, and for each of the three years in the period
ended December 31, 1992 included in this Prospectus/Proxy Statement have been
audited by Deloitte & Touche, independent auditors, as stated in their report
appearing herein, and are included in reliance upon the report of such firm
given upon their authority as experts in accounting and auditing.

The consolidated financial statements of First of America as of
December 31, 1992 and 1991, and for each of the years in the three- year period
ended December 31, 1992, incorporated by reference herein and elsewhere in the
registration statement have been incorporated by reference herein and in the
registration statement in reliance upon the report of KPMG Peat Marwick,
independent certified public accountants, incorporated by reference herein, and
upon the authority of said firm as experts in accounting and auditing.

68
<PAGE> 82
<TABLE>
<CAPTION>
INDEX TO CONSOLIDATED FINANCIAL STATEMENTS OF
LGF BANCORP, INC.
Page
-------------
<S> <C>
Audited Financial Statements
- ----------------------------

Independent Auditors' Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-2

Consolidated Statements of Financial Condition as of
December 31, 1992 and 1991 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3

Consolidated Statements of Operations for the Three
Years ended December 31, 1992, 1991 and 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . F-4

Consolidated Statements of Stockholders' Equity for the
Three Years ended December 31, 1992, 1991 and 1990 . . . . . . . . . . . . . . . . . . . . . . . F-5

Consolidated Statements of Cash Flows for the Three
Years ended December 31, 1992, 1991 and 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . F-6

Notes to Consolidated Financial Statements for years
ended December 31, 1992, 1991 and 1990 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8

Unaudited Financial Statements
- ------------------------------

Consolidated Statements of Financial Condition as of
September 30, 1993 and December 31, 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-30

Consolidated Statements of Operations for the Three Months
and Nine Months ended September 30, 1993 and 1992 . . . . . . . . . . . . . . . . . . . . . . . F-31

Consolidated Statement of Stockholders' Equity for the
Nine Months ended September 30, 1993 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-32

Consolidated Statements of Cash Flows for the Nine Months
ended September 30, 1993 and 1992 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-33

Notes to the Unaudited Consolidated Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . F-34
</TABLE>

F-1
<PAGE> 83
INDEPENDENT AUDITORS' REPORT

LGF Bancorp, Inc.:

We have audited the accompanying consolidated statements of financial
condition of LGF Bancorp, Inc. and subsidiaries at December 31, 1992 and 1991
and the related consolidated statements of operations, stockholders' equity and
cash flows for each of the three years in the period ended December 31, 1992.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audits.

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

In our opinion, such consolidated financial statements present fairly,
in all material respects, the financial position of LGF Bancorp, Inc. and
subsidiaries at December 31, 1992 and 1991, and the results of their operations
and their cash flows for each of the three years in the period ended December
31, 1992 in conformity with generally accepted accounting principles.

/s/ Deloitte & Touche
DELOITTE & TOUCHE

Chicago, Illinois
February 16, 1993

F-2
<PAGE> 84
LGF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
December 31,
-------------------------
1992 1991
-------- --------
ASSETS (In thousands)
<S> <C> <C>
Cash and due from depository institutions $ 7,201 $ 6,392
Interest-bearing deposits 2,087 4,364
Federal funds sold 1,200 4,100
-------- --------

Total cash and cash equivalents 10,488 14,856

Securities held for sale 74,894 99,852
Investment securities (market value 1992-$51,344;
1991-$16,605) 50,897 16,252
Mortgage-backed securities (market value 1992-$54,888;
1991-$14,653) 54,763 14,402
Loans receivable (net of allowance for possible loan losses
1992-$723; 1991-$450) 206,367 226,669
Federal Home Loan Bank stock-at cost 2,705 2,598
Real estate held for sale 4,503 4,187
Office properties and equipment, net 3,674 3,617
Accrued interest receivable 2,261 2,513
Other assets 971 8,338
-------- --------

Total Assets $411,523 $393,284
-------- --------
-------- --------

LIABILITIES AND STOCKHOLDERS' EQUITY
Deposits $366,989 $367,460
Advance payments by borrowers for taxes and insurance 1,390 1,714
Accrued interest payable 199 284
Employee Stock Ownership Plan loan obligation 992 --
Other liabilities 1,976 1,371
-------- --------

Total liabilities 371,546 370,829
-------- --------

Commitments and contingencies -- --

Stockholders' equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized -- --
Common stock, $.01 par value, 5,000,000 shares authorized,
1,851,500 shares issued, 1,821,500 outstanding 19 --
Additional paid-in capital 16,981 --
Retained earnings--substantially restricted 25,061 22,455
Stock held for Recognition and Retention Plan (612) --
Guaranteed Employee Stock Ownership Plan loan obligation (992) --
Treasury stock, at cost, 30,000 shares (480) --
-------- --------

Total stockholders' equity 39,977 22,455
-------- --------

Total Liabilities and Stockholders' Equity $411,523 $393,284
-------- --------
-------- --------

</TABLE>
SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-3
<PAGE> 85
LGF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS

<TABLE>
<CAPTION>
Years Ended December 31,
------------------------------------------
1992 1991 1990
---- ---- ----
(In thousands, except per share data)
Interest income:
<S> <C> <C> <C>
Loans receivable $20,779 $22,863 $22,212
Investment securities 2,062 5,153 5,611
Mortgage-backed securities 2,134 3,014 2,475
Securities held for sale 4,394 1,503 1,806
Interest-bearing deposits, Federal funds sold and other 884 1,021 624
------- ------- -------
Total interest income 30,253 33,554 32,728
------- ------- -------

Interest expense:
Deposits 20,105 24,998 25,559
Borrowed funds -- -- 20
Less capitalized interest -- -- (188)
------- ------- -------
Total interest expense 20,105 24,998 25,391
------- ------- -------

Net interest income 10,148 8,556 7,337
------- ------- -------

Provision for possible loan losses 310 419 82
------- ------- -------

Net interest income after provision for possible
loan losses 9,838 8,137 7,255
------- ------- -------

Other income:
Loan servicing fees, late charges, and other related fees 110 105 77
Net losses on sales of investment and mortgage-
backed securities and securities held for sale (448) (150) --
Lower of cost or market adjustment on securities
held for sale 590 2,281 (1,867)
Other 923 684 455
------- ------- -------
Total other income 1,175 2,920 (1,335)
------- ------- -------

Other expenses:
Compensation and employee benefits 3,447 2,687 2,510
Occupancy and equipment expenses, net 1,015 1,037 1,058
Federal deposit insurance premiums 791 745 608
Advertising and promotion 378 387 375
Real estate operations expense (income), net (110) 23 21
Other 1,714 1,468 1,293
------- ------- -------
Total other expenses 7,235 6,347 5,865
------- ------- -------

Income before income taxes 3,778 4,710 55

Provision for income taxes 1,172 284 743
------- ------- -------

Net income (loss) $ 2,606 $ 4,426 $ (688)
-------- -------- -------
-------- -------- -------
Earnings per share:
Primary $ 1.38
--------
--------

Fully diluted $ 1.35
--------
--------

</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-4
<PAGE> 86
LGF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
Unrealized
Retained Loss on
Years Ended December 31, Additional Earnings- Marketable
1992, 1991 and 1990 Common Paid-in Substantially Equity
(Dollars in Thousands) Stock Capital Restricted Securities
- ----------------------------- --------- ----------- ------------- ----------
<S> <C> <C> <C> <C>
Balance, January 1, 1990 $-- $ -- $18,717 $(1,941)
Net loss -- -- (688) --
Decrease in net unrealized
loss on marketable
equity securities -- -- -- 430
--- ------- ------- -------

Balance, December 31, 1990 -- -- 18,029 (1,511)
Net income -- -- 4,426 --
Decrease in net
unrealized loss on
marketable equity
securities -- -- -- 1,511

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

Balance, December 31, 1991 -- -- 22,455 --
Net income -- -- 2,606 --
Net proceeds from issuance
of 1,851,500 shares
of common stock 19 16,981 -- --
Common stock purchased for
Recognition and
Retention Plan -- -- -- --
Guaranteed Employee Stock
Ownership Plan
loan obligation -- -- -- --
Repayment of Employee Stock
Ownership Plan loan
obligation -- -- -- --
Amortization of purchase price
of Recognition and
Retention Plan's stock -- -- -- --
Purchase of treasury stock -- -- -- --
--- ------- ------- -----

Balance, December 31, 1992 $19 $16,981 $25,061 $ --
--- ------- ------- -----
--- ------- ------- -----

Years Ended December 31, Guaranteed Treasury
1992, 1991 and 1990 Stock Held ESOP Loan Stock,
(Dollars in Thousands) for RRP Obligation at Cost Total
- ----------------------------- ---------- ----------- ---------- ------
<S> <C> <C> <C> <C>
Balance, January 1, 1990 $ -- $ -- $ -- $16,776
Net loss -- -- -- (688)
Decrease in net unrealized
loss on marketable
equity securities -- -- -- 430
------ -------- ----- -------

Balance, December 31, 1990 -- -- -- 16,518
Net income -- -- -- 4,426
Decrease in net
unrealized loss on
marketable equity
securities -- -- -- 1,511

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

Balance, December 31, 1991 -- -- -- 22,455
Net income -- -- -- 2,606
Net proceeds from issuance
of 1,851,500 shares
of common stock -- -- -- 17,000
Common stock purchased for
Recognition and
Retention Plan (965) -- -- (965)
Guaranteed Employee Stock
Ownership Plan
loan obligation -- (1,111) -- (1,111)
Repayment of Employee Stock
Ownership Plan loan
obligation -- 119 -- 119
Amortization of purchase pri
of Recognition and
Retention Plan's stock 353 -- -- 353
Purchase of treasury stock -- -- (480) (480)
------ ------- -------- ----

Balance, December 31, 1992 $(612) $(992) $(480) $39,977
------ ------- ------ -------
------ ------- ------ -------
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-5

<PAGE> 87
LGF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------
1992 1991 1990
--------- --------- ---------
(In thousands)
Cash flows from operating activities:
<S> <C> <C> <C>
Net income (loss) $ 2,606 $ 4,426 $ (688)
Adjustments to reconcile net income (loss) to net
cash provided by operating activities:
Amortization of loan fees (917) (551) (373)
Provision for real estate held for sale -- 160 --
Provision for possible loan losses 310 419 82
Gain on sales of real estate owned -- (42) --
Net loss on sales of investment and mortgage-backed
securities and securities held for sale 448 150 --
Lower of cost or market adjustment on
securities held for sale (590) (2,281) 1,867
Depreciation and amortization 676 127 372
Deferred income taxes (236) (212) (391)
Increase in deferred loan fees 1,069 834 886
Decrease (increase) in accrued interest receivable
and other assets 7,855 (1,096) 117
Increase in accrued interest payable and other liabilities 520 416 36
--------- --------- --------

Net cash flows provided by operating activities 11,741 2,350 1,908
--------- --------- ---------

Cash flows from investing activities:
Proceeds from sale of investment securities -- 10,091 --
Proceeds from maturities of investment securities 13,167 15,000 7,508
Proceeds from sales of mortgage-backed securities -- 17,431 --
Proceeds from sales of securities held for sale 115,647 20,535 --
Proceeds from sale of FHLB stock -- -- 135
Purchases of investment securities (47,796) (26,019) --
Purchases of mortgage-backed securities (44,565) (15,341) --
Purchases of securities held for sale (93,469) (33,176) --
Purchases of mortgage loans -- (2,799) (2,008)
Purchase of FHLB stock -- (173) --
FHLB stock dividend (107) (124) --
Principal collected on mortgage-backed securities 7,144 3,730 2,598
Net decrease (increase) in loans receivable 19,747 (8,794) (19,306)
Proceeds from sales of real estate held for sale 76 297 65
Expenditures on real estate held for sale:
Improvements -- (122) (321)
Capitalized interest -- -- (188)
Investment in and advances to joint venture (375) (93) (114)
Expenditures for office properties and equipment (338) (58) (301)
--------- --------- ---------

Net cash flows used in investing activities (30,869) (19,615) (11,932)
--------- --------- --------
</TABLE>

F-6
<PAGE> 88
CONSOLIDATED STATEMENTS OF CASH FLOWS
(continued)

<TABLE>
<CAPTION>
Years Ended December 31,
-----------------------------------------------
1992 1991 1990
--------- --------- ---------
<S> <C> <C> <C>
(In thousands)
Cash flows from financing activities:
Proceeds from sale of common stock $ 17,000 $ -- $ --
Purchase of common stock for
Recognition and Retention Plan (965) -- --
Purchase of treasury stock (480) -- --
Net increase (decrease) in deposits (471) 20,884 18,546
Net increase (decrease) in advance payments by
borrowers for taxes and insurance (324) 89 416
Repayment of notes payable -- -- (4,800)
-------- -------- --------

Net cash flows provided by financing activities 14,760 20,973 14,162
-------- -------- --------

Net increase (decrease) in cash and cash equivalents (4,368) 3,708 4,138

Cash and cash equivalents--Beginning of year 14,856 11,148 7,010
-------- -------- --------

Cash and cash equivalents--End of year $ 10,488 $ 14,856 $ 11,148
-------- -------- --------
-------- -------- --------
Supplemental disclosure of cash flow information:
Cash paid during the year for interest $ 20,190 $ 25,087 $ 25,418
Cash paid during the year for income taxes 1,523 1,239 1,059
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-7
<PAGE> 89
LGF BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1992, 1991 AND 1990

1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

LGF Bancorp, Inc., a Delaware corporation, was organized in March 1992
for the purpose of acquiring all of the capital stock of La Grange Federal
Savings and Loan Association (the "Association") pursuant to a conversion of
the Association from a Federally chartered mutual association to a Federally
chartered stock association (the "Conversion"). Effective June 18, 1992, LGF
Bancorp, Inc. completed its initial public offering and sold 1,851,500 shares
of common stock for $10 per share, primarily to depositors. The expenses
associated with the conversion were charged to paid-in capital. Fifty percent,
or $8,500,000 of the net proceeds from the public offering was used to purchase
all of the capital stock of the Association issued pursuant to the Conversion.
This transaction was accounted for in a manner similar to a pooling of
interests, consequently no goodwill or other intangibles were recorded as a
result of this transaction.

The accounting and reporting policies of LGF Bancorp, Inc. and its
subsidiaries conform to generally accepted accounting principles and to general
practice within the savings and loan industry. The following is a description
of the more significant policies which LGF Bancorp, Inc. follows in preparing
and presenting its consolidated financial statements.

PRINCIPLES OF CONSOLIDATION - The consolidated financial statements of
LGF Bancorp, Inc. and its subsidiaries (the "Company") include the accounts of
LGF Bancorp, Inc., the Association and the Association's wholly-owned
subsidiary, West Suburban Financial Corp. All material intercompany accounts
and transactions have been eliminated in consolidation.

SECURITIES HELD FOR SALE - Securities held for sale consist of
securities that management either intends to sell or to use as part of its
asset/liability management strategy and that may be sold in response to changes
in interest rates, resultant prepayment risk and other factors related to
interest rates and resultant prepayment risk changes. Securities held for sale
at December 31, 1991 include certain mutual funds that have investments in
corporate bonds, including non-investment grade securities which, under the
Financial Institutions Reform Recovery Act of 1989, were required to be
divested. Accordingly, effective August 1989 such marketable equity securities
were transferred to securities held for sale and the related unrealized loss
was charged to operations. In December 1991, the Association transferred its
remaining investments in mutual funds and certain other investment and
mortgage-backed securities to securities held for sale.

Securities held for sale are recorded at the lower of cost or market
value at the date of purchase or transfer. Subsequent reductions of cost to
market value are recorded through a valuation allowance with a corresponding
charge to operations. Subsequent increases in market values reduce the
valuation allowance up to the lower of original recorded value at date of
designation or current market value with a corresponding credit to operations.

INVESTMENT AND MORTGAGE-BACKED SECURITIES - Investment securities and
mortgage-backed securities are carried at cost, adjusted for amortization of
premium and accretion of discount. Such securities are carried at amortized
cost only if they can be held to final maturity and there is no intent to sell
in the foreseeable future. The Company has both the ability and the intent to
hold such securities to maturity. Prior to December 1991, investments in
certain mutual funds (which invested in investment grade securities) were held
for investment and, accordingly, were carried at the lower of aggregate cost or
market with any increase or decrease in the valuation allowance recorded as an
adjustment to retained earnings. Gains or losses on the sale of investment and
mortgage-backed securities are determined using the adjusted cost of the
specific security sold.

INTEREST ON LOANS - Interest on loans is recorded as income earned.
Mortgage loans are placed on non-accrual status when, in management's judgment,
the probability of collection of interest is deemed to be insufficient to
warrant further accrual. The accrual of interest income is discontinued on
commercial real estate and consumer loans which are past due 90 or more days as
to principal or interest payments. When loans are placed

F-8
<PAGE> 90

on non-accrual status, interest accrued is charged against interest
income. Loans may be reinstated to accrual status when all payments are brought
current and, in the opinion of management, collection of the remaining balance
can be reasonably expected.

LOAN ORIGINATION FEES, SERVICING FEES, AND PREMIUMS AND DISCOUNTS -
Loan origination fees and related direct loan origination costs are deferred
and recognized over the contractual life of the loan as an adjustment to yield.
Fees for servicing mortgage loan portfolios are recognized in income as
collected. Premiums and discounts on mortgage loans purchased are amortized to
income over the lives of the loans using the level yield method.

PROVISION FOR POSSIBLE LOAN LOSSES - Provisions for possible loan
losses are charged to operations based on management's evaluation of the
potential losses in its loan portfolio. The major factors considered in
evaluating potential losses are historical charge-off experience, delinquency
rates, local and national economic conditions and the value of any related
collateral. Management's estimate of fair value of the collateral considers
the current and anticipated future operating or sales conditions, thereby
causing these estimates to be particularly susceptible to changes that could
result in a material adjustment to results of operations in the future.
Recovery of the carrying value of such loans and related real estate is
dependent, to a great extent, on economic, operating and other conditions that
may be beyond the Company's control.

REAL ESTATE HELD FOR SALE - In accordance with the American Institute
of Certified Public Accountants' Statement of Position 92-3, "Accounting for
Foreclosed Assets," properties acquired through foreclosure or by deed in lieu
of foreclosure are initially valued at the lower of recorded investment or fair
value. Any excess of recorded investment over fair value at the date of
acquisition is charged directly to the allowance for possible loan losses.
Costs relating to the development and improvement of a property are capitalized
when incurred. Provisions for estimated losses required on the basis of later
evaluations, gains or losses on sales, or net expenses incurred from
maintaining such properties are included in real estate operations expense.

The amounts the Company could ultimately recover from real estate held
for sale could differ materially from the amounts used in determining the net
carrying value of the assets because of future market factors beyond the
Company's control or changes in the Company's strategy for recovering its
investment.

OFFICE PROPERTIES AND EQUIPMENT - Depreciation is charged to operations
over the estimated useful lives of the assets on a straight-line basis.
Maintenance, repairs and minor improvements are charged to operating expenses
as incurred.

INCOME TAXES - The Company files a consolidated Federal income tax
return with the Association. Income taxes are accrued based on income and
expenses reported for financial statement purposes. Deferred income taxes are
provided on income and expenses which are recognized in different periods for
income tax purposes than for financial reporting purposes. Principal timing
differences consist of loan fees and capitalized interest recognized in
different periods for financial reporting and tax purposes.

NEW ACCOUNTING PRONOUNCEMENTS - The Financial Accounting Standards
Board ("FASB") issued Statement of Financial Accounting Standards No.106,
"Employers' Accounting for Post Retirement Benefits Other Than Pensions" (SFAS
106) in December, 1990. This statement requires accrual of post retirement
benefits (such as health care) during the years an employee provides services.
The Company does not currently provide, nor does it intend to provide,
non-pension benefits to employees after retirement.

The Company currently accounts for income taxes in accordance with
Accounting Principles Board Opinion No. 11. In February 1992, the FASB issued
Statement of Financial Accounting Standards No. 109, "Accounting for Income
Taxes" (SFAS 109). The statement requires the use of the liability method in
accounting for income taxes and eliminates, on a prospective basis, the former
exception for provision of deferred income taxes on thrift bad debt reserves.
The Company plans to adopt SFAS 109 in the first quarter of 1993.
Implementation of this new statement is not expected to have a material impact
on the Company's financial position.

F-9
<PAGE> 91

In November 1992, the FASB issued Statement of Financial Accounting
Standards No.112, "Employers' Accounting for Postemployment Benefits" (SFAS112)
which requires accrual of a liability representing the cost of certain benefits
earned by employees over their employment period. SFAS 112 applies to vested
benefits provided to former or inactive employees, their beneficiaries and
covered dependents, after employment but before retirement. Such benefits
include salary continuation, supplemental unemployment compensation, severance
pay, job training and continuation of health care and life insurance coverage.
This statement is effective for fiscal years beginning after December 15, 1993,
although earlier application is encouraged. Management is currently reviewing
the impact of this statement; however, at December 31, 1992, management did not
expect it to have a material impact on the Company.

CONSOLIDATED STATEMENTS OF CASH FLOWS - For purposes of reporting cash
flows, the Company has defined cash and cash equivalents to include cash and
amounts due from other depository institutions, interest-bearing deposits and
Federal funds sold with original maturities of 90 days or less. Non-cash
transfers from loans receivable to real estate acquired in settlement of loans
were $91,000 and $75,000 for the years ended December 31, 1992 and 1991. There
were no non-cash transfers from loans receivable to real estate acquired in
settlement of loans for the year ended December 31, 1990.

EARNINGS PER SHARE - Earnings per share for the year ended December 31,
1992 were determined by dividing net income for the year by the weighted
average number of common stock and common stock equivalents outstanding
determined as if the Company's initial public offering took place on January 1,
1992. Stock options are regarded as common stock equivalents and are therefore
considered in both primary and fully diluted earnings per share calculations.
Common stock equivalents are computed using the treasury stock method.
Earnings per share information for the years ended December 31, 1991 and 1990
is not meaningful because the Company had no shares issued until June 18, 1992.

F-10
<PAGE> 92
2. SECURITIES HELD FOR SALE

Securities held for sale are summarized as follows:

<TABLE>
<CAPTION>
December 31 1992
----------------------------------------------------------
Gross Estimated
Carrying Unrealized Market
Value Gains Value
---------- ------------ ----------
(in thousands)
<S> <C> <C> <C>
Mutual Funds
U.S. Government securities $23,565 $ 19 $ 23,584
Mortgage-backed securities:
ARM's 11,928 -- 11,928
Fixed rate 3,404 -- 3,404
Corporate debt (investment grade) 8,084 -- 8,084
U.S. Treasury bonds 2,202 -- 2,202
------- ------ --------
49,183 19 49,202
Mortgage-backed securities 25,711 -- 25,711
------- ------ --------

Total $74,894 $ 19 $ 74,913
------- ------ --------
------- ------ --------

</TABLE>
<TABLE>
<CAPTION>
December 31 1991
----------------------------------------------------------
Gross Estimated
Carrying Unrealized Market
Value Gains Value
---------- ------------ ----------
(in thousands)
Mutual Funds:
<S> <C> <C> <C>
U.S. Government securities $36,977 $ 144 $ 37,121
Mortgage-backed securities:
ARM's 15,000 -- 15,000
Fixed rate 10,982 27 11,009
Corporate debt:
Investment grade 10,019 -- 10,019
Non-investment grade 2,032 -- 2,032
U.S. Treasury bonds 3,398 -- 3,398
------- ------ --------
78,408 171 78,579
Mortgage-backed securities 21,444 918 22,362
------- ------ --------

Total $99,852 $1,089 $100,941
------- ------ --------
------- ------ --------
</TABLE>

Under an agreement with its regulatory agencies, the Association was
required to sell its investment in non-investment grade mutual funds by August
1992.

Proceeds, gross gains and gross losses from sales of securities held for
sale are summarized as follows (in thousands):

<TABLE>
<CAPTION>
Year Ended December 31,
---------------------------------------
1992 1991
--------- --------
<S> <C> <C>
Proceeds $115,647 $20,535
Gross gains 458 --
Gross losses 906 821
</TABLE>

There were no sales of securities held for sale during the year ended
December 31, 1990.

F-11
<PAGE> 93
3. INVESTMENT SECURITIES

The carrying and estimated market values of investment securities are as
follows:

<TABLE>
<CAPTION>
December 31, 1992
----------------------------------------------------------
Gross Gross Estimated
Carrying Unrealized Unrealized Market
Value Gains Losses Value
-------- ----------- ------------ ----------
(in thousands)
<S> <C> <C> <C> <C>
U.S. Treasury obligations $16,468 $218 $15 $16,671
U.S. Government agency obligations 34,357 247 3 34,601
Other 72 -- -- 72
------- ---- --- -------

Total $50,897 $465 $18 $51,344
------- ---- --- -------
------- ---- --- -------
</TABLE>

<TABLE>
<CAPTION>
December 31, 1991
----------------------------------------------------------
Gross Gross Estimated
Carrying Unrealized Unrealized Market
Value Gains Losses Value
-------- ----------- ------------ ----------
(in thousands)
<S> <C> <C> <C> <C>
U.S. Treasury obligations $ 6,000 $ 79 $-- $ 6,079
U.S. Government agency obligations 10,013 274 -- 10,287
Other 239 -- -- 239
------- ---- --- -------

Total $16,252 $353 $-- $16,605
------- ---- --- -------
------- ---- --- -------
</TABLE>
At December 31, 1992, the maturities of U.S. Treasury obligations,
U.S. Government agency obligations and other securities were as follows:
<TABLE>
<CAPTION> Term to Maturity
--------------------------------
Estimated
Carrying Market
Value Value
--------- ----------
(in thousands)
<S> <C> <C>
Due in one year or less $23,379 $23,543
Due after one year through five years 26,492 26,756
Due after five years through 10 years 1,026 1,045
------- -------

Total $50,897 $51,344
------- -------
------- -------
</TABLE>

Proceeds from sales of investment securities were $16,154,000
(including $6,063,000 receivable from a mutual fund which was reflected in
other assets) for the year ended December 31, 1991. Gross gains of $232,000
were realized on those sales for the year ended December 31, 1991. There were
no sales of investment securities during the years ended December 31, 1992 and
1990.

In December 1991, the Association transferred U.S. Treasury bonds and
mutual funds with carrying values of $3,398,000 and $48,375,000, respectively
to securities held for sale (See Note 2.) Such securities were transferred at
their lower of cost or market.

Investment securities with a carrying value of approximately
$3,500,000 were pledged as collateral on certain deposits at December 31, 1992.

F-12
<PAGE> 94
4. MORTGAGE-BACKED SECURITIES

The carrying and estimated market value of mortgage-backed securities are as
follows:

<TABLE>
<CAPTION>
December 31, 1992
-----------------------------------------------------------------------
Gross Gross Estimated
Carrying Unrealized Unrealized Market
Value Gains Losses Value
--------- ----------- ------------ ----------
(in thousands)
<S> <C> <C> <C> <C>
FHLMC certificates $14,156 $ 9 $124 $14,041
GNMA certificates 24,372 321 50 24,643
FNMA certificates 16,235 36 67 16,204
------- ---- ---- -------

Total $54,763 $366 $241 $54,888
------- ---- ---- -------
------- ---- ---- -------

December 31, 1991
-----------------------------------------------------------------------
Gross Gross Estimated
Carrying Unrealized Unrealized Market
Value Gains Losses Value
--------- ----------- ------------ ----------
(in thousands)

<S> <C> <C> <C> <C>
FHLMC certificates $ 6,382 $ 34 $ 19 $ 6,397
GNMA certificates 5,751 219 1 5,969
FNMA certificates 2,269 18 -- 2,287
------- ---- ---- -------

Total $14,402 $271 $ 20 $14,653
------- ---- ---- -------
------- ---- ---- -------
</TABLE>

At December 31, 1992, mortgage-backed securities were composed of
variable rate FHLMC and FNMA participation certificates and fixed rate FHLMC
and GNMA participation certificates representing pools of single family
mortgage loans originated for terms of 15 or 30 years. However, very few of
these loans remain outstanding for their entire term. Usually, scheduled
repayments gradually reduce the outstanding balance until the underlying
property is sold or refinanced and the original loan paid off. Expected
maturities will differ from contractual maturities because borrowers may have
the right to repay obligations without prepayment penalties.

There were no sales of mortgage-backed securities during the years
ended December 31, 1992 and 1990. In 1991, the Association exchanged
$14,983,000 of mortgage loans for undivided interests in FHLMC participation
certificates. Such securities were subsequently sold in 1991. Proceeds from
sales of mortgage-backed securities were $17,431,000 for the year ended
December 31, 1991. Gross gains of $439,000 were realized on those sales for the
year ended December 31, 1991. No gross losses were realized on sales for the
year ended December 31, 1991. In conjunction with the 1991 sales, approximately
$299,000 of previously deferred loan origination fees was recognized as income.
In December 1991, the Association transferred mortgage-backed securities with a
carrying value of $21,444,000 to securities held for sale (See note 2.) Such
securities were transferred at their lower of cost or market.

F-13
<PAGE> 95
5. LOANS RECEIVABLE

<TABLE>
<CAPTION>
Loans receivable consisted of the following at December 31:
1992 1991
-------- --------
(in thousands)
Mortgage loans:
<S> <C> <C>
One-to-four-family $197,025 $216,245
Multi-family 593 906
Commercial real estate 1,168 1,199
Land 195 195
-------- --------

Total mortgage loans 198,981 218,545

Consumer loans and other:
Home equity 7,004 6,556
Other 3,517 4,166
-------- --------

Gross loans receivable 209,502 229,267
Less:
Unearned discounts and deferred
loans fees, net 2,289 2,138
Loans in process 123 10
Allowance for possible loan losses 723 450
-------- --------

Loans receivable-net $206,367 $226,669
-------- --------
-------- --------
</TABLE>

The Company originates the majority of its mortgage loans in the
western suburbs of Chicago. All mortgage loans are secured by first mortgages
principally on one-to-four-family residences. Management believes that the
potential for loss due to this concentration of credit risk is not significant.

The Company also originates multi-family and commercial real estate
loans. Such loans, which are secured by the underlying property, are considered
by management to be of greater credit risk due to the dependency on income
production.

The Company originates and purchases both adjustable and fixed
interest rate mortgage loans. At December 31, 1992, adjustable interest rate
loans totaled $32,330,000 and fixed interest rate loans totaled $166,651,000.
The adjustable rate loans have interest rate adjustment limitations and are
generally indexed to a U.S. Treasury note rate. Fixed interest rate loans are
generally originated for terms of 30 years; however, very few of the loans
remain outstanding for their entire term.

Transactions in the allowance for possible loan losses are summarized
as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
1992 1991 1990
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Balance, beginning of period $450 $ 60 $ --
Provision for possible loan losses 310 419 82
Charge-offs (41) (40) (33)
Recoveries 4 11 11
---- ---- -----
Balance, end of period $723 $450 $ 60
---- ---- -----
---- ---- -----
</TABLE>

Loans on which the recognition of interest has been discontinued
amounted to approximately $575,000, $68,000 and $35,000 at December 31, 1992,
1991 and 1990, respectively.

F-14
<PAGE> 96

At December 31, 1992, 1991, and 1990, the Company was servicing loans
for the benefit of others with aggregate unpaid principal balances of
$14,197,000, $34,527,000 and $28,350,000, respectively. Servicing loans for
others generally consists of collecting mortgage payments, maintaining escrow
accounts, disbursing payments to investors and foreclosure processing. In
connection with these loans serviced for others, the Company held borrowers'
escrow balances of $201,000, $399,000 and $337,000, respectively. Loan
servicing income includes servicing fees from investors and certain charges
collected from borrowers such as late payment fees.

6. REAL ESTATE HELD FOR SALE

<TABLE>
<CAPTION>
DECEMBER 31,
--------------------------------
1992 1991
------ ------
(in thousands)
<S> <C> <C>
Real estate owned $3,814 $3,797
Less: allowance for estimated losses (331) (331)
Less: accumulated depreciation (157) (81)
------ ------
3,326 3,385
Investment in and advances to real estate
joint venture 1,177 802
------ ------

Total $4,503 $4,187
------ ------
------ ------
</TABLE>

Transactions in the allowance for estimated losses are summarized as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
1992 1991 1990
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Balance, beginning of period $331 $171 $171
Provision for estimated losses -- 175 --
Recoveries -- (15) --
---- ---- ----

Balance, end of period $331 $331 $171
---- ---- ----
---- ---- ----
</TABLE>

Real estate owned at December 31, 1992 and 1991 consists principally
of land and a warehouse located in a western suburb of Chicago. The building
is leased through August 1993 and is being depreciated on a straight-line basis
over 20 years. Rental income recognized during the years ended December 31,
1992, 1991, and 1990 totalled $229,000, $206,000 and $26,000, respectively.

At December 31, 1992 and 1991, investments in and advances to real
estate joint venture consist of a loan for $760,000 and $385,000, respectively,
and an equity investment of $417,000. There were no significant results of
operations during 1992, 1991 or 1990. The joint venture holds approximately 30
acres of real estate which it intends to develop into a 129
unit townhome community. The Company issued a commitment to fund the
development costs of this real estate investment joint venture project in an
amount up to $5.0 million, subject to Federal regulatory limitations.

The Association has guaranteed certain irrevocable letters of credit
totaling $490,000 at December 31, 1992, issued by the Federal Home Loan Bank of
Chicago on behalf of the real estate joint venture. As security for these
letters of credit, the Association has pledged its stock in the Federal Home
Loan Bank of Chicago and is required to maintain certain qualifying first
mortgage loans in an amount equal to at least 170 percent of the outstanding
advances.

F-15
<PAGE> 97
7. OFFICE PROPERTIES AND EQUIPMENT

Office properties and equipment are summarized at cost as follows:

<TABLE>
<CAPTION>
December 31,
---------------------------------------------
1992 1991
--------- --------
(in thousands)
<S> <C> <C>
Land $ 836 $ 836
Buildings and improvements 4,273 4,043
Furniture and equipment 570 636
------ ------
5,679 5,515
Less accumulated depreciation 2,005 1,898
------ ------
Office properties and equipment, net $3,674 $3,617
------ ------
------ ------
</TABLE>

8. REQUIRED INVESTMENTS

The Association, as a member of the Federal Home Loan Bank system, is
required to obtain and hold a specified number of shares of capital stock in
the Federal Home Loan Bank of Chicago. In accordance with Office of Thrift
Supervision regulations, the Association maintains cash, U.S. Treasury and
Government agency securities and other qualifying securities in an amount
exceeding five percent of its deposits and other obligations due within one
year.

