FNB CORP/PA, 424B3, 1997-08-14

FNB CORP/PA
424B3, 1997-08-14
NATIONAL COMMERCIAL BANKS

Previous: FNB CORP/PA, 10-Q, 1997-08-14

Next: WASATCH PHARMACEUTICAL INC, 10QSB, 1997-08-14

<PAGE> 1
Filed Pursuant to Rule 424(b)(3)
Registration No. 333-32355

PROXY STATEMENT PROSPECTUS
OF OF
INDIAN ROCKS STATE BANK F.N.B. CORPORATION

SPECIAL MEETING OF SHAREHOLDERS COMMON STOCK, $2.00 PAR VALUE
TO BE HELD ON
OCTOBER 9, 1997

This Proxy Statement-Prospectus (this "Proxy Statement-Prospectus") is
being furnished to holders (the "Shareholders") of common stock, par value
$4.00 per share ("IRSB Common Shares"), of Indian Rocks State Bank, a banking
corporation chartered under the laws of the State of Florida ("IRSB"), in
connection with the solicitation of proxies by the Board of Directors of IRSB
(the "IRSB Board") for use at a special meeting of such holders to be held on
October 9, 1997 commencing at 3:00 p.m., local time, and at any adjournment or
postponement thereof (the "Special Meeting"). At the Special Meeting, holders
of IRSB Common Shares will be asked to consider and vote upon a proposal to
approve the Agreement and Plan of Merger, dated as of May 10, 1997 and as
amended as of August 8, 1997, by and among F.N.B. Corporation, a Pennsylvania
corporation ("FNB"), Southwest Banks, Inc., a Florida corporation and wholly
owned subsidiary of FNB ("Southwest"), and IRSB (the "Merger Agreement"), and
the transactions contemplated thereby, pursuant to which, among other things,
IRSB would be acquired by FNB by means of a merger of IRSB with and into
Southwest Interim Bank, N.A., a national bank to be chartered under the laws of
the United States and to become a wholly owned subsidiary of FNB ("Interim").
Immediately upon consummation of the Merger, FNB will transfer 100% of its
ownership of Interim to Southwest so that Interim will become a wholly owned
subsidiary of Southwest. A copy of the Merger Agreement is attached hereto as
Appendix A and is incorporated herein by reference.

Pursuant to the Merger Agreement, upon consummation of the Merger,
except as described herein, each issued and outstanding IRSB Common Share
(other than shares held by IRSB, FNB or any FNB subsidiary, in each case,
except for those shares held in a fiduciary capacity or as a result of debts
previously contracted, which shares will be canceled and retired without
consideration being paid, and other than shares held by IRSB shareholders who
perfect their dissenters' rights) will be converted into two (2) shares of
common stock, par value $2.00 per share, of FNB ("FNB Common Stock"), subject
to certain further adjustments as described in this Proxy Statement-Prospectus
(the "Exchange Ratio"), unless: (i) the average of the closing bid and asked
price per share of FNB Common Stock for a specified period prior to Closing
("FNB Average Price") is equal to or greater than $27 but less than $30, in
which case the exchange ratio shall be adjusted so that the value of FNB Common
Stock to be received for each IRSB Common Share will be $54, (ii) the FNB
Average Price is $30 or greater, in which case the exchange ratio shall be 1.8
shares of FNB Common Stock for each IRSB Common Share, or (iii) the FNB Average
Price is less than $22, in which case the exchange ratio will be adjusted so
that the value of FNB Common Stock to be received for each IRSB Common Share
will be $44. Cash will be paid in lieu of fractional shares. If the FNB
Average Price is less than $20, FNB will have a right to terminate the
transaction. See "THE MERGER -- Modification, Waiver, Termination" and "THE
MERGER -- Description of the Merger." Each holder of IRSB Common Shares who
would otherwise be entitled to receive a fraction of a share of FNB Common
Stock (after taking into account all of a shareholder's certificates) will
receive, in lieu thereof, the equivalent cash value of such fraction of a
share, without interest. See "THE MERGER -- Description of the Merger." In
addition, the Merger Agreement permits IRSB to declare and pay semi-annual cash
dividends for the first half of 1997 to its shareholders in June 1997 in an
amount not to exceed $0.25 per share and in December 1997 (if the closing of
the Merger has not occurred) in an amount not to exceed $0.50 per share for the
second half of 1997.

----------------
(continued on next page)

THE FNB COMMON STOCK TO BE ISSUED IN THE MERGER, IF ANY, HAS 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 PROXY
STATEMENT-PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.

THE SHARES OF FNB COMMON STOCK OFFERED HEREBY ARE NOT SAVINGS ACCOUNTS
OR BANK DEPOSITS, ARE NOT OBLIGATIONS OF OR GUARANTEED BY ANY BANKING OR
NONBANKING AFFILIATE OF FNB, AND ARE NOT INSURED BY THE FEDERAL DEPOSIT
INSURANCE CORPORATION OR ANY OTHER GOVERNMENT AGENCY.

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

The date of this Proxy Statement-Prospectus is August 11, 1997.