9. ACCRUED INTEREST RECEIVABLE

Accrued interest receivable is summarized as follows:

<TABLE>
<CAPTION>
December 31,
---------------------------------------------
1992 1991
--------- --------
(in thousands)
<S> <C> <C>
Loans receivable $1,080 $1,285
Investment securities 472 328
Mortgage-backed securities 287 129
Securities held for sale 385 763
Other 37 8
------ ------
Total $2,261 $2,513
------ ------
------ ------
</TABLE>

F-16
<PAGE> 98
10. DEPOSITS

Deposits are summarized as follows:

<TABLE>
<CAPTION>
December 31, 1992 December 31, 1991
---------------------------------- ----------------------------------
Weighted Weighted
Average Average
Nominal Nominal
Rate Balance Rate Balance
-------- ---------- --------- ----------
(in thousands)
<S> <C> <C> <C> <C>
Demand accounts:
NOW accounts 2.22% $ 27,098 3.49% $ 23,142
Money market accounts 2.83 29,136 3.96 31,082
-------- --------

Total demand 2.53 56,234 3.76 54,224
-------- --------

Passbook and statement accounts 3.25 78,603 5.00 59,985
-------- --------

Certificate accounts:
Within one year:
Six months 3.63 27,588 5.54 29,295
Other within one year 4.25 58,401 6.21 62,915
One year to three years 5.88 45,377 7.34 55,534
Over three years 7.86 19,938 8.26 19,191
IRA and Keogh 7.72 69,602 8.30 66,084
Jumbo 3.83 11,246 6.27 20,232
-------- --------

Total certificate accounts 5.83 232,152 7.08 253,251
-------- --------

Total deposits 4.77% $366,989 6.25% $367,460
----- -------- ----- --------
----- -------- ----- --------

</TABLE>

At December 31, 1992, certificate accounts are scheduled to mature as follows:

<TABLE>
<CAPTION>
Year Maturing 1992
--------------------- --------
(in thousands)
<S> <C>
1993 $145,599
1994 38,571
1995 19,470
1996 15,939
1997 and thereafter 12,573
--------

Total $232,152
--------
--------

</TABLE>

F-17
<PAGE> 99
Interest expense on deposits consists of the following:

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
1992 1991 1990
---- ---- ----
(in thousands)
<S> <C> <C> <C>
NOW accounts $ 749 $ 1,028 $ 1 017
Money market accounts 1,067 1,697 1,906
Passbook and statement accounts 2,699 2,855 2,627
Certificate accounts 15,590 19,418 20,009
------- ------- -------

Total $20,105 $24,998 $25,559
------- ------- -------
------- ------- -------
</TABLE>

11. INCOME TAXES

The components of the provision for income taxes are as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
1992 1991 1990
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Current $1,408 $1,394 $ 939
Deferred (236) (212) (391)
IRS settlements -- (898) 195
------ ------ ------

Total $1,172 $ 284 $ 743
------ ------ ------
------ ------ ------
</TABLE>

The differences between recorded income taxes and the amount computed at the
statutory Federal income tax rates are as follows:

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
1992 1991 1990
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Tax effect of computed provision for income taxes
at statutory rate of 34% $1,285 $1,601 $ 19
Loss (recovery) on mutual funds held for sale (95) (641) 635
Bad debt deduction (13) 46 (44)
Non-taxable interest income (2) (4) (4)
IRS settlements -- (898) 195
Provision for loss on real estate owned -- 82 --
Miscellaneous-net (3) 98 (58)
------ ------ ----
Income tax expense $1,172 $ 284 $743
------ ------ ----
------ ------ ----
</TABLE>

F-18
<PAGE> 100
The significant timing differences creating the deferred income taxes
recognized in the consolidated statements of operations are summarized as
follows:

<TABLE>
<CAPTION>
Year Ended December 31,
-----------------------------------------------
1992 1991 1990
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Loan fees $(256) $(300) $(379)
Capitalized interest -- -- 64
FHLB stock dividend 49 54 --
Other (29) 34 (76)
------ ------ ------

Total $(236) $(212) $(391)
------ ------ ------
------ ------ ------

</TABLE>

In December 1991, the Association reached a settlement with the
Internal Revenue Service on disputed issues relating to certain tax years
spanning from 1970 to 1988. Such issues included the deductibility of core
deposit intangibles and the computation of bad debt deductions in the years
with net operating loss carrybacks or carryforwards. Such items represent
permanent differences between expense for financial reporting purposes and
income tax reporting purposes. As a result of the settlement, the Association
recorded approximately $898,000 to reduce the Association's provision for
income taxes for the year ended December 31, 1991. In 1992, the settlement was
collected in full. Related interest of approximately $304,000 and $225,000 has
been recorded in other income for the years ended December 31, 1992 and 1991,
respectively. In 1990, the Association settled certain prior year issues
resulting in an increase to the 1990 provision for income taxes of $195,000.
Related interest of $106,000 was recognized and recorded as a reduction of
other income.

The Company is permitted under the Internal Revenue Code (the "Code")
to deduct an annual addition to the reserve for bad debts in determining
taxable income, subject to certain limitations. The Company's deductions for
the years ended December 31, 1992, 1991 and 1990 were based upon the percentage
of taxable income method as defined by the Code. The bad debt deduction
allowable under this method equals eight percent of taxable income determined
without regard to that deduction and with certain adjustments. This addition
differs from the bad debt experience used for financial accounting purposes.
Bad debt deductions for income tax purposes are included in taxable income of
later years only if the bad debt reserve is used subsequently for purposes
other than to absorb bad debt losses. Because the Company does not intend to
use the reserve for purposes other than to absorb losses, no deferred income
taxes have been provided. Retained earnings at December 31, 1992 includes
approximately $10.5 million representing such bad debt deductions for which no
deferred income taxes have been provided.

The income tax provision applicable to sales of investment securities,
mortgage-backed securities, and securities held for sale was approximately
$148,000 and $149,000 for the years ended December 31, 1992 and 1991,
respectively. During 1992 and 1991, certain mutual fund investments were sold
which generated net capital losses. To the extent that capital gains did not
offset such losses, no tax benefit has been recognized. At December 31, 1992,
the applicable financial statement and tax capital loss carryforwards were
approximately $1,902,000 and $725,000, respectively.

12. CONVERSION TO STOCK OWNERSHIP AND REGULATORY CAPITAL

On January 22, 1992, the Association's Board of Directors adopted a
plan of conversion to convert from a federally chartered mutual savings and
loan association to a federally chartered stock association. On June 18, 1992,
the Company sold 1,851,500 shares of common stock for $10.00 per share to
depositors, employees and other community members. Of this amount, 50 percent
of the net proceeds of the offering were used to acquire all of the capital
stock of the Association. The expenses associated with the conversion were
charged to paid-in capital.

At the time of conversion, the Association established a liquidation
account for the benefit of deposit account holders as of September 30, 1991,
who continue to maintain their deposit accounts in the Association after

F-19
<PAGE> 101

conversion. In the event of a complete liquidation of the Association, a
deposit account holder as of September 30, 1991, who continues to maintain his
savings account will be entitled to receive a liquidation distribution from the
liquidation account before any distribution may be made with respect to the
Association's capital stock. The Association may not declare or pay a cash
dividend to the Company on, or repurchase any of, its capital stock if the
effect thereof would cause the net worth of the Association to be reduced below
the amount required for the liquidation account. Substantially all of the
initial liquidation account of $22,661,000 remains at December 31, 1992.

Office of Thrift Supervision ("OTS") regulations provide that an
association that exceeds all fully phased-in capital requirements and not
deemed "undercapitalized" before and after any proposed capital distribution
could, after prior notice but without the approval of the OTS, make capital
distributions during a calendar year up to 100 percent of its net income to
date during the calendar year plus the amount that would reduce by one-half the
excess capital over fully phased in capital requirements at the beginning of
the calendar year. Any additional capital distributions would require prior
regulatory approval.

Unlike the Association, the Company is not subject to these regulatory
restrictions on the payment of dividends to its stockholders. However, the
source of future dividends, if any, may depend upon dividends from the
Association.

Under current capital regulations, the Association must have: (i)
tangible capital equal to 1.5 percent of adjusted total assets, (ii) core
capital equal to 3 percent of adjusted total assets, and (iii) total capital
equal to 8.0 percent of risk-weighted assets.

At December 31, 1992, the Association's regulatory capital was as
follows:

<TABLE>
<CAPTION>
Tangible Core Risk-based
Capital Capital Capital
---------- -------- -----------
(in thousands)
<S> <C> <C> <C>
Stockholders' equity $32,890 $32,890 $32,890
Stock held for Recognition and Retention Plan 612 612 612
Nonincludable investments and advances (202) (202) (202)
General valuation allowances -- -- 723
------- ------- -------

Regulatory capital computed 33,300 33,300 34,023
Minimum capital requirement 6,091 12,181 12,618
------- ------- -------

Regulatory capital excess $27,209 $21,119 $21,405
------- ------- -------
------- ------- -------

Computed capital ratio 8.20% 8.20% 21.57%
Minimum capital ratio 1.50 3.00 8.00
------- ------- -------

Regulatory capital excess 6.70% 5.20% 13.57%
------- ------- -------
------- ------- -------

</TABLE>

At December 31, 1992, tangible assets and total risk-weighted assets
used in computing regulatory capital were $406,044,000 and $157,728,000,
respectively.

Management believes that, under the current regulations, the
Association will continue to meet its minimum capital requirements in the
coming year. Certain other regulatory capital amendments are mandated or
expected to occur in future periods. These amendments may include, among other
things, the disallowance of certain intangible and other assets not now
excluded, additional capital requirements related to interest rate risk and
possible increases in required core capital levels to between 4% and 5%.

F-20
<PAGE> 102
In April 1991, the OTS issued a proposal to amend the regulatory
capital regulations to establish a 3% leverage ratio (defined as the ratio of
core capital to adjusted total assets) for institutions in the strongest
financial and managerial condition, with a 1 MACRO Rating (the highest rating
of the OTS for savings institutions). For all other institutions, the minimum
core capital leverage ratio would be 3% plus at least an additional 100 to 200
basis points. In determining the amount of additional capital under the
proposal, the OTS would assess both the quality of risk management systems and
the level of overall risk in each individual institution through the
supervisory process on a case-by-case basis. Although the OTS has not adopted
this regulation in final form, generally a savings association that has a
leverage capital ratio of less than 4.0% will be deemed to be
"undercapitalized" under the OTS prompt corrective action rule and thus may be
subject to certain restrictions.

In September 1992, the OTS issued a proposed rule which would set
forth the methodology for calculating an interest rate component that would be
incorporated in the OTS regulatory capital rule. This recent proposal replaces
an earlier proposal by the OTS to calculate interest rate risk. Under the new
proposal, only savings associations with "above normal" interest rate risk
exposure (i.e., where an institution's market value portfolio equity would
decline in value by more than 2% of assets in the event of a hypothetical
200-basis-point move in interest rates) would be required to maintain
additional capital. The additional capital that such an institution would be
required to maintain would be equal to one half the difference between its
measured interest rate risk and 2%, multiplied by the market value of its
assets. That dollar amount of capital would be in addition to an institution's
existing risk-based capital requirement. If adopted in final form, this
proposal could increase the amount of regulatory capital required to be held by
the Association.

Based upon the current proposed capital requirements, management does
not believe that the proposed regulations will have a material impact on the
Association. However, events beyond the control of the Association such as
increased rates or a downturn in the economy in areas where the Association has
most of its loans, could adversely affect future earnings and, consequently,
the ability of the Association to meet its future minimum capital requirements.

F-21
<PAGE> 103
13. RETIREMENT PLANS

The Company has a noncontributory defined benefit retirement plan (the
"Plan") which covers all full-time employees who meet minimum service
requirements. The benefits are based, among other things, on years of service
and the employee's compensation in each year of service. The Company's funding
policy is to contribute the annual pension cost as determined by the actuarial
cost method subject to the limitations of the Employee Retirement Income
Security Act of 1974. The following table sets forth the funded status of the
Plan and amounts recognized in the Company's financial statements at December
31:

<TABLE>
<CAPTION>
1992 1991
------ ------
(in thousands)
<S> <C> <C>
Actuarial present value of benefits obligation:
Vested benefits $1,547 $1,423
Nonvested benefits 87 54
------ ------

Accumulated benefit obligation 1,634 1,477
Effect of projected future compensation levels 198 209
------ ------

Projected benefit obligation 1,832 1,686
Plan assets at fair value 2,423 2,136
------ ------

Plan assets in excess of projected benefit obligation 591 450
Unrecognized prior service cost 58 22
Unrecognized net asset at transition at
January 1, 1987, being amortized over 15 years (357) (396)
Unrecognized net loss (gain) due to
past experience different from that earned (125) 71
------ ------

Net prepaid pension cost included in other assets $ 167 $ 147
------ ------
------ ------
</TABLE>

Net pension cost (benefit) for the years ended December 31, 1992, 1991 and 1990
included the following components:

<TABLE>
<CAPTION>
1992 1991 1990
---- ---- ----
(in thousands)
<S> <C> <C> <C>
Service cost $ 62 $ 61 $ 59
Interest cost 143 131 127
Expected return on assets (190) (169) (169)
Amortization of unrecognized prior service cost 5 2 2
Amortization of unrecognized transition net gain (40) (40) (40)
----- ----- -----

Net pension (benefit) $(20) $(15) $(21)
----- ----- -----
----- ----- -----
</TABLE>

The weighted average discount rate, long-term investment rate and rate
of increase in future compensation levels used in determining the actuarial
present value of the projected benefit obligation was 8.5 percent, 8.5
percent, and 5 percent, respectively, for each of the three years in the period
ended December 31, 1992.

Additionally, the Company has a defined contribution plan (the "401(k)
Plan") which is intended to qualify as a salary reduction plan under Section
401(k) of the Internal Revenue Code. Substantially all of the Company's
employees are covered by the 401(k) Plan. Participants may make tax-deferred
contributions within a range specified by the 401(k) Plan. The Company makes
matching contributions in an amount equal to 50 percent of each

F-22
<PAGE> 104

participant's contribution up to the first six percent of the pay that
is deferred. Contributions by the Company to the 401(k) Plan were $40,000,
$34,000 and $34,000 for the years ended December 31, 1992, 1991 and 1990,
respectively.

The assets of the 401(k) and pension plans included $230,000 and
$259,000, respectively, in deposit accounts at the Association at December 31,
1992 and 1991.

14. OFFICER, DIRECTOR AND EMPLOYEE PLANS

STOCK OPTION PLANS - In conjunction with the Conversion, the Company
adopted a stock option plan for the benefit of officers and employees of the
Company and a directors' stock option plan for the benefit of outside directors
of the Company. The option price must be at least equal to the per share value
of such stock at the date the option is granted. Options granted expire ten
years from the date of grant and are not transferable other than on death.
Options granted pursuant to the officers' and employees' stock option plan
(Options granted - 92,575 shares at $10 per share) will become exercisable
commencing from the grant date at a rate of 20 percent annually. Options
granted pursuant to the directors' stock option plan (76,615 shares granted
during the 1992 fiscal year, 7,980 subsequently forfeited, at an exercise price
of $10 per share; 23,940 shares available for future grant) will become
exercisable commencing from the grant date at a rate of 33.33 percent annually.
No options were exercised during the 1992 fiscal year.

EMPLOYEE STOCK OWNERSHIP PLAN ("ESOP") - As part of the conversion,
the Company established an ESOP for officers and employees who have reached the
age of 21 and completed one year of service. The ESOP borrowed $1,110,900 from
an unrelated financial institution and purchased 111,090 shares issued in the
conversion. The Company is obligated to make cash contributions in amounts
adequate to service the debt of the ESOP. The Board of Directors may authorize
additional contributions at its discretion. Total contributions to the ESOP
were $155,319 for the year ended December 31, 1992, which were used to fund
principal and interest payments on the ESOP debt.

Since the Company is obligated as to payment of principal and interest
on the ESOP loan, the unpaid balance of the borrowing is reported as a
liability by the Company and an equivalent amount, which is comparable to
unearned compensation, is shown as a deduction of stockholders' equity. Both
the liability and the amount in stockholders' equity will be reduced in equal
amounts as the ESOP repays the borrowings. The ESOP will repay the loan in
twenty-eight equal quarterly installments of $39,675 commencing June 30, 1992
and continuing until March 31, 1999. The ESOP will also pay interest on the
unpaid principal balance quarterly in arrears at the prime rate plus .25
percent, adjusted monthly.

RECOGNITION AND RETENTION PLAN ("RRP") - In conjunction with the
Conversion, the Company formed an RRP that subsequent to the Conversion
purchased 74,060 shares in the open market for a total of $965,000. These
shares, except for 7,720 shares that were not allocated at December 31, 1992,
were granted to directors, officers and other key employees of the Company.
The awards are earned by employees and outside directors ratably over a
five-year and three-year period, respectively.

The aggregate purchase price of these shares is being amortized to
expense as the directors and officers become vested in their stock awards and
the unamortized cost is reflected as a reduction of stockholders' equity. For
the year ended December 31, 1992, expense related to the RRP was $353,000.

As these plans were established in 1992, there was no expense related
to these plans during the years ended December 31, 1991 and 1990.

F-23
<PAGE> 105
15. FINANCIAL INSTRUMENTS WITH OFF-BALANCE-SHEET RISK

The Company is a party to financial instruments with off-balance-sheet
risk in the normal course of business to meet the financing needs of its
customers. These financial instruments include commitments to extend mortgage
loans and lines of credit. Such instruments involve elements of credit risk in
excess of the amount recognized in the statements of financial condition. The
Company does not use financial instruments with off-balance-sheet risk as part
of its own asset/liability management program or for trading purposes.

The Company's exposure to credit loss for commitments to extend credit
is represented by the contractual amount of those instruments. The Company
uses the same credit policies in making commitments as it does for
on-balance-sheet instruments.

Off-balance-sheet financial instruments whose contract amounts
represent credit risk at December 31, 1992 and 1991 are as follows:

<TABLE>
<CAPTION>
1992 1991
------- ------
(in thousands)
<S> <C> <C>
Commitments to originate mortgage loans $11,895 $2,572
Unused home equity lines of credit 4,561 3,176
Unused credit card lines of credit 4,712 4,216
</TABLE>

Additionally, the Company has issued a commitment to fund the
development costs of its real estate investment joint venture project in an
amount up to $5.0 million, subject to Federal regulatory limitations.

Commitments to extend credit are agreements to lend to a customer as
long as there is no violation of any condition established in the contract.
Commitments generally have fixed expiration dates or other termination clauses
and any required payment of a fee. The Company evaluates each credit extension
on a case-by-case basis. The amount of collateral obtained, if deemed
necessary by the Company upon extension of credit, is based on management's
credit evaluation of the counter party. Such collateral consists primarily of
residential properties.

Additionally, the Company has sold loans with recourse provisions to
FHLMC. Such loans have an outstanding balance of approximately $9,571,000 at
December 31, 1992. On these loans, the Company bears all risks and costs of a
borrower default, including the costs of foreclosure.

The Company must repurchase FHLMC's percentage of participation in a
mortgage plus accrued interest upon completion of the foreclosure sale.

16. CONTINGENCIES

In the normal course of the Company's business, there are various
commitments, legal proceedings and contingencies which are not reflected in the
accompanying consolidated financial statements. In the opinion of management,
no material losses are expected to result from any such commitments, legal
proceedings or contingencies.

F-24
<PAGE> 106

17. FAIR VALUE OF FINANCIAL INSTRUMENTS

The following disclosure of the estimated fair value of financial
instruments is made in accordance with the requirements of SFAS No. 107,
"Disclosures about Fair Value of Financial Instruments." The estimated fair
value amounts have been determined by the Company using available market
information and appropriate valuation methodologies. However, considerable
judgment is necessarily required to interpret market data to develop the
estimates of fair value. Accordingly, the estimates presented herein are not
necessarily indicative of the amounts the Company could realize in a current
market exchange. The use of different market assumptions and/or estimation
methodologies may have a material effect on the estimated fair value amounts.

<TABLE>
<CAPTION>
December 31, 1992
-------------------------------------
Carrying Fair
Amount Value
---------- --------
(in thousands)
<S> <C> <C>
ASSETS:
Cash and due from depository institutions $ 7,201 $ 7,201
Interest-bearing deposits 2,087 2,087
Federal funds sold 1,200 1,200
Securities held for sale 74,894 74,894
Investment securities 50,897 51,344
Mortgage-backed securities 54,763 54,888
Loans receivable 206,367 233,084
Federal Home Loan Bank stock 2,705 2,705
Accrued interest receivable 2,261 2,261

LIABILITIES:
Deposits 366,989 374,743
Advance payments by borrowers for taxes and insurance 1,390 1,390
Accrued interest payable 199 199
Other liabilities 1,976 1,976
Employee Stock Ownership Plan loan obligation 992 992

OFF-BALANCE-SHEET INSTRUMENTS--unrealized losses:
Commitments to extend credit 119
</TABLE>

CASH AND DUE FROM DEPOSITORY INSTITUTIONS, INTEREST-BEARING DEPOSITS,
FEDERAL FUNDS SOLD AND FHLB STOCK - For cash and due from depository
institutions, interest-bearing deposits, Federal funds sold and FHLB stock, the
carrying amount is a reasonable estimate of fair value.

SECURITIES HELD FOR SALE AND INVESTMENT SECURITIES - For securities
held for sale and held for investment purposes, fair values are based on quoted
market prices or dealer quotes. If a quoted price is not available, fair value
is estimated using quoted prices for similar securities.

MORTGAGE-BACKED SECURITIES - Estimated fair value of mortgage-backed
securities is based on similar securities with quoted market prices and
adjusted for any differences in credit ratings or maturities.

LOANS RECEIVABLE - For certain homogeneous categories of loans, such
as residential mortgages, credit card receivables, and other consumer loans,
the fair value is estimated by discounting the future cash flows using
the current rates at which similar loans would be made to borrowers with similar
credit ratings and for the same remaining maturities.

ACCRUED INTEREST RECEIVABLE - The carrying amount of accrued interest
receivable approximates fair value.

F-25
<PAGE> 107

DEPOSITS - The fair value of demand deposits, savings accounts, and
certain money market deposits is the amount payable on demand at the reporting
date. The fair value of fixed-maturity certificates of deposit is estimated
using the rates currently offered for deposits of similar remaining maturities.

GUARANTEED EMPLOYEE STOCK OWNERSHIP PLAN LOAN OBLIGATION - Rates
currently available to the Company for debt with similar terms and remaining
maturities are used to estimate fair value of existing debt.

ADVANCE PAYMENTS BY BORROWERS FOR TAXES AND INSURANCE, ACCRUED
INTEREST PAYABLE AND OTHER LIABILITIES - The estimated fair value of advance
payments by borrowers for taxes and insurance, accrued interest payable and
other liabilities, which primarily include trade accounts payable, approximates
their carrying value.

COMMITMENTS TO EXTEND CREDIT - The fair value of commitments is
estimated using the fees currently charged to enter into similar agreements,
taking into account the remaining terms of the agreements and the present
creditworthiness of the counterparty. For fixed-rate loan commitments, fair
value also considers the difference between current levels of interest rates
and the committed rates.

F-26
<PAGE> 108
18. CONDENSED PARENT ONLY FINANCIAL STATEMENTS

The following condensed statement of financial condition as of
December 31, 1992, and condensed statement of operations and cash flows for the
period from March 9, 1992 (inception) to December 31, 1992, for LGF Bancorp,
Inc., should be read in conjunction with the consolidated financial statements
and notes thereto.

STATEMENT OF FINANCIAL CONDITION
December 31, 1992 (In Thousands)

<TABLE>
<S> <C>
ASSETS
Cash and cash equivalents $ 2,105
Investment securities 2,971
Mortgage-backed securities 3,003
Investment in the Association 11,047
Other assets 56
------
Total assets $19,182
-------
-------
LIABILITIES
Other liabilities $ 56
Employee Stock Ownership Plan loan obligation 992
-------
Total liabilities 1,048
-------
-------
Stockholders' Equity:
Common stock 19
Additional paid-in capital 16,981
Retained earnings 2,606
Guaranteed Employee Stock Ownership Plan loan obligation (992)
Treasury stock, at cost (480)
-------
-------
Total stockholders' equity 18,134
-------
Total liabilities and stockholders' equity $19,182
-------
-------
</TABLE>

STATEMENT OF OPERATIONS
For the Period from March 9, 1992 (Inception) to
December 31, 1992 (In Thousands)

<TABLE>
<S> <C>
Interest income $ 161
Other expenses 72
-------
Income before income taxes and equity in undistributed
income of subsidiaries 89
Provision for income taxes 30
-------
Income before equity in undistributed income of subsidiaries 59
Equity in undistributed income of subsidiaries 2,547
-------
Net income $ 2,606
-------
-------
</TABLE>

F-27
<PAGE> 109
STATEMENT OF CASH FLOWS
For the Period from March 9, 1992 to
December 31,1992
(In Thousands)

<TABLE>
<CAPTION>
<S> <C>
OPERATING ACTIVITIES
Net income $ 2,606
Less equity in earnings of the Association
not providing funds (2,547)
Net changes in:
Amortization of premiums/discounts (1)
Other assets (56)
Other liabilities 55
--------
Net cash provided by operations 57
--------
INVESTING ACTIVITIES
Purchase of capital stock of the Association (8,500)
Purchases of investment securities (2,969)
Purchases of mortgage-backed securities (3,008)
Repayment of mortgage-backed securities 5
--------
Net cash used in investment activities (14,472)

FINANCING ACTIVITIES
Net proceeds from common stock issuance 17,000
Purchase of treasury stock (480)
--------
Net cash provided by financing activities 16,520
--------
Net increase in cash and cash equivalents 2,105

Cash and Cash Equivalents-Beginning of period --
--------
Cash and Cash Equivalents-End of period $ 2,105
--------
--------
</TABLE>

F-28
<PAGE> 110
19. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)

<TABLE>
<CAPTION>
Year Ended December 31, 1992
--------------------------------------------------------
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr.
-------- -------- -------- --------
(In Thousands)
<S> <C> <C> <C> <C>
Interest income $7,720 $7,470 $7,549 $7,514
Interest expense 5,418 5,217 4,900 4,570
------ ------ ------ ------

Net interest income 2,302 2,253 2,649 2,944
Provision for possible loan losses 110 75 77 48
------ ------ ------ ------

Net interest income after provision
for possible loan losses 2,192 2,178 2,572 2,896
Net gain (loss) on sale of investment
and mortgage-backed securities
and securities held for sale 31 (275) (204) --
Lower of cost or market adjustment
on securities held for sale (398) 806 514 (332)
Other income 335 191 186 321
Non-interest expense 1,710 1,863 1,769 1,893
------ ------ ------ ------

Income before income taxes 450 1,037 1,299 992
Provision for income taxes 244 260 279 389
------ ------ ------ ------

Net income $ 206 $ 777 $1,020 $ 603
------ ------ ------ ------
------ ------ ------ ------
</TABLE>
<TABLE>
<CAPTION>
Year Ended December 31, 1991
-------------------------------------------------------
1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr.
-------- -------- ------- -------
(In Thousands)
<S> <C> <C> <C> <C>
Interest income $8,281 $8.400 $8,546 $8,327
Interest expense 6,379 6,354 6,279 5,986
------ ------ ------ ------

Net interest income 1,902 2,046 2,267 2,341
Provision for possible loan losses 46 37 30 306
------ ------ ------ ------

Net interest income after provision
for possible loan losses 1,856 2,009 2,237 2,035
Net gain (loss) on sale of investment
and mortgage-backed securities
and securities held for sale -- (260) (118) 228
Lower of cost or market adjustment
on securities held for sale 868 628 542 243
Other income 139 154 186 310
Non-interest expense 1,488 1,476 1,593 1,790
------ ------ ------ ------

Income before income taxes 1,375 1,055 1,254 1,026
Provision for income taxes 189 116 353 (374)
------ ------ ------ ------

Net income $1,186 $ 939 $ 901 $1,400
------ ------ ------ ------
------ ------ ------ ------
</TABLE>

F-29
<PAGE> 111
LGF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF FINANCIAL CONDITION
(In thousands, except per share data)

<TABLE>
<CAPTION>
September 30, December 31,
1993 1992
------------- ------------
Assets:
<S> <C> <C>
Cash and due from depository institutions $ 7,161 $ 7,201
Interest bearing deposits 3,561 2,087
Federal funds sold 1,700 1,200
-------- --------
Total cash and cash equivalents 12,422 10,488
Securities held for sale 30,374 74,894
Investment securities
(Market value 1993--$77,420, 1992--$51,344) 76,518 50,897
Mortgage-backed securities
(Market value 1993--$80,215, 1992--$54,888) 78,291 54,763
Loan receivable (Net of allowance for possible
loan losses 1993--$902, 1992--$723) 197,311 206,367
Federal Home Loan Bank stock - at cost 2,748 2,705
Real estate held for sale 6,809 4,503
Other properties and equipment, net 3,670 3,674
Accrued interest receivable 2,610 2,261
Other assets 1,241 971
-------- --------
Total Assets $411,994 $411,523
-------- --------
-------- --------

Liabilities and Stockholders' Equity:
Deposits $362,673 $366,989
Borrowed funds 5,000 --
Advance payments by borrowers for taxes and insurance 345 1,390
Accrued interest payable 157 199
ESOP loan obligation 873 992
Other liabilities 879 1,976
-------- --------
Total Liabilities 369,927 371,546
-------- --------

Commitments and Contingencies

Stockhholders' Equity:
Preferred stock, $.01 par value, 1,000,000 shares authorized
Common stock, $.01 par value, 5,000,000 shares authorized,
1,851,500 shares issued, 1,759,000 outstanding at
September 30, 1993; 1,821,500 outstanding at December 31, 1992 19 19
Additional paid-in capital 16,981 16,981
Retained earnings, substantially restricted 28,059 25,061
Stock held for recognition and retention plan (457) (612)
Guaranteed ESOP loan obligation (873) (992)
Treasury stock, at cost, 92,500 shares at September 30, 1993;
30,000 shares at December 31, 1992 (1,662) (480)
-------- --------

Total Stockholders' Equity 42,067 39,977
-------- --------

Total Liabilities and Stockholders' Equity $411,994 $411,523
-------- --------
-------- --------
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-30
<PAGE> 112
LGF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands, except per share data)

<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
September 30, September 30,
------------------------ ------------------------
1993 1992 1993 1992
------- ------- ------- -------
<S> <C> <C> <C> <C>
Interest Income:
Loans receivable $ 4,473 $ 5,213 $13,856 $15,785
Investment securities 958 709 2,514 1,363
Mortgage-backed securities 944 544 2,448 1,471
Securities held for sale 403 877 1,911 3,372
Interest-bearing deposits, federal funds
sold, and other 110 206 295 748
------- ------- ------- -------
Total interest income 6,888 7,549 21,024 22,739
------- ------- ------- -------

Interest Expense:
Deposits 4,048 4,900 12,224 15,535
Borrowed funds 59 67
------- ------- ------- -------
Total interest expense 4,107 4,900 12,291 15,535
------- ------- ------- -------

Net interest income 2,781 2,649 8,733 7,204

Provision for possible loan losses 54 77 195 262
------- ------- ------- -------

Net interest income after provision for
possible loan losses 2,727 2,572 8,538 6,942
------- ------- ------- -------

Other Income:
Loan servicing fees, late charges, and
other related fees 22 42 72 141
Net gain (loss) on sales of securities 192 (204) (70) (448)
held for sale
Lower of cost or market adjustment
on securities held for sale 239 514 959 922
Other 130 144 490 571
------- ------- ------- -------
Total other income 583 496 1,451 1,186
------- ------- ------- -------

Other Expenses:
Compensation and employee benefits 896 911 2,683 2,660
Occupancy and equipment expenses, net 259 250 752 720
Federal deposit insurance premiums 212 198 439 592
Advertising and promotion 67 47 336 275
Real estate operations expense, net (2) (11) (22) (76)
Other 472 374 1,488 1,171
------- ------- ------- -------
Total other expense 1,904 1,769 5,676 5,342
------- ------- ------- -------

Income before income taxes 1,406 1,299 4,313 2,786
Provision for income taxes 395 279 1,315 783
------- ------- ------- -------

Net income $ 1,011 $ 1,020 $ 2,998 $ 2,003
------- ------- ------- -------
------- ------- ------- -------

Earnings per share $ 0.54 $ 0.55 $ 1.59 $ 1.08
------- ------- ------- -------
------- ------- ------- -------

</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

F-31
<PAGE> 113
LGF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENT OF STOCKHOLDERS' EQUITY
NINE MONTHS ENDED SEPTEMBER 30, 1993
(In thousands)

<TABLE>
<CAPTION>
STOCK
HELD FOR
RECOGNITION GUARANTEED
ADDITIONAL AND ESOP TREASURY
COMMON PAID-IN RETAINED RETENTION LOAN STOCK
STOCK CAPITAL EARNINGS PLAN OBLIGATION AT COST TOTAL
--------- ------------ --------- ------------- ----------- ----------- -----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance, January 1, 1993 $19 16,981 25,061 (612) (992) (480) 39,977

Net income 2,998 2,998

Repayment of ESOP loan obligation 119 119

Amortization of cost of recognition
and retention plan stock 155 155

Purchase of treasury stock (1,182) (1,182)
---- ------ ------ ----- ----- ------- -------

Balance, September 30, 1993 $19 16,981 28,059 (457) (873) (1,662) 42,067
---- ------ ------ ----- ----- ------- ------
---- ------ ------ ----- ----- ------- ------
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-32
<PAGE> 114
LGF BANCORP, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
<TABLE>
<CAPTION>
(In thousands) For Nine Months Ended
September 30,
----------------------
1993 1992
--------- ---------

<S> <C> <C>
Cash Flows From Operating Activities:
Net income $ 2,998 $ 2,003
Adjustments to reconcile net income to net cash provided by
operating activities:
Amortization of loan fees (802) (559)
Provision for possible loan losses 195 262
Net loss on sales of investment and securities held for sale 70 448
Lower of cost or market adjustment on securities held for sale (959) (922)
Depreciation and amortization 474 553
Increase in deferred loan fees 584 799
(Increase) decrease in accrued interest receivable and other assets (619) 6,061
Increase (decrease) in accrued interest payable and other liabilities (1,139) 1,756
--------- ---------
Net cash flows provided by operating activities 802 10,401
--------- ---------

Cash Flows From Investing Activities:
Proceeds from maturities of investment securities 13,375 11,167
Proceeds from sale of investment securities 45
Proceeds from sales of securities held for sale 62,249 97,193
Purchases of investment securities (39,029) (35,825)
Purchases of mortgage-backed securities (31,255) (34,465)
Purchases of securities held for sale (18,684) (70,025)
Purchase of FHLB stock (6) --
FHLB stock dividend (37) (107)
Principal collected on mortgage-backed securities 9,495 5,154
Net decrease in loans receivable 9,079 13,961
Proceeds from sales of real estate held for sale 91 76
Expenditures on real estate held for sale:
Improvements -- (2)
Investment in and advance to joint venture (2,453) (219)
Expenditures for office properties and equipment (195) (328)
--------- --------
Net cash flows provided by (used in) investing activities 2,675 (13,420)
--------- --------

Cash Flows From Financing Activities:
Net proceeds from sale of common stock -- 17,000
Net decrease in deposits (4,316) (1,382)
Proceeds from borrowed funds 5,000 --
Net decrease in advance payments by borrowers for taxes and insurance (1,045) (1,412)
Purchase of treasury stock (1,182) --
Purchase of common stock under recognition and retention plan (965)
--------- ---------
Net cash flows provided by (used in) financing activities (1,543) 13,241
--------- ---------
Net increase in cash and cash equivalents 1,934 10,222
Cash and cash equivalents - beginning of year 10,488 14,856
--------- ---------
Cash and cash equivalents - end of period $ 12,422 $ 25,078
--------- ---------
--------- ---------

Supplemental disclosure of cash flow information:
Cash paid during the period for interest $ 12,266 $ 15,625
Cash paid during the period for income taxes 1,238 1,080
</TABLE>

SEE NOTES TO CONSOLIDATED FINANCIAL STATEMENTS.

F-33
<PAGE> 115
LGF BANCORP, INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. BASIS OF PRESENTATION

LGF Bancorp, Inc. (the "Company"), a Delaware Corporation, was
organized in March 1992 for the purpose of acquiring all of the capital stock
of La Grange Federal Savings and Loan Association (the "Association") pursuant
to a conversion of the Association from a federally chartered mutual savings
association to a federally chartered stock savings association. The transaction
was accounted for in a manner similar to a pooling of interests, consequently
no goodwill or other intangibles were recorded as a result of the transaction.

The unaudited consolidated financial statements include the accounts
of the Company and of the Association and its wholly-owned subsidiary. All
material intercompany accounts and transactions have been eliminated in
consolidation.

The accompanying unaudited consolidated financial statements have been
prepared in accordance with generally accepted accounting principles ("GAAP")
for interim financial information and with Regulation S-X. Accordingly, they do
not include all of the information and footnotes required by GAAP for complete
financial statements. In the opinion of management, all adjustments (consisting
of normal recurring accruals) considered necessary for fair presentation have
been included.

The results of operations for the three and nine month periods ended
September 30, 1993 are not necessarily indicative of the results that may be
expected for the year ending December 31, 1993.

2. EARNINGS PER SHARE

Earnings per share for the three and nine month periods ended
September 30, 1993 have been determined by dividing net income for the period
by the weighted average number of common stock and common stock equivalents
outstanding.

3. CONTINGENCIES

In the normal course of business, there are various commitments, legal
proceedings and contingencies which are not reflected in the accompanying
consolidated financial statements. In the opinion of management, no material
losses are expected to result from any such commitments, legal proceedings or
contingencies.

4. ACCOUNTING FOR INCOME TAXES

The Company adopted Statement of Financial Accounting Standards (SFAS)
No. 109, "Accounting for Income Taxes", effective January 1, 1993. This
Statement supersedes APB 11, "Accounting for Income Taxes", which was
previously used by the Company in 1992 and earlier years. There was no
material cumulative effect of adopting SFAS No. 109 on the Company's financial
statements as of January 1, 1993 and for the three and nine months ended
September 30, 1993.

F-34
<PAGE> 116
Deferred income taxes reflect the net tax effects of (a) temporary
differences between the carrying amounts of assets and liabilities for
financial reporting purposes and the amounts used for income tax purposes, and
(b) capital loss carryforwards. The tax effects of significant items comprising
the Company's net deferred tax asset as of January 1, 1993 are as follows:

<TABLE>
<CAPTION>
(in thousands)
<S> <C>
DEFERRED TAX LIABILITIES
Capitalized Interest $ 178.3
Prepaid Pension 56.6
Tax Bad Debt Allowance In
Excess of Base Year Amount 703.2
Other 163.6
-------

1,101.7
-------
DEFERRED TAX ASSETS
Loan Fees 776.1
Tax Capital Losses 246.4
Financial Statement Bad Debt Allowance 358.5
Differences Between Financial Statement
and Tax Bases of FHLB Stock and
Securities Held for Sale 315.4
-------
1,696.4
-------

Valuation Allowance 0.0
-------

Net Deferred Tax Asset $ 594.7
-------
-------
</TABLE>

5. NEW ACCOUNTING PRONOUNCEMENTS

In May 1993, FASB issued two new accounting standards, SFAS No. 114,
"Accounting by Creditors for Impairment of a Loan" ("FAS 114") and SFAS No.
115, "Accounting for Certain Investments in Debt and Equity Securities" ("FAS
115"). FAS 114 requires that impaired loans be measured at the present value
of expected future cash flows by discounting those flows at the loan's
effective interest rate, or the fair value of the collateral if the loan is
collateral dependent. Under FAS 115, only debt securities which LGF has the
positive intent and ability to hold to maturity would be classified as held to
maturity and reported at amortized cost. These statements are effective for
fiscal years beginning after December 15, 1994 and 1993, respectively. Based
on preliminary evaluations, LGF's management believes that FAS 114 will not
have a material impact on LGF's consolidated financial statements. LGF's
management is unable to determine the future effects, if any, of FAS 115 at
this time.

F-35
<PAGE> 117

Exhibit A

CAPITAL RESOURCES GROUP, INC.

January 4, 1994

Board of Directors
LGF Bancorp, Inc.
1 N. La Grange Road
La Grange, IL 60525

Dear Board Members:

You have requested our opinion as to the fairness from a financial
point of view to the holders of shares of common stock of LGF Bancorp, Inc.
("LGF Bancorp" or the "Company") of the proposed consideration to be paid to
the shareholders of LGF Bancorp by First of America Bank Corporation ("First of
America").

Capital Resources Group, Inc. ("Capital Resources") is an investment
banking firm that, as part of our specialization in financial institutions, is
regularly engaged in the financial valuations and analyses of business
enterprises and securities in connection with mergers and acquisitions,
valuations for mutual-to-stock conversions of thrifts, initial and secondary
offerings, divestiture and other corporate purposes. Senior members of Capital
Resources have extensive experience in such matters. We believe that, except
for the fee we will receive for our opinion and other fees to be received in
connection with the transaction discussed below, we are independent of the
Company.

FINANCIAL TERMS OF THE OFFER

We understand that, pursuant to an Agreement and Plan of
Reorganization, dated October 12, 1993, among First of America, First of
America Acquisition Company and LGF Bancorp ("Agreement"), First of America has
agreed to acquire all of the issued and outstanding shares of common stock of
LGF Bancorp pursuant to which each share of LGF Bancorp's outstanding stock
will be converted into .8754 shares (the "exchange ratio") of First of America
common stock ("Transaction"). Based on First of America's average closing
trading price during the last 30 trading days preceding January 4, 1994 as
quoted on the New York Stock Exchange, of $38.86 per share, this translates
into an acquisition price of $34.02 per share for LGF Bancorp's common stock.
Each outstanding option for the purchase of Company common stock shall be
converted into and represent the right to receive and be exchanged for .6322
shares of First of America common stock (the "option exchange ratio"). If First
of America effects a stock dividend, reclassification, split-up, reverse split
or similar transaction prior to the effective time of the Transaction, then the
appropriate adjustment will be made in the exchange ratio and option exchange
ratio.

A-1
<PAGE> 118
CAPITAL RESOURCES GROUP, INC.
Board of Directors
January 4, 1994
Page 2

The Agreement may be terminated at any time prior to the effective
time of the Transaction by the Company in the event that the average closing
trading price of First of America common stock on the New York Stock Exchange
during the last 15 trading days on which reportable sales of First of America
common stock took place immediately prior to, but not including, the third
business day prior to the effective time of the Transaction is less than
$34.95.

It is intended that no gain or loss will be recognized by any LGF
Bancorp stockholder for tax purposes, except in connection with the receipt of
cash in lieu of a fractional share of First of America common stock, upon the
exchange of LGF Bancorp common stock for First of America common stock.

Pursuant to the Transaction, LGF Bancorp will be merged into a wholly
owned subsidiary of First of America. Also, as a result of the Transaction, it
is expected that La Grange Federal Savings and Loan Association, the wholly
owned operating subsidiary of LGF Bancorp, will be merged with and into First
of America's affiliate, First of America Bank-Kankakee/Will County, N.A.

MATERIALS REVIEWED

In the course of rendering our opinion we have, among other things:

(1) Reviewed the terms of the offer and discussed the offer with
management and the Board of Directors, and LGF Bancorp's legal
counsel, Muldoon, Murphy & Faucette;

(2) Reviewed the following financial data of LGF Bancorp:

o the audited financial statements of LGF Bancorp for
the fiscal years ended December 31, 1987 through
December 31, 1992 and unaudited financial statements
for the nine months ended September 30, 1993 as
reported in its Report on Form 10-Q,

o the Office of Thrift Supervision ("OTS") quarterly
Thrift Financial Reports covering the period through
September 30, 1993, the latest available period,

o LGF Bancorp's latest available asset/liability
reports,

o other miscellaneous internally-generated management
information reports for recent periods,

A-2

<PAGE> 119
CAPITAL RESOURCES GROUP, INC.
Board of Directors
January 4, 1994
Page 3

o LGF Bancorp's most recent business plan and budget
report;

(3) Reviewed LGF Bancorp's Annual Report to shareholders and Form
10-K Report for fiscal 1992 which provides a discussion of the
Company's business and operations and reviews various
financial data and trends;

(4) Discussed with executive management of LGF Bancorp, the
business, operations, recent financial condition and operating
results and future prospects of the Company;

(5) Compared LGF Bancorp's financial condition and operating
results to those of similarly-sized thrift companies operating
in the Midwest and the U.S.;

(6) Compared LGF Bancorp's financial condition and operating
performance to the published financial statements and market
price data of publicly-traded thrifts in general, and
publicly-traded thrifts in LGF Bancorp's region of the U.S.
specifically;

(7) Reviewed the relevant market information regarding the shares
of common stock of the Company including trading activity and
volume and information on options to purchase shares of common
stock;

(8) Performed such other financial analyses and investigations as
we deemed necessary, including a comparative financial
analysis and review of the financial terms of other pending
and completed acquisitions of companies we consider to be
generally similar to the Company;

(9) Examined LGF Bancorp's economic operating environment and the
competitive environment of the Company's market area;

(10) Reviewed available financial reports and financial data for
First of America, including Annual Reports to shareholders and
Form 10-K Reports covering the fiscal years ended 1988 through
1992, quarterly reports, Form 10-Q reports, other published
financial data and other internal and regulatory financial
reports provided by management of First of America; reviewed
First of America's banking office network; and reviewed the
pricing trends of First of America's common stock and dividend
payment history;

(11) Visited First of America's administrative offices and
conducted interviews with management.

A-3

<PAGE> 120
CAPITAL RESOURCES GROUP, INC.
Board of Directors
January 4, 1994
Page 4

In arriving at our opinion, we have relied upon the accuracy and
completeness of the information provided to us by the various parties mentioned
above, upon public information and upon representations and warranties in the
Agreement, and have not conducted any independent investigations to verify any
such information or performed any independent appraisal of LGF Bancorp's or
First of America's assets.

This fairness opinion is supported by the detailed information and
analysis contained in the Evaluation and Analysis Report dated January 4, 1994
("Report"), which has been produced by Capital Resources and delivered to
LGF Bancorp. We have relied on the Report for purposes of rendering this
current fairness opinion. The Report contains a business description and
financial analysis of LGF Bancorp, an analysis of current economic conditions
in the Company's primary market area, and a financial and market pricing
comparison with a selected group of thrift institutions which completed merger
and acquisition transactions or are currently subject to pending transactions.

OPINION

Based on the foregoing and on our general knowledge of and experience
in the valuation of businesses and securities, we are of the opinion that, as
of January 4, 1994, the consideration proposed by First of America for
shares of common stock of the Company is fair to the shareholders of the
Company from a financial point of view.

Respectfully submitted,

CAPITAL RESOURCES GROUP, INC.

/s/ David P. Rochester
David P. Rochester
Chairman and Chief
Executive Officer

/s/ Michael B. Seiler
Michael B. Seiler
Senior Vice President

A-4
<PAGE> 121
EXHIBIT B

AGREEMENT AND PLAN OF REORGANIZATION

AMONG

FIRST OF AMERICA BANK CORPORATION,

FIRST OF AMERICA ACQUISITION COMPANY

AND

LGF BANCORP, INC.

DATED AS OF OCTOBER 12, 1993
<PAGE> 122
TABLE OF CONTENTS

<TABLE>
<S> <C>
ARTICLE ONE - THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1

1.01 Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.02 Manner of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.03 Effect of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.04 Certificate of Incorporation, Bylaws, Directors, Officers
and Name of the Surviving Corporation . . . . . . . . . . . . . . . . 3
1.05 Merger of LA GRANGE FEDERAL and FOA-BANK . . . . . . . . . . . . . . . 3
1.06 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4

ARTICLE TWO - REPRESENTATIONS AND WARRANTIES OF FIRST OF AMERICA . . . . . . . . . . . 4

2.01 Organization; Qualification; Good Standing; Corporate Power . . . . . 4
2.02 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.03 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
2.04 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 6
2.05 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . 7
2.06 No Violation, Consents . . . . . . . . . . . . . . . . . . . . . . . . 7
2.07 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.08 Taxes, Returns and Reports . . . . . . . . . . . . . . . . . . . . . . 8
2.09 Corporate Properties . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.10 Brokerage Commissions, Fees, Etc . . . . . . . . . . . . . . . . . . . 8
2.11 Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . . . . . 8
2.12 Compliance With ERISA . . . . . . . . . . . . . . . . . . . . . . . . 9
2.13 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . 9
2.14 Advice of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . 10
2.15 Shares to be Issued in Merger . . . . . . . . . . . . . . . . . . . . 10
2.16 Orders, Injunctions, Decrees, Etc. . . . . . . . . . . . . . . . . . . 10
2.17 Ownership of COMPANY Stock . . . . . . . . . . . . . . . . . . . . . . 10
2.18 Compliance with Environmental and Safety Laws . . . . . . . . . . . . 10
2.19 Community Reinvestment Act Compliance . . . . . . . . . . . . . . . . 11
2.20 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

ARTICLE THREE - REPRESENTATIONS AND WARRANTIES OF THE COMPANY . . . . . . . . . . . . 12

3.01 Organization; Qualification; Good Standing; Corporate Power . . . . . 12
3.02 Authorization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.03 Capitalization . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
3.04 Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . 14
3.05 Absence of Undisclosed Liabilities . . . . . . . . . . . . . . . . . . 15
3.06 No Violation, Consents . . . . . . . . . . . . . . . . . . . . . . . . 16
</TABLE>

i
<PAGE> 123
<TABLE>
<S> <C>
3.07 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.08 Taxes, Returns and Reports . . . . . . . . . . . . . . . . . . . . . . . . . 16
3.09 Corporate Properties . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.10 Obligations to Employees . . . . . . . . . . . . . . . . . . . . . . . . . . 17
3.11 Brokerage Commissions, Fees, Etc . . . . . . . . . . . . . . . . . . . . . . 18
3.12 Certain Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
3.13 Articles of Incorporation, Articles of Association, Bylaws, Etc . . . . . . 19
3.14 Orders, Injunctions, Decrees, Etc . . . . . . . . . . . . . . . . . . . . . 20
3.15 Stockholders of the COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 20
3.16 Regulatory Filings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.17 Loans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
3.18 Conduct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.19 Fiduciary Responsibilities . . . . . . . . . . . . . . . . . . . . . . . . . 21
3.20 Compliance With Environmental and Safety Laws . . . . . . . . . . . . . . . 22
3.21 Other Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.22 Insider Interests . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.23 No Sensitive Transactions . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.24 Delaware Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
3.25 Community Reinvestment Act Compliance . . . . . . . . . . . . . . . . . . . 23
3.26 Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.27 Qualified Thrift Lender . . . . . . . . . . . . . . . . . . . . . . . . . . 24
3.28 Advice of Changes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24

ARTICLE FOUR - COVENANTS OF FIRST OF AMERICA . . . . . . . . . . . . . . . . . . . . . . . . 24

4.01 Conduct Of Business; Certain Covenants . . . . . . . . . . . . . . . . . . . 24
4.02 SEC Registration . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
4.03 Authorization, Reservation, and Stock Exchange Listing
of Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.04 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.05 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
4.06 Required Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
4.07 Employment Agreements and Directors . . . . . . . . . . . . . . . . . . . . 26
4.08 Severance Policy for Terminated Employees . . . . . . . . . . . . . . . . . 27
4.09 Retirement Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
4.10 Information, Access Thereto . . . . . . . . . . . . . . . . . . . . . . . . 27
4.11 Negative Covenant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

ARTICLE FIVE - COVENANTS OF THE COMPANY . . . . . . . . . . . . . . . . . . . . . . . . . . . 28

5.01 Stockholders' Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
5.02 Conduct Of Business; Certain Covenants . . . . . . . . . . . . . . . . . . . 28
5.03 Affiliate Agreements . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
5.04 Information, Access Thereto . . . . . . . . . . . . . . . . . . . . . . . . 31
</TABLE>

ii
<PAGE> 124
<TABLE>
<S> <C>
5.05 Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.06 Recommendation of Merger to Stockholders . . . . . . . . . . . . . . . . . 32
5.07 Litigation Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.08 Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
5.09 Warrant Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32

ARTICLE SIX - CONDITIONS TO OBLIGATIONS OF EACH OF THE PARTIES . . . . . . . . . . . . . . 33

6.01 Approval by Affirmative Vote of Stockholders . . . . . . . . . . . . . . . 33
6.02 Approval by Federal Reserve . . . . . . . . . . . . . . . . . . . . . . . 33
6.03 Approval by OTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.04 Approval by FIB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.05 Approval of Bank Merger . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.06 Tax Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
6.07 Registration Statement . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.08 Blue Sky . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.09 Other Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.10 Orders, Decrees and Judgments . . . . . . . . . . . . . . . . . . . . . . 34
6.11 Pooling Letter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.12 Fairness Opinion . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
6.13 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 35

ARTICLE SEVEN - FURTHER CONDITIONS TO THE OBLIGATIONS OF THE COMPANY . . . . . . . . . . . 35

7.01 Compliance by FIRST OF AMERICA . . . . . . . . . . . . . . . . . . . . . . 35
7.02 Accuracy of Financial Statements . . . . . . . . . . . . . . . . . . . . . 35
7.03 Sufficiency of Documents . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.04 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
7.05 Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 37
7.06 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . 37
7.07 Consents and Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . 38
7.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38

ARTICLE EIGHT - FURTHER CONDITIONS TO THE OBLIGATIONS OF FIRST OF AMERICA . . . . . . . . . 38

8.01 Compliance by the COMPANY . . . . . . . . . . . . . . . . . . . . . . . . 38
8.02 Accuracy of Financial Statements . . . . . . . . . . . . . . . . . . . . . 38
8.03 Net Worth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 38
8.04 Sufficiency of Documents, Proceedings . . . . . . . . . . . . . . . . . . 39
8.05 Opinion of Counsel . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
8.06 Officers' Certificate . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.07 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . 41
8.08 Litigation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 41
8.09 Transfer by Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>

iii
<PAGE> 125
<TABLE>
<S> <C>
8.10 Bank Merger Agreement . . . . . . . . . . . . . . . . . . . . . 42
8.11 Pooling of Interests . . . . . . . . . . . . . . . . . . . . . . 42
8.12 Affiliation Audit . . . . . . . . . . . . . . . . . . . . . . . 42

ARTICLE NINE - ABANDONMENT; AMENDMENT AND WAIVER . . . . . . . . . . . . . . . . 42

9.01 Abandonment . . . . . . . . . . . . . . . . . . . . . . . . . . 42
9.02 Effect of Abandonment . . . . . . . . . . . . . . . . . . . . . 43

ARTICLE TEN - MODIFICATIONS, AMENDMENTS AND WAIVER . . . . . . . . . . . . . . . 43

10.01 Modifications, Amendments and Waiver . . . . . . . . . . . . . . 43

ARTICLE ELEVEN - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . 44

11.01 Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44
11.02 Certificate of Merger . . . . . . . . . . . . . . . . . . . . . 44
11.03 Procurement of Approvals . . . . . . . . . . . . . . . . . . . . 45
11.04 Further Acts . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.05 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45
11.06 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . 46
11.07 Nonsurvival of Representations and
Warranties . . . . . . . . . . . . . . . . . . . . . . 46
11.08 Discussions With Other Banks, Bank Holding Companies
and Bank-Related Businesses . . . . . . . . . . . . . . 47
11.09 The ESOP . . . . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.10 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . 47
11.11 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . 47
11.12 Binding Effect and Parties in Interest . . . . . . . . . . . . . 47
11.13 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.14 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . 48
11.15 Severability Clause . . . . . . . . . . . . . . . . . . . . . . 48
11.16 Identification . . . . . . . . . . . . . . . . . . . . . . . . . 48
</TABLE>

EXHIBIT A

EXHIBIT B

EXHIBIT C

APPENDIX I

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AGREEMENT AND PLAN OF REORGANIZATION

THIS AGREEMENT AND PLAN OF REORGANIZATION by and among FIRST OF
AMERICA BANK CORPORATION, a Michigan corporation ("FIRST OF AMERICA"), FIRST OF
AMERICA ACQUISITION COMPANY, a Delaware corporation and a wholly owned
subsidiary of FIRST OF AMERICA ("FOA- ACQUISITION"), and LGF BANCORP, INC., a
Delaware corporation (the "COMPANY").

W I T N E S S E T H:

WHEREAS, FOA-ACQUISITION is a wholly owned subsidiary of FIRST OF
AMERICA, and FIRST OF AMERICA and the COMPANY desire that the COMPANY shall be
merged with FOA-ACQUISITION in accordance with the applicable statutes of the
State of Delaware and in accordance with an Agreement and Plan of Merger (the
"Plan of Merger") substantially on the terms and in the form attached hereto as
Exhibit A (the merger provided for therein being herein called the "Merger");

NOW, THEREFORE, in consideration of the premises and the mutual and
dependent promises hereinafter contained, the parties do represent, warrant,
covenant and agree as follows:

ARTICLE ONE

THE MERGER

1.01 Plan of Merger. FOA-ACQUISITION, the COMPANY and FIRST OF
AMERICA agree to execute and adopt the Plan of Merger substantially on the
terms and in the form attached hereto as Exhibit A.

1.02 Manner of Merger. At the Effective Time, as hereinafter
defined, the COMPANY shall be merged into FOA- ACQUISITION, under the
Certificate of Incorporation of FOA-ACQUISITION as the Surviving Corporation
(hereinafter sometimes called the "Surviving Corporation"), pursuant to the
terms of this Agreement and with the effect of the provisions of the Delaware
General Corporation Law (the "Delaware Law").

At the Effective Time, the corporate existence of the COMPANY shall
cease, and the corporate existence of FOA-ACQUISITION, with all its purposes,
objects, rights, privileges, powers and franchises, shall continue unaffected
and unimpaired by the Merger.

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1.03 Effect of Merger. Upon the Merger becoming effective:

(a) The separate existence of the COMPANY shall cease and
be merged into the Surviving Corporation, which shall possess all of
the rights, privileges, immunities, powers and franchises of a public
as well as of a private nature, and shall be subject to all of the
restrictions, disabilities and duties, of each of the COMPANY and
FOA-ACQUISITION; and all singular rights, privileges, immunities,
powers and franchises of each of the COMPANY and FOA-ACQUISITION, and
all property, real, personal and mixed, and all debts due to either
the COMPANY or FOA-ACQUISITION in whatever account, including
subscriptions to shares, and all other things in action or belonging
to each of the COMPANY and FOA-ACQUISITION shall be vested in
FOA-ACQUISITION as the Surviving Corporation; and all property,
rights, privileges, immunities, powers and franchises, and all and
every interest, shall be thereafter as effectually the property of
FOA-ACQUISITION as the Surviving Corporation as they were of the
COMPANY and FOA-ACQUISITION and the title to any real estate, or
interest therein, vested by deed or otherwise, in either of the
COMPANY and FOA-ACQUISITION shall not revert or be in any way impaired
by reason of the Merger.

(b) All rights of creditors and all liens upon any
property of the COMPANY or FOA-ACQUISITION shall be preserved
unimpaired and all debts, liabilities and duties of the COMPANY or
FOA-ACQUISITION shall thenceforth attach to FOA-ACQUISITION as the
Surviving Corporation and may be enforced against FOA-ACQUISITION as
the Surviving Corporation to the same extent as if said debts,
liabilities and duties had been incurred or contracted by it;
provided, however, that all such liens shall attach only to those
assets to which they were attached prior to the Effective Time (as
hereinafter defined).

(c) Any action or proceeding, whether civil, criminal or
administrative, pending by or against either the COMPANY or
FOA-ACQUISITION shall be prosecuted as if the Merger had not taken
place, and FOA-ACQUISITION as the Surviving Corporation may be
substituted as a party in such action or proceeding in place of the
COMPANY.

(d) Each share of stock of FOA-ACQUISITION issued and
outstanding immediately prior to the Merger and each share of FIRST OF
AMERICA Common Stock issued and outstanding immediately prior to the
Merger shall remain as identical shares of the Surviving Corporation
and FIRST OF AMERICA, respectively, after the Merger.

(e) Each share of the COMPANY'S Common Stock issued and
outstanding immediately prior to the Merger shall be converted into
and represent the right to receive and be exchangeable for .8754
shares (the "exchange ratio") of FIRST OF AMERICA Common Stock.

(f) Each of the Option Rights (as hereinafter defined)
which is outstanding immediately prior to the Merger shall be
converted into and represent the right to receive and be exchangeable
for .6322 shares of FIRST OF AMERICA Common Stock (the "Option

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exchange ratio"). For purposes of determining Option Rights
outstanding immediately prior to the Merger, all Option Rights which
have been granted as of the date hereof, as described in Section 3.03
hereof, shall be deemed outstanding unless they shall have been
exercised prior to the Effective Time or shall have expired or
otherwise have been terminated prior thereto.

(g) In the event of any extraordinary dividend
distribution to the holders of FIRST OF AMERICA Common Stock or in the
event of any increase or reduction in the number of shares of FIRST OF
AMERICA Common Stock issued and outstanding caused by split-up,
reverse split, reclassification, distribution of stock dividends or
change of par or stated value, the parties agree to amend the Plan of
Merger to cause a proportionate adjustment to be made to the exchange
ratio and the Option exchange ratio.

1.04 Certificate of Incorporation, Bylaws, Directors, Officers and
Name of the Surviving Corporation. By virtue of the Merger and at the
Effective Time:

(a) The Certificate of Incorporation of FOA-ACQUISITION,
shall be the Certificate of Incorporation of the Surviving Corporation
until the same shall be further amended and changed as provided by
law.

(b) The Bylaws of FOA-ACQUISITION shall be the Bylaws of
the Surviving Corporation until the same shall be further amended and
changed as provided by law.

(c) The Directors and Officers of FOA-ACQUISITION
immediately prior to the Effective Time shall be the sole Directors
and Officers of the Surviving Corporation and shall hold office until
the next annual meeting of the shareholder and the next annual meeting
of the Board of Directors of the Surviving Corporation and until their
successors are elected and qualified.

(d) The name of the Surviving Corporation shall be FIRST
OF AMERICA ACQUISITION COMPANY or such other name as is designated by
FIRST OF AMERICA.

1.05 Merger of LA GRANGE FEDERAL and FOA-BANK. The COMPANY owns
all of the issued and outstanding shares of La Grange Federal Savings and Loan
Association, La Grange, Illinois ("LA GRANGE FEDERAL"). FIRST OF AMERICA and
the COMPANY agree and acknowledge that, immediately following the Effective
Time, LA GRANGE FEDERAL shall be merged (the "Bank Merger") with and into FIRST
OF AMERICA'S affiliate, First of America Bank-Kankakee/Will County, National
Association ("FOA-BANK") in a transaction which satisfies the requirements of
Section 5(d)(3) of the Federal Deposit Insurance Corporation Act, and which
will, upon consummation thereof, result in the ownership by FIRST OF AMERICA of
100% of the issued and outstanding capital stock of FOA-BANK. Such transaction
will otherwise be on the terms and conducted in the manner described in the
bank merger agreement (the "Bank Merger Agreement") attached hereto as Appendix
I.

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1.06 Effective Time. The Merger shall be consummated upon the
filing of appropriate Certificate of Merger with the Secretary of State of the
State of Delaware in the form and manner required by the Delaware Law. The
close of business on the date on which such Certificate of Merger shall have
been filed is herein referred to as the "Effective Time," unless some other
date is agreed upon by the parties hereto and is specified therein.

ARTICLE TWO

REPRESENTATIONS AND WARRANTIES OF FIRST OF AMERICA

FIRST OF AMERICA represents and warrants to the COMPANY as follows:

2.01 Organization; Qualification; Good Standing; Corporate Power.

(a) FIRST OF AMERICA is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Michigan and is duly qualified to do business and is in good standing
in each jurisdiction in which the nature of the business conducted or
the properties or assets owned or leased by it makes such
qualification necessary. FIRST OF AMERICA is a registered bank
holding company under the Bank Holding Company Act of 1956. FIRST OF
AMERICA has the corporate power and authority to carry on its business
as it is now conducted, to own, lease and operate its properties, to
execute and deliver this Agreement and the power to consummate the
transactions contemplated hereby.

(b) FOA-ACQUISITION is a corporation in organization and
before the Effective Time will be duly organized, validly existing and
in good standing under the laws of the State of Delaware and will be
duly qualified to do business and in good standing in each
jurisdiction in which the nature of the business conducted or the
properties or assets owned or leased by it makes such qualification
necessary. FOA-ACQUISITION will have the corporate power and
authority to carry on the business of the COMPANY as it is now
conducted, to own, lease and operate its properties, to execute and
deliver this Agreement and the power to consummate the transactions
contemplated hereby.

(c) FIRST OF AMERICA holds all licenses, certificates,
permits, franchises and rights from all appropriate federal, state or
other public authorities necessary for the conduct of its businesses.
FIRST OF AMERICA has conducted its business so as to comply in all
material respects with all applicable federal, state and local
statutes, ordinances, regulations or rules, and FIRST OF AMERICA is
not presently charged with, or, to its knowledge, under governmental
investigation with respect to, any actual or alleged material
violations of any statute, ordinance, regulation or rule; and FIRST OF
AMERICA is not the subject of any pending or, to its knowledge,
threatened material proceeding by any regulatory authority having
jurisdiction over its business, properties or operations.

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2.02 Authorization. Upon approval by the Board of Directors of
FIRST OF AMERICA not later than October 20, 1993, the execution, delivery and
performance of this Agreement and the Plan of Merger by FIRST OF AMERICA will
have been duly authorized and approved by all necessary corporate action, and
this Agreement and the Plan of Merger will be legally binding on and
enforceable against FIRST OF AMERICA in accordance with their terms, subject to
the receipt of all required regulatory or other governmental approvals and
except as enforceability may be limited by bankruptcy laws, insolvency laws or
other laws affecting creditors' rights generally. The execution and delivery
of this Agreement and the Plan of Merger do not, and the consummation of the
Merger will not, violate the provisions of FIRST OF AMERICA'S respective
Articles of Incorporation, as amended, or Bylaws, as amended.

2.03 Capitalization. As of June 30, 1993, the authorized
capitalization of FIRST OF AMERICA consisted of 100,000,000 shares of Common
Stock, par value $10.00 per share ("FIRST OF AMERICA Common Stock"), of which
57,134,965 shares were outstanding; 10,000,000 shares of Preferred Stock,
without par value ("FIRST OF AMERICA Preferred Stock") which have been divided
into and issued in series as follows: (1) 500,000 shares have been designated
as Series A Junior Participating Preferred Stock of which no shares are
outstanding; and (2) 400,000 shares have been designated as Series F 9%
Convertible Preferred Stock of which 392,557 shares were outstanding. Except
incident to FIRST OF AMERICA'S Shareholders' Investment Plan, Employee
Service/Retirement Award Program, the RESTATED FIRST OF AMERICA Bank
Corporation 1987 Stock Option Plan, the FIRST OF AMERICA Bank Corporation
Reserve Plus Savings Plan, the rights to acquire shares pursuant to the Rights
Agreement dated July 18, 1990, between FIRST OF AMERICA and First of America
Bank-Michigan, N.A., as Rights Agent, the possible offering, pursuant to a
"shelf" registration statement on Form S-3 filed by FIRST OF AMERICA under the
Securities Act of 1933, as amended (the "Securities Act"), of shares of FIRST
OF AMERICA Preferred Stock, and any conversion rights applicable thereto, and
conversion rights incident to the FIRST OF AMERICA Preferred Stock, there were,
as of June 30, 1993, no outstanding warrants, options, rights, calls or other
commitments of any nature relating to the authorized but unissued shares of
FIRST OF AMERICA Common Stock or FIRST OF AMERICA Preferred Stock or concerning
the authorization, issuance or sale of any other class of equity securities of
FIRST OF AMERICA. Except incident to the foregoing plans, programs and rights,
between June 30, 1993, and the date of this Agreement there has been no
material change in the capitalization of FIRST OF AMERICA. The number of
shares set forth above is subject to change before the Effective Time by
affiliation with other banks, bank holding companies or bank-related businesses
or by purchase, sale, issuance, redemption, conversion, distribution or other
transaction. A vote of the shares set forth above is not required to approve
this Agreement. All of the outstanding shares set forth above are validly
issued, fully paid, and nonassessable.

2.04 Financial Statements.

(a) FIRST OF AMERICA has furnished to the COMPANY true,
correct and complete copies of: (i) the audited Consolidated Balance
Sheets of FIRST OF AMERICA as of December 31, 1991, and December 31,
1992, and the related Consolidated Statements of Income, Consolidated
Statements of Changes in Shareholders' Equity and the

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Consolidated Statements of Cash Flows for each of the three years
ending December 31, 1992, including the respective notes thereto,
together with the reports of KPMG Peat Marwick relating thereto; and
(ii) the unaudited Consolidated Balance Sheet as of June 30, 1993, and
the related unaudited Consolidated Statement of Income for the period
then ended (the "Financial Statements"). Subject to such changes
which may result from an audit which includes the period of the
unaudited Financial Statements as of and for the six months ended June
30, 1993 (which changes in the aggregate would not be material), such
Financial Statements fairly present the consolidated financial
position of FIRST OF AMERICA as of and for the periods ended on their
respective dates and the consolidated operating results and changes in
financial position of FIRST OF AMERICA for the indicated periods in
conformity with generally accepted accounting principles applied on a
consistent basis. Since June 30, 1993, there have not been any changes
in FIRST OF AMERICA'S consolidated financial condition, assets,
liabilities or business, other than changes in the ordinary course of
business which in the aggregate have not been materially adverse.

(b) FIRST OF AMERICA will furnish the COMPANY with copies
of its audited and unaudited Consolidated Balance Sheets, and related
reports, for each annual and quarterly period subsequent to June 30,
1993, until the Closing Date ("Subsequent Financial Statements").

(c) Subject to such changes which may result from an
audit which includes the period of the unaudited Financial Statements
as of and for the six months ended June 30, 1993, or an audit of any
Subsequent Financial Statements (which changes, in the aggregate, will
not be material), all of the aforesaid Financial Statements have been,
and, with respect to the Subsequent Financial Statements, will be,
prepared in accordance with generally accepted accounting principles,
utilizing accounting practices consistent with prior years except as
otherwise disclosed. None of the aforesaid Financial Statements
contain, and none of the Subsequent Financial Statements will contain,
any material undisclosed extraordinary or prior period items or fail
to disclose any material items that should be disclosed. All of the
aforesaid Financial Statements present fairly, and all of the
Subsequent Financial Statements will present fairly, the consolidated
financial position of FIRST OF AMERICA and the results of its
operations and changes in its financial position as of and for the
periods ending on their respective dates. Subject to such changes
which may result from an audit which includes the six months ended
June 30, 1993, or an audit of any Subsequent Financial Statements
(which changes, in the aggregate, will not be material), the allowance
for loan losses in such Financial Statements is, and with respect to
the Subsequent Financial Statements will be, adequate under the
standards applied by the Board of Governors of the Federal Reserve
System ("Federal Reserve") and based on past loan loss experiences and
potential losses in current portfolios to cover all known or
anticipated loan losses. There are, and with respect to the
Subsequent Financial Statements will be, no agreements, contracts or
other instruments to which FIRST OF AMERICA is a party or by which it
or (to the knowledge of FIRST OF AMERICA) any of the officers,
directors, employees or shareholders of FIRST OF AMERICA have rights
which

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would have a materially adverse effect on the consolidated financial
position of FIRST OF AMERICA which are not reflected in the Financial
Statements and the Subsequent Financial Statements.

2.05 Absence of Undisclosed Liabilities. Except as and to the
extent reflected or reserved against in the Financial Statements or the
Subsequent Financial Statements, neither FIRST OF AMERICA nor any of its
subsidiaries have, and with respect to the Subsequent Financial Statements
will not have, any liabilities or obligations, of any nature, secured or
unsecured, (whether accrued, absolute, contingent or otherwise) including,
without limitation, any tax liabilities due or to become due, which would have
a materially adverse effect on the consolidated financial position of FIRST OF
AMERICA. FIRST OF AMERICA further represents and warrants that it does not
know or have any reason to believe that there is or will be any basis for
assertion against it or any of its subsidiaries as of December 31, 1992, or
June 30, 1993, or as of the date of any Subsequent Financial Statements, of any
liability or obligation of any nature or any amount not fully reflected or
reserved against in the Consolidated Balance Sheets as of said dates or as of
such subsequent dates and for such subsequent periods or in the footnotes
thereto, which would have a materially adverse effect on the consolidated
financial position of FIRST OF AMERICA.

2.06 No Violation, Consents. Neither the execution and delivery of
this Agreement nor the consummation of the transactions contemplated hereby,
with or without the giving of notice or the lapse of time, or both, will: (i)
violate, conflict with, result in the breach or termination of, constitute a
default under, accelerate the performance required by, or result in the
creation of any material lien, charge or encumbrance upon any of the properties
or assets of FIRST OF AMERICA or its subsidiaries, taken as a whole, pursuant
to any indenture, mortgage, deed of trust or other agreement (including
borrowing agreements) or instrument to which FIRST OF AMERICA or any of its
subsidiaries is a party or by which it or any of its properties or assets may
be bound; or (ii) violate any statute, rule or regulation applicable to FIRST
OF AMERICA or any of its subsidiaries which would have a material adverse
effect on FIRST OF AMERICA'S consolidated financial condition, assets,
liabilities or business. No consent, approval, authorization, order,
registration or qualification of or with any court, regulatory authority or
other governmental body, or of any lender or purchaser under any borrowing
agreement, other than as specifically contemplated by this Agreement, is
required for the consummation by FIRST OF AMERICA of the transactions
contemplated by this Agreement.

2.07 Litigation. As of the date of this Agreement, there are no
legal, quasi-judicial, administrative, or other actions, suits, proceedings or
investigations of any kind or nature pending or, to the knowledge of FIRST OF
AMERICA, threatened against FIRST OF AMERICA or any of its subsidiaries that
challenge the validity or propriety of the transactions contemplated by this
Agreement or which would have a material adverse effect on FIRST OF AMERICA'S
consolidated financial condition, assets, liabilities or business. Neither
FIRST OF AMERICA nor any of its subsidiaries is subject to, or in default with
respect to, nor are any of their assets subject to, any outstanding judgment,
order or decree of any court or of any governmental agency or

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instrumentality which would have a material adverse effect on FIRST OF
AMERICA'S consolidated financial condition, assets, liabilities or business.

2.08 Taxes, Returns and Reports. FIRST OF AMERICA has duly filed
all material tax returns required to be filed. The reserve for taxes in FIRST
OF AMERICA'S December 31, 1992, Consolidated Balance Sheet is adequate to
cover all of its tax liabilities (including, without limitation, income taxes
and franchise fees) that may become payable in future years in respect to any
transactions consummated prior to December 31, 1992. FIRST OF AMERICA has not
had and, to the best of FIRST OF AMERICA'S knowledge, will not have any
liability for taxes of any nature for or in respect of the operation of its
business or ownership of its assets from December 31, 1992, up to and including
the Effective Time, except to the extent reflected on its Consolidated Balance
Sheet as of June 30, 1993, or on its Subsequent Financial Statements or
otherwise reflected in the books and records of FIRST OF AMERICA for the period
following its then most recent Subsequent Financial Statements.

2.09 Corporate Properties. No proceedings to take all or any part
of the properties of FIRST OF AMERICA (whether leased or owned) by condemnation
or right of eminent domain are pending or, to FIRST OF AMERICA'S knowledge,
threatened. FIRST OF AMERICA owns directly or indirectly 100% of the issued
and outstanding shares of its banking subsidiaries.

2.10 Brokerage Commissions, Fees, Etc. All negotiations relating
to this Agreement and the Plan of Merger and the transactions contemplated
herein and therein have been and will be carried on by FIRST OF AMERICA
directly with the COMPANY, its counsel, accountants and other representatives
in such a manner as not to give rise to any claim against the COMPANY for any
brokerage commission, finder's fee, investment advisor's fee or other like
payment.