<PAGE> 2

Consummation of the Merger is subject to several conditions,
including, among others, the affirmative vote to approve the Merger Agreement
by the holders of two-thirds of the issued and outstanding IRSB Common Shares
as of the Record Date entitled to vote on the matter and the approval of
appropriate regulatory authorities. See "THE MERGER -- Conditions Precedent to
the Merger."

Until June 15, 1997, the FNB Common Stock traded on the SmallCap
Market Tier of the Nasdaq Stock Market (the "Nasdaq SmallCap Market") under the
trading symbol "FBAN." Since June 16, 1997, the FNB Common Stock has traded on
the Nasdaq Stock Market as a National Market Security (the "Nasdaq National
Market") under the same trading symbol. The last reported sale price of FNB
Common Stock as reported by the Nasdaq Stock Market on May 9, 1997, the last
trading day preceding public announcement of the proposed Merger, was $22.375
per share. The last reported sale price of FNB Common Stock as reported by the
Nasdaq Stock Market on August 8, 1997 was $31.00 per share. Based on such
last reported sale price, as of August 8, 1997, the Exchange Ratio would have
resulted in a per share purchase price for the IRSB Common Shares of $55.80.
The IRSB Common Shares are not traded on any exchange, and there is no
established public trading market for such stock. There is, however, limited
and sporadic trading of IRSB Common Shares in its local area. Based on the
limited information available, IRSB's management believes that since January 1,
1996, negotiated sales of IRSB Common Shares among shareholders have been made
at prices ranging from $27.50 to $30.00 per share. In view of the extremely
limited volume of transactions involving IRSB Common Shares and the lack of
reliable trading price data available to management, there is no assurance that
the stated prices paid for IRSB Common Shares provide a reliable or relevant
indication of the value of IRSB Common Shares. See "PRICE RANGE OF COMMON STOCK
AND DIVIDENDS."

Because the Exchange Ratio is subject to adjustment according to the
terms of the Merger Agreement, a change in the market price of FNB Common Stock
before the Merger would affect the amount of FNB Common Stock to be received in
the Merger in exchange for the IRSB Common Shares. However, if the FNB Average
Price is less than $20.00, FNB will not be required to consummate the Merger
and, at its option, may terminate the Merger Agreement. If the FNB Average
Price is $30 or greater, IRSB will have a similar right to terminate the Merger
Agreement.

Allen C. Ewing & Co. has rendered its opinion, dated August 8, 1997,
confirming and updating its prior oral opinion of May 8, 1997 to the IRSB Board
that the terms of the Merger are fair, from a financial point of view, to the
holders of IRSB Common Shares. See "THE MERGER -- Opinion of IRSB's Financial
Advisor."

THE IRSB BOARD UNANIMOUSLY RECOMMENDS THAT THE SHAREHOLDERS OF IRSB VOTE TO
APPROVE THE MERGER AGREEMENT. FAILURE TO VOTE IS EQUIVALENT TO VOTING AGAINST
THE MERGER AGREEMENT.

IRSB shareholders should note that certain members of management and
directors of IRSB have certain interests in and may derive certain benefits as
a result of the Merger. See "THE MERGER -- Interests of Certain Persons in the
Merger."

This Proxy Statement-Prospectus also constitutes a prospectus of FNB
with respect to the shares of FNB Common Stock issuable to shareholders of IRSB
upon consummation of the Merger. FNB has supplied all information contained in
this Proxy Statement-Prospectus relating to FNB and its subsidiaries, and IRSB
has supplied all information contained in this Proxy Statement-Prospectus
relating to IRSB.

This Proxy Statement-Prospectus is included as part of a Registration
Statement on Form S-4 (together with any amendments and exhibits thereto, the
"Registration Statement") filed with the Securities and Exchange Commission
(the "Commission") by FNB relating to the registration under the Securities Act
of 1933, as amended (the "Securities Act"), of up to 700,000 shares of FNB
Common Stock to be issued in connection with the Merger.

This Proxy Statement-Prospectus, Notice of Special Meeting, and the
accompanying form of proxy for the Special Meeting are first being sent to the
shareholders of IRSB on or about August 13, 1997.

ii
<PAGE> 3

<TABLE>
<CAPTION>
TABLE OF CONTENTS
PAGE
----
<S> <C>
AVAILABLE INFORMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 1

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE . . . . . . . . . . . . . . .. . . . . . . . . . . . . . . . . . . . 1

SUMMARY . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
The Companies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
FNB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
IRSB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
Special Meeting and Vote Required to Approve the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
The Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Recommendation of the IRSB Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
Opinion of IRSB's Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Certain Differences in the Rights of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Modification, Waiver and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Regulatory Approvals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Resales by Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Share Information and Market Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
Comparative Unaudited Per Share Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
Selected Financial Data . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11

THE SPECIAL MEETING OF SHAREHOLDERS OF IRSB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Voting and Revocation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Solicitation of Proxies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Record Date and Voting Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
Recommendation of the IRSB Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14