2.11 Regulatory Filings. FIRST OF AMERICA has filed and will
continue to file in a timely manner all required filings with (i) the
Securities and Exchange Commission ("SEC"), including all reports on Form 10-K,
Form 10-Q, Form 8-K and proxy statements and will furnish the COMPANY with
copies of all such SEC filings made subsequent to the date hereof until the
Effective Time; and (ii) the Federal Reserve; and, to the best knowledge of
FIRST OF AMERICA, all such filings were complete and accurate in all material
respects as of the dates of the filings, and no such SEC filing made any untrue
statement of a material fact or omitted to state a material fact necessary in
order to make the statements made, in the light of the circumstances under
which they were made, not misleading. Except for normal examinations conducted
by the Internal Revenue Service or various banking regulatory authorities in
the regular course of the business of the FIRST OF AMERICA and its
subsidiaries, no federal, state or local governmental agency, commission or
other entity has initiated any proceeding or, to the best of the knowledge and
belief of the FIRST OF AMERICA, investigation into the business or operations
of the FIRST OF AMERICA and its subsidiaries within the past five years which
would have material adverse effect on the consolidated financial condition of
FIRST OF AMERICA. To FIRST OF AMERICA'S knowledge, there is no unresolved
violation, criticism or exception of a material nature by the SEC or any
banking regulatory authority or other agency, commission or entity with respect
to any report or statement referred to herein. Since the date of any such

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filings there has been no material change in FIRST OF AMERICA'S condition,
financial or otherwise, such that had such change occurred prior to any such
filing, such change would have been required to be disclosed or described
therein.

2.12 Compliance With ERISA. All employee benefit plans (as defined
in Section 3(3) of the Employee Retirement Income Security Act of 1974
("ERISA")) established or maintained by FIRST OF AMERICA or to which FIRST OF
AMERICA contributes ("FIRST OF AMERICA Employee Plans") are in compliance in
all material respects with all applicable requirements of ERISA, and are in
compliance in all material respects with all applicable requirements (including
qualification and nondiscrimination requirements in effect as of the Effective
Time) of the Internal Revenue Code of 1986, as amended (the "Code"), for
obtaining the tax benefits the Code thereupon permits with respect to such
FIRST OF AMERICA Employee Plans. No FIRST OF AMERICA Employee Plan has, or as
of the Effective Time will have, any amount of unfunded benefit liabilities (as
defined in Section 4001(a)(18) of ERISA) for which FIRST OF AMERICA would be
liable to any person under Title IV of ERISA if the FIRST OF AMERICA Employee
Plans were terminated as of the Effective Time, which amounts would be material
to FIRST OF AMERICA. The FIRST OF AMERICA Employee Plans are funded in
accordance with Section 412 of the Code (if applicable). There would be no
obligations which would be material to FIRST OF AMERICA under Title IV of ERISA
relating to any Employee Plan that is a multi-employer plan if any such plan
were terminated or if FIRST OF AMERICA or any of its subsidiaries withdrew from
any such plan as of the Effective Time.
2.13 Other Information. No representation or warranty by FIRST OF
AMERICA contained in this Agreement, no certificate or other instrument or
document furnished or to be furnished by or on behalf of FIRST OF AMERICA
pursuant to this Agreement and no information furnished or to be furnished by
FIRST OF AMERICA for use in the Prospectus/Proxy Statement (as hereinafter
defined) or the Registration Statement (as hereinafter defined) or the
regulatory filings described in Section 4.06 hereof contains or will contain
any untrue statement of material fact or omits or will omit to state any
material fact required to be stated herein or therein which is necessary to
make the statements contained herein or therein, in light of the circumstances
in which they are or were made, not misleading in any material respect.

2.14 Advice of Changes. Between the date hereof and the Effective
Time, FIRST OF AMERICA shall promptly advise the COMPANY in writing of any fact
which, if existing or known at the date hereof, would have been required to be
set forth or disclosed in or pursuant to this Agreement or of any fact which,
if existing or known at the date hereof, would have made any of the
representations contained herein materially untrue.

2.15 Shares to be Issued in Merger. The FIRST OF AMERICA Common
Stock which the stockholders of the COMPANY will be entitled to receive upon
consummation of the Merger pursuant to the Plan of Merger will, at the
Effective Time, be duly authorized and will, when issued pursuant to the Plan
of Merger, be validly issued, fully paid and nonassessable and will have been
registered under the Securities Act.

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2.16 Orders, Injunctions, Decrees, Etc. FIRST OF AMERICA is not
subject to any order, injunction, or decree of any governmental body or court,
or in violation of any order, injunction, or decree, or any other requirement
of any governmental body or court, which would have a material adverse effect
on the condition (financial or otherwise), business, properties, assets,
operations, or liabilities of FIRST OF AMERICA on a consolidated basis.

2.17 Ownership of COMPANY Stock. Except with respect to shares
which may be held in a fiduciary capacity by FIRST OF AMERICA'S banking
subsidiaries, as of the date of this Agreement, neither FIRST OF AMERICA nor
any of its subsidiaries owns any shares of any class of the capital stock of
the COMPANY.

2.18 Compliance with Environmental and Safety Laws.

(a) The operations of FIRST OF AMERICA and its
subsidiaries comply and have complied in all material respects with
all applicable federal, state and local environmental statutes and
regulations; to the best of FIRST OF AMERICA'S knowledge, none of
FIRST OF AMERICA'S or its subsidiaries' operations are subject to any
judicial or administrative proceedings, alleging the violation of any
federal, state or local environmental, health, or safety statute or
regulation; to the best of FIRST OF AMERICA'S knowledge, none of FIRST
OF AMERICA'S or its subsidiaries' operations are the subject of a
federal, state or local investigation evaluating whether any remedial
action is needed to respond to a release of hazardous or toxic waste,
substance or constituent, or any other substance into the environment;
to the knowledge of FIRST OF AMERICA, neither FIRST OF AMERICA nor its
subsidiaries have generated hazardous waste in FIRST OF AMERICA'S or
the subsidiaries' operations; to the knowledge of FIRST OF AMERICA,
neither FIRST OF AMERICA nor its subsidiaries have transported
hazardous waste attributable to FIRST OF AMERICA'S or its
subsidiaries' operations for treatment, storage or disposal; and to
the knowledge of FIRST OF AMERICA, neither FIRST OF AMERICA nor its
subsidiaries have reported a spill or release of a hazardous or toxic
waste, substance or constituent or any other substance in the
environment due to FIRST OF AMERICA'S or its subsidiaries' operations.

(b) FIRST OF AMERICA and its subsidiaries own and control
real estate either outright, as REO property, in a fiduciary capacity
and otherwise (the "FIRST OF AMERICA Real Estate"). There are various
judicial or administrative proceedings alleging the violation of
federal, state or local environmental, health or safety statute or
regulation with respect to certain properties which are included in
the FIRST OF AMERICA Real Estate and various investigations evaluating
whether remedial action is needed with respect to certain properties
which are included in the FIRST OF AMERICA Real Estate to respond to a
release of hazardous or toxic waste, substance or constituent, or
other substances into the environment. However, FIRST OF AMERICA is
not aware of any such proceedings or investigation which is reasonably
likely to result in a materially adverse change in the consolidated
financial condition of FIRST OF AMERICA.

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(c) FIRST OF AMERICA'S representations regarding the
"operations" referenced in this Section 2.18 do not extend to
customers of FIRST OF AMERICA or its subsidiaries unless FIRST OF
AMERICA or its subsidiaries influenced the customer's use, storage or
disposal of hazardous or toxic waste. To the knowledge of FIRST OF
AMERICA, neither FIRST OF AMERICA nor its subsidiaries has influenced
any customer's use, storage or disposal of hazardous or toxic waste.

(d) For the purposes of this Section 2.18, any reference
to "hazardous" or "toxic" waste, substances or constituents
encompasses any waste, substance or constituent regulated by, or
subject to, the provisions and regulations of either the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 USC
Section 6901 et seq., the Toxic Substances Control Act, 15 USC Section
2601 et seq., or the Illinois Environmental Protection Act, 415 ILCS
5/1 (1992 State Bar Ed.).

2.19 Community Reinvestment Act Compliance. FIRST OF AMERICA and
each of its subsidiaries, where applicable, is in substantial compliance with
the applicable provisions of the Community Reinvestment Act of 1977 and the
regulations promulgated thereunder. As of the date of this Agreement, FIRST OF
AMERICA has not been advised of the existence of any act or circumstance or set
of facts or circumstances which, if true, would cause FIRST OF AMERICA or any
of its subsidiaries to fail to be in substantial compliance with such
provisions. None of FIRST OF AMERICA'S subsidiaries have received a rating
from its principal banking regulator which is less than "satisfactory."

2.20 Approvals. FIRST OF AMERICA knows of no reason why all
regulatory approvals necessary to permit it to consummate the transactions
contemplated hereby in the manner provided herein should not be obtained or why
the opinion letter referred to in Section 8.11 hereof cannot be obtained.

ARTICLE THREE

REPRESENTATIONS AND WARRANTIES OF THE COMPANY

The COMPANY represents and warrants to FIRST OF AMERICA as follows:
(For purposes of this Article Three a "COMPANY Schedule" is defined as a
schedule prepared and executed by an Officer of the COMPANY and delivered to
FIRST OF AMERICA and dated not later than twenty (20) days after the date of
the execution of this Agreement).

3.01 Organization; Qualification; Good Standing; Corporate Power.

(a) The COMPANY is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware
and is duly qualified to do business and is in good standing in
Illinois and in each other jurisdiction in which the nature of the
business conducted or the properties or assets owned or leased by it
makes

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such qualification necessary. The COMPANY is a registered savings
association holding company under the Home Owners Loan Act. The
COMPANY has the corporate power and authority to carry on its business
as it is now conducted, to own, lease and operate its properties, to
execute and deliver this Agreement and the power to consummate the
transactions contemplated hereby.

(b) LA GRANGE FEDERAL is a federally chartered stock
savings association duly organized, validly existing and in good
standing under the laws of the United States. West Suburban Financial
Corporation ("WEST SUBURBAN") is a wholly owned subsidiary of LA
GRANGE FEDERAL and is a corporation duly organized, validly existing
and in good standing under the laws of the State of Illinois. (LA
GRANGE FEDERAL and WEST SUBURBAN are sometimes collectively referred
to herein as the "SUBSIDIARIES"). The SUBSIDIARIES each have the
corporate power and authority to carry on its business as it is now
conducted and to own, lease and operate its properties, and is duly
qualified to do business and is in good standing in each jurisdiction
in which the nature of the business conducted or the properties or
assets owned or leased by it makes such qualification necessary.

(c) The COMPANY and the SUBSIDIARIES hold all licenses,
certificates, permits, franchises and rights from all appropriate
federal, state or other public authorities necessary for the conduct
of its and their business and where failure to do so would have a
material adverse effect on the COMPANY or the SUBSIDIARIES. The
COMPANY and the SUBSIDIARIES have each conducted its business so as to
comply in all material respects with all applicable federal, state and
local statutes, ordinances, regulations or rules, and neither the
COMPANY nor either of the SUBSIDIARIES is presently charged with, or,
to the COMPANY'S knowledge, under governmental investigation with
respect to, any actual or alleged material violations of any statute,
ordinance, regulation or rule; and neither the COMPANY nor either of
the SUBSIDIARIES is the subject of any pending or, to the COMPANY'S
knowledge, threatened material proceeding by any regulatory authority
having jurisdiction over its business, properties or operations.

3.02 Authorization. The execution, delivery and performance of
this Agreement and the Plan of Merger by the COMPANY have been duly authorized
and approved by all necessary corporate action, and this Agreement and the Plan
of Merger are legally binding on and enforceable against the COMPANY in
accordance with their terms, subject to the approval of the stockholders of the
COMPANY and subject to the receipt of all required regulatory and other
government approvals and except as enforceability may be limited by bankruptcy
laws, insolvency laws or other laws affecting creditors' rights generally. The
execution and delivery of this Agreement and of the Plan of Merger do not, and
the consummation of the Merger will not violate the COMPANY'S Certificate of
Incorporation, as amended, or Bylaws, as amended.

3.03 Capitalization.

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(a) As of the date of this Agreement, the authorized
capitalization of the COMPANY consists of (i) 5,000,000 shares of
Common Stock ("COMPANY Common Stock"), $.01 par value per share, of
which 1,759,000 shares (not including treasury shares) are issued and
outstanding, which includes 111,090 shares which are held by La Grange
Federal Savings and Loan Association Employee Stock Ownership Plan
(the "ESOP"), and 92,500 shares are held by the COMPANY as treasury
shares and (ii) 1,000,000 shares of Preferred Stock, $.01 par value
per share, of which no shares are issued and outstanding. The COMPANY
has no other class of stock and there are and, as of the Effective
Time, there will be, no fractional shares of COMPANY Common Stock
issued or outstanding. In addition, there are outstanding options for
the purchase of 92,575 of COMPANY Common Stock at an exercise price of
Ten Dollars ($10.00) per share granted to certain employees of the
COMPANY pursuant to the LGF Bancorp, Inc. 1992 Incentive Stock Option
Plan (the "Employee Plan") and there are outstanding options for the
purchase of 68,635 shares of COMPANY Common Stock at an exercise price
of Ten Dollars ($10.00) per share granted to directors of the COMPANY
pursuant to the LGF Bancorp, Inc. 1992 Stock Option Plan for Outside
Directors (the "Director Plan") (the option rights granted pursuant to
the Employee Plan and the Director Plan are sometimes collectively
referred to herein as the "Option Rights".) In addition, LA GRANGE
FEDERAL has made certain restricted stock awards to certain directors
and officers of LA GRANGE FEDERAL pursuant to LA GRANGE FEDERAL'S
Recognition and Retention Plan and Trust which purchased 74,060 shares
of COMPANY Common Stock in the open market (the "Restricted Stock").
Except with respect to the Option Rights and the Restricted Stock,
neither the COMPANY nor the SUBSIDIARIES have granted any outstanding
warrants, options, rights, calls, agreements, understandings or other
commitments of any nature relating to the authorization, issuance,
sale or repurchase of any equity securities of the COMPANY or the
SUBSIDIARIES. Except in connection with the exercise of the Option
Rights and stock issued in connection with the Warrant Agreement
referred to in Section 5.09 hereof, the number of shares set forth
above is not subject to change before the Effective Time. Assuming
the exercise of all of the Option Rights prior to the Effective Time,
at the Effective Time the number of shares of COMPANY Common Stock
which will be issued and outstanding will not exceed 1,920,210.
Except as otherwise provided in the Certificate of Incorporation of
the COMPANY, all of the issued and outstanding shares of COMPANY
Common Stock will be entitled to vote to approve this Agreement and
the Plan of Merger.

(b) The COMPANY owns directly or indirectly all of the
issued and outstanding shares of capital stock of the SUBSIDIARIES.
COMPANY Schedule 3.03 accurately identifies the number of shares of
authorized and outstanding capital stock of the SUBSIDIARIES. Except
as set forth in COMPANY Schedule 3.03, neither the COMPANY nor the
SUBSIDIARIES owns directly or indirectly any debt, equity or other
proprietary interest in any other corporation, joint venture,
partnership, entity, association or other business.

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(c) All of the outstanding shares of the COMPANY and the
SUBSIDIARIES are validly issued, fully paid and nonassessable and, in
the case of the shares of the SUBSIDIARIES, are owned free and clear
of all liens, charges or encumbrances.

3.04 Financial Statements.

(a) The COMPANY has furnished to FIRST OF AMERICA true,
correct and complete copies of: (i) the audited Consolidated
Statements of Financial Condition of the COMPANY as of December 31,
1991 and December 31, 1992, and the related Consolidated Statements of
Operations, Consolidated Statements of Stockholders' Equity and
Consolidated Statements of Cash Flows for each of the three years
ending December 31, 1992, including the respective notes thereto,
together with the reports of Deloitte & Touche; and (ii) the unaudited
Consolidated Statements of Financial Condition of the COMPANY as of
June 30, 1993, and the related Consolidated Statements of Operations,
Consolidated Statements of Stockholders' Equity and Consolidated
Statements of Cash Flows for the period then ended ("COMPANY Financial
Statements"). Subject to such changes which may result from an audit
which includes the period of the unaudited COMPANY Financial
Statements as of and for the six months ended June 30, 1993 (which
changes in the aggregate would not be material), such COMPANY
Financial Statements fairly present the financial position of the
COMPANY and the SUBSIDIARIES as of and for the periods ended on their
respective dates and the operating results of the COMPANY and the
SUBSIDIARIES for the indicated periods in conformity with generally
accepted accounting principles applied on a consistent basis. Since
June 30, 1993, there have not been any changes in the COMPANY'S or the
SUBSIDIARIES' financial condition, assets, liabilities or business,
other than changes in the ordinary course of business which in the
aggregate have not been materially adverse.

(b) The COMPANY will furnish FIRST OF AMERICA with copies
of its audited and unaudited Consolidated Statements of Condition, and
related reports, for each annual and quarterly period, and each
financial report it or the SUBSIDIARIES file with the Office of Thrift
Supervision ("OTS"), subsequent to June 30, 1993, until the Effective
Time ("Subsequent COMPANY Financial Statements").

(c) Subject to such changes which may result from an
audit which includes any Subsequent COMPANY Financial Statements
(which changes in the aggregate will not be material), all of the
aforesaid COMPANY Financial Statements have been, and, with respect to
the Subsequent COMPANY Financial Statements, will be, prepared in
accordance with generally accepted accounting principles (except with
respect to reports filed with the OTS which have, in each case, been
prepared in accordance with OTS requirements), utilizing accounting
practices consistent with prior years except as otherwise disclosed.
None of the aforesaid COMPANY Financial Statements contain, and none
of the Subsequent COMPANY Financial Statements will contain, any
material undisclosed extraordinary or prior period items or fail to
disclose any material items that should be disclosed. All of the
aforesaid COMPANY Financial Statements present fairly,

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and all of the Subsequent COMPANY Financial Statements will present
fairly, the financial position of the COMPANY and the results of its
operations and changes in its financial position as of and for the
periods ending on their respective dates. Subject to such changes
which may result from an audit of any Subsequent COMPANY Financial
Statements (which changes in the aggregate will not be material), the
provision for loan losses in such COMPANY Financial Statements is,
and, with respect to the Subsequent COMPANY Financial Statements will
be, adequate under the standards applied by the OTS and based on past
loan loss experiences and potential losses in current portfolios to
cover all known or anticipated loan losses. Except with respect to
this Agreement and the transactions contemplated herein, there are,
and with respect to the Subsequent Financial Statements will be, no
agreements, contracts or other instruments to which the COMPANY or the
SUBSIDIARIES is a party or by which it or they or (to the knowledge of
the COMPANY) any of the officers, directors, employees or stockholders
of the COMPANY or the SUBSIDIARIES have rights which would have a
materially adverse effect on the consolidated financial position of
the COMPANY or the financial position of LA GRANGE FEDERAL which are
not disclosed herein or reflected in the COMPANY Financial Statements
and the Subsequent COMPANY Financial Statements.

3.05 Absence of Undisclosed Liabilities. Except as and to the
extent reflected or reserved against in the COMPANY Financial Statements or the
Subsequent COMPANY Financial Statements, neither the COMPANY nor the
SUBSIDIARIES had, nor with respect to the Subsequent COMPANY Financial
Statements will have, any liabilities or obligations, of any nature, secured or
unsecured, (whether accrued, absolute, contingent or otherwise) including,
without limitation, any tax liabilities due or to become due, which would have
a materially adverse effect on the consolidated financial position of the
COMPANY or the financial position of LA GRANGE FEDERAL. Except as set forth in
Schedule 3.05, the COMPANY further represents and warrants that it does not
know or have reason to believe that there is or will be any basis for assertion
against it or the SUBSIDIARIES as of December 31, 1992, or June 30, 1993, or as
of the date of any Subsequent COMPANY Financial Statements, of any liability or
obligation of any nature or any amount not fully reflected or reserved against
in the COMPANY Financial Statements as of said dates and for subsequent periods
or in the footnotes thereto, which would have a materially adverse effect on
the financial position of the COMPANY or the SUBSIDIARIES.

3.06 No Violation, Consents. Neither the execution and delivery of
this Agreement nor, subject to the approval of this Agreement by the
stockholders of the COMPANY, the consummation of the transactions contemplated
hereby, with or without the giving of notice or the lapse of time, or both,
will: (i) violate, conflict with, result in the breach or termination of,
constitute a default under, accelerate the performance required by, or result
in the creation of any material lien, charge or encumbrance upon any of the
properties or assets of the COMPANY or the SUBSIDIARIES pursuant to any
indenture, mortgage, deed of trust, or other material agreement (including
borrowing agreements) or instrument to which the COMPANY or the SUBSIDIARIES is
a party or by which it or the SUBSIDIARIES or any of their properties or assets
may be bound; or (ii) violate any statute, rule or regulation applicable to the
COMPANY or the SUBSIDIARIES, which would have a material adverse effect on the
consolidated financial condition,

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assets, liabilities or business of the COMPANY or the financial condition,
assets, liabilities or business of LA GRANGE FEDERAL. Other than as
specifically contemplated by this Agreement, no consent, approval,
authorization, order, registration or qualification of or with any court,
regulatory authority or other governmental body, or of any lender or purchaser
under any borrowing agreement, is required for the consummation by the COMPANY
and the SUBSIDIARIES of the transactions contemplated by this Agreement.

3.07 Litigation. As of the date of this Agreement, there are no
legal, quasi-judicial, administrative, or other actions, suits, proceedings, or
investigations of any kind or nature pending or, to the knowledge of the
COMPANY, threatened against the COMPANY or the SUBSIDIARIES that challenge the
validity or legality of the transactions contemplated by this Agreement or
which would have a material adverse effect on the financial condition, assets,
liabilities or business of the COMPANY or the SUBSIDIARIES. COMPANY Schedule
3.07 accurately describes all litigation which is pending or, to the knowledge
of the COMPANY, threatened against the COMPANY or the SUBSIDIARIES. Neither
the COMPANY nor the SUBSIDIARIES is subject to or in default with respect to,
nor are any of its or their assets subject to, any outstanding judgment, order
or decree of any court or of any governmental agency or instrumentality which
would have a material adverse effect on the financial condition, assets,
liabilities or business of the COMPANY or the SUBSIDIARIES.

3.08 Taxes, Returns and Reports. The COMPANY and the SUBSIDIARIES
have duly filed all material tax returns required to be filed. The reserve for
taxes in the COMPANY December 31, 1992 Consolidated Statement of Condition is
adequate to cover all tax liabilities of the COMPANY and the SUBSIDIARIES
(including, without limitation, income taxes and franchise fees) that may
become payable in future years in respect to any transactions consummated prior
to December 31, 1992. Neither the COMPANY nor the SUBSIDIARIES has or, to the
best of the COMPANY'S knowledge, will have any liability for taxes of any
nature for or in respect of the operation of its business or ownership of its
or their assets from December 31, 1992, up to and including the Effective Time,
except to the extent reflected in the COMPANY'S Consolidated Statement of
Condition as of June 30, 1993, or the Subsequent COMPANY Financial Statements,
or otherwise reflected in the books and records of the COMPANY for the period
following the then most recent COMPANY Subsequent Financial Statements.

3.09 Corporate Properties.

(a) COMPANY Schedule 3.09 accurately identifies: (i) all
real property owned or leased by the COMPANY or the SUBSIDIARIES,
including a brief description of any buildings located thereon; and
(ii) all known copyrights, patents, trademarks, trade names,
franchises, and related applications and all other similar intangible
assets owned by the COMPANY or the SUBSIDIARIES. Except as set forth
in said COMPANY Schedule, all of the COMPANY'S or the SUBSIDIARIES'
properties, leasehold improvements, and equipment are in reasonable
operating condition, free from any known defects, except defects which
in the aggregate do not materially and adversely affect the COMPANY'S
consolidated, or LA GRANGE FEDERAL'S, condition, financial or
otherwise, and all known

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copyrights, patents, trademarks, trade names, franchises, and related
applications are valid and in full force and effect in accordance with
their terms. No complaints have been received by the COMPANY or the
SUBSIDIARIES and, to the best of the COMPANY'S knowledge, none are
threatened that the COMPANY or the SUBSIDIARIES are in violation of
applicable building, zoning, environmental, safety, or similar laws,
ordinances, or regulations in respect of their buildings or equipment,
or the operation thereof, and to the best of the COMPANY'S knowledge,
the COMPANY and the SUBSIDIARIES are not in material violation of any
such law, ordinance, or regulation, except as disclosed in said
COMPANY Schedule. To the knowledge of the COMPANY, no proceedings to
take all or any part of the properties of the COMPANY or the
SUBSIDIARIES (whether leased or owned) by condemnation or right of
eminent domain are pending or threatened.

(b) Except as set forth in said COMPANY Schedule 3.09,
the COMPANY and the SUBSIDIARIES have good and marketable title to all
their real and personal property, free, clear, and discharged of, and
from, any and all liens, charges, encumbrances, security interests,
and/or equities which, in the aggregate, are materially adverse to the
COMPANY'S or the SUBSIDIARIES' condition, financial or otherwise.

3.10 Obligations to Employees. Except as set forth in COMPANY
Schedule 3.10, all material accrued obligations of the COMPANY and the
SUBSIDIARIES, whether arising by operation of law or by contract, for payments
to trusts or other funds or to any governmental agency or to any individual
director, officer, employee or agent (or his or her heirs, legatees or legal
representatives) with respect to unemployment compensation benefits, profit
sharing, pension or retirement benefits or social security benefits have been
paid, or adequate actuarial accruals for such payments have been and are being
made, by the COMPANY and the SUBSIDIARIES. All material obligations of the
COMPANY and the SUBSIDIARIES, whether arising by operation of law or by
contract, for bonuses and other forms of compensation which are or may become
payable to their directors, officers, employees or agents have been paid, or
adequate accruals for payment therefor have been and are being made to the
extent required in accordance with generally accepted accounting principles,
all of which accruals are reflected in the books and records of the COMPANY.
COMPANY Schedule 3.10 includes a list of all of the COMPANY'S and the
SUBSIDIARIES' pension, profit sharing, health, accident, welfare, life
insurance and other employee benefit plans within the meaning of Section 3(3)
of ERISA ("COMPANY Employee Plans"). All such COMPANY Employee Plans
established or maintained by the COMPANY or the SUBSIDIARIES or to which the
COMPANY or the SUBSIDIARIES contributes are in compliance in all material
respects with all applicable requirements of ERISA, and are in compliance in
all material respects with all applicable requirements (including qualification
and nondiscrimination requirements in effect as of the Effective Time) of the
Code, for obtaining the tax benefits the Code thereupon permits with respect to
such COMPANY Employee Plans. No COMPANY Employee Plan has any amount of
unfunded benefit liabilities (as defined in Section 4001(a)(18) of ERISA) for
which the COMPANY or the SUBSIDIARIES would be liable to any person under Title
IV of ERISA if the COMPANY Employee Plans were terminated as of the Effective
Time, which amounts would be material to the COMPANY or the SUBSIDIARIES. The
Employee Plans are funded in accordance with Section 412 of the Code (if
applicable). There would be no

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obligations which would be material to the COMPANY or the SUBSIDIARIES under
Title IV of ERISA relating to any COMPANY Employee Plan that is a
multi-employer plan if any such plan were terminated or if the COMPANY or the
SUBSIDIARIES withdrew from any such plan as of the Effective Time.

3.11 Brokerage Commissions, Fees, Etc. All negotiations relating
to this Agreement and the Plan of Merger and the transactions contemplated
herein and therein have been and will be carried on by the COMPANY directly
with FIRST OF AMERICA, its counsel, accountants and other representatives in
such a manner as not to give rise to any claim against FIRST OF AMERICA or the
COMPANY for any brokerage commission, finder's fee, investment advisor's fee or
other like payment, except that the COMPANY has agreed to make payment to
Capital Resources Group, Inc. for services rendered as financial advisor in
connection with the transactions contemplated hereby pursuant to that certain
letter agreement dated August 27, 1993, between the COMPANY and Capital
Resources Group, Inc.

The COMPANY has fee agreements with all outside attorneys,
accountants, and other independent experts and advisors it has used or plans to
use in connection with the transactions contemplated in this Agreement, which
provide that such attorneys, accountants, and other independent experts and
advisors will be compensated only at their normal hourly or per diem rates plus
reasonable out-of-pocket expenses.

3.12 Certain Agreements. COMPANY Schedule 3.12 accurately
identifies all of the following agreements, contracts, or other instruments
written or, to the knowledge of the COMPANY, oral, to which the COMPANY or the
SUBSIDIARIES are a party or by which any of them are bound or affected or, to
the knowledge of the COMPANY, by which any of the stock, properties, or assets
of the COMPANY or the SUBSIDIARIES are bound or affected, or under which any of
their officers, directors, employees, or stockholders have rights: (a) all
material leases of real property under which the COMPANY or the SUBSIDIARIES
are either lessor, sublessor, lessee, or sublessee; (b) all insurance policies
held by the COMPANY or the SUBSIDIARIES relating to their properties or
operations, including but not limited to those covering their leasehold
improvements, properties, equipment, furniture, fixtures, lives of, or
performance of their duties by their directors, officers, and employees (all
such policies of insurance, including blanket bonds and director and officer
liability insurance, are in force and, until the Effective Time, the COMPANY
will cause all such policies to continue in force or to obtain substitute
policies acceptable to FIRST OF AMERICA with comparable coverage in amounts
deemed by FIRST OF AMERICA to be sufficient); (c) to the extent not disclosed
in COMPANY Schedule 3.10, all employment contracts, pension, retirement, stock
option, stock purchase, savings, profit sharing, deferred compensation,
consultant, incentive, bonus, noncompetition, or collective bargaining
agreements, group insurance contracts, or other incentive, benefit, or welfare
plans or arrangements of the COMPANY and the SUBSIDIARIES, including any trust
or comparable agreement or instrument relating thereto, and including for each
plan the latest actuary's report on the condition of the plan and any
determination letters issued by the Internal Revenue Service (except as
otherwise disclosed in said COMPANY Schedule, all such contracts, plans,
practices, or arrangements are terminable at the will of the employer without
liability on not more than 60

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days' notice to any affected employee); and (d) except as entered into with
respect to loan transactions or work outs in the ordinary course of business by
the COMPANY, any material agreement, instrument, or understanding of the
COMPANY or the SUBSIDIARIES, whether or not made in the ordinary and regular
course of business involving an aggregate liability in excess of $50,000.00 per
annum. The COMPANY will deliver to FIRST OF AMERICA true, complete, and
correct copies of all of the written agreements, contracts, or other
instruments, and written descriptions of the material details of any oral
agreements or instruments identified in said COMPANY Schedule. Except as
otherwise specifically disclosed in said COMPANY Schedule 3.12, all such
agreements, contracts, or other instruments are in full force and effect and
neither the COMPANY nor either of the SUBSIDIARIES is in material default under
any such agreement, contract, or other instrument to which they are a party or
by which they may be bound.

3.13 Articles of Incorporation, Articles of Association, Bylaws,
Etc. COMPANY Schedule 3.13 includes complete and correct copies of the
following: (a) the Certificate of Incorporation, and all amendments thereto,
of the COMPANY and WEST SUBURBAN; (b) the Charter, and all amendments thereto,
of LA GRANGE FEDERAL; (c) the Bylaws of the COMPANY and the SUBSIDIARIES, as
amended to date; and (d) a specimen certificate for each type of outstanding
security of the COMPANY and the SUBSIDIARIES.

3.14 Orders, Injunctions, Decrees, Etc. Neither the COMPANY nor
the SUBSIDIARIES are subject to any order, injunction or decree of any
governmental body or court, or are in violation of any order, injunction, or
decree, or any other requirement of any governmental body or court, which would
have a material adverse effect on the condition (financial or otherwise),
business, properties, assets, operations or liabilities of the COMPANY or the
SUBSIDIARIES.

3.15 Stockholders of the COMPANY. COMPANY Schedule 3.15 accurately
identifies the names and addresses of all of the stockholders who, to the
COMPANY'S knowledge, beneficially own more than 5% of COMPANY Common Stock and
the number of shares of stock of the COMPANY held by each such stockholder and
by each director and senior officer of the COMPANY. From the date hereof until
the Effective Time, the COMPANY shall, upon request, provide FIRST OF AMERICA
with a complete list of all of its stockholders, including the names, addresses
and number of shares of COMPANY Common Stock held by each stockholder. Without
the advance written consent of the COMPANY, FIRST OF AMERICA will not disclose
or make use of the information provided by the COMPANY pursuant hereto except
as may be required in connection with regulatory or other filings permitted by
this Agreement, the mailing of the Prospectus/Proxy Statement (as hereinafter
defined) or as is otherwise specifically permitted by this Agreement.

3.16 Regulatory Filings. The COMPANY and the SUBSIDIARIES have
filed and will continue to file in a timely manner all required filings with
(i) the SEC (and will furnish FIRST OF AMERICA with copies of all such filings
made subsequent to the date hereof until the Effective Time), (ii) the OTS and
(iii) the Federal Deposit Insurance Corporation ("FDIC") and, to the best
knowledge of the COMPANY, all such filings were true, complete and accurate in
all material respects as of the dates of the filings, and no such SEC filing
made any untrue statement of a

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material fact or omitted to state a material fact necessary in order to make
the statements made, in the light of the circumstances under which they were
made, not misleading. Except for normal examinations conducted by the Internal
Revenue Service or the OTS or the FDIC in the regular course of the business of
the COMPANY or the SUBSIDIARIES, no federal, state or local governmental
agency, commission or other entity has initiated any proceeding or, to the best
of the knowledge and belief of the COMPANY, investigation into the business or
operations of the COMPANY or the SUBSIDIARIES within the past five years. To
the COMPANY'S knowledge, there is no unresolved violation, criticism or
exception of a material nature by the SEC or the OTS or the FDIC or other
agency, commission or entity with respect to any report or statement referred
to herein. Since the date of any such filings there has been no material
change in the COMPANY'S or LA GRANGE FEDERAL'S condition, financial or
otherwise, such that, had such change occurred prior to any such filing, such
change would have been required to be disclosed or described therein.

3.17 Loans. All loans and loan commitments extended by the
SUBSIDIARIES (the "Loans") have been made in accordance with customary lending
standards in the ordinary course of business. The Loans are evidenced by
appropriate and sufficient documentation and constitute valid and binding
obligations of the borrowers enforceable in accordance with their terms, except
as limited by applicable bankruptcy, insolvency, or other similar laws
affecting the enforcement of creditors' rights and remedies generally from time
to time in effect and by applicable law which may affect the availability of
equitable remedies. All such Loans are, and at the Effective Time will be,
free and clear of any security interest, lien, encumbrance or other charge and
the COMPANY and the SUBSIDIARIES have complied, and at the Effective Time will
have complied, in all material respects with all laws and regulations relating
to such Loans. The Loans are not subject to any material offsets, or to the
knowledge of the COMPANY, claims of material offset, or claims of other
material liability on the part of the COMPANY or the SUBSIDIARIES.

3.18 Conduct. Except as set forth in Company Schedule 3.18, since
June 30, 1993, neither the COMPANY nor any of the SUBSIDIARIES have: (i)
conducted its business or entered into any transaction other than in the
ordinary course, or incurred or become subject to any liabilities or
obligations except liabilities incurred in the ordinary course of business;
(ii) suffered any labor trouble, or any event or condition of any character
materially adversely affecting its or their business or prospects; (iii)
discharged or satisfied any material lien or encumbrance or paid any material
obligation or liability other than those presented in the COMPANY Financial
Statements or incurred after the date thereof in the ordinary course of
business; (iv) mortgaged, pledged, or subjected to lien, charge or other
encumbrance any material part of its assets, or sold or transferred any such
assets, except in the ordinary course of business; (v) made or permitted an
amendment or termination of any material contract to which it is a party except
in the ordinary course of business; (vi) issued, agreed to issue or sold any of
its capital stock or corporate debt obligations (whether authorized and
unissued or held in the treasury); (vii) granted any options, warrants or other
rights for the purchase of its capital stock; (viii) declared, agreed to
declare, set aside or paid any dividend or other distribution in respect of its
or their capital stock (except as permitted by Section 5.02(b)(iii) of this
Agreement) or, directly or indirectly purchased, redeemed, or otherwise
acquired or agreed to purchase or redeem or

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otherwise acquire any shares of such stock; (ix) entered into any employment
contract with any officer or salaried employee, made any accrual or arrangement
for or payment of bonuses or special compensation of any kind or any severance
or termination pay to any of its or their present officers or employees,
increased the rate of compensation payable or to become payable by them to any
of its or their officers or employees, or instituted or made any material
increase in any employee welfare, retirement or similar plan or arrangement, in
each case other than in the ordinary course of business; or (x) entered into
any other material transaction other than in the ordinary course of business.

3.19 Fiduciary Responsibilities. The COMPANY and the SUBSIDIARIES
have performed all of their duties in their capacities as trustees, executors,
administrators, registrars, guardians, custodians, escrow agents, receivers or
any other fiduciary capacity in a manner which complies in all material
respects with all applicable laws, regulations, orders, agreements, wills,
instruments and common law standards.

3.20 Compliance With Environmental and Safety Laws.

(a) The operations of the COMPANY and the SUBSIDIARIES
comply and have complied in all material respects with all applicable
federal, state, and local environmental statutes and regulations; to
the best of the COMPANY'S knowledge, none of the COMPANY'S or the
SUBSIDIARIES' operations are subject to any judicial or administrative
proceedings alleging the violation of any federal, state, or local
environmental, health or safety statute or regulation; to the best of
the COMPANY'S knowledge, none of the COMPANY'S or the SUBSIDIARIES'
operations are the subject of a federal, state or local investigation
evaluating whether any remedial action is needed to respond to a
release of any hazardous or toxic waste, substance or constituent, or
any other substance into the environment; to the knowledge of the
COMPANY, neither the COMPANY nor the SUBSIDIARIES have generated
hazardous waste in the COMPANY'S or the SUBSIDIARIES' operations; to
the COMPANY'S knowledge, neither the COMPANY nor the SUBSIDIARIES have
transported hazardous waste attributable to the COMPANY'S or the
SUBSIDIARIES' operations for treatment, storage or disposal; and to
the knowledge of the COMPANY, neither the COMPANY nor the SUBSIDIARIES
have reported a spill or release of a hazardous or toxic waste,
substance or constituent or any other substance in the environment due
to the COMPANY'S or the SUBSIDIARIES' operations.

(b) All real estate owned, beneficially or otherwise, or
controlled by the COMPANY or the SUBSIDIARIES, whether owned outright,
as REO property (this representation is limited to the COMPANY'S
knowledge as to REO), as a joint venture, or owned or controlled in a
fiduciary capacity, or otherwise (the "Real Estate"), is in compliance
in all material respects with all applicable federal, state, and local
environmental statutes and regulations; to the best of the COMPANY'S
knowledge, the Real Estate is not subject to any judicial or
administrative proceedings alleging the violation of any federal,
state, or local environmental, health or safety statute or

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regulation; to the best of the COMPANY'S knowledge, the Real Estate is
not the subject of a federal, state, or local investigation evaluating
whether any remedial action is needed to respond to a release of any
hazardous or toxic waste, substance or constituent, or any other
substance into the environment; to the knowledge of the COMPANY,
neither the COMPANY nor any of the SUBSIDIARIES have generated any
hazardous material on the Real Estate; and to the knowledge of the
COMPANY, neither the COMPANY nor any of the SUBSIDIARIES have
transported any hazardous material from the Real Estate to any waste
treatment, storage or disposal facility.

(c) The COMPANY'S representations regarding the
"operations" referenced in this Section 3.20 do not extend to
customers of the COMPANY or of the SUBSIDIARIES unless the COMPANY or
the SUBSIDIARIES influenced the customer's use, storage, or disposal
of hazardous or toxic waste. To the knowledge of the COMPANY, neither
the COMPANY nor the SUBSIDIARIES has influenced any customer's use,
storage, or disposal of hazardous or toxic waste.

(d) For the purposes of this Section 3.20, any reference
to "hazardous" or "toxic" waste, substances, or constituents
encompasses any waste, substance, or constituent regulated by, or
subject to, the provisions and regulations of either the Comprehensive
Environmental Response, Compensation, and Liability Act, 42 USC
Section 6901 et seq., the Toxic Substances Control Act, 15 USC
Section 2601 et seq., or the Illinois Environmental Protection Act,
415 ILCS 5/1 (1992 State Bar Ed.).

3.21 Other Information. No representation or warranty by the
COMPANY contained in this Agreement, or disclosure in any COMPANY Schedule,
certificate or other instrument or document furnished or to be furnished by or
on behalf of the COMPANY pursuant to this Agreement and no information
furnished or to be furnished by the COMPANY for use in the Prospectus/Proxy
Statement (as hereinafter defined) or the Registration Statement (as
hereinafter defined) or the regulatory filings described in Section 4.06 hereof
contains or will contain any untrue statement of a material fact or omits or
will omit to state any material fact required to be stated herein or therein
which is necessary to make the statements contained herein or therein, in light
of the circumstances under which they were made, not misleading in any material
respect.

3.22 Insider Interests. All loans, extensions of credit, and other
contractual arrangements (including deposit relationships) between the COMPANY
or the SUBSIDIARIES and any officer or director of the COMPANY or the
SUBSIDIARIES, or any affiliate of any such officer or director conform to
applicable rules and regulations and requirements of all applicable regulatory
agencies. No officer or director of the COMPANY or the SUBSIDIARIES has any
material interest in any property, real or personal, tangible or intangible,
used in or pertaining to the business of the COMPANY or the SUBSIDIARIES.

3.23 No Sensitive Transactions. Within the past five (5) years,
neither the COMPANY nor the SUBSIDIARIES nor, to the COMPANY'S knowledge, any
director, employee, or agent of the

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COMPANY or the SUBSIDIARIES, has directly or indirectly used funds or other
assets of the COMPANY or the SUBSIDIARIES for (a) illegal contributions, gifts,
entertainment, or other expenses related to political activities; (b) payments
to or for the benefit of any governmental official or employee, other than
payments required or permitted by law; (c) illegal payments to or for the
benefit of any person, firm, corporation, or other entity, or any officer,
employee, agent, or representative thereof; or (d) the establishment or
maintenance of a secret or unrecorded fund.

3.24 Delaware Law. The provisions of Section 203 of the Delaware
Law as they relate to the COMPANY do not and will not apply to this Agreement,
the Merger or the transactions contemplated hereby.

3.25 Community Reinvestment Act Compliance. The COMPANY and each
of the SUBSIDIARIES, where applicable, is in substantial compliance with the
applicable provisions of the Community Reinvestment Act of 1977 and the
regulations promulgated thereunder. As of the date of this Agreement, the
COMPANY has not been advised of the existence of any act or circumstance or set
of facts or circumstances which, if true, would cause the COMPANY or any of the
SUBSIDIARIES to fail to be in substantial compliance with such provisions. LA
GRANGE FEDERAL has not received a rating from the OTS which is less than
"satisfactory."

3.26 Approvals. The COMPANY knows of no reason why all regulatory
approvals necessary to permit FIRST OF AMERICA to consummate the transactions
contemplated hereby in the manner provided herein should not be obtained or why
the opinion letter referred to in Section 8.11 hereof cannot be obtained.

3.27 Qualified Thrift Lender. LA GRANGE FEDERAL is a "Qualified
Thrift Lender" as defined under 12 USC 1467a(m) or Section 10(m) of the Home
Owners' Loan Act.

3.28 Advice of Changes. Between the date hereof and the Closing
Date, the COMPANY shall promptly advise FIRST OF AMERICA in writing of any fact
which, if existing or known as of the date hereof, would have been required to
be set forth or disclosed in or pursuant to this Agreement or of any fact
which, if existing or known as of the date hereof, would have made any of the
representations contained herein materially untrue.

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ARTICLE FOUR

COVENANTS OF FIRST OF AMERICA

FIRST OF AMERICA hereby covenants and agrees with the COMPANY as follows:

4.01 Conduct Of Business; Certain Covenants. From and after the
execution and delivery of this Agreement and until the Effective Time, FIRST OF
AMERICA and its banking subsidiaries will:

(a) conduct its and their business and operate only in
the usual ordinary course of business and maintain its and their
properties, books, contracts, business, operations, commitments,
records, loans, investments and any trust operations in accordance
with generally accepted accounting principles;

(b) conduct its and their business and operate only in
accordance with sound banking and business practices;

4.02 SEC Registration. FIRST OF AMERICA shall file with the SEC as
soon as practicable after the execution of this Agreement, a registration
statement on an appropriate form under the Securities Act covering the FIRST OF
AMERICA Common Stock to be issued pursuant to the Plan of Merger and shall use
its best efforts to cause the same to become effective and thereafter, until
the Effective Time or termination of this Agreement, to keep the same effective
and, if necessary, amend and supplement the same. Such registration statement
and any amendments and supplements thereto are referred to herein as the
"Registration Statement." The Registration Statement shall include a
prospectus/proxy statement thereto ("the Prospectus/Proxy Statement"), prepared
for use in connection with the meeting of stockholders of the COMPANY referred
to in Section 5.01 of this Agreement, all in accordance with the rules and
regulations of the SEC. FIRST OF AMERICA shall, as soon as practicable after
the execution of this Agreement, make all filings required to obtain all
material Blue Sky permits, authorizations, consents or approvals required for
the issuance of the FIRST OF AMERICA Common Stock.

4.03 Authorization, Reservation, and Stock Exchange Listing of
Common Stock. By appropriate Resolution, a certified copy of which shall be
provided to the COMPANY, the Board of Directors of FIRST OF AMERICA shall,
prior to the Effective Time, authorize and reserve the required number of
shares of FIRST OF AMERICA Common Stock to be issued pursuant to the Plan of
Merger. FIRST OF AMERICA shall also use all reasonable efforts to cause the
shares of FIRST OF AMERICA Common Stock to be issued pursuant to the Plan of
Merger to be approved for listing on the New York Stock Exchange ("NYSE"),
subject in each case to official notice of issuance, prior to the Effective
Time.

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4.04 Confidentiality. FIRST OF AMERICA will cause all internal,
nonpublic financial and business information obtained by it from the COMPANY to
be treated confidentially (exercising the same degree of care as it uses to
preserve and safeguard its own confidential information); provided, however,
that notwithstanding the foregoing, nothing contained herein shall prevent or
restrict FIRST OF AMERICA from making such disclosure thereof as may be
required by law in connection with purchases or sales of securities or as may
be required in the performance of this Agreement. If the Merger shall not take
place, all nonpublic financial statements, documents and materials and all
copies thereof shall be returned to the COMPANY, or destroyed by FIRST OF
AMERICA, and shall not be used by FIRST OF AMERICA in any way detrimental to
the COMPANY or any of its affiliates.

4.05 Indemnification. FIRST OF AMERICA agrees that it will honor
with respect to the COMPANY, and that FOA-BANK will honor with respect to LA
GRANGE FEDERAL, all rights to indemnification, including rights to payments of
advances for indemnification obligations, existing in favor of the employees,
agents, directors, and officers of the COMPANY or LA GRANGE FEDERAL as provided
in their Certificate of Incorporation, Charter, Bylaws, or otherwise in effect
on the date of this Agreement, and that all such rights shall survive the
Effective Time and shall continue in full force and effect with respect to
matters occurring prior to the Effective Time. As of the Effective Time and
for a period of three (3) years thereafter, FIRST OF AMERICA will maintain in
effect director and officer liability insurance policies, with respect to acts
or omissions occurring prior to the Effective Time, for those individuals who
were directors or officers of the COMPANY and the SUBSIDIARIES at any time
between January 1, 1989, and the Effective Time which will provide coverage for
such individuals not less favorable than the insurance maintained by the
COMPANY on the date of this Agreement, provided that such coverage is available
and obtainable at a cost reasonable in comparison to the cost paid for similar
prior acts coverage for similar companies.

4.06 Required Approvals. As soon as practicable after the
execution of this Agreement, FIRST OF AMERICA will submit: (a) an application
with the Federal Reserve, or the appropriate Federal Reserve Bank under
delegated authority, for the acquisition by FIRST OF AMERICA of the COMPANY and
the SUBSIDIARIES; (b) an application with the OTS to permit the acquisition by
FIRST OF AMERICA of the COMPANY and the SUBSIDIARIES; (c) an application with
the Michigan Financial Institutions Bureau ("FIB") to permit the acquisition by
FIRST OF AMERICA of the COMPANY and the SUBSIDIARIES; and (d) an application
with the Office of the Comptroller of the Currency (the "OCC"), the OTS and the
Federal Reserve to permit the Bank Merger.

4.07 Employment Agreements and Directors.

(a) FIRST OF AMERICA agrees to honor the COMPANY'S and LA
GRANGE FEDERAL'S existing employment agreements with J. Edward Weishel
and LA GRANGE FEDERAL'S existing Change In Control Agreements with
Edward J. Bilka, Winfield H. Lewis, Howard M. Lipsey and Kenneth J.
Okelman, each of which is dated June 1, 1993. (The agreements
referred to in this Section 4.07(a) are collectively referred to
herein as the "Employment Agreements.")

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(b) Following the Bank Merger, the Board of Directors of
FOA-BANK shall consist of those persons who are currently serving in
such capacity of FOA-BANK and those persons who are currently serving
in such capacity of LA GRANGE FEDERAL. After the Effective Time, such
directors shall serve until their successors are elected and duly
qualified or until they are no longer qualified to serve; provided,
however, that notwithstanding the director age qualification
requirement contained in the Bylaws of FOA-BANK, directors of LA
GRANGE FEDERAL who would otherwise be ineligible to serve as of the
date of the Bank Merger, or who would otherwise become ineligible to
serve during the two-year period after the date of the Bank Merger, on
the Board of Directors of the BANK because of such age qualification
requirement will be eligible to serve until the annual meeting of
FOA-BANK'S shareholders which follows the expiration of two (2) years
from the date of the Bank Merger. Persons who were members of the
Board of Directors of LA GRANGE FEDERAL, but who were not otherwise
employed by the COMPANY or LA GRANGE FEDERAL, immediately prior to the
Bank Merger shall be deemed to be retired from such positions as of
the date of the Bank Merger and FIRST OF AMERICA will honor the terms
of the directors' retirement plan and pay each such person ten (10)
annual installments of Four Thousand Five Hundred Dollars ($4,500.00)
commencing on the date of the Bank Merger with the nine (9) remaining
installments to be paid on the next succeeding nine anniversary dates
of the Bank Merger. In the event that any such director shall fail to
survive for the full period of such payments, such payments shall be
made to the designated beneficiary or the estate of such deceased
director. Such payments shall be in lieu of any other benefits such
directors shall be entitled to receive as retiring directors of the
COMPANY and LA GRANGE FEDERAL; provided, however, during the period of
their service on the Board of Directors of FOA-BANK such directors
shall nevertheless be entitled to receive director fees in accordance
with the practices and policies of FOA-BANK as in effect from time to
time.

4.08 Severance Policy for Terminated Employees. Each employee of
the COMPANY or LA GRANGE FEDERAL who is terminated from employment, other than
for cause, following the Effective Time (other than those employees who are the
subject of the Employment Agreements) will be provided salary continuation
payments for such period (the "Salary Continuation Period") as provided in
FIRST OF AMERICA'S severance policy as then in effect for terminated employees
of FIRST OF AMERICA generally. Such policy currently provides for the payment
of two (2) weeks salary for each year of full-time service. For purposes of
determining entitlement to benefits under such policy, each such terminated
employee will be credited for periods of full-time service with the COMPANY or
LA GRANGE FEDERAL prior to the Effective Time. During the Salary Continuation
Period, such employees will be permitted to continue to participate in the
FIRST OF AMERICA Employees' Health Care Plan upon payment of the appropriate
employee contribution rate applicable to other full-time employees of FIRST OF
AMERICA.

4.09 Retirement Plans. For purposes of crediting periods of
service for eligibility and vesting under the First of America Bank Corporation
Employees' Retirement Plan and the First of America Bank Corporation Reserve
Plus Savings Plan, and for purposes of crediting periods of service for
eligibility for other employee benefits provided to employees of FIRST OF
AMERICA and its affiliates, employees of the COMPANY and the SUBSIDIARIES who
otherwise would be

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eligible to participate in such plans and benefit programs after the Effective
Time shall be given credit for service with the COMPANY and the SUBSIDIARIES
prior to the Effective Time.

4.10 Information, Access Thereto. The COMPANY, its representatives
and agents shall, at all times during normal business hours prior to the
Closing Date, have full and continuing access to the facilities, operations,
records and properties of FIRST OF AMERICA and its subsidiaries. The COMPANY,
its representatives and agents may, prior to the Effective Time, make or cause
to be made such investigation of the operations, records and properties of
FIRST OF AMERICA and its subsidiaries, and of its and their financial and legal
condition as the COMPANY shall deem necessary or advisable to familiarize
itself with such records, properties and other matters. Upon request, FIRST OF
AMERICA and its subsidiaries will furnish the COMPANY or its representatives or
agents, its and their attorneys' responses to auditors requests for information
and such financial and operating data and other information requested by the
COMPANY developed by FIRST OF AMERICA or its subsidiaries, its and their
auditors, accountants or attorneys, and will permit the COMPANY, its
representatives or agents to discuss such information directly with any
individual or firm performing auditing or accounting functions for FIRST OF
AMERICA or its subsidiaries, and such auditors and accountants shall be
directed to furnish copies of any reports or financial information as developed
to the COMPANY or its representatives or agents. No investigation by the
COMPANY shall affect the representations and warranties made by FIRST OF
AMERICA herein. No investigation or access provided hereunder shall interfere
with the normal operations of FIRST OF AMERICA and its subsidiaries.

4.11 Negative Covenant. From and after the execution of this
Agreement and until the Effective Time, FIRST OF AMERICA will not, without the
prior written consent of the COMPANY, take any action which constitutes a
breach or default of its obligations under this Agreement or which is
reasonably likely to delay or jeopardize the receipt of any of the regulatory
approvals required hereby or is reasonably likely, to the best of FIRST OF
AMERICA'S knowledge, to preclude the Merger from qualifying for "pooling of
interests" accounting treatment (provided, however, FIRST OF AMERICA shall not
be precluded from taking such action in the event it shall have first waived
the condition contained in Section 8.11 hereof) or cause any of the other
conditions set forth in Articles Six, Seven or Eight hereof to fail.

ARTICLE FIVE

COVENANTS OF THE COMPANY

The COMPANY hereby covenants and agrees with FIRST OF AMERICA as
follows:

5.01 Stockholders' Meeting. The COMPANY shall cause a meeting of
its stockholders to be held at the earliest practicable date after the
execution of this Agreement and availability of the Prospectus/Proxy Statement
for the purpose of acting upon this Agreement and the Plan of Merger, and in
connection therewith shall distribute the Prospectus/Proxy Statement and any

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amendments or supplements thereto and shall solicit proxies from its
stockholders in accordance with the rules and regulations of the SEC.

5.02 Conduct Of Business; Certain Covenants.

(a) From and after the execution and delivery of this
Agreement and until the Effective Time, the COMPANY and the
SUBSIDIARIES will:

(i) conduct its and their business and operate
only in the usual ordinary course of business and maintain its
and their properties, books, contracts, business, operations,
commitments, records, loans, investments and any trust
operations in accordance with generally accepted accounting
principles;

(ii) conduct its and their business and operate
only in accordance with sound banking and business practices,
including charging off all loans required to be charged off by
bank regulators and regulations, statutes and sound banking
practices;

(iii) maintain a provision for loan losses at an
adequate level based on past loan loss experience and
evaluation of potential losses in current portfolios;

(iv) remain in good standing with all applicable
banking regulatory authorities and preserve each of its and
their existing banking locations;

(v) use its and their best efforts to retain the
services of such of its and their present officers and
employees that its and their goodwill and business
relationships with customers and others are not materially and
adversely affected;

(vi) maintain insurance covering the performance of
its and their duties by its and their directors, officers and
employees; and

(vii) consult with FIRST OF AMERICA prior to
acquiring any interest in real property.

(b) From and after the execution and delivery of this
Agreement and until the Effective Time, the COMPANY and the
SUBSIDIARIES will not, without the prior written consent of FIRST OF
AMERICA:

(i) amend its or their Certificate of
Incorporation, Charter, or Bylaws;

(ii) except in connection with the exercise of
Option Rights or as contemplated by Section 5.09 hereof, issue
or sell any shares of its or their capital stock, issue or
grant any stock options, warrants, rights, calls or
commitments of any character calling for or permitting the
issue or sale of its or

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their capital stock (or securities convertible into or
exchangeable, with or without additional consideration, for
shares of such capital stock);

(iii) pay or declare any cash dividend or other
dividend or distribution with respect to the COMPANY'S or the
SUBSIDIARIES' capital stock, except that the SUBSIDIARIES
shall be permitted to make dividend payments to the COMPANY in
accordance with past practices and as permitted by law;

(iv) increase or reduce the number of shares of
its or their capital stock by split-up, reverse split,
reclassification, distribution of stock dividends, or change
of par or stated value;

(v) except in connection with the exercise of Option
Rights or as contemplated by Section 5.09 hereof, purchase,
permit the conversion of or otherwise acquire or transfer for
any consideration any outstanding shares of its or their
capital stock or securities carrying the right to acquire, or
convert into or exchange for such stock, with or without
additional consideration;

(vi) except with respect to amending the director
retirement plan of the COMPANY to permit payments to be made
to the designated beneficiary or the estate of a deceased
director, and except in connection with annual renewal of the
Employment Agreements on substantially the same terms as
currently in effect, and except in connection with the
adoption of bonus plans for 1994 which are substantially on
the same terms as bonus plans currently in effect (but which
will provide for payment of prorated bonuses for the period
between January 1, 1994, and the Effective Time), any bonus,
pension, profit sharing, retirement or other compensation plan
or enter into any contract of employment with any officer
which is not terminable at will without cost or other
liability (other than benefits accrued as of the date of such
termination), except as herein provided and except as may be
required by applicable law or regulation, including revenue
laws or regulations;

(vii) incur any obligations or liabilities except in
the ordinary course of business;

(viii) mortgage, pledge (except pledges required for
existing Federal Home Loan Bank advances or pledges of such
assets as may be required to permit LA GRANGE FEDERAL to
accept deposits of public funds) or subject to any material
lien (excluding mechanics liens), charge, security interest,
or any other encumbrance, any of its or their assets or
property, except for liens for taxes not yet due and payable;

(ix) transfer or lease any of its or their assets or
property except in the ordinary course of business, or close
any banking office;

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(x) transfer or grant any rights, under any leases,
licenses or agreements, other than in the ordinary course of
business;

(xi) make or grant any general or individual wage or
salary increase except for general salary and wage adjustments
now in progress, or as part of the conduct of a normal salary
administration program consistent with past practices;

(xii) other than with respect to loan transactions
(including, without limitation, letters of credit and purchase
of leases), and other than with respect to sales of REO
property less than $250,000, and other than with respect to
payments made with respect to the ESOP Loan (as hereinafter
defined) in 1993 and 1994 in an amount which does not exceed
$160,000 in 1993 or $120,000 in 1994, make or enter into any
material transaction, contract or agreement or incur any other
material commitment which is defined for purposes of this
provision as any transaction, contract, agreement or
commitment in excess of $50,000.00;

(xiii) incur any indebtedness for borrowed money,
except for deposit liabilities and except for indebtedness
incurred in the ordinary course of business the repayment term
of which does not exceed one year;

(xiv) cancel or compromise any debt or claim, which
has not previously been charged off, other than in the
ordinary course of business in an aggregate amount which is
not materially adverse;

(xv) enter into any transaction other than in the
ordinary course of business;

(xvi) invite or initiate or engage in discussions or
negotiations for the acquisition or merger of the COMPANY or
the SUBSIDIARIES by or with any corporation or other entity
other than FIRST OF AMERICA or its affiliates; and

(xvii) take any action which constitutes a breach or
default of its obligations under this Agreement or which is
reasonably likely to delay or jeopardize the receipt of any of
the regulatory approvals required hereby or is reasonably
likely to the best of the COMPANY'S knowledge to preclude the
Merger from qualifying for "pooling of interests" accounting
treatment or cause any of the other conditions set forth in
Articles Six, Seven, or Eight hereof to fail.

5.03 Affiliate Agreements. At or prior to the Closing Date, the
COMPANY shall furnish to FIRST OF AMERICA an agreement in the form set forth in
Exhibit B, executed by each person, other than FIRST OF AMERICA and any of its
affiliates, who is an affiliate of the COMPANY, as such term is defined in Rule
144 under the Securities Act.

5.04 Information, Access Thereto. FIRST OF AMERICA, its
representatives and agents shall, at all times during normal business hours
prior to the Closing Date, have full and

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continuing access to the facilities, operations, records and properties of the
COMPANY and the SUBSIDIARIES. FIRST OF AMERICA, its representatives and agents
may, prior to the Effective Time, make or cause to be made such investigation
of the operations, records and properties of the COMPANY and the SUBSIDIARIES,
and of its and their financial and legal condition as FIRST OF AMERICA shall
deem necessary or advisable to familiarize itself with such records, properties
and other matters. Upon request, the COMPANY and the SUBSIDIARIES will furnish
FIRST OF AMERICA or its representatives or agents, its and their attorneys'
responses to auditors requests for information and such financial and operating
data and other information requested by FIRST OF AMERICA developed by the
COMPANY or the SUBSIDIARIES, its and their auditors, accountants or attorneys,
and will permit FIRST OF AMERICA, its representatives or agents to discuss such
information directly with any individual or firm performing auditing or
accounting functions for the COMPANY or the SUBSIDIARIES, and such auditors and
accountants shall be directed to furnish copies of any reports or financial
information as developed to FIRST OF AMERICA or its representatives or agents.
FIRST OF AMERICA and FIRST OF AMERICA'S agents, contractors and environmental
consultants shall also have the right of access to the Real Estate before the
Closing Date for the purpose of undertaking such environmental investigation
and testing as FIRST OF AMERICA deems necessary or appropriate. FIRST OF
AMERICA and FIRST OF AMERICA'S agents, contractors and environmental
consultants shall also have the right of access to the COMPANY'S and the
SUBSIDIARIES records or employees for the purpose of carrying out necessary
investigation and testing. No investigation by FIRST OF AMERICA shall affect
the representations and warranties made by the COMPANY herein. No
investigation or access provided hereunder shall interfere with the normal
operations of the COMPANY and the SUBSIDIARIES.

5.05 Confidentiality. The COMPANY will cause all materials and
other internal, nonpublic financial and business information obtained by it
from FIRST OF AMERICA or any of its affiliates to be treated confidentially
(exercising the same degree of care as it uses to preserve and safeguard its
own confidential information); provided, however, that notwithstanding the
foregoing, nothing contained herein shall prevent or restrict the COMPANY from
making such disclosure thereof as may be required by law in connection with
purchases or sales of securities or as may be required in the performance of
this Agreement. If the Merger shall not be consummated, all nonpublic
financial statements, documents and material and all copies thereof shall be
returned to FIRST OF AMERICA, or destroyed by the COMPANY, and shall not be
used by the COMPANY in any way detrimental to FIRST OF AMERICA or any of its
affiliates.

5.06 Recommendation of Merger to Stockholders. The Board of
Directors of the COMPANY will unanimously recommend in the Prospectus/Proxy
Statement approval of the Merger by all stockholders of the COMPANY entitled to
vote thereon.

5.07 Litigation Matters. The COMPANY will consult with FIRST OF
AMERICA about any proposed settlement or lack thereof, or any disposition of,
any material litigation matter in which it or either of the SUBSIDIARIES is or
becomes involved.

5.08 Bank Merger. The COMPANY will cause LA GRANGE FEDERAL to take
all such corporate action as is reasonably required to complete the Bank
Merger, including approval by

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the Board of Directors of LA GRANGE FEDERAL and execution by appropriate
officers of LA GRANGE FEDERAL of the Bank Merger Agreement.

5.09 Warrant Agreement. Simultaneously with the execution of this
Agreement, the COMPANY and FIRST OF AMERICA executed a Warrant Agreement (the
"Warrant Agreement"), the form of which is attached hereto as Exhibit C, and
the COMPANY issued a Warrant (the "Warrant") to FIRST OF AMERICA which entitled
FIRST OF AMERICA to purchase an aggregate of 439,574 shares of COMPANY Common
Stock at an exercise price of Twenty-Eight Dollars ($28.00) per share on the
terms and conditions set forth therein. The COMPANY will promptly notify FIRST
OF AMERICA of the occurrence of any event giving FIRST OF AMERICA the right to
sell, assign, transfer or exercise the Warrant, as provided in the Warrant
Agreement.

ARTICLE SIX

CONDITIONS TO OBLIGATIONS OF EACH OF THE PARTIES

The obligation of each of the parties hereto to consummate the
transactions contemplated by this Agreement are subject to the satisfaction of
the following conditions at or prior to the Effective Time:

6.01 Approval by Affirmative Vote of Stockholders. This Agreement
and the Plan of Merger shall have been duly approved, confirmed and ratified by
the requisite vote of the stockholders of the COMPANY.

6.02 Approval by Federal Reserve. Prior approval shall have been
received from the Federal Reserve for the acquisition by FIRST OF AMERICA of
the COMPANY and the SUBSIDIARIES as set forth herein without any conditions
which in the reasonable opinion of FIRST OF AMERICA are materially adverse and
such approval shall not have been withdrawn or stayed.

6.03 Approval by OTS. Prior approval shall have been received from
the OTS of the acquisition by FIRST OF AMERICA of the COMPANY and of the
SUBSIDIARIES without any conditions which in the reasonable opinion of FIRST OF
AMERICA or the COMPANY are materially adverse and such approval shall not have
been withdrawn or stayed.

6.04 Approval by FIB. Prior approval shall have been received from
the FIB of the acquisition by FIRST OF AMERICA of the COMPANY and the
SUBSIDIARIES as set forth herein without any conditions which in the reasonable
opinion of FIRST OF AMERICA are materially adverse and such approval shall not
have been withdrawn or stayed.

6.05 Approval of Bank Merger. Prior approval shall have been
received from the OCC, the OTS and the Federal Reserve for the Bank Merger in
the manner set forth herein and in the Bank Merger Agreement without any
conditions which in the reasonable opinion of FIRST

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OF AMERICA or the COMPANY are materially adverse and such approval shall not
have been withdrawn or stayed.

6.06 Tax Opinion. An opinion shall have been delivered by Howard &
Howard Attorneys, P.C. in form and substance reasonably satisfactory to FIRST
OF AMERICA and the COMPANY and to its counsel, that the Merger will qualify as
a tax-free reorganization under the Code and, except with regard to cash
received in exchange for fractional or dissenting shares, that no gain or loss
will be recognized by the holders of COMPANY Common Stock upon receipt of
shares of FIRST OF AMERICA Common Stock in exchange for their shares of COMPANY
Common Stock.

6.07 Registration Statement. The Registration Statement filed by
FIRST OF AMERICA with the SEC with respect to the FIRST OF AMERICA Common Stock
to be issued pursuant to this Agreement and the Plan of Merger shall have
become effective and no stop order proceedings with respect thereto shall be
pending or threatened.

6.08 Blue Sky. FIRST OF AMERICA shall have obtained any and all
material Blue Sky permits, authorizations, consents or approvals required for
the issuance of the FIRST OF AMERICA Common Stock.

6.09 Other Approvals. All actions, consents or approvals,
governmental or otherwise, which are, or in the opinion of counsel for FIRST OF
AMERICA may be, necessary to permit or enable the FOA-ACQUISITION, upon and
after the Merger, and as are or may be necessary to permit FOA-BANK, upon and
after the Bank Merger, to conduct all or any part of the business of the
COMPANY and the SUBSIDIARIES, respectively, in the manner in which such
activities and businesses are conducted up to the Effective Time (except those
activities and business of the COMPANY or the SUBSIDIARIES which FIRST OF
AMERICA or FOA-BANK would be unable to conduct as a bank holding company or
national bank, respectively), shall have been obtained without any conditions
which in the reasonable opinion of FIRST OF AMERICA are materially adverse, and
shall not have been withdrawn or stayed.

6.10 Orders, Decrees and Judgments. Consummation of the
transactions contemplated by this Agreement shall not violate any order, decree
or judgment of any court or governmental body having competent jurisdiction.

6.11 Pooling Letter. The COMPANY and FIRST OF AMERICA shall have
received, within forty-five (45) days after the execution of this Agreement, a
letter from KPMG Peat Marwick which is reasonably satisfactory to the COMPANY
and FIRST OF AMERICA to the effect that KPMG Peat Marwick has reviewed the
terms of this Agreement and the transactions contemplated hereby and that
nothing has come to its attention which would render it incapable or otherwise
affect its ability or willingness to issue the opinion referred to in Section
8.11 hereof; provided, however, in the event FIRST OF AMERICA shall have waived
prior to the expiration of such period the condition contained in Section 8.11
hereof, this Section 6.11 shall be without any effect.

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6.12 Fairness Opinion. An opinion shall have been received by the
COMPANY from Capital Resources Group, Inc., prior to distribution of the
Prospectus/Proxy Statement to the stockholders of the COMPANY as required by
Section 5.01 of this Agreement, to the effect that the consideration to be
received by the COMPANY'S stockholders pursuant to this Agreement is fair to
the stockholders of the COMPANY from a financial point of view and such opinion
shall not have been withdrawn or materially modified prior to the vote of the
stockholders.

6.13 Consents and Approvals. Any consents or approvals required to
be secured by either party by the terms of this Agreement or the Plan of Merger
or otherwise reasonably necessary in the opinion of FIRST OF AMERICA or the
COMPANY to consummate the transactions contemplated by this Agreement or the
Plan of Merger or the Bank Merger Agreement shall have been obtained and shall
be satisfactory to FIRST OF AMERICA.

ARTICLE SEVEN

FURTHER CONDITIONS TO THE OBLIGATIONS OF THE COMPANY

The obligation of the COMPANY to consummate the transactions
contemplated by this Agreement is further subject to the satisfaction of the
following conditions:

7.01 Compliance by FIRST OF AMERICA. (a) All the terms, covenants
and conditions of this Agreement required to be complied with and satisfied by
FIRST OF AMERICA at or prior to the Effective Time shall have been duly
complied with and satisfied in all material respects, and (b) the
representations and warranties made by FIRST OF AMERICA shall be true and
correct in all material respects at and as of the Effective Time, except for
those specifically relating to a time or times other than the Effective Time
(which shall be true and correct in all material respects at such time or
times) and except for changes permitted by this Agreement and the Plan of
Merger, with the same force and effect as if made at and as of the Effective
Time.

7.02 Accuracy of Financial Statements. The Financial Statements
and the Subsequent Financial Statements heretofore or hereafter furnished by
FIRST OF AMERICA to the COMPANY shall not be inaccurate in any material
respect.

7.03 Sufficiency of Documents. All documents and proceedings of
FIRST OF AMERICA in connection with the Registration Statement, the
Prospectus/Proxy Statement, regulatory filings and the Closing contemplated by
this Agreement and the Plan of Merger shall be reasonably satisfactory to
counsel to the COMPANY.

7.04 Opinion of Counsel. There shall have been delivered and
addressed to the COMPANY an opinion of Howard & Howard Attorneys, P.C., General
Counsel to FIRST OF AMERICA, in form and substance reasonably satisfactory to
counsel to the COMPANY, dated the Closing Date, to the effect that:

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(a) FIRST OF AMERICA is a corporation duly organized,
validly existing and in good standing under the laws of the State of
Michigan, and FOA-ACQUISITION is a corporation duly organized, validly
existing and in good standing under the laws of the State of Delaware;

(b) FIRST OF AMERICA and FOA-ACQUISITION have the
corporate power and authority to carry on its business as now
conducted, to own, lease and operate its properties and to consummate
the transactions contemplated by this Agreement and the Plan of
Merger;

(c) this Agreement and the Plan of Merger have been duly
authorized, executed and delivered by FIRST OF AMERICA and
FOA-ACQUISITION and constitute the valid and binding obligation of
FIRST OF AMERICA and FOA-ACQUISITION;

(d) as of the close of business on June 30, 1993, the
capitalization of FIRST OF AMERICA was as set forth in Section 2.03
hereof;

(e) all corporate acts and other proceedings required to
be taken by or on the part of FIRST OF AMERICA to consummate the
transactions contemplated by this Agreement and the Plan of Merger
have been properly taken; neither the execution and delivery of this
Agreement or the Plan of Merger, nor the consummation of the
transactions contemplated hereby and thereby, with or without the
giving of notice or the lapse of time, or both, will (x) violate any
provision of the Articles of Incorporation or Bylaws of FIRST OF
AMERICA, or (y) to the knowledge of such counsel, violate, conflict
with, result in the breach or termination of, constitute a default
under, accelerate the performance required by, or result in the
creation of any material lien, charge or encumbrance upon any of the
properties or assets of FIRST OF AMERICA pursuant to any indenture,
mortgage, deed of trust, or other agreement or instrument to which it
is a party or by which it or any of its properties or assets may be
bound, or violate any statute, rule or regulation applicable to FIRST
OF AMERICA, which would have a material adverse effect on FIRST OF
AMERICA'S consolidated financial condition, assets, liabilities or
business; to the knowledge of such counsel, no consent, approval,
authorization, order, registration or qualification of or with any
court, regulatory authority or other governmental body, other than as
specifically contemplated by this Agreement, is required for the
consummation by FIRST OF AMERICA of the transactions contemplated by
this Agreement or the Plan of Merger;

(f) the FIRST OF AMERICA Common Stock to be issued in
exchange for the COMPANY Common Stock has been duly authorized and,
when such FIRST OF AMERICA Common Stock is issued and delivered as
contemplated by this Agreement and the Plan of Merger, all such FIRST
OF AMERICA Common Stock will have been validly issued, fully paid and
nonassessable;

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(g) the Registration Statement has been declared
effective by the SEC or has become effective and, to the knowledge of
such counsel, no stop order proceedings are pending or threatened with
respect thereto by the SEC or state securities authorities;

(h) except as disclosed in such opinion, to the knowledge
of such counsel there are no actions, suits, proceedings or
investigations of any nature pending or threatened that challenge the
validity or propriety of the transactions contemplated by this
Agreement or the Plan of Merger or which seek or threaten to restrain,
enjoin or prohibit or to obtain substantial damages in connection with
the consummation of such transactions; and

(i) the Prospectus/Proxy Statement as of the date thereof
and as amended or supplemented prior to the date of the meeting of the
COMPANY'S stockholders referred to in Section 5.01 (except as to
financial statements and other financial data contained therein, upon
which such counsel need express no opinion) complies as to form in all
material respects with the requirements of the Securities Act and the
rules and regulations thereunder; such counsel has participated in the
preparation of the Prospectus/Proxy Statement, and although such
counsel has not independently verified the information contained
therein, nothing has come to the attention of such counsel to lead
such counsel to believe that the Prospectus/Proxy Statement, as of the
date thereof and as amended and supplemented prior to the date of the
meeting of the COMPANY'S stockholders referred to in Section 5.01,
contains any untrue statement of a material fact or omits to state a
material fact necessary in order to make the statements made therein,
in light of the circumstances under which they were made, not
misleading (except that such counsel need express no opinion with
respect to financial statements and other financial data contained
therein or with respect to matters relating to the COMPANY or its
business, properties, management, or securities), and such counsel
does not know of any contracts or other documents relating to FIRST OF
AMERICA of a character required to be filed with the Prospectus/Proxy
Statement as of such dates, or of any documents, other contracts,
statutes or legal or governmental proceedings relating to FIRST OF
AMERICA required to be described therein which are not filed or
described as required.