THE MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Description of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
Effective Time of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Exchange of Certificates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
Background of and Reasons for the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
Background of the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
IRSB Reasons for the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
FNB Reasons for the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20
Opinion of IRSB's Financial Advisor . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
Valuation Methodologies . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
Conditions Precedent to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
Conduct of Business Prior to the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
Modification, Waiver and Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 27
Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
Certain Federal Income Tax Consequences . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Interests of Certain Persons in the Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
Management Post-Merger; IRSB Employment Agreements . . . . . . . . . . . . . . . . . . . . . . . . . 29
Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Other Matters Relating to IRSB Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . 30
Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
Dissenters' Rights of IRSB Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34
Accounting Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 35
Bank Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
</TABLE>

iii
<PAGE> 4

<TABLE>
<S> <C>
Federal Reserve Board . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 36
Status of Regulatory Approvals and Other Information . . . . . . . . . . . . . . . . . . . . . . . . 36
Restrictions on Resales by Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 37
Voluntary Dividend Reinvestment and Stock Purchase Plan . . . . . . . . . . . . . . . . . . . . . . . . . . 38

PRICE RANGE OF COMMON STOCK AND DIVIDENDS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Market Prices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
Dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

INFORMATION ABOUT FNB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40

INFORMATION ABOUT IRSB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42

MANAGEMENT'S DISCUSSION AND ANALYSIS ORPLAN OF OPERATIONS OF IRSB . . . . . . . . . . . . . . . . . . . . . . . . . . 45

DESCRIPTION OF FNB CAPITAL STOCK AND IRSB CAPITAL STOCK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
FNB Common Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Voting and Other Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 63
FNB Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
FNB Series A Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
FNB Series B Preferred Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 64
IRSB Common Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
General . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65

COMPARISON OF SHAREHOLDER RIGHTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65
Removal of Directors; Filling Vacancies on the Board of Directors . . . . . . . . . . . . . . . . . . . . . 65
Quorum of Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Adjournment and Notice of Shareholder Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Call of Special Shareholder Meetings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Shareholder Consent in Lieu of Meeting . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66
Dissenters' Rights . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Derivative Actions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 67
Dividends and Distributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Director Qualifications and Number . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68
Indemnification of Officers and Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 69
Director Liability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70
Amendment of Articles of Incorporation and Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Vote Required for Extraordinary Corporate Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . 71
Interested Shareholder Transactions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72
Fiduciary Duty . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73
Provisions with Possible Anti-Takeover Effects . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74

LEGAL OPINIONS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

EXPERTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

OTHER MATTERS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 76

INDEX TO FINANCIAL STATEMENTS OF INDIAN ROCKS STATE BANK . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-1
APPENDIX A -- Agreement and Plan of Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . A-1
APPENDIX B -- Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . B-1
APPENDIX C -- Opinion of Allen C. Ewing & Co., Inc. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . C-1
</TABLE>

iv
<PAGE> 5

AVAILABLE INFORMATION

FNB has filed with the Commission the Registration Statement under the
Securities Act, relating to the shares of FNB Common Stock to be issued in
connection with the Merger. For further information pertaining to the shares of
FNB Common Stock to which this Proxy Statement-Prospectus relates, reference is
made to such Registration Statement, including the exhibits and schedules filed
as a part thereof. This Proxy Statement-Prospectus constitutes the Prospectus
of FNB filed as part of the Registration Statement and does not contain all the
information set forth in the Registration Statement, certain portions of which
have been omitted pursuant to the rules and regulations of the Commission. In
addition, FNB is subject to the informational requirements of the Securities
Exchange Act of 1934, as amended (the "Exchange Act"), and, in accordance
therewith, files certain reports, proxy statements and other information with
the Commission. Such reports, proxy statements and other information can be
inspected and copied at the public reference room of the Commission, 450 Fifth
Street, N.W., Room 1024, Washington, D.C. 20549, and copies of such materials
can be obtained by mail from the Public Reference Section of the Commission,
450 Fifth Street, N.W., Room 1024, Washington, D.C. 20549, at prescribed rates.
Such documents also may be obtained at the Web site maintained by the
Commission (http://www.sec.gov). In addition, copies of such materials are
available for inspection and reproduction at the public reference facilities of
the Commission at its New York Regional Office, 7 World Trade Center, Suite
1300, New York, New York 10048; and at its Chicago Regional Office, Suite 1400,
500 West Madison Street, Chicago, Illinois 60661-2511. FNB Common Stock trades
on the Nasdaq Stock Market and, as a result, reports, proxy statements and
other information concerning FNB also may be inspected at the offices of the
Nasdaq Stock Market, 1735 K Street, N.W., Washington, D.C. 20006-1500.

INCORPORATION OF CERTAIN INFORMATION BY REFERENCE

The following documents previously filed by FNB (SEC File No. 0-8144)
with the Commission are hereby incorporated by reference in this Proxy
Statement-Prospectus: (a) the FNB Annual Report on Form 10-K for the year ended
December 31, 1996; (b) the FNB Quarterly Report on Form 10-Q for the quarter
ended March 31, 1997; (c) the description of FNB Common Stock contained in the
FNB registration statement filed pursuant to Section 12 of the Exchange Act and
any amendment or report filed for the purpose of updating such description; and
(d) the FNB Current Reports on Form 8-K filed January 24, 1997, March 5, 1997,
April 22, 1997 and July 22, 1997.