7.05 Officers' Certificate. FIRST OF AMERICA shall deliver to the
COMPANY a certificate signed by its Chairman and Chief Executive Officer or
Vice Chairman or President and Chief Operating Officer or Executive Vice
President and by its Secretary or Assistant Secretary, dated the Closing Date,
certifying to his respective best knowledge and belief, that FIRST OF AMERICA
has met and fully complied with all conditions necessary to make this Agreement
and the Plan of Merger effective as to it. FIRST OF AMERICA shall have
delivered all such other certificates and documents with respect to FIRST OF
AMERICA as may reasonably have been requested by the COMPANY.

7.06 Absence of Certain Changes or Events. From the date hereof to
the Effective Time, there shall be and have been no material adverse change in
the consolidated capitalization, business, properties or financial condition of
FIRST OF AMERICA.

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7.07 Consents and Approvals. Any consents or approvals required to
be secured by either party by the terms of this Agreement or the Plan of Merger
or otherwise reasonably necessary in the opinion of the COMPANY to consummate
the transactions contemplated by this Agreement or the Plan of Merger shall
have been obtained and shall be satisfactory to the COMPANY.

7.08 Litigation. FIRST OF AMERICA shall not be made a party to, or
to the knowledge of FIRST OF AMERICA threatened by, any actions, suits,
proceedings, litigation or legal proceedings which, in the reasonable opinion
of the COMPANY, have or are likely to have a material adverse effect on the
consolidated assets, properties, business, operations or condition, financial
or otherwise, of FIRST OF AMERICA. No action, suit, proceeding or claim shall
have been instituted, made or threatened by any person relating to the Merger
or the validity or propriety of the transactions contemplated by this Agreement
or the Plan of Merger.

ARTICLE EIGHT

FURTHER CONDITIONS TO THE OBLIGATIONS OF FIRST OF AMERICA

The obligation of FIRST OF AMERICA to consummate the transactions
contemplated by this Agreement is further subject to satisfaction of the
following conditions:

8.01 Compliance by the COMPANY. (a) All the terms, covenants and
conditions of this Agreement required to be complied with and satisfied by the
COMPANY at or prior to the Effective Time shall have been duly complied with
and satisfied in all material respects, and (b) the representations and
warranties made by the COMPANY shall be true and correct in all material
respects at and as of the Effective Time, except for those specifically
relating to a time or times other than the Effective Time (which shall be true
and correct in all material respects at such time or times) and except for
changes permitted by this Agreement and the Plan of Merger, with the same force
and effect as if made at and as of the Effective Time.

8.02 Accuracy of Financial Statements. The COMPANY Financial
Statements, COMPANY Schedules and Subsequent COMPANY Financial Statements
heretofore or hereafter furnished to FIRST OF AMERICA shall not be inaccurate
in any material respect.

8.03 Net Worth. As of the close of business on the day immediately
preceding the Effective Time and without consideration of the recognition or
payment of the fees, expenses or other charges incurred in connection with this
transaction, the COMPANY'S net worth as shown by the sum of its total
stockholders' equity plus the provision for loan losses shall not be less than
such amount as set forth in the COMPANY Consolidated Statement of Condition at
June 30, 1993. The COMPANY shall deliver to FIRST OF AMERICA a certificate
signed by its chief financial officer, dated the Closing Date, certifying to
such effect.

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8.04 Sufficiency of Documents, Proceedings. All documents
delivered by and proceedings of the COMPANY in connection with the transactions
contemplated by this Agreement and the Plan of Merger shall be reasonably
satisfactory to Howard & Howard, Attorneys, P.C.

8.05 Opinion of Counsel. There shall have been delivered to FIRST
OF AMERICA an opinion of Muldoon, Murphy & Faucette, special counsel to the
COMPANY, in form and substance reasonably satisfactory to Howard & Howard
Attorneys, P.C., dated the Closing Date, to the effect that:

(a) the COMPANY is a corporation duly incorporated,
validly existing and in good standing under the laws of the State of
Delaware and LA GRANGE FEDERAL is a federally chartered stock savings
association validly existing and in good standing under the laws of
the United States;

(b) the COMPANY has the corporate power and authority to
carry on its business as described in the Prospectus/Proxy Statement,
to own, lease and operate its properties and to consummate the
transactions contemplated by this Agreement and the Plan of Merger and
the SUBSIDIARIES have the corporate power and authority to carry on
their business as described in the Prospectus/Proxy Statement and to
own, lease and operate its properties and LA GRANGE FEDERAL has the
authority to consummate the transactions contemplated by the Bank
Merger Agreement;

(c) this Agreement and the Plan of Merger have been duly
authorized and approved by the COMPANY and this Agreement and the Plan
of Merger have been approved by the COMPANY'S stockholders and duly
authorized, executed and delivered by the COMPANY and this Agreement
and the Plan of Merger constitute the valid and binding obligation of
the COMPANY;

(d) the authorized capitalization of the COMPANY is as
set forth in Section 3.03 hereof;

(e) all corporate acts and other proceedings required to
be taken by or on the part of the COMPANY, including the adoption of
this Agreement and the Plan of Merger by the stockholders of the
COMPANY, to consummate the transactions contemplated by this Agreement
and the Plan of Merger have been properly taken; neither the execution
and delivery of this Agreement and the Plan of Merger nor the
consummation of the transactions contemplated hereby and thereby, with
or without the giving of notice or the lapse of time, or both, will
(i) violate any provision of the Certificate or Charter or Bylaws of
the COMPANY or the SUBSIDIARIES; or (ii) to the knowledge of such
counsel, violate, conflict with, result in the material breach or
termination of, constitute a material default under, accelerate the
performance required by, or result in the creation of any material
lien, charge or encumbrance upon any of the properties or assets of
the COMPANY or the SUBSIDIARIES pursuant to any indenture, mortgage,
deed of trust, or other agreement or instrument to which the COMPANY
or the SUBSIDIARIES is a party or

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by which it or any of their properties or assets may be bound, or
violate any statute, rule or regulation applicable to the COMPANY or
the SUBSIDIARIES, which would have a material adverse effect on the
financial condition, assets, liabilities or business of the COMPANY or
the SUBSIDIARIES; to the knowledge of such counsel, no consent,
approval, authorization, order, registration or qualification of or
with any court, regulatory authority or other governmental body, other
than as specifically contemplated by this Agreement and the Bank
Merger Agreement, is required for the consummation by the COMPANY or
the SUBSIDIARIES of the transactions contemplated by this Agreement,
the Plan of Merger or the Bank Merger Agreement;

(f) to the knowledge of such counsel, since June 30,
1993, neither the COMPANY nor the SUBSIDIARIES have granted any
options, warrants, calls, agreements or commitments of any character
relating to any of the shares of the COMPANY or the SUBSIDIARIES, nor
has the COMPANY or the SUBSIDIARIES granted any rights to purchase or
otherwise acquire from the COMPANY or the SUBSIDIARIES any shares of
the COMPANY'S or the SUBSIDIARIES' capital stock;

(g) except as disclosed in such opinion, to the knowledge
of such counsel there are no actions, suits, proceedings or
investigations of any nature pending or threatened that challenge the
validity or legality of the transactions contemplated by this
Agreement or the Plan of Merger or the Bank Merger Agreement or which
seek or threaten to restrain, enjoin or prohibit (or obtain
substantial damages in connection with) the consummation of such
transactions;

(h) except as disclosed in said opinion, such counsel
(notwithstanding anything contained herein to the contrary, the
opinion provided in this Section 8.05(h) may be provided by legal
counsel to the COMPANY other than Muldoon, Murphy & Faucette, provided
that such other legal counsel is reasonably acceptable to FIRST OF
AMERICA) does not know of any litigation, appraisal or other
proceeding or governmental investigation pending or threatened against
or relating to the business or property of the COMPANY or the
SUBSIDIARIES which would have a materially adverse effect on the
consolidated financial condition of the COMPANY or the financial
condition of LA GRANGE FEDERAL, or of any legal impediment to the
continued operation of the properties and business of the COMPANY or
the SUBSIDIARIES in the ordinary course after the consummation of the
transactions contemplated by this Agreement and the Plan of Merger or
by the Bank Merger Agreement; and

(i) such counsel has participated in the preparation of
the Prospectus/Proxy Statement and, although such counsel has not
independently verified the information contained therein, nothing has
come to the attention of such counsel to lead such counsel to believe
that the Prospectus/Proxy Statement, as of the date thereof and as
amended and supplemented prior to the date of the meeting of the
COMPANY'S stockholders referred to in Section 5.01, contains any
untrue statement of a material fact or omits to state a material fact
necessary in order to make the statements made therein, in light of
the

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circumstances under which they were made, not misleading (except that
such counsel need express no opinion with respect to financial
statements and other financial data contained therein or with respect
to matters relating to FIRST OF AMERICA or its business, properties,
management or securities), and such counsel does not know of any
contracts or other documents relating to the COMPANY or the
SUBSIDIARIES of a character required to be filed with the
Prospectus/Proxy Statement as of such dates, or of any documents,
other contracts, statutes or legal or governmental proceedings
relating to the COMPANY or the SUBSIDIARIES required to be described
therein which are not filed or described as required.

8.06 Officers' Certificate. The COMPANY shall deliver to FIRST OF
AMERICA a certificate signed by its Chairman, Chief Executive Officer and
President and by its Secretary, dated the Effective Time, certifying in their
official capacity to their respective best knowledge and belief that the
COMPANY has met and fully complied with all conditions necessary to make this
Agreement and the Plan of Merger effective as to the COMPANY. The COMPANY
shall have delivered all such other certificates and documents with respect to
the COMPANY as may reasonably have been requested by FIRST OF AMERICA.

8.07 Absence of Certain Changes or Events. From the date hereof to
the Effective Time, there shall be and have been no material adverse change in
the capitalization or in the business, properties or financial condition of the
COMPANY or the SUBSIDIARIES.

8.08 Litigation. Neither the COMPANY nor the SUBSIDIARIES shall be
made a party to, or, to the knowledge of the COMPANY, threatened by, any
actions, suits, proceedings, litigation or legal proceedings which, in the
reasonable opinion of FIRST OF AMERICA, have or are likely to have a material
adverse effect on the consolidated assets, properties, business, operations or
condition, financial or otherwise, of the COMPANY or the assets, properties,
business, operations or condition, financial or otherwise, of LA GRANGE
FEDERAL, nor shall any director or officer or former director or officer of the
COMPANY or the SUBSIDIARIES be made a party to, or threatened by, any actions,
suits, proceedings, litigation or legal proceedings relating to their
performance or nonperformance of their legal or fiduciary duties as directors
and officers of the COMPANY or the SUBSIDIARIES which in the reasonable opinion
of the Board of Directors of FIRST OF AMERICA is likely to have a material
adverse effect on the COMPANY on a consolidated basis or LA GRANGE FEDERAL. No
action, suit, proceeding or claim shall have been instituted, made or
threatened by any person relating to the Merger or the validity or propriety of
the transactions contemplated by this Agreement or the Plan of Merger or the
Bank Merger Agreement which would make consummation of the Merger or the Bank
Merger inadvisable in the reasonable opinion of FIRST OF AMERICA.

8.09 Transfer by Affiliates. At or prior to thirty (30) days prior
to the Effective Time, the COMPANY shall have entered into agreements with each
of its affiliates, as such term is defined in Rule 144 under the Securities
Act, by which each such affiliate shall have agreed to make no disposition of
the COMPANY Common Stock during the thirty (30) day period immediately
preceding the Effective Time.

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8.10 Bank Merger Agreement. The Bank Merger Agreement shall have
been duly authorized and approved by LA GRANGE FEDERAL and the other terms and
conditions of the Bank Merger Agreement shall have been satisfied so as to
permit the Bank Merger to be consummated as contemplated thereby.

8.11 Pooling of Interests. FIRST OF AMERICA shall have received an
opinion, dated as of the Effective Time, from KPMG Peat Marwick that the Merger
shall be accounted for as a pooling of interests.

8.12 Affiliation Audit. No later than forty-five (45) days after
the execution of this Agreement, at FIRST OF AMERICA'S expense, FIRST OF
AMERICA or, at FIRST OF AMERICA'S option, an independent certified public
accountant designated by FIRST OF AMERICA, shall have examined the COMPANY'S
and the SUBSIDIARIES' operations, properties, books, contracts, commitments,
and records and, after appropriate inquiry and examination with respect to the
financial condition, results of operations, quality of the loan and bond
portfolios and the adequacy of the provision for loan losses of the COMPANY and
the SUBSIDIARIES as of the affiliation audit date, FIRST OF AMERICA shall have
received an audit report the results of which, in the reasonable opinion of
FIRST OF AMERICA, are satisfactory to FIRST OF AMERICA.

ARTICLE NINE

ABANDONMENT; AMENDMENT AND WAIVER

9.01 Abandonment. This Agreement may be terminated and the Plan of
Merger abandoned at any time prior to the filing of the Certificate of Merger
as provided in Section 11.02 hereof (whether before or after approval of this
Agreement and the Plan of Merger by the stockholders of the COMPANY):

(a) by agreement between FIRST OF AMERICA and the COMPANY
authorized by a majority of the entire Board of Directors of each;

(b) by either FIRST OF AMERICA or the COMPANY if
adversely affected and if any of the conditions set forth in Article
Six hereof shall not have been fulfilled and shall not have been
waived pursuant to Section 10.01 (b) hereof or shall become impossible
of fulfillment;

(c) by the COMPANY if any of the conditions set forth in
Article Seven hereof shall not have been fulfilled and shall not have
been waived pursuant to Section 10.01 (b) hereof or shall become
impossible of fulfillment;

(d) by FIRST OF AMERICA if any of the conditions set
forth in Article Eight hereof shall not have been fulfilled and shall
have not been waived pursuant to Section 10.01 (b) hereof or shall
become impossible of fulfillment;

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(e) by either FIRST OF AMERICA or the COMPANY in the
event of a material breach by the opposite party of any
representation, warranty, covenant or agreement contained herein which
has not been cured within thirty (30) days after written notice of
such breach has been given to the party causing such breach; or

(f) by either FIRST OF AMERICA or the COMPANY in the
event the Merger is not consummated on or before July 31, 1994.

(g) by the COMPANY in the event that the Average Price is
less than $34.95. The term "Average Price" shall mean the average
closing trade prices of FIRST OF AMERICA Common Stock on the New York
Stock Exchange during the last fifteen (15) trading days on which
reportable sales of FIRST OF AMERICA Common Stock took place
immediately prior to, but not including, the third business day prior
to the Effective Time.

9.02 Effect of Abandonment. In the event this Agreement is
terminated and the Plan of Merger abandoned as provided in Section 9.01, this
Agreement and the Plan of Merger shall become void and of no further force and
effect without any liability on the part of the terminating party or parties or
their respective stockholders, directors or officers; provided, however, that
Section 4.04 and Section 5.05 of this Agreement shall survive any such
abandonment. In the event of termination of this Agreement and abandonment of
the Plan of Merger as provided in Section 9.01, written notice thereof and the
reasons therefor shall be given to the other parties by the terminating party.

ARTICLE TEN

MODIFICATIONS, AMENDMENTS AND WAIVER

10.01 Modifications, Amendments and Waiver. At any time prior to
the Effective Time and before or after stockholder approval of this Agreement
or the Plan of Merger, the COMPANY, FIRST OF AMERICA and FOA-ACQUISITION may,
(a) by written agreement executed by a duly authorized officer of each, and in
the case of the COMPANY approved by its Board of Directors, extend the time for
the performance of any of the obligations or other acts of the parties hereto,
(b) by written notice executed by a duly authorized officer of the party
adversely affected waive compliance in whole or in part with any of the
covenants, agreements or conditions contained in this Agreement or the Plan of
Merger, or (c) by written agreement executed by a duly authorized officer of
each, make any other amendment or modification of this Agreement or the Plan of
Merger; provided, however, that, after stockholder approval of this Agreement,
no such extension, waiver, amendment or modification shall adversely affect the
amount of the consideration to be received in the Merger by the stockholders of
the COMPANY. Any such extension, waiver, amendment or modification shall be
conclusively evidenced by the execution and delivery of the same by the
Chairman and Chief Executive Officer, the President and Chief Operating
Officer, the Vice Chairman, or any Executive Vice

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President in the case of FIRST OF AMERICA or FOA-ACQUISITION, or the Chairman,
Chief Executive Officer and President in the case of the COMPANY, attested to
by the Secretary or Assistant Secretary of each party. The failure of any
party at any time or times to require performance of any provision hereof shall
in no manner affect such party's right at a later time to enforce the same. No
waiver by any party of any condition or of the breach of any term contained in
this Agreement or the Plan of Merger, whether by conduct or otherwise, in any
one or more instances shall be deemed to be or construed as a further or
continuing waiver of any such condition or a waiver of any other condition or
of the breach of any other term of this Agreement or the Plan of Merger.

ARTICLE ELEVEN

MISCELLANEOUS

11.01 Closing. A closing (the "Closing") of the transactions
provided for herein shall take place at the offices of the COMPANY in La
Grange, Illinois, on the last business day of the month in which all of the
approvals required hereby and by the Plan of Merger become effective, or on
such later day and at such other place as the parties may agree (the "Closing
Date"). In the event the Closing does not take place on the date referred to in
the preceding sentence because any condition to the obligations of any party
under this Agreement and the Plan of Merger is not met on that date, the other
parties to this Agreement may postpone the Closing to any designated subsequent
business day by giving the nonperforming party to this Agreement notice of the
postponed date. At the Closing the parties will exchange the certificates,
opinions, and other documents called for herein. Subject to the terms and
conditions hereof, consummation of the Merger in the manner described herein
shall be accomplished as soon as practicable after the exchange of the
documents at the Closing has been completed.

11.02 Certificate of Merger. Subject to the provisions of this
Agreement, on the Closing Date, as herein defined, the Certificate of Merger
described in Section 1.06, shall be signed, verified and affirmed as required
by the Delaware Law and duly filed with the Secretary of State of the State of
Delaware.

11.03 Procurement of Approvals. FIRST OF AMERICA, FOA-ACQUISITION
and the COMPANY shall each use its best efforts to proceed as expeditiously as
possible and cooperate fully in the procurement of any required consents and
approvals and in the taking of any other action, and the satisfaction of all
other requirements prescribed by law or otherwise, necessary for the
consummation of the Merger on the terms provided herein and in the Plan of
Merger and in the Bank Merger Agreement, including, without being limited to,
preparation by FIRST OF AMERICA and submission of any required application for
prior approval of the Federal Reserve, an application for prior approval of the
OTS, an application for prior approval of the FIB, applications for prior
approval of the Bank Merger by the OCC, the OTS and the Federal Reserve,
preparation by FIRST OF AMERICA and submission under the Securities Act of the

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Registration Statement, the preparation of the Prospectus/Proxy Statement by
the COMPANY and FIRST OF AMERICA and the distribution of the Prospectus/Proxy
Statement and the solicitation of proxies by the COMPANY.

11.04 Further Acts. Each of the parties (a) shall perform such
further acts and execute such further documents as may be reasonably required
to effect the Merger (including, without limitation, the certification,
execution, acknowledgement and filing of the Plan of Merger) and to effect the
Bank Merger and (b) shall use all reasonable efforts to satisfy or obtain the
satisfaction of the conditions set forth in Articles Six, Seven and Eight
hereof.

11.05 Notices. All documents, notices, requests, demands and other
communications that are required or permitted to be delivered or given under
this Agreement and the Plan of Merger shall be in writing and shall be deemed
to have been duly delivered or given upon the delivery or mailing thereof, as
the case may be, if delivered personally or sent by registered or certified
mail, return receipt requested, postage prepaid:

(a) if to the COMPANY, to:

LGF BANCORP, INC.
One North La Grange Road
La Grange, Illinois 60525

ATTENTION: Mr. J. Edward Weishel
Chairman, Chief Executive Officer and
President

with a copy to:

Muldoon, Murphy & Faucette
5101 Wisconsin Avenue, N.W.
Washington, D.C. 20016

ATTENTION: Leslie Murphy, Esq.
Thomas J. Haggerty, Esq.

(b) and if to FIRST OF AMERICA or FOA-ACQUISITION to:

FIRST OF AMERICA BANK CORPORATION
211 South Rose Street
Kalamazoo, Michigan 49007

ATTENTION: Mr. Richard D. Klein
Vice Chairman

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with a copy to:

Howard & Howard Attorneys, P.C.
Suite 400
107 West Michigan Avenue
Kalamazoo, Michigan 49007

ATTENTION: Joseph B. Hemker, Esq.

or to such other person or address as a party hereto shall specify hereunder.

11.06 Expenses. The COMPANY, FIRST OF AMERICA and FOA-ACQUISITION
shall each pay all of their own fees and expenses incident to the negotiation,
preparation, execution and performance of this Agreement, the Bank Merger
Agreement, shareholders' meetings, including the fees and expenses of their own
counsel, accountants, investment bankers and other experts, whether or not the
transactions contemplated by this Agreement are consummated; provided, however,
in the event this Agreement is terminated by either party hereto as a result of
a misrepresentation or a breach of any representation, warranty, or covenant
contained herein, the terminating party shall be entitled to recover from the
other party the fees and expenses incurred by the terminating party incident
hereto. FIRST OF AMERICA and the COMPANY each agree to indemnify and hold the
other harmless, and their respective officers, directors and affiliates,
against and in respect of any and all claims made by, and losses incurred with
respect to, third parties that arise out of or are based upon any
misrepresentation or breach by the indemnifying party of any representation,
warranty or covenant contained herein, including but not limited to, damages,
judgments, settlements, attorneys' fees and costs; provided, however, that
neither FIRST OF AMERICA nor the COMPANY shall be held liable for false
statements made in the Prospectus/Proxy Statement, Registration Statement or
any application filed in connection with this Agreement to the extent such
false statement was based upon information provided in writing by the other.

11.07 Nonsurvival of Representations and Warranties. No
representation or warranty contained in this Agreement or the Plan of Merger
(other than contained in Section 2.11 relating to regulatory filings, Section
2.15 relating to shares of FIRST OF AMERICA Common Stock to be issued pursuant
to the Plan of Merger, Section 4.05 relating to indemnification, Section 11.06
relating to expenses and Article III of the Plan of Merger relating to the
issuance of the FIRST OF AMERICA Common Stock to stockholders of the COMPANY)
shall survive the Merger.

11.08 Discussions With Other Banks, Bank Holding Companies and
Bank-Related Businesses. FIRST OF AMERICA now or in the future may be
discussing possible affiliation with other banks or bank holding companies or
bank-related businesses located in Illinois or other states, but such
discussions, if any, are preliminary in nature and there can be no assurance at
this time that agreements for affiliation will be reached, or if reached, will
be consummated. However, it is agreed that additional banks, bank holding
companies or bank-related businesses as now or hereafter approved by the
Federal Reserve may become affiliated with FIRST OF

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AMERICA prior to, concurrently with, or after the date hereof, on such terms as
FIRST OF AMERICA and any such other bank, bank holding company or bank-related
business may in their discretion agree. It is further agreed that FIRST OF
AMERICA and its subsidiaries, its pending subsidiaries, and future subsidiaries
may engage in any activities permitted to be performed by bank holding
companies, banks, or bank-related businesses and that FIRST OF AMERICA may
merge or consolidate any or all of its subsidiaries, banks, or any or all of
its bank-related businesses, as FIRST OF AMERICA may deem desirable or
appropriate; provided, however, that nothing contained herein shall affect the
right of the COMPANY or FIRST OF AMERICA to abandon this Agreement in the
manner contemplated by Article Nine.

11.09 The ESOP. FIRST OF AMERICA and the COMPANY agree to use their
best efforts to obtain assurance from the lender to the ESOP that accelerated
cash payments under the loan agreement entered into in conjunction with the
ESOP (the "ESOP Loan") will not be required by virtue of the acquisition of the
COMPANY by FIRST OF AMERICA.

11.10 Entire Agreement. This Agreement, the Plan of Merger, the
Bank Schedules and the Bank Merger Agreement constitute the entire agreement
and understanding of the parties with respect to the transactions contemplated
hereby and thereby, supersede any and all prior agreements and understandings
relating to the subject matter hereof and thereof and may not be modified,
amended or terminated except in writing signed by each of the parties hereto.

11.11 Governing Law. This Agreement and the Plan of Merger shall be
governed by, and construed and enforced in accordance with, the laws of the
State of Illinois.

11.12 Binding Effect and Parties in Interest. This Agreement and
the Plan of Merger may not be assigned by any party hereto without the written
consent of the other parties. This Agreement and the Plan of Merger shall be
binding upon and shall inure to the benefit of the parties hereto and their
respective successors and permitted assigns. Nothing in this Agreement,
express or implied, is intended to confer upon any other person any rights or
remedies of any nature whatsoever under or by reason of this Agreement and the
Plan of Merger otherwise than as specifically provided herein.

11.13 Captions. The caption headings of the Articles, Sections and
subsections of this Agreement are for convenience of reference only and are not
intended to be, and should not be construed as, a part of this Agreement or the
Plan of Merger.

11.14 Counterparts. This Agreement may be executed in any number of
counterparts, each of which shall be deemed to be an original instrument and
all of which together shall constitute a single agreement.

11.15 Severability Clause. If any provision of this Agreement or
the Plan of Merger shall be held invalid, the remainder shall nevertheless, be
deemed valid and effective.

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11.16 Identification. This Agreement may be identified by date of
execution of the last to sign of FIRST OF AMERICA, FOA-ACQUISITION and the
COMPANY.

IN WITNESS WHEREOF, each of the parties hereto has duly executed this
Agreement as of the date set forth hereafter.

LGF BANCORP, INC.

By:/s/ J. Edward Weishel (Corporate Seal)
J. Edward Weishel
Chairman, Chief Executive Officer and President

Dated: October 12, 1993
Attest:/s/ David R. Metzer

Secretary

FIRST OF AMERICA BANK CORPORATION

By:/s/ Richard D. Klein (Corporate Seal)
Richard D. Klein
Vice Chairman

Dated: October 12, 1993

Attest:/s/ G. S. Nugent

FIRST OF AMERICA ACQUISITION COMPANY

By:/s/ Richard D. Klein
Richard D. Klein
President

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<PAGE> 173
Dated: October 12, 1993

Attest: /s/ G.S. Nugent

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<PAGE> 174
APPROVAL AND AGREEMENT OF DIRECTORS

The undersigned, being all of the Directors of LGF BANCORP, INC., La
Grange, Illinois, do hereby approve the foregoing Agreement and the basis of
exchange set forth therein, and in consideration of the benefits to be derived
from affiliation by LGF BANCORP, INC. and its stockholders, each of us hereby
agrees with each of the corporate parties, to exchange all shares of stock in
LGF BANCORP, INC., now or hereafter beneficially owned by each in accordance
with the terms thereof, and to vote said shares, in person or by proxy, at any
meeting of stockholders of said LGF BANCORP, INC. or adjournments thereof, in
favor of approval of this Agreement and the Plan of Merger and to unanimously
recommend acceptance and approval of the Agreement and the Plan of Merger by
stockholders of LGF BANCORP, INC. in the Prospectus/Proxy Statement.

/s/ Edward L. Breen /s/ Daniel R. Metzger
Edward L. Breen Daniel R. Metzger

/s/ Lee M. Burkey /s/ Herbert R. Pohl
Lee M. Burkey Herbert R. Pohl

/s/ Howard A. Graening /s/ J. Edward Weishel
Howard A. Graening J. Edward Weishel

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EXHIBIT A

AGREEMENT AND PLAN OF MERGER

This Agreement and Plan of Merger is made and entered into as of
____________________, 199____, between FIRST OF AMERICA ACQUISITION COMPANY, a
Delaware corporation ("FOA-ACQUISITION"), and LGF BANCORP, INC., a Delaware
corporation, (the "COMPANY"), joined in by FIRST OF AMERICA BANK CORPORATION, a
Michigan corporation ("FIRST OF AMERICA"). FOA-ACQUISITION and the COMPANY are
hereinafter sometimes collectively referred to as the "Constituent
Corporations." FIRST OF AMERICA is a party to this Agreement and Plan of
Merger as a parent party corporation and not as a constituent corporation.

RECITALS

FOA-ACQUISITION is a corporation duly organized, validly existing and
in good standing under the laws of the State of Delaware. As of the date
hereof, the authorized capital stock of FOA-ACQUISITION consists of 1,000
shares of Common Stock, $1.00 par value per share, all of which are owned by
FIRST OF AMERICA.

The COMPANY is a corporation duly organized and validly existing under
the laws of the State of Delaware. As of the date hereof, the authorized
capital of the COMPANY consists of _____________ shares of COMPANY common
stock, $.01 par value per share ("COMPANY Common Stock"), of which
______________ shares are issued and outstanding and of which _______________
shares are held in the treasury of the COMPANY.

FOA-ACQUISITION, the COMPANY and FIRST OF AMERICA have entered into
an Agreement and Plan of Reorganization dated as of October 12, 1993 (the
"Agreement"), setting forth certain representations, warranties, covenants and
agreements in connection with the transactions therein and herein contemplated
and which contemplates the merger of the COMPANY with and into FOA-ACQUISITION
(the "Merger") in accordance with this Agreement and Plan of Merger.

FIRST OF AMERICA will authorize the issuance of shares of its Common
Stock, par value $10.00 per share (the "FIRST OF AMERICA Common Stock"), for
the purposes of the Agreement and this Agreement and Plan of Merger.

The respective Boards of Directors of the COMPANY, FIRST OF AMERICA
and FOA-ACQUISITION deem the Merger advisable and in the best interests of each
such corporation and their respective shareholders. The respective Boards of
Directors of the COMPANY, FIRST OF AMERICA and FOA-ACQUISITION, by resolutions
duly adopted, have approved the Agreement and approved this Agreement and Plan
of Merger, and this Agreement and Plan of Merger has

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been submitted to and approved by the requisite vote of the COMPANY'S and
FOA-ACQUISITION'S stockholders.

Therefore, in consideration of the premises and the mutual covenants
and agreements herein contained, the parties hereto hereby covenant and agree
as follows:

ARTICLE I

1.01 Merger of the COMPANY into FOA-ACQUISITION. The COMPANY shall
be merged into FOA-ACQUISITION at the Effective Time as that term is defined in
the Agreement. The separate corporate existence of the COMPANY shall thereupon
cease and FOA-ACQUISITION shall be the surviving corporation. FOA-ACQUISITION
is herein sometimes referred to as the "Surviving Corporation".

1.02 Effect of the Merger. From and after the Effective Time:

(a) The separate existence of the COMPANY shall cease and
be merged into the Surviving Corporation, which shall possess all of
the rights, privileges, immunities, powers and franchises of a public
as well as of a private nature, and shall be subject to all of the
restrictions, disabilities and duties, of each of the COMPANY and
FOA-ACQUISITION; and all singular rights, privileges, immunities,
powers and franchises of each of the COMPANY and FOA-ACQUISITION, and
all property, real, personal and mixed, and all debts due to either
the COMPANY or FOA-ACQUISITION on whatever account, including
subscriptions to shares, and all other things in action or belonging
to each of the COMPANY and FOA-ACQUISITION shall be vested in
FOA-ACQUISITION as the Surviving Corporation; and all property,
rights, privileges, immunities, powers and franchises, and all and
every interest, shall be thereafter as effectually the property of
FOA-ACQUISITION as the Surviving Corporation as they were of the
COMPANY and FOA-ACQUISITION and the title to any real estate, or
interest therein, vested by deed or otherwise, in either of the
COMPANY and FOA-ACQUISITION shall not revert or be in any way impaired
by reason of the Merger.

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1.03 Additional Actions. If, at any time after the Effective Time,
the Surviving Corporation shall consider or be advised that any further
assignments or assurances in law or any other acts are necessary or desirable
to (a) vest, perfect or confirm, of record or otherwise, in the Surviving
Corporation its rights, title or interest in, to or under any of the rights,
properties or assets of the COMPANY acquired or to be acquired by the Surviving
Corporation as a result of, or in connection with, the Merger, or (b) otherwise
carry out the purposes of the Agreement and this Agreement and Plan of Merger,
the COMPANY and its proper officers and directors shall be deemed to have
granted to the Surviving Corporation an irrevocable power of attorney to
execute and deliver all such proper deeds, assignments and assurances in law
and to do all acts necessary or proper to vest, perfect or confirm title to and
possession of such rights, properties or assets in the Surviving Corporation
and otherwise to carry out the purposes of the Agreement and this Agreement and
Plan of Merger; and the proper officers and directors of the Surviving
Corporation are fully authorized in the name of the COMPANY or otherwise to
take any and all such action.

ARTICLE II

2.01 Name. The name of the Surviving Corporation shall be "FIRST OF
AMERICA ACQUISITION COMPANY."

2.02 Articles of Incorporation. From and after the Effective Time,
the Articles of Incorporation of FOA-ACQUISITION shall be the Articles of
Incorporation of the Surviving Corporation.

2.03 Bylaws. The Bylaws of FOA-ACQUISITION, as in effect immediately
prior to the Effective Time, shall be the Bylaws of the Surviving Corporation
until duly amended in accordance with law.

2.04 Directors and Officers. The directors and officers of
FOA-ACQUISITION immediately prior to the Effective Time shall be the sole
directors and officers of the Surviving Corporation.

ARTICLE III

3.01 Manner and Basis of Converting Shares of FOA-ACQUISITION. At
the Effective Time, each share of FOA-ACQUISITION Common Stock which is
outstanding immediately prior to the Effective Time shall continue to be
outstanding without any change therein.

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3.02 Manner and Basis of Converting Shares of COMPANY Stock.

(a) Any shares of COMPANY Common Stock or any other class
or series of stock of the COMPANY held in the treasury of the COMPANY
immediately prior to the Effective Time shall be canceled, and no
FIRST OF AMERICA Common Stock shall be issuable or exchangeable with
respect thereto.

(b) Each share of the COMPANY'S Common Stock issued and
outstanding immediately prior to the Merger shall be converted into
and represent the right to receive and be exchangeable for .8754
shares of FIRST OF AMERICA Common Stock.

(c) Each of the Option Rights (as defined in the
Agreement) which is outstanding immediately prior to the Merger shall
be converted into and represent the right to receive and be
exchangeable for .6322 shares of FIRST OF AMERICA Common Stock.

3.03 Description of FIRST OF AMERICA Common Stock. The FIRST OF
AMERICA Common Stock has a $10.00 par value. Holders of FIRST OF AMERICA
Common Stock are entitled to receive such dividends as are declared by the
Board of Directors of FIRST OF AMERICA. Each share of FIRST OF AMERICA Common
Stock is entitled to one vote. Holders of FIRST OF AMERICA Common Stock have
no cumulative voting rights in the election of directors. In the event of
liquidation, holders of FIRST OF AMERICA Common Stock are entitled to receive
on a pro rata basis any assets distributed to common shareholders.

3.04 Fractional Shares. No certificate evidencing fractional
shares of FIRST OF AMERICA Common Stock shall be issued and no right to vote or
receive any dividends or other rights as a shareholder shall attach to any
fractions of a share of the FIRST OF AMERICA Common Stock resulting from the
conversion as herein provided. In lieu thereof, shareholders of the COMPANY,
who otherwise are entitled to receive a fraction of a share of FIRST OF AMERICA
Common Stock, will be paid cash at a rate equal to the Average Price. The term
"Average Price" shall mean the average closing trade prices of FIRST OF AMERICA
Common Stock on the New York Stock Exchange during the last fifteen (15)
trading days on which reportable sales of FIRST OF AMERICA Common Stock took
place immediately prior to, but not including, the third business day prior to
the Effective Time.

3.05 Surrender Of COMPANY Stock Certificates In Exchange For FIRST
OF AMERICA Common Stock.

(a) After the Effective Time, each holder of a
certificate or certificates that prior thereto represented validly
issued and outstanding shares of COMPANY Common Stock shall surrender
such certificate or certificates to NORWEST BANK MINNESOTA, NATIONAL
ASSOCIATION, the exchange agent for such shares, or another exchange
agent selected by FIRST OF AMERICA (the "Exchange Agent"), and shall
receive in exchange therefor the applicable number of whole shares of
FIRST OF AMERICA Common Stock, and

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the cash for fractional shares (without interest thereon), if any, as
provided in this Agreement and Plan of Merger.

The holder of a certificate or certificates that prior to the
Merger represented issued and outstanding shares of COMPANY Common
Stock shall have no rights, after the Effective Time, with respect to
such shares except to surrender the certificate or certificates in
exchange for the applicable number of whole shares of FIRST OF AMERICA
Common Stock, and the cash for fractional shares, if any. The
Exchange Agent shall mark all certificates delivered pursuant to this
Section 3.05(a) as canceled and shall promptly thereafter deliver the
same to FIRST OF AMERICA for disposal.

(b) FIRST OF AMERICA dividends or other distributions
otherwise payable subsequent to the Effective Time on any whole shares
of FIRST OF AMERICA Common Stock for which a COMPANY certificate or
certificates have not been surrendered for exchange pursuant to this
Agreement and Plan of Merger shall be withheld until such COMPANY
outstanding certificate or certificates shall be surrendered for
exchange. Upon such surrender, there shall be paid to the record
holder of the new certificate or certificates of FIRST OF AMERICA
Common Stock the amount of all dividends, without interest thereon,
withheld with respect to such shares as above provided.

(c) If a certificate of COMPANY Common Stock is lost,
stolen or destroyed, the registered owner thereof shall be entitled to
receive the applicable number of whole shares of FIRST OF AMERICA
Common Stock, and the cash for fractional shares, if any, to which he
or she would be otherwise entitled on surrender of such certificate of
COMPANY Common Stock, by notifying FIRST OF AMERICA in writing of such
lost, stolen or destroyed certificate and giving FIRST OF AMERICA
evidence of loss and, at FIRST OF AMERICA'S option, a bond adequate in
the opinion of FIRST OF AMERICA to indemnify it and the Exchange Agent
against any claim that may be made against it on account of the
alleged lost, stolen and destroyed certificate and the issuance of the
applicable number of whole shares of FIRST OF AMERICA Common Stock,
and the cash for fractional shares, if any.

(d) Promptly after the Effective Time, FIRST OF AMERICA
shall cause the Exchange Agent to mail to each holder of record of a
certificate or certificates which as of the Effective Time represented
outstanding shares of COMPANY Common Stock (the "Certificates") (i) a
form letter of transmittal which shall specify that delivery shall be
effected, and risk of loss and title to the Certificates shall pass,
only upon delivery of the Certificates and (ii) instructions for use
in effecting the surrender of the Certificates in exchange for FIRST
OF AMERICA Common Stock.

3.06 Appraisal Rights. Each outstanding share of COMPANY Common
Stock as to which an election to demand appraisal rights may be made and which
is made in accordance with Section 262 of the Delaware General Corporation Law
("Appraisal Shares") and not withdrawn shall not be converted into or represent
a right to receive shares of FIRST OF AMERICA Common

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Stock hereunder unless and until the holder shall have failed to perfect or
shall have effectively withdrawn or lost his or her right to appraisal of and
for payment for his or her Appraisal Shares, at which time his or her shares
shall be converted in the Merger into shares of FIRST OF AMERICA Common Stock
as provided above and as provided in the Delaware General Corporation Law.

ARTICLE IV

4.01 Counterparts. This Agreement and Plan of Merger may be
executed in one or more counterparts, each of which shall be deemed to be an
original but all of which together shall constitute one agreement.

4.02 Governing Law. This Agreement and Plan of Merger shall be
governed in all respects, including, but not limited to, validity,
interpretation, effect and performance, by the laws of the State of Illinois.

4.03 Amendment. Subject to applicable law, this Agreement and
Plan of Merger may be amended, modified or supplemented only by written
agreement of FIRST OF AMERICA, FOA-ACQUISITION and the COMPANY, by their
respective officers thereunto duly authorized, at any time prior to the
Effective Time.

4.04 Waiver. Any of the terms or conditions of this Agreement and
Plan of Merger may be waived at any time by whichever of the Constituent
Corporations is, or the shareholders or stockholders of which are, entitled to
the benefit thereof by action taken by the Board of Directors of such
Constituent Corporation.

4.05 Termination. This Agreement and Plan of Merger shall
terminate upon the termination of the Agreement and there shall be no liability
on the part of any of the parties hereto (or any of their respective directors
or officers) except as otherwise provided in the Agreement.

IN WITNESS WHEREOF, each of the Constituent Corporations and FIRST OF
AMERICA have caused this Agreement and Plan of Merger to be executed on their
behalf by their officers hereunto duly authorized and their respective
corporate seals to be affixed hereto, all as of the date first above written.

ATTEST: FIRST OF AMERICA
ACQUISITION COMPANY

By: By:
Richard D. Klein
President

State of Michigan )

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) ss:
County of Kalamazoo )

On this _______ day of _______________, 199____, before me appeared
the above-signed officers, who being first duly sworn, deposed and said that
they are officers of FIRST OF AMERICA ACQUISITION COMPANY, and are duly
authorized by its Board of Directors to sign, affirm and verify this Agreement
and Plan of Merger and that this Agreement and Plan of Merger has been approved
by all requisite action of the Board of Directors of FIRST OF AMERICA
ACQUISITION COMPANY and this Agreement and Plan of Merger is the act and deed
of the Corporation and the facts stated herein are true to the best of their
knowledge.

Notary Public
Kalamazoo County, Michigan
My Commission Expires:
My County of
Residence: Kalamazoo

ATTEST: LGF BANCORP, INC.

By: By:
J. Edward Weishel
Secretary Chairman, Chief Executive
Officer and President

State of Michigan )
) ss:
County of Kalamazoo )

On this _______ day of ______________, 199____, before me appeared the
above-signed officers, who being first duly sworn, deposed and said that they
are officers of LGF BANCORP, INC. and are duly authorized by its Board of
Directors to sign, affirm and verify this Agreement and Plan of Merger and that
this Agreement and Plan of Merger has been approved by all requisite action of
the Board of Directors of LGF BANCORP, INC. and this Agreement and Plan

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of Merger is the act and deed of the Corporation and the facts stated herein
are true to the best of their knowledge.

Notary Public
(Seal) Kalamazoo County, Michigan
My Commission Expires:
My County of
Residence:

ATTEST: FIRST OF AMERICA BANK
CORPORATION

By: By:
Richard D. Klein
Vice Chairman

State of Michigan )
) ss:
County of Kalamazoo )

On this ________ day of ______________, 199____, before me appeared
the above-signed officers, who being first duly sworn, deposed and said that
they are officers of FIRST OF AMERICA BANK CORPORATION, and are duly authorized
by its Board of Directors to sign, affirm and verify this Agreement and Plan of
Merger and that this Agreement and Plan of Merger has been approved by all
requisite action of the Board of Directors of FIRST OF AMERICA BANK CORPORATION
and this Agreement and Plan of Merger is the act and deed of the Corporation
and the facts stated herein are true to the best of their knowledge.

Notary Public
(Seal) Kalamazoo County, Michigan
My Commission Expires:
My County of Residence:
Kalamazoo

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EXHIBIT B

FIRST OF AMERICA BANK CORPORATION
211 South Rose Street
Kalamazoo, Michigan 49007

Gentlemen:

I have been advised that I may be deemed an "affiliate" within the
meaning of paragraph (c) of Rule 145 of the Rules and Regulations of the
Securities and Exchange Commission ("SEC") under the Securities Act of 1933
(the "Act") of LGF BANCORP, INC., a Delaware corporation (the "COMPANY"), and
may be deemed such at the time of the merger ("Merger") of FIRST OF AMERICA
ACQUISITION COMPANY, a Delaware corporation ("FOA-ACQUISITION") with the
COMPANY. Pursuant to the Merger, I will acquire shares of the Common Stock
("FIRST OF AMERICA Common Stock") of FIRST OF AMERICA BANK CORPORATION ("FIRST
OF AMERICA") in exchange for each share of the COMPANY stock held by me. I
agree that I will not make any sale, transfer or other disposition of the FIRST
OF AMERICA Common Stock in violation of the Act or the rules and regulations
promulgated thereunder by the SEC.

I have been advised that the issuance of the FIRST OF AMERICA Common
Stock to me pursuant to the Merger has been registered under the Act by FIRST
OF AMERICA by the filing of a Registration Statement with the SEC. I have also
been advised that such registration does not apply to any distribution by me of
the FIRST OF AMERICA Common Stock received by me in the Merger. I have also
been advised that, since at the effective time of the Merger, I may be deemed
to have been an "affiliate" of the COMPANY, any offering or sale by me of any
of the FIRST OF AMERICA Common Stock will, under current law, require either
(i) the further registration under the Act of the FIRST OF AMERICA Common Stock
to be sold; (ii) compliance with Rule 145 promulgated under the Act; or (iii)
the availability of another exemption from such registration. In addition, I
have been advised that any transferee in a private offering or other similar
disposition will be subject to the same limitations as those imposed on me.

I represent and warrant to FIRST OF AMERICA that:

1. I have carefully read this letter and discussed its
requirements and other applicable limitations upon the sale, transfer or other
disposition of the FIRST OF AMERICA Common Stock to the extent I felt
necessary, with my counsel or counsel for the COMPANY.

2. I have been informed by FIRST OF AMERICA that the FIRST OF
AMERICA Common Stock must be held by me indefinitely unless (i) any of the
FIRST OF AMERICA Common Stock received by me in the Merger and to be
distributed by me is first registered under the Act other than by the
registration by FIRST OF AMERICA referred to above; (ii) a sale of the FIRST OF
AMERICA Common Stock is made in conformity with the volume and other applicable
limitations of paragraph (d) of Rule 145 (which incorporates by reference
paragraphs (c), (e), (f) and (g)

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of Rule 144); or (iii) some other exemption from registration is available with
respect to any such proposed sale, transfer or other disposition of the FIRST
OF AMERICA Common Stock. I will be required to deliver to FIRST OF AMERICA
evidence of compliance with such requirements in connection with any proposed
sale, transfer or other disposition by me which may include, in the case of a
distribution under some other exemption from registration, an opinion of
counsel satisfactory to counsel for FIRST OF AMERICA that such exemption is
available.

3. I understand that FIRST OF AMERICA is under no obligation to
register the FIRST OF AMERICA Common Stock that I may wish to sell, transfer,
or otherwise dispose of or to take any other action necessary in order to make
compliance with an exemption from registration available.

4. If I rely on the exemption from the registration provisions
contained in Section 4 of the Act (other than that contained in Rule 144 or
145), I will obtain and deliver to FIRST OF AMERICA a copy of a letter from any
prospective transferee which will contain (a) representations reasonably
satisfactory to FIRST OF AMERICA as to the nondistributive intent,
sophistication, ability to bear risk, and access to information of such
transferee; (b) an acknowledgment concerning restrictions on transfer of the
FIRST OF AMERICA Common Stock; and (c) an assumption of the obligations of the
undersigned under this paragraph 4.

5. I understand that FIRST OF AMERICA expects that the Merger
will be accounted for as a pooling-of-interests and that Accounting Series
Release Number 130 of the SEC provides that the risk sharing requirement for
the applicability of pooling-of-interests accounting will have occurred if no
affiliate of either FIRST OF AMERICA or the COMPANY sells or in any other way
reduces his or her risk relative to any common stock received in the Merger
until such time as financial results covering at least 30 days of post-Merger
combined operations have been published. I agree, in order to preserve
pooling-of-interests accounting for the Merger, to make no disposition of any
shares of FIRST OF AMERICA received in the Merger, or in any other way reduce
my risk relative to the shares of FIRST OF AMERICA received in the Merger,
until publication by FIRST OF AMERICA of financial results covering at least 30
days of post-Merger combined operations in the form of a Form 10-Q or Form 8-K
filing with the SEC, the issuance of a quarterly earnings report, or any other
public issuance which includes combined net sales and net income.

6. I also understand that to enforce the foregoing commitments,
stop transfer instructions will be given to FIRST OF AMERICA'S transfer agent
with respect to the FIRST OF AMERICA Common Stock and that there will be placed
on the certificates for the FIRST OF AMERICA Common Stock, or any substitutions
therefor, a legend stating in substance:

THE SECURITIES REPRESENTED BY THIS CERTIFICATE HAVE BEEN ISSUED IN A
TRANSACTION TO WHICH RULE 145 PROMULGATED UNDER THE SECURITIES

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ACT OF 1933 APPLIES AND MAY ONLY BE SOLD OR OTHERWISE TRANSFERRED IN COMPLIANCE
WITH THE REQUIREMENTS OF RULE 145 OR PURSUANT TO A REGISTRATION STATEMENT UNDER
SAID ACT OR AN EXEMPTION FROM SUCH REGISTRATION AND MAY NOT BE SOLD OR
OTHERWISE TRANSFERRED UNTIL SUCH TIME AS FINANCIAL STATEMENTS OF FIRST OF
AMERICA BANK CORPORATION COVERING AT LEAST THIRTY (30) DAYS OF COMBINED
OPERATIONS FOLLOWING THE ACQUISITION OF LGF BANCORP, INC. SHALL HAVE BEEN
PUBLISHED.

Very truly yours,

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EXHIBIT C

WARRANT AGREEMENT

THIS WARRANT AGREEMENT, dated as of October 12, 1993, by and between
First of America Bank Corporation ("First of America") and LGF Bancorp, Inc.
("the Company").

W I T N E S S E T H:

WHEREAS, First of America and the Company have entered into an
Agreement and Plan of Reorganization dated as of October 12, 1993 (the "Plan"),
which Plan is being executed by the parties hereto simultaneously with this
Warrant Agreement;

WHEREAS, as a condition to First of America's entry into the Plan and
in consideration for such entry, First of America has insisted that the Company
agree to issue, on the terms and conditions set forth herein, warrants
entitling First of America to purchase up to an aggregate of 439,574 shares of
the Company's common stock, par value $.01 per share (the Company's common
stock being hereinafter referred to as "Common Stock").

NOW, THEREFORE, in consideration of the execution of the Plan and the
premises herein contained, First of America and the Company agree as follows:

1. Concurrently with the execution of the Plan, the
Company shall issue to First of America a warrant or warrants in the
form of Attachment A hereto (the "Warrant", which term as used herein
includes any warrants issued upon transfer or exchange of the original
Warrant) to purchase up to 439,574 shares of Common Stock. Each
Warrant shall be exercisable at a price per share of Common Stock of
$28.00, subject to adjustment as herein provided (the "Exercise
Price"). The Company shall at all times maintain and reserve, free
from preemptive rights, such number of authorized but unissued shares
of Common Stock so that the Warrant may be exercised without
additional authorization of Common Stock after giving effect to all
other options, warrants, convertible securities and other rights to
acquire shares of Common Stock. The Company represents and warrants
that it has duly authorized the issuance of shares of Common Stock
upon exercise of the Warrant and covenants that the shares of Common
Stock issued upon exercise of the Warrant shall be duly authorized,
validly issued and fully paid and nonassessable and subject to no
preemptive rights by the Company stockholders. Each of the Company
and First of America hereby represents to the other that this
Agreement has been authorized by all necessary corporate action on its
part and that the execution, delivery and performance of this
Agreement by it do not, and the consummation of the transactions
contemplated hereby by it will not, constitute (i) a breach or
violation of any judgment, decree, order, governmental permit or
license, or agreement, indenture or instrument made by it or to which
it is subject, which breach,

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violation or default would have a material adverse effect on the
financial condition, results of operations or business of it and its
subsidiaries, taken as a whole, or (ii) a breach or violation of, or a
default under, the articles or by-laws of it or its subsidiaries; and
the consummation of the transactions contemplated hereby will not
require any consent or approval under any such judgment, decree,
order, governmental permit or license or the consent or approval of
any other party to any such agreement, indenture or instrument, other
than any required approvals of applicable regulatory authorities. The
Warrant and the shares of Common Stock for which the Warrant is
exercisable (the "Warrant Common Stock") are hereinafter collectively
referred to, from time to time, as "the securities." First of America
hereby represents and warrants that (i) any securities acquired by
First of America hereunder are being acquired for investment purposes
only and not with a present view to distribution thereof within the
meaning of the Securities Act of 1933, as amended (the "Securities
Act"); (ii) any sale, transfer or other disposition of the securities
purchased by First of America hereunder will be made only in
compliance with all applicable provisions of the Securities Act and
applicable state securities laws and the rules and regulations
thereunder; and (iii) the certificate or certificates for the
securities shall contain an appropriate legend with respect to the
foregoing except that such legend shall not be included with respect
to any securities which shall have been sold in a registered public
offering in accordance with the provisions of this Agreement.

2. First of America will not sell, assign, transfer or
exercise the Warrant without the prior written consent of the Company
except upon: (i) the failure of the Company's stockholders to approve
the Plan at a meeting called for such purpose after the public
announcement by any person (other than First of America or any
subsidiary thereof) of an offer or proposal to acquire (after giving
effect to the shares of Common Stock of the Company already owned by
such person) 10 percent or more of the Common Stock, or to acquire,
merge or consolidate with the Company or to purchase all or
substantially all of the Company's assets; (ii) the acquisition (after
giving effect to the shares of Common Stock of the Company already
owned by such person) by any person of, or of the right to acquire, 10
percent or more of the Common Stock exclusive of the shares of Common
Stock sold directly or indirectly to such person by First of America
or any subsidiary thereof; (iii) the fifth day preceding the scheduled
expiration date of a tender or exchange offer by any person (unless
the Company's stockholders have previously adopted the Plan) to
acquire securities of the Company if (a) after giving effect to such
offer such person would own or have the right to acquire 10 percent or
more of any class or series of voting securities of the Company, (b)
there have been filed documents with the Securities and Exchange
Commission (the "SEC") in connection therewith (or, if no such filing
is required, public evidence that the offer has actually commenced)
and (c) such person has received all required regulatory approvals to
own or control 10 percent or more of the class or series of securities
to which the offer relates; (iv) the Company shall have entered into
an agreement with a person (other than an agreement with First of
America or any subsidiary thereof) for such person to acquire, merge
or consolidate with the Company or to purchase all or substantially
all

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of the Company's assets; or (v) the withdrawal, revocation or material
modification by the Company or its Board of Directors of its or their
approval of the Plan or its or their recommendation of the Plan to the
stockholders of the Company; provided, however, that First of America
may not sell, assign or transfer, and neither First of America nor any
Holder (as hereinafter defined) may exercise the Warrant if it is in
material breach of any of its representations, warranties or covenants
in the Plan at the time of any such exercise. As used in this
Agreement, "person" shall mean any individual, firm, corporation, or
other entity and shall include any syndicate or group of persons
deemed to be a "person" by Section 13(d)(3) of the Securities Exchange
Act of 1934, as amended ( the "Exchange Act"). Any sale of the
Warrant or the shares of Warrant Common Stock by First of America
following an event described in this Paragraph 2, other than a
registered public offering pursuant to Paragraph 3 or 5 or a sale to a
majority-owned subsidiary, shall be subject to the right of first
refusal of the Company (or any assignee or assignees of the Company
previously notified to First of America) at a price equal to the bona
fide written offer price and on the other terms which First of America
receives from a third party (other than a majority-owned subsidiary of
First of America) and intends to accept. The right of first refusal
shall terminate unless consummated within ten (10) business days after
notice of First of America's intention to sell has been delivered to
the Company. Delivery shall be deemed to have been made when the
notice is placed in registered mail by First of America; provided,
however, First of America shall use its best efforts to notify the
Company by telephone that such notice has been placed in registered
mail. If an offer is made for a consideration other than cash, the
value shall be determined by a recognized investment banking firm
selected by First of America and acceptable to the Company (the
failure of the Company to notify First of America within two (2)
business days after delivery of notice of First of America's intention
to sell that such firm is unacceptable shall constitute acceptance of
such firm), and such determination shall in no event be made later
than the fifth business day after notice of First of America's
intention to sell has been delivered to the Company.

3. If at any time after the Warrant may be exercised or
sold, the Company shall receive a written request therefor from First
of America, the Company shall, if permitted, prepare, file and keep
current a shelf registration statement on Form S-3 under the
Securities Act covering the Warrant Common Stock, and shall use its
best efforts to cause such registration statement to become effective
and remain current for a period of 90 days from the effective date of
such registration statement; provided, however, that First of America
may not make more than two such requests. Without the written consent
of First of America, neither the Company nor any other holder of
securities of the Company may include securities in such registration
statement. If the Company shall have notified First of America that
it is contemplating a public offering of its common equity securities,
then during the period of such offering First of America shall be
entitled only to the registration rights described in Paragraph 5,
below.

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4. If and whenever the Company is required by the
provisions of Paragraph 3 hereof to effect the registration of its
securities under the Securities Act, the Company will:

(a) prepare and file with the SEC such amendments
to such registration statement and supplements to the
prospectus contained therein as may be necessary to keep such
registration statement current;

(b) furnish to First of America and to the
underwriters of the securities being registered such
reasonable number of copies of the registration statement,
preliminary prospectus, final prospectus and such other
documents as First of America or such underwriters may
reasonably request in order to facilitate the public offering
of such securities;

(c) use its best efforts to register or qualify
the securities covered by such registration statement under
such state securities or blue sky laws of such jurisdictions
as First of America or such underwriters may reasonably
request; provided that the Company shall not be required by
virtue hereof to submit to jurisdiction in any state;

(d) notify First of America, promptly after the
Company shall receive notice thereof, of the time when such
registration statement has become effective or a supplement or
amendment to any prospectus forming a part of such
registration statement has been filed;

(e) notify First of America promptly of any
request by the SEC for the amending or supplementing of such
registration statement or prospectus or for additional
information;

(f) prepare and file with the SEC, promptly upon
the request of First of America, any amendments or supplements
to such registration statement or prospectus which, in the
opinion of counsel for First of America and the Company, are
required under the Securities Act or the rules and regulations
thereunder in connection with the distribution of the
securities by First of America;

(g) prepare and promptly file with the SEC such
amendment or supplement to such registration statement or
prospectus as may be necessary to correct any statement or
omissions if, at the time when a prospectus relating to such
securities is required to be delivered under the Securities
Act, any event shall have occurred as the result of which such
prospectus as then in effect would include an untrue statement
of a material fact or omit to state any material fact
necessary to make the statements therein, in the light of the
circumstances in which they were made, not misleading;

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<PAGE> 190
(h) advise First of America, promptly after it
shall receive notice or obtain knowledge, of the issuance of
any stop order by the SEC suspending the effectiveness of such
registration statement or the initiation or threatening of any
proceeding for that purpose and promptly use its best efforts
to prevent the issuance of any stop order or to obtain its
withdrawal if such stop order should be issued; and

(i) furnish on the date or dates provided for in
the underwriting agreement: (i) an opinion or opinions of the
counsel representing the Company for the purposes of such
registration, addressed to the underwriters covering such
matters as such underwriters may reasonably request and are
customarily covered by issuer's counsel at that time; and (ii)
a letter or letters from the independent certified public
accountants of the Company, addressed to the underwriters
covering such matters as such underwriters may reasonably
request, in which letters such accountants shall state
(without limiting the generality of the foregoing), that they
are independent certified public accountants within the
meaning of the Securities Act and that, in the opinion of
such accountants, the financial statements and other financial
data of the Company included or incorporated by reference in
the registration statement or any amendment or supplement
thereto comply in all material respects with applicable
accounting requirements of the Securities Act.

Notwithstanding the foregoing, the Company may postpone for up to one
(1) month the filing or the effectiveness of a registration statement
if the Company reasonably determines that such registration would have
a material adverse effect on any plan by the Company or any of its
subsidiaries to engage in any material financings or in any
acquisition of assets (other than in the ordinary course of business)
or similar transaction or other material corporate transaction outside
the ordinary course of business.

5. If at any time the Company proposes to register any
of its common equity securities under the Securities Act on Forms S-1,
S-2, S-3 or any other registration form at the time in effect on which
the securities could be registered for sale by the Company (other than
a registration in connection with an acquisition of or merger with
another entity or the sale of shares to employees of the Company
pursuant to employee stock option or other employee stock purchase
plans, provided that the only securities covered by such registration
are the securities to be issued as part of such acquisition or merger
or the securities to be sold to such employees), the Company shall on
each such occasion give written notice to First of America of its
intention to do so and, upon the written request of First of America,
given within 15 days after receipt of any such notice (which request
shall state the intended method of disposition of the securities by
First of America), the Company will use its diligent, good faith
efforts to cause the securities, as to which First of America shall
have so requested, to be registered under the Securities Act and under
the same registration statement proposed to be filed by the Company;
provided, however, that if the offering to which the proposed
registration

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statement relates is to be distributed by or through an underwriter
selected by the Company, First of America shall agree either to sell
the securities through such underwriter on the same terms and
conditions as the underwriter agrees to sell securities on behalf of
the Company or to withhold such shares from the market for a period of
135 days after the effective date of the closing with underwriters;
and, provided, further, that if a greater number of securities is
offered for participation in the proposed underwriting than in the
opinion of the managing underwriter proposing to underwrite securities
to be sold by the Company can be accommodated without adversely
affecting the proposed underwriting, the Company may elect to reduce
pro-rata the amount of all securities (including the securities)
proposed to be offered in the underwriting to a number deemed
satisfactory by the managing underwriter. First of America may not
make more than two (2) requests pursuant to this paragraph.

6. With respect to the first registration requested
pursuant to Paragraph 3 hereof, and with respect to the incidental
registration requested pursuant to Paragraph 5 hereof, the Company
shall bear the following fees, costs and expenses: all registration,
filing and NASD fees, printing and engraving expenses, fees and
disbursements of counsel and accountants for the Company, and all
legal fees and disbursements and other expenses of the Company to
comply with state securities or blue sky laws in which securities to
be offered are to be registered or qualified. First of America shall
bear such costs, fees and expenses with respect to the second
registration requested pursuant to Paragraph 3 hereof. With respect
to the registrations requested pursuant to Paragraph 3 and Paragraph 5
hereof, fees and disbursements of counsel and accountants for First of
America, underwriting discounts and commissions and transfer taxes for
First of America and any other expenses incurred by First of America
shall be borne by First of America.

7. (a) The Company will indemnify and hold harmless
First of America, any underwriter (as defined in the
Securities Act) for First of America, and each person, if any,
who controls First of America or such underwriter (within the
meaning of the Securities Act) from and against any and all
loss, damage, liability, cost and expense to which First of
America or any such underwriter or controlling person may
become subject under the Securities Act or otherwise, insofar
as such losses, damages, liabilities, costs or expenses arise
out of or are caused by any untrue statement or alleged untrue
statement of any material fact contained in such registration
statement, any prospectus or preliminary prospectus contained
therein or any amendment or supplement thereto, or arise out
of or are based upon the omission or alleged omission to state
therein a material fact required to be stated therein or
necessary to make the statements therein, in light of the
circumstances in which they were made, not misleading;
provided, however, that the Company will not be liable in any
such case to the extent that any such loss, damage, liability,
cost or expense arises out of or is based upon an untrue
statement or alleged untrue statement or omission or alleged
omission so made in conformity with information furnished by
First of America, such

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underwriter or such controlling person in writing specifically
for use in the preparation thereof.

(b) First of America will indemnify and hold
harmless the Company, any underwriter (as defined in the
Securities Act), and each person, if any, who controls the
Company or such underwriter (within the meaning of the
Securities Act) from and against any and all losses, damages,
liabilities, costs or expenses to which the Company or any
such underwriter or controlling person may become subject
under the Securities Act or otherwise, insofar as such losses,
damages, liabilities, costs or expenses arise out of or are
caused by any untrue or alleged untrue statement of any
material fact contained in such registration statement, any
prospectus or preliminary prospectus contained therein or any
amendment or supplement thereto, or arise out of or are based
upon the omission or the alleged omission to state therein a
material fact required to be stated therein or necessary to
make the statements therein, in light of the circumstances in
which they were made, not misleading, in each case to the
extent, but only to the extent, that such untrue statement or
alleged untrue statement or omission or alleged omission was
so made in reliance upon and in conformity with written
information furnished by First of America specifically for use
in the preparation thereof.

(c) Promptly after receipt by an indemnified
party pursuant to the provisions of subparagraph (a) or (b) of
this Paragraph 7 of any claim in writing or of notice of the
commencement of any action involving the subject matter of the
foregoing indemnity provisions, such indemnified party will,
if a claim in respect thereof is to be made against the
indemnifying party pursuant to the provisions of said
subparagraph (a) or (b), promptly notify the indemnifying
party of the receipt of such claim or notice of the
commencement of such action, but the omission to so notify the
indemnifying party will not relieve it from any liability
which it may have to any indemnified party otherwise
hereunder. In case such action is brought against any
indemnified party and it notifies the indemnifying party of
the commencement thereof, the indemnifying party shall have
the right to participate in, and, to the extent that it may
wish, jointly with any other indemnifying party similarly
notified, to assume the defense thereof, with counsel
satisfactory to such indemnified party; provided, however, if
the defendants in any action include both the indemnified
party and the indemnifying party and there is a conflict of
interest which would prevent counsel for the indemnifying
party from also representing the indemnified party, the
indemnified party or parties shall have the right to select
one separate counsel to participate in the defense of such
indemnified party or parties. After notice from the
indemnifying party to such indemnified party of its election
so to assume the defense thereof, the indemnifying party will
not be liable to such indemnified party pursuant to the
provisions of said subparagraphs (a) or (b) for any legal or
other expenses subsequently incurred by such indemnified party
in connection with the defense thereof other than reasonable
costs of investigation, unless (i) the

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indemnified party shall have employed counsel in accordance
with the provisions of the preceding sentence, (ii) the
indemnifying party shall not have employed counsel
satisfactory to the indemnified party to represent the
indemnified party within a reasonable time after the notice of
the commencement of the action, or (iii) the indemnifying
party has authorized the employment of counsel for the
indemnified party at the expense of the indemnifying party.

(d) If recovery is not available under the
foregoing indemnification provisions, for any reason other
than as specified therein, the parties entitled to
indemnification by the terms thereof shall be entitled to
contribution to liabilities and expenses, except to the extent
that contribution is not permitted under Section 11(f) of the
Securities Act. In determining the amount of contribution to
which the respective parties are entitled, there shall be
considered the parties' relative knowledge and access to
information concerning the matter with respect to which the
claim was asserted, the opportunity to correct and/or prevent
any statement or omission, and any other equitable
considerations appropriate under the circumstances. First of
America and the Company agree that it would not necessarily be
equitable if the amount of such contribution were determined
by pro-rata or per capita allocation even if the underwriters
and First of America as a group were considered a single
entity for such purpose.

8. Subject to applicable regulatory restrictions, from
and after the date on which (i) any person acquires, or obtains the
right to acquire, at least 10 percent of the Common Stock or (ii) an
event described in clause (iv) or clause (v) of Paragraph 2 of this
Agreement occurs, (1) at the request of the holder of the Warrant (the
"Holder"), the Company shall repurchase the Warrant from the Holder at
a price (the "Warrant Repurchase Price") equal to the higher of (i)
(x) the Market/Offer Price less the Exercise Price, multiplied by (y)
the number of shares of Common Stock for which the Warrant is then
exercisable (the "Conversion Number") and (ii) in the event of the sale
of all or any substantial part of the assets of the Company (or all or
any substantial part of the assets of any significant subsidiary), the
Conversion Number multiplied by the excess of (x)(I) the sum of (a)
the price paid for such assets, (b) the current market value of the
remaining assets of the Company, as determined by a recognized
investment banking firm selected by the Holder and acceptable to the
Company, and (c) the Exercise Price multiplied by the Conversion
Number, divided by (II) the sum of the number of shares of Common
Stock then outstanding and the Conversion Number (the "Sales Price"),
over (y) the Exercise Price; and (2) at the request of the owner of
Warrant Stock (the "Owner"), the Company shall repurchase any shares
of Common Stock purchased pursuant to the Warrant ("Warrant Stock"),
at a price (the "Warrant Stock Repurchase Price") equal to the highest
of (x) 110 percent of the Exercise Price multiplied by the number of
such shares, (y) the Market/Offer Price multiplied by the number of
such shares and (z) in the event of a sale of all or any substantial
part of the assets of the Company (or all or any substantial part of
the assets of any significant subsidiary), the Sales Price multiplied
by the number of such shares. In the event that an exchange offer

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is made or an agreement is entered into for a merger or consolidation
involving consideration other than cash, the value of the securities
or other property issuable or deliverable in exchange for the Common
Stock shall be determined by a nationally recognized investment
banking firm acceptable to the Holder or Owner (as the case may be)
and the Company.

Each of the Holder of the Warrant and the Owner may exercise
its respective right to require the Company to repurchase the Warrant
and the Warrant Stock pursuant to this Paragraph 8 by surrendering for
such purpose to the Company, at its principal office, the Warrant and
certificates for Warrant Stock accompanied by a written notice or
notices stating that the Holder or the Owner, as the case may be,
elects to require the Company to repurchase the Warrant and/or the
Warrant Stock in accordance with the provisions of this Paragraph 8.
As promptly as practicable, and in any event within five (5) business
days after the surrender of the Warrant and/or certificates
representing shares of Warrant Stock and the receipt of such notice or
notices relating thereto, the Company shall deliver or cause to be
delivered to the Holder the Warrant Repurchase Price and/or to the
Owner the Warrant Stock Repurchase Price therefor or the portion
thereof which the Company is not then prohibited under applicable law
and regulation from so delivering.

To the extent that the Company is prohibited under applicable
law or regulation, or as a result of administrative or judicial
action, from repurchasing the Warrant and/or Warrant Stock in full,
the Company shall immediately so notify the Holder and/or the Owner
and thereafter deliver or cause to be delivered, from time to time, to
the Holder and/or the Owner, as appropriate, the portion of the
Warrant Repurchase Price and the Warrant Stock Repurchase Price,
respectively, which it is no longer prohibited from delivering, within
five (5) business days after the date on which the Company is no
longer so prohibited; provided, however, to the extent the Company is
at the time and after the expiration of 24 months, so prohibited from
delivering to the Holder and/or the Owner, as appropriate, the Warrant
Repurchase Price and the Warrant Stock Repurchase Price, respectively,
in full (and the Company hereby undertakes to use its best efforts to
obtain all required regulatory and legal approvals as promptly as
practicable), the Company shall deliver to the Holder a new Warrant
evidencing the right of the Holder to purchase that number of shares
of Common Stock obtained by multiplying the number of shares of Common
Stock for which the Warrant may at such time be exercised by a
fraction, the numerator of which is the Warrant Repurchase Price less
the portion thereof (if any) theretofore delivered to the Holder and
the denominator of which is the Warrant Repurchase Price, and the
Company shall deliver to the Owner a certificate for the shares of
Warrant Stock it is then so prohibited from repurchasing, and the
Company shall have no further obligation to repurchase such new
Warrant or such Warrant Stock; and provided, further, that upon
receipt of such notice and until five (5) business days thereafter the
Holder and/or Owner may revoke its notice of repurchase of the Warrant
and/or Warrant Stock by written notice to the Company at its principal
office stating that the Holder and/or Owner elects to revoke its
election to exercise its right to require the

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Company to repurchase the Warrant and/or Warrant Stock, whereupon the
Company will promptly deliver to the Holder and/or Owner the Warrant
and/or certificates representing the shares of Warrant Stock
surrendered to the Company for purposes of such repurchase and the
Company shall have no further obligation to repurchase such Warrant
and/or Warrant Stock.

Upon the occurrence of an event which results in the Warrant
and the Warrant Stock becoming repurchasable as provided in this
Paragraph 8, the Company shall promptly notify the Holder and the
Owner of such event and promptly compute the Warrant Repurchase Price
and the Warrant Stock Repurchase Price and furnish to the Holder and
the Owner a certificate, signed by a principal financial officer of
the Company, setting forth the Warrant Repurchase Price and the
Warrant Stock Repurchase Price and the basis and computation thereof.