In addition, all documents filed by FNB with the Commission pursuant
to Sections 13(a), 13(c), 14 and 15(d) of the Exchange Act after the date
hereof and prior to the time at which the Special Meeting has been finally
adjourned are hereby deemed to be incorporated by reference herein. Any
statements contained in a document incorporated or deemed to be incorporated by
reference herein shall be deemed to be modified or superseded for purposes of
this Proxy Statement-Prospectus to the extent that a statement contained
herein or in any other subsequently filed document that also is or is deemed to
be incorporated by reference herein modifies or supersedes such statement. Any
such statement so modified or superseded shall not be deemed, except as so
modified or superseded, to constitute a part of this Proxy Statement-Prospectus.

THIS PROXY STATEMENT-PROSPECTUS INCORPORATES DOCUMENTS BY REFERENCE
WHICH ARE NOT PRESENTED HEREIN OR DELIVERED HEREWITH. THESE DOCUMENTS (OTHER
THAN EXHIBITS TO SUCH DOCUMENTS WHICH EXHIBITS ARE NOT SPECIFICALLY
INCORPORATED BY REFERENCE IN SUCH DOCUMENTS) ARE AVAILABLE WITHOUT CHARGE UPON
REQUEST FROM DAVID B. MOGLE, SECRETARY AND TREASURER, F.N.B. CORPORATION,
HERMITAGE SQUARE, HERMITAGE, PENNSYLVANIA 16148, TELEPHONE (412) 981-6000. IN
ORDER TO ENSURE TIMELY DELIVERY OF THE DOCUMENTS, ANY REQUEST SHOULD BE MADE BY
OCTOBER 2, 1997. PERSONS REQUESTING COPIES OF EXHIBITS TO SUCH DOCUMENTS THAT
ARE NOT SPECIFICALLY INCORPORATED BY REFERENCE IN SUCH DOCUMENTS WILL BE
CHARGED THE COSTS OF REPRODUCTION AND MAILING.

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

<PAGE> 6

NO PERSON IS AUTHORIZED TO GIVE ANY INFORMATION OR MAKE ANY
REPRESENTATION OTHER THAN THOSE CONTAINED OR INCORPORATED IN THIS PROXY
STATEMENT-PROSPECTUS, AND, IF GIVEN OR MADE, SUCH INFORMATION OR REPRESENTATION
SHOULD NOT BE RELIED UPON AS HAVING BEEN AUTHORIZED BY FNB OR IRSB.

THIS PROXY STATEMENT-PROSPECTUS DOES NOT CONSTITUTE AN OFFER TO
EXCHANGE OR SELL, OR A SOLICITATION OF AN OFFER TO EXCHANGE OR PURCHASE, THE
SECURITIES OFFERED BY THIS PROXY STATEMENT-PROSPECTUS, NOR DOES IT CONSTITUTE
THE SOLICITATION OF A PROXY, IN ANY JURISDICTION IN WHICH SUCH OFFER OR
SOLICITATION IS NOT AUTHORIZED OR TO OR FROM ANY PERSON TO WHOM IT IS UNLAWFUL
TO MAKE SUCH OFFER OR SOLICITATION.

THE INFORMATION CONTAINED IN THIS PROXY STATEMENT-PROSPECTUS SPEAKS AS
OF THE DATE HEREOF UNLESS OTHERWISE SPECIFICALLY INDICATED. NEITHER THE
DELIVERY OF THIS PROXY STATEMENT-PROSPECTUS NOR ANY DISTRIBUTION OF THE
SECURITIES MADE HEREUNDER SHALL, UNDER ANY CIRCUMSTANCES, CREATE ANY
IMPLICATION THAT THERE HAS BEEN NO CHANGE IN THE AFFAIRS OF IRSB OR FNB SINCE
THE DATE OF THIS PROXY STATEMENT-PROSPECTUS OR THAT THE INFORMATION IN THIS
PROXY STATEMENT-PROSPECTUS OR IN THE DOCUMENTS INCORPORATED BY REFERENCE IS
CORRECT AT ANY TIME SUBSEQUENT TO THAT DATE.

THIS PROXY STATEMENT-PROSPECTUS DOES NOT COVER ANY RESALES OF THE FNB
COMMON STOCK OFFERED HEREBY TO BE RECEIVED BY SHAREHOLDERS OF IRSB DEEMED TO BE
"AFFILIATES" OF IRSB OR FNB UPON THE CONSUMMATION OF THE MERGER. NO PERSON IS
AUTHORIZED TO MAKE USE OF HIS PROXY STATEMENT-PROSPECTUS IN CONNECTION WITH ANY
SUCH RESALES.

2
<PAGE> 7

SUMMARY

The following is a brief summary of certain information set forth
elsewhere in this Proxy Statement-Prospectus and is not intended to be
complete. It should be read in conjunction with, and is qualified in its
entirety by reference to, the more detailed information contained elsewhere in
this Proxy Statement-Prospectus, the accompanying Appendices, and the documents
incorporated herein by reference.

Certain statements contained or incorporated by reference in this
Proxy Statement-Prospectus are "forward looking statements" within the meaning
of the Private Securities Litigation Reform Act of 1995, such as statements
relating to financial results, plans for future business development
activities, capital spending or financing sources, capital structure and the
effects of regulation and competition and are thus prospective. Such forward
looking statements are subject to risks, uncertainties and other factors which
could cause actual results to differ materially from future results expressed
or implied by such forward looking statements. Potential risks and
uncertainties include, but are not limited to, economic conditions, competition
and other uncertainties detailed from time to time in FNB's filings with the
Commission.