The term "Market/Offer Price" means the highest of (a) the
highest price per share of Common Stock at which a tender offer or
exchange offer meeting the requirements of clause (iii) of Paragraph 2
has been made, (b) the highest price per share of Common Stock paid or
agreed to be paid therefor by any third party pursuant to an agreement
with the Company and (c) the highest last reported sale price per
share for shares of Common Stock reported for any trading day within
the four-month period immediately preceding the date the Holder gives
notice of a required repurchase pursuant to this Paragraph 8.

Notwithstanding anything to the contrary contained herein, the
Warrant Repurchase Price and/or the Warrant Stock Repurchase Price
shall not exceed an aggregate of $3,500,000 for all shares covered by
the Warrant or acquired upon the exercise of the Warrant (prorated as
to each share) if the repurchase is based on clause (i) of this
Paragraph 8 or, if the repurchase is based on clause (ii) of this
Paragraph 8, if an event described in clause (v) of Paragraph 2 of
this Agreement occurs without the occurrence of an event described in
clause (iv) of said Paragraph 2 or without any person acquiring or
obtaining the right to acquire at least 10% of the Common Stock.

9. In the event that the Company issues any additional
shares of Common Stock pursuant to outstanding stock options, or for
any other reason, the Company shall issue additional warrants to First
of America, such additional warrants to be exercisable for a number of
shares of Common Stock equal to 19.99 percent of the number of
additional shares of Common Stock so issued. Such additional warrants
shall be identical to the Warrant.

10. The Company will not enter into any transaction
described in (a), (b) or (c) of Paragraph 5(A) of the Warrant unless
the Acquiring Corporation (as defined in the Warrant) assumes in
writing, in form and substance satisfactory to the Holder, all the
obligations of the Company hereunder.

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11. Without limiting the foregoing or any remedies
available to First of America, it is specifically acknowledged that
First of America would not have an adequate remedy at law for any
breach of this Agreement and will be entitled to specific performance
of the obligations under, and injunctive relief against actual or
threatened violations of the obligations of any person subject to,
this Agreement.

12. This Warrant Agreement and the rights conferred
hereby, except the registration and related rights described in
Paragraphs 3 through 7 of this Warrant Agreement, shall terminate upon
the earliest of (a) two years after an event described in the first
sentence of Paragraph 2 of this Agreement, (b) the Effective Time of
the Plan, (c) the failure of the Company's stockholders to adopt the
Plan at a meeting called for such purpose (including any adjournment
or adjournments thereof), other than any such failure described in
clause (i) of Paragraph 2 of this Agreement, or (d) a valid
termination of the Plan (other than if terminated by First of America
by reason of a willful breach by the Company, in which event this
Warrant Agreement shall terminate two years after such breach) prior
to the occurrence of an event described in the first sentence of
Paragraph 2 of this Warrant Agreement.

IN WITNESS WHEREOF, the parties hereto have caused this instrument to
be executed in counterparts by their duly authorized officers and their
corporate seals to be hereunto affixed, all as of the day and year first above
written.

FIRST OF AMERICA BANK
CORPORATION

Attest:

By:
Richard D. Klein
Vice Chairman

LGF BANCORP, INC.

Attest:

By:
J. Edward Weishel
Chairman, Chief Executive
Officer and President

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ATTACHMENT A TO
THE WARRANT
AGREEMENT

WARRANT
TO PURCHASE UP TO 439,574 SHARES OF
COMMON STOCK
OF
LGF BANCORP, INC.

This is to certify that, for value received, First of America Bank
Corporation ("First of America") or any subsequent transferee (First of America
or such transferee, the "Holder") is entitled to purchase, subject to the
provisions of this Warrant, from LGF Bancorp, Inc. (the "Company") an aggregate
of up to 439,574 fully paid and nonassessable shares of common stock, par value
$.01 per share (the "Common Stock"), of the Company at a price per share equal
to $28.00, subject to adjustment as herein provided (the "Exercise Price").

1. Exercise of Warrant. Subject to the provisions hereof and the
limitations set forth in Paragraph 2 of the Warrant Agreement of even date
hereof by and between First of America and the Company (the "Agreement")
forming part of an Agreement and Plan of Reorganization of even date herewith
between First of America and the Company (the "Plan"), this Warrant may be
exercised in whole or in part, at any time or from time to time on or after the
date hereof. This Warrant shall be exercised by presentation and surrender
hereof to the Company at the principal office of the Company, accompanied by
(i) a written notice of exercise, (ii) payment to the Company, for the account
of the Company, of the Exercise Price for the number of shares of Common Stock
specified in such notice and (iii) a certificate of the Holder stating the
event or events that have occurred which entitle the Holder to exercise this
Warrant. The Exercise Price for the number of shares of Common Stock specified
in the notice shall be payable in immediately available funds.

Upon such presentation and surrender, accompanied by such notice,
payment and certificate, the Company shall issue promptly (and within one
business day if requested by the Holder) to the Holder or its assignee,
transferee or designee the shares of Common Stock to which the Holder is
entitled hereunder.

If this Warrant should be exercised in part only, the Company shall,
upon surrender of this Warrant for cancellation, execute and deliver a new
Warrant evidencing the rights of the Holder thereof to purchase the balance of
the shares of Common Stock purchasable hereunder. Upon exercise of this
Warrant, as set forth above, the Holder shall be deemed to be the holder of
record of the shares of Common Stock issuable upon such exercise,
notwithstanding that the stock transfer books of the Company shall then be
closed or that certificates representing such shares of Common Stock shall not
then be actually delivered to the Holder. The Company shall pay all expenses
that may be payable in connection with the preparation, issuance and delivery

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of stock certificates pursuant to this Paragraph 1 in the name of the Holder or
its assignee, transferee or designee, other than stock transfer taxes which may
be payable upon such issuance in a name other than the Holder.

2. Reservation of Shares; Preservation of Rights of Holder. The
Company hereby agrees that at all times it will maintain and reserve, free from
preemptive rights, such number of authorized but unissued shares of Common
Stock so that this Warrant may be exercised without additional authorization of
Common Stock after giving effect to all other options, warrants, convertible
securities, and other rights to acquire shares of Common Stock. The Company
further agrees (i) that it will not, by charter amendment or through
reorganization, consolidation, merger, dissolution or sale of assets, or by any
other voluntary act, avoid or seek to avoid the observance or performance of
any of the covenants, stipulations or conditions to be observed or performed
hereunder or under the Agreement by the Company, (ii) that it will use its best
efforts to take all action (including (A) complying with all premerger
notification, reporting and waiting period requirements specified in 15 U.S.C.
Section 18a and regulations promulgated thereunder and (B) in the event, under
the Home Owners Loan Act, the Bank Holding Company Act of 1956, as amended, or
the Change in Bank Control Act, prior approval of the Office of Thrift
Supervision ("OTS") or the Board of Governors of the Federal Reserve System
(the "Board") is necessary before this Warrant may be exercised, cooperating
fully with the Holder in preparing such applications and providing such
information to the OTS or the Board as the OTS or the Board may require) in
order to permit the Holder to exercise this Warrant and the Company duly and
effectively to issue shares of its Common Stock hereunder, and (iii) that it
will promptly take all action necessary to protect the rights of the Holder
against dilution as provided herein.

3. Fractional Shares. The Company shall not be required to issue
fractional shares of Common Stock upon exercise of this Warrant but shall pay
for any such fraction of a share in cash or by certified or official bank check
at the Exercise Price.

4. Exchange, Transfer or Loss of Warrant. This Warrant is
exchangeable or, subject to Paragraph 2 of the Agreement, transferable, without
expense (other than stock transfer taxes which may be payable), at the option
of the Holder, upon presentation and surrender hereof at the principal office
of the Company, for other Warrants of different denominations entitling the
Holder to purchase in the aggregate the same number of shares of Common Stock
purchasable hereunder. The term "Warrant" as used herein includes any
Warrants for which this Warrant may be exchanged. Upon receipt by the Company
of evidence reasonably satisfactory to it of the loss, theft, destruction or
mutilation of this Warrant, and (in the case of loss, theft or destruction) of
reasonably satisfactory indemnification, and upon surrender and cancellation of
this Warrant, if mutilated, the Company will execute and deliver a new Warrant
of like tenor and date.

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5. Certain Transactions.

(A) In case the Company (a) shall consolidate with or merge
into any Person, other than the Holder or one of its Affiliates, and
shall not be the continuing or surviving corporation of such
consolidation or merger, (b) shall permit any Person, other than the
Holder or one of its Affiliates, to merge into the Company and the
Company shall be the continuing or surviving corporation, but, in
connection with such merger, the shares of Common Stock outstanding
immediately prior to the merger shall be changed into or exchanged for
stock or other securities of any other Person or cash or any other
property or shall represent less than 50 percent of the shares of
Common Stock immediately after giving effect to the merger, or (c)
shall sell or otherwise transfer all or substantially all of its
assets to any Person, other than the Holder or one of its Affiliates,
then, and in each such case, the agreement governing such transaction
shall make proper provision so that this Warrant shall, upon the
consummation of any such transaction and upon the terms and conditions
set forth herein, be converted into, or exchanged for, a warrant (the
"Substitute Warrant"), at the option of the Holder, of (I) the
Acquiring Corporation (as hereinafter defined), (II) any company which
controls the Acquiring Corporation, or (III) in the case of a merger
described in clause (A)(b), the Company, in which case such warrant
shall be a newly issued warrant.

(B) The following terms have the meanings indicated:

(a) "Acquiring Corporation" shall mean (I) the
continuing or surviving corporation of a consolidation or
merger with the Company (if other than the Company), (II) the
corporation merging into the Company in a merger in which the
Company is the continuing or surviving person and in
connection with which the shares of Common Stock outstanding
immediately prior to the merger are changed into or exchanged
for stock or other securities of any other Person or cash or
any other property or shall represent less than 50 percent of
the shares of Common Stock immediately after giving effect to
the merger, and (III) the transferee of all or substantially
all of the Company's assets or the assets of its subsidiaries;

(b) "Substitute Common Stock" shall mean the common
stock issued by the issuer of the Substitute Warrant;

(c) "Assigned Value" shall mean the highest of the
highest price per share of Common Stock at which a tender
offer or exchange offer has been made, the highest price per
share of Common Stock paid or agreed to be paid therefor by
any third party pursuant to an agreement with the Company and
the highest last reported sale price per share for shares of
Common Stock reported for any trading day within the 4-month
period immediately preceding the consolidation or merger in
question;

(d) "Average Price" shall mean the average of the
closing or last reported sale prices of a share of Substitute
Common Stock for days on which trading

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occurs during the 4-month period immediately preceding the
consolidation, merger, or sale in question, but in no event
higher than the closing or last reported sale price of the
shares of Substitute Common Stock on the day preceding such
consolidation, merger or sale; provided that if the Company is
the issuer of the Substitute Warrant, the Average Price shall
be computed with respect to a share of the common stock issued
by the Person merging into the Company or by any company which
controls such Person, as the Holder may elect;

(e) A "Person" shall mean any individual, firm,
corporation or other entity and include as well any syndicate
or group deemed to be a "person" by Section 13(d)(3) of the
Securities Exchange Act of 1934, as amended;

(f) "Affiliate" shall have the meaning ascribed to
such term in Rule 12b-2 of the General Rules and Regulations
under the Securities Exchange Act of 1934, as amended, as in
effect on the date hereof.

(C) Subject to (D), the Substitute Warrant shall have the
same terms as this Warrant provided that if the terms of the
Substitute Warrant cannot, for legal reasons, be the same as this
Warrant, such terms shall be as similar as possible and in no event
less advantageous to the Holder. The issuer of the Substitute Warrant
shall also enter into an agreement with the then Holder of the
Substitute Warrant in substantially the same form as the Agreement,
which shall be applicable to the Substitute Warrant.

(D) The Substitute Warrant shall be exercisable for such
number of shares of Substitute Common Stock as is equal to the
Assigned Value multiplied by the number of shares of Common Stock for
which this Warrant is then exercisable, divided by the Average Price.
The exercise price of the Substitute Warrant per share of Substitute
Common Stock shall be equal to the Exercise Price multiplied by a
fraction in which the numerator is the number of shares of Common
Stock for which this Warrant is then exercisable and the denominator
is the number of shares of Substitute Common Stock for which the
Substitute Warrant is exercisable.

(E) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Warrant be exercisable for more than 19.99
percent of the aggregate of the outstanding shares of Substitute
Common Stock and the Shares of Substitute Common Stock issuable upon
exercise of the Substitute Warrant.

6. Adjustment. The number of shares of Common Stock purchasable upon
the exercise of this Warrant and the Exercise Price shall be subject to
adjustment from time to time as provided in this Paragraph 6.

(A)(1) In case the Company shall pay or make a dividend or other
distribution on any class of capital stock of the Company in Common Stock, the
number of shares of Common

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Stock purchasable upon exercise of this Warrant shall be increased by
multiplying such number of shares by a fraction of which the denominator shall
be the number of shares of Common Stock outstanding at the close of business on
the day immediately preceding the date of such distribution and the numerator
shall be the sum of such number of shares and the total number of shares
constituting such dividend or other distribution, such increase to become
effective immediately after the opening of business on the date following such
distribution.

(2) In case outstanding shares of Common Stock shall be subdivided
into a greater number of shares of Common Stock, the number of shares of Common
Stock purchasable upon exercise of this Warrant at the opening of business on
the day following the day upon which such subdivision becomes effective shall
be proportionately increased, and, conversely, in case outstanding shares of
Common Stock shall each be combined into a smaller number of shares of Common
Stock, the number of shares of Common Stock purchasable upon exercise of this
Warrant at the opening of business on the day following the day upon which such
combination becomes effective shall be proportionately decreased, such increase
or decrease, as the case may be, to become effective immediately after the
opening of business on the day following the day upon which such subdivision or
combination becomes effective.

(3) The reclassification (excluding any transaction in which a
Substitute Warrant would be issued) of Common Stock into securities (other than
Common Stock) and/or cash and/or other consideration shall be deemed to involve
a subdivision or combination, as the case may be, of the number of shares of
Common Stock outstanding immediately prior to such reclassification into the
number or amount of securities and/or cash and/or other consideration
outstanding immediately thereafter and the effective date of such
reclassification shall be deemed to be "the day upon which such subdivision
becomes effective" or "the day upon which such combination becomes effective",
as the case may be, within the meaning of clause (2) above.

(4) The Company may make such increases in the number of shares of
Common Stock purchasable upon exercise of this Warrant, in addition to those
required by this subparagraph (A), as shall be determined by its Board of
Directors to be advisable in order to avoid taxation so far as practicable of
any dividend of stock or stock rights or any event treated as such for federal
income tax purchases to the recipients.

(B) Whenever the number of shares of Common Stock purchasable upon
exercise of this Warrant is adjusted as herein provided, the Exercise Price
shall be adjusted by a fraction in which the numerator is equal to the number
of shares of Common Stock purchasable prior to the adjustment and the
denominator is equal to the number of shares of Common Stock purchasable after
the adjustment.

(C) For the purpose of this Paragraph 6, the term "Common Stock"
shall include any shares of the Company of any class or series which has no
preference or priority in the payment of dividends or in the distribution of
assets upon any voluntary or involuntary liquidation, dissolution or winding up
of the Company and which is not subject to redemption by the Company.

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7. Notice. (A) Whenever the number of shares of Common Stock for
which this Warrant is exercisable is adjusted as provided in Paragraph 6, the
Company shall promptly compute such adjustment and mail to the Holder a
certificate, signed by a principal financial officer of the Company, setting
forth the number of shares of Common Stock for which this Warrant is
exercisable as a result of such adjustment, a brief statement of the facts
requiring such adjustment and the computation thereof and when such adjustment
will become effective.

(B) Upon the occurrence of an event which results in this Warrant
becoming convertible into, or exchangeable for, the Substitute Warrant, as
provided in Paragraph 5, each of the Company and any Acquiring Corporation
shall promptly notify the Holder of such event; and, upon receipt from the
Holder of its choice as to the issuer of the Substitute Warrant, each of the
Company and any Acquiring Corporation shall promptly compute the number of
shares of Substitute Common Stock for which the Substitute Warrant is
exercisable and furnish to the Holder a certificate, signed by a principal
financial officer of each of the Company and any Acquiring Corporation, setting
forth the number of shares of Substitute Common Stock for which the Substitute
Warrant is exercisable, a computation thereof and when such adjustment will
become effective.

8. Rights of the Holder. (A) Without limiting the foregoing or any
remedies available to the Holder, it is specifically acknowledged that the
Holder would not have an adequate remedy at law for any breach of this Warrant
and will be entitled to specific performance of the obligation under, and
injunctive relief against actual or threatened violations of the obligations of
any Person subject to, this Warrant.

(B) The Holder shall not, by virtue hereof, be entitled to any rights
of a shareholder in the Company.

9. Termination. This Warrant and the rights conferred hereby shall
terminate upon the earliest of (a) two years after an event described in the
first sentence of Paragraph 2 of the Agreement, (b) the Effective Time of the
Plan, (c) the failure of the Company's stockholders to adopt the Plan at a
meeting called for such purpose (including any adjournment or adjournments
thereof), other than any such failure described in clause (i) of Paragraph 2 of
the Agreement, or (d) a valid termination of the Plan (other than if terminated
by First of America by reason of a willful breach by the Company, in which
event the Warrant shall terminate two years after such breach) prior to the
occurrence of an event described in the first sentence of Paragraph 2 of the
Agreement.

10. Governing Law. This Warrant shall be governed by, and
interpreted in accordance with, the laws of the State of Delaware.

Dated: October 12, 1993 LGF BANCORP, INC.

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By:
J. Edward Weishel
Chairman, Chief Executive Officer
and President

ATTEST

By:

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APPENDIX I
MERGER AGREEMENT

THIS AGREEMENT is made and entered into as of _____________, 1993 by
and between First of America Bank-Kankakee/Will County, N.A. ("First of
America") and La Grange Federal Savings & Loan Association ("La Grange").

RECITALS

WHEREAS, First of America is a national banking association organized
under the laws of the United States of America, being located at One Dearborn
Square, City of Kankakee, County of Kankakee, in the State of Illinois, with
Capital of $_________________ divided into 549,000 shares of Common Stock, each
of $25 par value ("First of America Stock"), Surplus of $_________ and
Undivided Profits, including Capital Reserves, of $_________ as of September
30, 1993; and

WHEREAS, La Grange is a federal savings and loan association organized
under the laws of the United States of America, being located at 1 North La
Grange Road, City of La Grange, County of Cook, in the State of Illinois, with
Capital of $___________ divided into _________ shares of Common Stock, each of
$_____ par value ("La Grange Stock"), Surplus of $___________ and Undivided
Profits, including Capital Reserves, of $_________ as of September 30, 1993;
and

WHEREAS, First of America Bank Corporation ("FABC") is the sole
shareholder of all of the outstanding First of America Stock; and

WHEREAS, immediately prior to the Effective Time, as hereinafter
defined, FABC shall be the sole shareholder of all of the outstanding La Grange
Stock; and

WHEREAS, in accordance with the provisions of the Act of November 7,
1918, as amended (12 U.S.C. Section 215a), directors of First of America and La
Grange, in each case constituting not less than a majority of the respective
Boards of Directors of First of America and La Grange, have agreed upon this
Agreement in writing by their execution hereof.

NOW, THEREFORE, in consideration of the mutual promises contained
herein, First of America and La Grange, hereby agree as follows:

SECTION 1

La Grange shall be merged with and into First of America under the
charter, Articles of Association and By-laws of the latter, except that the
Articles of Association shall be those set forth in Section 9 hereof.

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SECTION 2

The name of the receiving association in the Merger (hereinafter
called the "Association" whenever reference is made to it as of the time when
the merger becomes effective being hereinafter called the "Effective Time" or
thereafter) shall be "First of America Bank-__________________________,
National Association."

SECTION 3

The business of the Association shall be that of a national banking
association. This business shall be conducted by the Association at its main
office, which shall be located at 202 One Dearborn Square, Kankakee, Illinois.
All of the branches of La Grange and First of America in lawful operation at
the Effective Time shall continue as branches of the Association and the main
office of La Grange shall continue as a branch of the Association.

SECTION 4

The amount of capital stock of the Association shall be $__________
divided into ______________ shares of common stock, each of $25 par value, and
at the Effective Time the Association shall have Surplus and Undivided Profits
including Capital Reserves equal to the combined capital structures of La
Grange and First of America as stated in the recital clauses to this Agreement,
adjusted, however, for normal earnings and expenses and for the payment by La
Grange and First of America of any dividends paid subsequent to the date of
this Agreement (subject to adjustment, if necessary, for compliance with the
push-down method of accounting for goodwill).

SECTION 5

At the Effective Time, by virtue of the merger, all assets, rights,
franchises and interests of La Grange in and to every type of property (real,
personal and mixed) and choses in action, as they exist immediately prior to
the Effective Time, shall pass and be transferred to and vest in the
Association, without any deed, conveyance or other transfer, and the separate
existence of La Grange shall cease. The corporate existence of the Association
shall continue after the Effective Time unaffected and unimpaired by the
Merger, and the Association shall be responsible for all liabilities, including
the liquidation account and liabilities arising out of the operation of any
Trust Department, of La Grange of every kind and description, as they exist
immediately prior to the Effective Time.

At the Effective Time, by virtue of the Merger, the Association,
without any order or other action on the part of any court or otherwise, shall
hold and enjoy all rights of property, franchises and interests, including
appointments, designations and nominations, and all other rights and interests
as trustee, executor, administrator, registrar of stocks and bonds, guardian of
estates, assignee, receiver and committee of estates of incompetents, and in
every other

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fiduciary capacity, in the same manner and to the same extent as such rights,
franchises and interest were held or enjoyed by La Grange and First of America
immediately prior to the Effective Time, subject to removal by a court of
competent jurisdiction in the same manner and to the same extent as was La
Grange or First of America as the case may be, prior to the Effective Time.

SECTION 6

(a) Of the capital stock of the Association, the shares of First of
America Stock outstanding immediately prior to the Effective Time shall remain
outstanding at and after the Effective Time as one share of Common Stock of the
Association, without any change therein.

(b) At the Effective Time each share of La Grange Stock outstanding
immediately prior to the Effective Time shall, by virtue of the Merger and
without any action on the part of the holder thereof, be converted into and
exchanged for ____________________ (______) shares of Common Stock of the
Association. Each certificate representing shares of La Grange Stock
immediately prior to the Effective Time shall until surrendered as provided for
in paragraph (c) of this Section evidence ownership of the number of shares of
Common Stock of the Association into which the shares of La Grange theretofore
represented thereby shall have been converted in the Merger.

(c) After the Effective Time the former holder of shares of La Grange
Stock which have been converted into shares of Common Stock of the Association
in the Merger shall, upon surrender in proper form to the Association for
cancellation of the certificate or certificates which prior to the Effective
Time represented such holder's shares of La Grange Stock, be entitled to
receive one or more certificates representing the shares of Common Stock of the
Association into which the shares of La Grange Stock previously represented by
the surrendered certificates shall have been so converted.

SECTION 7

La Grange and First of America may pay normal and regular dividends
between the date of this Agreement and the Effective Time and may dispose of
any of their respective assets in any other manner in the normal course of
business and for adequate value.

SECTION 8

The Board of Directors of the Association shall consist of the
individuals who, immediately prior to the Effective Time, were directors of
First of America and La Grange. Such directors shall serve until the next
annual meeting of the shareholders of the Association, unless sooner removed,
disqualified or deceased and until such time as their successors have been
elected and have qualified.

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SECTION 9

From and after the Effective Time, the Articles of Association of the
Association shall read in their entirety as set forth in Annex I thereto.

SECTION 10

This Agreement may be amended by the parties hereto at any time prior
to the Effective Time, whether before or after approval hereof by the
shareholders of La Grange and First of America, but, after such approval by
either the shareholders of La Grange or First of America, no amendment shall be
made which materially adversely affects the rights of the shareholders of
either party without further approval of such shareholders. The President or
any Vice President acting together with the Cashier or Secretary of any party
hereto are authorized and empowered to make, execute and deliver such amendment
or amendments to this Agreement as such officers signing such amendment on
behalf of a party may approve as shall be conclusively evidenced by their
signatures to any such amendment. This Agreement may not be amended, except by
an instrument in writing signed on behalf of the parties hereto.

This Agreement may be terminated by the unilateral action of the Board
of Directors of either party prior to the approval of the shareholders of
either La Grange or First of America or by mutual consent of the respective
Boards of Directors of La Grange and First of America after the approval of the
shareholders of either La Grange or First of America.

SECTION 11

The obligations of the parties under this Agreement shall be subject
to: (i) the approval, ratification and confirmation of this Agreement by the
shareholders of La Grange at a meeting of shareholders duly called and held;
(ii) the approval, ratification and confirmation of this Agreement by the
shareholders of First of America at a meeting of shareholders duly called and
held; (iii) receipt of approval of the Merger from all governmental and banking
authorities whose approval is required; (iv) receipt of any necessary
regulatory approval to operate the main office of La Grange and the branches of
La Grange as branches of the Association; and (v) the consummation of the
transaction by an Agreement and Plan of Reorganization among FABC, First of
America Acquisition Company, and LGF Bancorp, Inc. dated as of October _____,
1993, on or before the Effective Time. The Merger shall become effective at
the time specified in a certificate to be issued by the Comptroller of the
Currency of the United States, under the seal of his office, approving the
Merger.

SECTION 12

All notices and other communications hereunder shall be in writing and
shall be deemed given if delivered personally or mailed by registered or
certified mail (return receipt requested), postage prepaid, to the parties at
the following addresses (or at such other addresses for a party as shall be
specified by like notice):

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If to First of America, at:

First of America Bank-Kankakee/Will County, N.A.
One Dearborn Square
Kankakee, Illinois 60901
Attention: Lee J. Cieslak, President

If to La Grange, at:

La Grange Federal Savings & Loan Association
1 North La Grange Road
La Grange, Illinois 60525
Attention: J. Edward Weishel, President

SECTION 13

From time to time after the Effective Time, as and when requested by
the Association and to the extent permitted by law, the officers and directors
of First of America and La Grange last in office shall execute and deliver such
assignments, deeds and other instruments and shall take or cause to be taken
such further or other action as shall be necessary in order to vest or perfect
in or to confirm of record or otherwise to the Association title to, and
possession of, all of the assets, rights, franchises and interests of First of
America and La Grange in and to every type of property (real, personal and
mixed) and choses in action, and otherwise to carry out the purposes of this
Agreement, and the proper officers and directors of the Association as the
surviving corporation are fully authorized to take any and all such action in
the name of First of America, La Grange or otherwise.

SECTION 14

This Agreement shall be governed by and construed in accordance with
the laws of the State of Illinois except to the extent that the laws of the
United States of America are applicable.

SECTION 15

This Agreement may be executed in two or more counterparts, which
together shall constitute a single agreement.

WITNESS, the signatures and seals of First of America and La Grange as
of the date first above written, each hereunto set by its President or Vice
President and attested by its Cashier or Secretary, pursuant to a resolution of
its Board of Directors, acting by a majority thereof, and witness the
signatures hereto of a majority of each of the Boards of Directors of First of
America and La Grange.

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<TABLE>
<S> <C>
FIRST OF AMERICA BANK-
KANKAKEE/WILL COUNTY, N.A.

(Corporate Seal)
By:____________________________________
ATTEST: Its President

_______________________________
Its Secretary

Directors of First of America Bank-Kankakee/Will County, N.A.:

______________________________________ ______________________________________
Merrill Ashline Richard D. Klein

______________________________________ ______________________________________
Dr. John C. Bowling John McCracken

______________________________________ ______________________________________
Lee J. Cieslak Robert L. Moyer

______________________________________ ______________________________________
Joseph S. Feth Charles H. Smith

______________________________________ ______________________________________
Robert Hoekstra Samuel G. Stone

______________________________________ ______________________________________
Wayne Hove Hugh VanVoorst

LA GRANGE FEDERAL SAVINGS &
LOAN ASSOCIATION
(Corporate Seal)
By:__________________________________________
ATTEST: Its President

_______________________________
Its Secretary
</TABLE>

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Directors of La Grange Federal Savings & Loan Association:

<TABLE>
<S> <C>
_____________________________________ ______________________________________
Edward L. Breen Daniel R. Metzger

_____________________________________ ______________________________________
Lee M. Burkey Herbert R. Pohl

_____________________________________ ______________________________________
Howard A. Graening J. Edward Weishel
</TABLE>

STATE OF ILLINOIS )
) ss:
COUNTY OF KANKAKEE )

On this _____ day of , 1993, before me, a Notary
Public for the State and County aforesaid, personally came Lee J. Cieslak, as
President, and as Secretary, of First of America
Bank-Kankakee/Will County, N.A. and each in his or her said capacity
acknowledged the foregoing instrument to be the act and deed of said
association and the seal affixed thereto to be its seal; and came also

<TABLE>
<S> <C>
_______________________________________, ______________________________________,
_______________________________________, ______________________________________,
_______________________________________, ______________________________________,
_______________________________________, ______________________________________,
_______________________________________, ______________________________________,
_______________________________________, and ______________________________________,

</TABLE>

being not less than a majority of the Board of Directors of said association,
and each of them acknowledged said instrument to be the act and deed of said
association and of himself as a director thereof.

Witness my Official Seal and signature this day and year aforesaid.

(SEAL OF NOTARY) _______________________________________
Notary Public

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<PAGE> 211

STATE OF ILLINOIS )
) ss:
COUNTY OF COOK )

On this ______ day of , 1993, before me, a Notary
Public for the State and County aforesaid, personally came ____________________
as President, and as Secretary, of
La Grange Federal Savings & Loan Association, and each in his or her said
capacity acknowledged the foregoing instrument to be the act and deed of said
association and the seal affixed thereto to be its seal; and came also

_____________________________________, ___________________________________,
______________________________________, __________________________________,
_____________________________________, and _______________________________,
being not less than a majority of the Board of Directors of said Bank,
and each of them acknowledged said instrument to be the act and deed of said
association and of himself as a director thereof.

Witness my Official Seal and signature this day and year aforesaid.

(SEAL OF NOTARY)
Notary Public

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ANNEX I
RESTATED AND AMENDED ARTICLES OF ASSOCIATION
(Restated and Amended Effective )

The following Articles of Association of First of America
Bank-Kankakee/Will County, National Association, Kankakee, Illinois, are hereby
amended and restated in their entirety as follows:

FIRST. The Title of this Association shall be First of America
_______________________________, National Association.

SECOND. The Main Office of the Association shall be in the City of
Kankakee, County of Kankakee and State of Illinois. The general business of the
Association shall be conducted at its main office and its branches.

THIRD. The Board of Directors of this Association shall consist of not
less than five nor more than twenty-five persons, the exact number to be fixed
and determined from time to time by resolution of a majority of the full Board
of Directors or by resolution of the shareholders at any annual or special
meeting thereof. Each Director, during the full term of his or her
directorship, shall own either such shares of the capital stock of the
Association or of any company which has control of the Association as required
by applicable laws, regulations or rulings. Unless otherwise provided by the
laws of the United States, any vacancy in the Board of Directors for any
reason, including an increase in the number thereof, may be filled by action of
the Board of Directors. A majority of the Board of Directors shall be necessary
to constitute a quorum for the transaction of business at any Director's
meeting.

FOURTH. There shall be an annual meeting of the shareholders, the purpose
of which shall be the election of Directors and the transaction of whatever
other business may be brought before said meeting. It shall be held at the main
office or other convenient place as the Board of Directors may designate, on
the day of each year specified therefore in the Bylaws, but if no election is
held on that day, it may be held on any subsequent day according to such lawful
rules as may be prescribed by the Board of Directors.

FIFTH. The authorized amount of capital stock of this Association shall
be _______________ shares of common stock of the par value of Twenty-five
($25.00) Dollars each; but said capital stock may be increased or decreased
from time to time, in accordance with the provisions of the laws of the United
States.

No holder of shares of the capital stock of any class of the Association
shall have any preemptive or preferential right of subscription to any shares
of any class of stock of the Association whether now or hereafter authorized,
or to any obligations convertible into stock of the Association, issued or
sold, nor any right of subscription to any thereof other than such, if any, as
the Board of Directors, in its discretion, may from time to time determine and
at such price as the Board of Directors may from time to time fix.

The Association, at any time and from time to time, by resolution duly
adopted by its Board of Directors, may authorize and issue debt obligations of
any kind whether or not Subordinated to other liabilities of the Association,
without the approval of the shareholders.

SIXTH. The Board of Directors shall appoint one of its members President
of this Association, who shall be Chairperson of the Board, unless the Board
appoints another director to be the Chairperson. The Board of Directors shall
have the power to appoint one or more Vice Presidents; and to appoint a Cashier
and such other officers and employees as may be required to transact the
business of this Association.

The Board of Directors shall have the power to define the duties of the
officers and employees of the Association; to fix the salaries to be paid to
them; to dismiss them; to require bonds from them and to fix the penalty
thereof; to regulate the manner in which any increase of the capital of the
Association shall be made; to manage and administer the business and affairs of
the Association; to make all Bylaws that it may be lawful for them to make; and
generally to do and perform all acts that it may be legal for a Board of
Directors to do and perform.

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SEVENTH. The Board of Directors shall have the power to change the
location of the main office to any other place within the limits of the City of
Kankakee without the approval of the shareholders upon notification to the
Comptroller of the Currency, where relocation is to an already approved branch
or with approval of the Comptroller of the Currency for any other relocation;
and shall have the power to establish or change the location of any branch or
branches of the Association to any other location, without the approval of the
shareholders, but subject to the approval of the Comptroller of the Currency.

EIGHTH. The corporate existence of this Association shall continue until
terminated in accordance with the laws of the United States.

NINTH. The Board of Directors of this Association, or any shareholder
owning, in the aggregate, not less than Ten Percent of the stock of this
Association, may call a special meeting of shareholders at any time. Unless
otherwise provided by the laws of the United States, a notice of the time,
place and purpose of every annual and special meeting of the shareholders shall
be given by first-class mail, postage prepaid, mailed at least ten days prior
to the date of such meeting to each shareholder of record at his or her address
as shown upon the books of this Association.

TENTH. No director of the Association shall be personally liable to the
Association or its shareholders for monetary damages for breach of the
director's fiduciary duty; provided that this Article Ten shall not eliminate
or limit the liability of a director for any breach of the director's duty of
loyalty to the Association or its shareholders or for any act or omission for
which the elimination or limitation of liability is not permitted by the
National Bank Act or the rules and regulations promulgated by the Comptroller
of the Currency or other applicable bank regulatory agency or is not permitted
by the Business Corporation Act of the State of Michigan with respect to
directors of business corporations organized under the laws of that State. No
amendment, alteration, modification or repeal of this Article Ten shall have
any effect on the liability of any director of the Association with respect to
any act or omission of such director occurring prior to such amendment,
alteration, modification or repeal.

The Association may indemnify any person, his/her heirs, executors or
administrators who was or is a party or is threatened to be made a party to any
threatened, pending or completed action, suit or proceeding whether civil,
criminal, administrative or investigative by reason of the fact that such
person is or was a director, officer, employee or agent of the Association, or
is or was serving at the request of the Association as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust of
other enterprise, against expenses (including attorneys' fees), and (except as
to an action or suit by or in the right of the Association) judgments, fines
and amounts paid in settlement actually and reasonably incurred by him or her
in connection with such action, suit or proceeding to the maximum extent now or
hereafter permitted from time to time by the law of the State of Michigan
applicable to Michigan business corporations, either at the time of the act or
omission to be indemnified against or at the time of fully carrying out such
indemnification, whichever is broader. Expenses incurred in defending any such
civil or criminal action, suit or proceeding may be paid by the Association in
advance of final disposition of any such matter subject to an undertaking by or
on behalf of the director, officer, employee or agent, to repay such amount
unless it shall ultimately be determined that he or she is entitled to be
indemnified by the Association or by its indemnification insurance carrier;
provided that there shall not be allowed hereunder indemnification against
expenses, penalties or other payments incurred under an administrative
proceeding or action instituted by an appropriate bank regulatory agency which
proceeding or action results in a final order assessing civil money penalties
in requiring affirmative action by an individual or individuals in the form of
payments to the Association.

The Association may purchase and maintain insurance on behalf of any
person who is or was a director, officer, employee or agent of the Association,
or is or was serving at the request of the Association as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust or
other enterprise, against such liability asserted against such person and
incurred by such person in any such capacity or arising out of his or her
status as such, irrespective of whether or not the Association would have the
power to indemnify against such liabilities under the law of the State of
Michigan applicable to Michigan business corporations; provided that such

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insurance shall not include coverage for a formal order assessing civil money
penalties against a director or employee of the Association.

ELEVENTH. These Articles of Association may be amended at any regular or
special meeting of the shareholders by the affirmative vote of the holders of a
majority of the stock of this Association, unless the vote of the holders of a
greater amount of stock is required by law, and in that case by the vote of the
holders of such greater amount.