GENERAL

This Proxy Statement-Prospectus, Notice of Special Meeting of IRSB
shareholders to be held on October 9, 1997, and form of proxy solicited in
connection therewith are first being mailed to IRSB shareholders on or about
August 13, 1997. At the Special Meeting, the holders of IRSB Common Shares will
consider and vote on whether to approve the Merger Agreement and the
transactions contemplated thereby. A copy of the Merger Agreement is attached
hereto as Appendix A.

THE COMPANIES

FNB. FNB is a bank holding company registered under the Bank Holding
Company Act of 1956, as amended (the "BHCA"). FNB was organized under the laws
of the Commonwealth of Pennsylvania in 1974 and has as its principal assets the
stock of its subsidiaries. FNB provides a full range of financial services,
primarily to consumers and small- to medium-sized businesses through its
subsidiaries and their network of 99 offices in Pennsylvania, southwestern
Florida, eastern Ohio and southwestern New York. On January 21, 1997, FNB
acquired Southwest, a Florida corporation and registered bank holding company
under the BHCA, with banking subsidiaries located in Naples and Cape Coral,
Florida. On April 18, 1997, FNB acquired West Coast Bancorp, Inc. ("West
Coast"), a Florida corporation and registered bank holding company under the
BHCA located in Cape Coral, Florida with assets of approximately $170 million.
As of June 30, 1997, on a consolidated basis, FNB had total assets of
approximately $2.37 billion, total deposits of approximately $1.95 billion and
99 offices. The principal executive offices of FNB are located at Hermitage
Square, Hermitage, Pennsylvania 16148, and its telephone number is (412)
981-6000. All references herein to FNB refer to FNB Corporation and its
subsidiaries, unless the context otherwise requires.

FNB continues to evaluate additional potential acquisition candidates,
and may after the date of this Proxy Statement-Prospectus, enter into one or
more agreements with one or more such candidates.

For additional information regarding FNB and the combined company that
would result from the Merger, see "THE MERGER" and "INFORMATION ABOUT FNB."

IRSB. IRSB is a Florida banking corporation organized under the laws
of the State of Florida in February 1986. IRSB, which commenced banking
operations in April 1986, provides commercial banking services through three
offices located in west central Pinellas County, Florida. On March 31, 1997,
IRSB had total assets of approximately $78.4 million and total deposits of
approximately $64.4 million. IRSB's principal executive offices are located at
12360 Indian Rocks Road, Largo, Florida 33774, and its telephone number is
(813) 596-9990.

For additional information regarding IRSB, see "THE MERGER" and
"INFORMATION ABOUT IRSB."

3
<PAGE> 8

SPECIAL MEETING AND VOTE REQUIRED TO APPROVE THE MERGER

The Special Meeting will be held at the Largo Cultural Center, 105
Central Park Drive, Largo, Florida 33771, on Thursday, October 9, 1997 at 3:00
p.m., local time, at which time the shareholders of IRSB will be asked to
approve the Merger Agreement and the transactions contemplated thereby. Only
the record holders of IRSB Common Shares at the close of business on August 12,
1997 (the "Record Date") are entitled to notice of and to vote at the Special
Meeting. On the Record Date, there were approximately 338 holders of record
of IRSB Common Shares and 350,000 IRSB Common Shares outstanding.

Pursuant to the National Bank Act, approval of the Merger Agreement
will require the affirmative vote of two-thirds of the issued and outstanding
IRSB Common Shares entitled to vote at the Special Meeting. As of the Record
Date, directors and executive officers of IRSB and their affiliates held
approximately 108,704 shares, or 31.1% of the IRSB Common Shares entitled to
vote at the Special Meeting.

Pursuant to the terms of the Merger Agreement, the members of the IRSB
Board will vote their shares in favor of the Merger Agreement and the
transactions contemplated thereby at the Special Meeting.

See "THE SPECIAL MEETING OF SHAREHOLDERS OF IRSB" and "THE MERGER --
Interests of Certain Persons in the Merger."

Approval of the Merger Agreement by the shareholders of FNB is not
required.

THE MERGER

Subject to the terms and conditions of the Merger Agreement, at the
Effective Time, IRSB will merge with and into Southwest Interim Bank,
N.A.("Interim"), a national banking association to be chartered under the laws
of the United States, and which will be a wholly owned subsidiary of FNB.
Interim will be the surviving entity in the Merger and, immediately upon
consummation of the Merger, FNB will transfer 100% of its ownership of Interim
to Southwest so that Interim will become a wholly owned subsidiary of
Southwest. At the Effective Time, each outstanding IRSB Common Share (other
than shares held by IRSB, FNB or any FNB subsidiary, in each case, except for
those shares held in a fiduciary capacity or as a result of debts previously
contracted, which shares will be canceled and retired without consideration
being paid, and other than shares held by IRSB shareholders who perfect their
dissenters' rights) will be converted into and exchanged for two (2) shares
(subject to possible adjustment as provided below) of FNB Common Stock,
unless: (i) the average of the closing bid and asked price per share of FNB
Common Stock for a specified period prior to Closing ("FNB Average Price") is
equal to or greater than $27 but less than $30, in which case the exchange
ratio shall be adjusted so that the value of FNB Common Stock to be received
for each IRSB Common Share will be $54, (ii) the FNB Average Price is $30 or
greater, in which case the exchange ratio shall be 1.8 shares of FNB Common
Stock for each IRSB Common Share, or (iii) the FNB Average Price is less than
$22, in which case the exchange ratio will be adjusted so that the value of FNB
Common Stock to be received for each IRSB Common Share will be $44. Cash will
be paid in lieu of fractional shares. If the FNB Average Price is less than
$20, FNB will have a right to terminate the transaction. Each share of FNB
capital stock outstanding prior to the Merger will continue to be outstanding
after the Effective Time. Further, the Merger Agreement also provides that
the Exchange Ratio may be adjusted to prevent dilution in the event FNB
changes the number of shares of FNB Common Stock issued and outstanding prior
to the Effective Time as a result of a stock split, stock dividend,
recapitalization, reclassification or similar transaction. As of the Record
Date, there were 350,000 IRSB Common Shares outstanding and IRSB has
represented that, as of the Effective Time, there will be no more than 350,000
IRSB Common Shares issued and outstanding.

Immediately following the Effective Time, assuming that 350,000 IRSB
Common Shares are outstanding immediately prior to the Effective Time and that
there has been no adjustment to the Exchange Ratio, the former shareholders of
IRSB would own 700,000 shares, or approximately 4.7%, of the then outstanding
FNB Common Stock (assuming 14,082,000 shares of FNB Common Stock outstanding
immediately prior to the Effective Time).

4
<PAGE> 9

Because the Exchange Ratio is subject to adjustment based on
fluctuations in the value of FNB Common Stock outside of a range of values set
forth in the Merger Agreement, the number of shares of FNB Common Stock that
holders of IRSB Common Shares will receive in the Merger may be greater than or
less than 700,000.

As of the Record Date, there were no IRSB Options outstanding and no
outstanding rights relating to the capital stock of IRSB except as provided for
in the Stock Option Agreement between IRSB and FNB. See "THE MERGER -- Stock
Option Agreement."

The Merger Agreement permits IRSB to declare and pay semi-annual cash
dividends for the first half of 1997 to its shareholders in June 1997 in an
amount not to exceed $0.25 per share and in December 1997 (if the Closing of
the Merger has not occurred) in as amount not to exceed $0.50 per share for the
second half of 1997.

The Merger is subject to the satisfaction or waiver of certain
conditions. Such conditions include, among others, approval of the Merger
Agreement by IRSB shareholders, the effectiveness under the Securities Act of
the Registration Statement for shares of FNB Common Stock to be issued in the
Merger, receipt of the opinion of Allen C. Ewing & Co. ("Ewing") as to the
fairness of the transaction to IRSB shareholders, and approval of appropriate
regulatory agencies. The obligation of FNB to effect the Merger also is subject
to, among other things, the receipt, to the extent necessary to assure, in the
reasonable judgment of FNB, that the transactions contemplated hereby will
qualify for pooling-of-interests accounting treatment, of agreements from
affiliates of IRSB restricting their ability to sell or otherwise transfer
their IRSB Common Shares prior to consummation of the Merger or their shares of
FNB Common Stock received upon consummation of the Merger. See "THE MERGER --
Conditions Precedent to the Merger."

For additional information relating to the Merger, see "THE MERGER."

EFFECTIVE TIME OF THE MERGER

Unless otherwise agreed by FNB and IRSB, the Effective Time is
expected to occur on the date and at the time the certification of Merger is
received from the Office of the Comptroller of the Currency (the "Comptroller
of the Currency"). This filing is expected to be made at Closing which the
parties have agreed to use their reasonable best efforts to cause to take place
on, but not prior to, the fifth business day following the last to occur of:
(i) the effective date of the last required consent of any state or federal
regulatory authority having authority over the Merger (including the expiration
of any applicable waiting periods following such consents or the delivery of
appropriate notices), or (ii) the date on which the IRSB shareholders approve
the Merger Agreement. If approved by the IRSB shareholders and applicable
regulatory authorities, the parties expect that the Effective Time will occur
on or before October 16, 1997, although there can be no assurance as to
whether or when the Merger will occur. See "THE MERGER -- Effective Time of
the Merger" and "-- Conditions Precedent to the Merger."

RECOMMENDATION OF THE IRSB BOARD

THE IRSB BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY. THE IRSB BOARD BELIEVES THAT THE MERGER IS
IN THE BEST INTERESTS OF IRSB AND ITS SHAREHOLDERS AND RECOMMENDS THAT THE
SHAREHOLDERS OF IRSB VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT.

5
<PAGE> 10

In the course of reaching its decision to approve the Merger Agreement
and the transactions contemplated thereby, the IRSB Board consulted with its
legal advisors regarding the legal terms of the Merger Agreement and with its
financial advisor, Ewing, as to the fairness, from a financial point of view,
of the consideration to be received in the Merger by holders of IRSB Common
Shares. For a discussion of the factors considered by the IRSB Board in
reaching its conclusions, see "THE MERGER -- Background of and Reasons for the
Merger."

OPINION OF IRSB'S FINANCIAL ADVISOR

Ewing, in its capacity as financial advisor to IRSB, has rendered an
opinion to the IRSB Board that the terms of the Merger are fair, from a
financial point of view, to the shareholders of IRSB. A copy of such opinion,
dated August 8, 1997, confirming and updating its prior oral opinion of
May 8, 1997, is attached hereto as Appendix C and should be read in its
entirety with respect to the assumptions made, matters considered and
limitations of the review undertaken by Ewing in rendering such opinion. See
"THE MERGER -- Opinion of IRSB's Financial Advisor."

CERTAIN DIFFERENCES IN THE RIGHTS OF SHAREHOLDERS

The rights of FNB shareholders and other corporate matters relating to
FNB Common Stock are controlled by the FNB Articles of Incorporation (the "FNB
Charter"), the FNB Bylaws (the "FNB Bylaws") and the Pennsylvania Business
Corporation Law (the "PBCL"). The rights of IRSB shareholders and other
corporate matters relating to IRSB Common Shares are controlled by the IRSB
Articles of Incorporation (the "IRSB Charter"), the IRSB Bylaws (the "IRSB
Bylaws"), the Florida Banking Code and the Florida Business Corporation Act
(the "FBCA"). The dissenters' rights of the IRSB shareholders incident to the
Merger are governed by Title 12, Chapter 2, Section 215a of the United States
Code ("12 U.S.C. Section 215"). Upon consummation of the Merger, shareholders
of IRSB will become shareholders of FNB whose rights will be governed by the
FNB Charter, the FNB Bylaws, and the provisions of the PBCL. See "DESCRIPTION
OF FNB CAPITAL STOCK AND IRSB CAPITAL STOCK," "COMPARISON OF SHAREHOLDERS
RIGHTS" and "THE MERGER -- Dissenters' Rights of IRSB Shareholders."

MODIFICATION, WAIVER AND TERMINATION

The Merger Agreement provides that it may be amended by a subsequent
writing signed by each party upon the approval of each of their respective
Board of Directors. However, no amendment that reduces or modifies in any
material respect the consideration to be received by the holders of IRSB Common
Shares in connection with the Merger may be made after the Special Meeting
without the further approval of such shareholders. The Merger Agreement
provides that each party may waive any of the conditions precedent to its
obligations to consummate the Merger, to the extent legally permitted.

The Merger Agreement may be terminated by mutual agreement of the
Board of Directors of FNB (the "FNB Board") and the IRSB Board. The Merger
Agreement may also be terminated by either the FNB Board or the IRSB Board (i)
in the event of breach of the Merger Agreement by the other party that cannot
or has not been cured within 30 days of written notice of such breach, (ii) if
the required approval of the IRSB shareholders or any applicable regulatory
authority is not obtained, or (iii) if the Merger is not consummated by January
2, 1998.

In addition, the Merger Agreement may be terminated by the IRSB Board,
if at any time prior to the Effective Time, the fairness opinion of Ewing is
withdrawn or if the FNB Average Price is equal to or greater than $30.00. The
FNB Board may also terminate the Merger Agreement in the event dissenters'
rights are exercised by persons owning in the aggregate more than 10% of the
issued and outstanding IRSB Common Shares or if the FNB Average Price is less
than $20.00.

See "THE MERGER -- Modification, Waiver and Termination" and "THE
MERGER -- Description of the Merger."

<PAGE> 11

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

The Merger is intended to qualify as a reorganization under Section
368(a) of the Internal Revenue Code of 1986, as amended (the "Code"). Smith,
Gambrell & Russell, LLP, has delivered an opinion, based upon certain customary
assumptions and representations, to the effect that, for federal income tax
purposes, no gain or loss will be recognized by the IRSB shareholders as a
result of the Merger to the extent that they receive FNB Common Stock solely in
exchange for their IRSB Common Shares. For a more complete description of the
federal income tax consequences, see "THE MERGER -- Certain Federal Income Tax
Consequences."

INTERESTS OF CERTAIN PERSONS IN THE MERGER

Certain members of IRSB's management and of the IRSB Board may be
deemed to have interests in the Merger in addition to their interests, if any,
as shareholders of IRSB generally. These interests include, among others, (i)
entry into employment agreements with FNB by certain officers of IRSB; (ii) the
election or appointment of all remaining members of the IRSB Board to the board
of directors of Interim for a period of one year; and (iii) agreements by FNB
to indemnify present and former directors, officers, employees and agents of
IRSB from and after the Effective Time of the Merger against certain
liabilities arising prior to the Effective Time to the full extent permitted
under Florida law, the IRSB Charter, and the IRSB Bylaws.

See "THE MERGER -- Interests of Certain Persons in the Merger."

STOCK OPTION AGREEMENT

As a condition to FNB's entering into the Merger Agreement and to
increase the probability that the Merger will be consummated, IRSB granted FNB
an option (the "Stock Option") to purchase, under certain circumstances and
subject to certain adjustments, up to 86,953 IRSB Common Shares (the "Stock
Option Shares") at a price, subject to certain adjustments, of $30.00 per share
pursuant to the terms of a Stock Option Agreement dated May 10, 1997 by and
between FNB and IRSB (the "Stock Option Agreement"). The Stock Option, if
exercised, would equal an amount not to exceed 19.9% of the total number of
IRSB Common Shares outstanding as of its date of exercise (after giving affect
to the exercise of the Stock Option). The Stock Option is exercisable only upon
the occurrence of certain events generally indicating a change of control of
IRSB not involving FNB which occur within 12 months of a termination of the
Merger Agreement, and the receipt of any required regulatory approvals, neither
of which has occurred as of the date hereof. Under certain circumstances, IRSB
may be required to repurchase the Stock Option or the Stock Option Shares
acquired pursuant to the exercise of the Stock Option. The purpose of the Stock
Option Agreement and the Stock Option is to increase the likelihood that the
Merger will occur by making it more difficult for another party to acquire
IRSB. The ability of FNB to exercise the Stock Option and to cause, subject to
certain adjustments, up to an additional 86,953 IRSB Common Shares to be issued
may be considered a deterrent to other potential acquisitions of control of
IRSB, as it is likely to increase the cost of an acquisition of all the IRSB
Common Shares which would then be outstanding. See "THE MERGER -- Stock Option
Agreement."

<PAGE> 12

DISSENTERS' RIGHTS

Each holder of IRSB Common Stock who dissents from the Merger is
entitled to the rights and remedies of dissenting shareholders as set forth in
12 U.S.C. Section 215a subject to the compliance with the procedures set forth
therein. Among other things, a dissenting shareholder is entitled to receive
an amount of cash equal to the "fair value" of such holder's shares as
ascertained by an independent appraisal committee or, in certain circumstances,
by an independent appraiser selected by the Comptroller of the Currency. A
summary of 12 U.S.C. Section 215a is included under "THE MERGER -- Dissenters'
Rights of IRSB Shareholders." To perfect dissenters' rights, a shareholder
must strictly comply with the procedures set forth in 12 U.S.C. Section 215a
which require among other things, that the shareholder either give IRSB notice
in writing at or prior to the vote of the shareholders at the Special Meeting
that he dissents from the Merger Agreement or that he vote against the Merger
at the Special Meeting. Dissenting shareholders who have given notice of their
intention to dissent or who have voted against the Merger at the Special
Meeting shall be entitled to receive the value of the shares held by them upon
written request made to FNB at any time before 30 days after the date of
consummation of the Merger, accompanied by the surrender of their stock
certificates. Any IRSB shareholder who returns a signed proxy but fails to
provide instructions as to the manner in which such holder's shares are to be
voted will be deemed to have voted in favor of the Merger Agreement and thus
will not be entitled to assert dissenters' rights. Shareholders should note
that FNB has the right to terminate the Merger Agreement in the event
dissenters' rights are claimed pursuant to 12 U.S.C. Section 215a with respect
to 10% or more of the issued and outstanding IRSB Common Shares. See "THE
MERGER -- Dissenters' Rights of IRSB Shareholders."

ACCOUNTING TREATMENT

It is intended that the Merger will be accounted for as a
pooling-of-interests under generally accepted accounting principles ("GAAP").
See "THE MERGER -- Accounting Treatment."

REGULATORY APPROVALS

The Merger is subject to the approval of the Federal Reserve Board,
the Comptroller of the Currency and the Florida Department of Banking and
Finance. The Merger may not be consummated until expiration of all applicable
waiting periods.

FNB and IRSB have filed all required applications for regulatory
review and approval or notice with the Federal Reserve Board, the Comptroller
of the Currency, and the Florida Department of Banking and Finance in
connection with the Merger. There can be no assurance that such approvals
will be obtained or as to the date of any such approvals.

See "THE MERGER -- Conditions Precedent to the Merger" and "-- Bank
Regulatory Matters."

RESALES BY AFFILIATES

IRSB has agreed to use its reasonable efforts to obtain from each of
those individuals identified by it as an affiliate an appropriate agreement
that such individual will not transfer any shares of FNB Common Stock received
by it as a result of the Merger, except in compliance with the applicable
provisions of the Securities Act and as permitted under pooling-of-interests
accounting treatment. See "THE MERGER -- Restrictions on Resales by
Affiliates."

SHARE INFORMATION AND MARKET PRICES

Until June 15, 1997, the FNB Common Stock traded on the Nasdaq
SmallCap Market under the trading symbol "FBAN." Since June 16, 1997, the FNB
Common Stock has traded on the Nasdaq National Market under the same trading
symbol. As of August 8, 1997, there were 14,081,550 shares of FNB

<PAGE> 13

Common Stock outstanding held by approximately 5,000 holders of record. As of
the Record Date, there were 350,000 IRSB Common Shares outstanding held by
approximately 338 holders of record.

The last sale price reported by the Nasdaq Stock Market for shares of
FNB Common Stock was $22.375 on May 9, 1997, the last trading day preceding
public announcement of the proposed Merger, and was $31.00 on August 8, 1997.
There currently is no market for the IRSB Common Shares. The IRSB equivalent
per share price as May 9, 1997 was $44.75 and as of August 8, 1997 was $55.80.
The IRSB equivalent per share price represents the last sale price of a
share of FNB Common Stock on such date multiplied by the Exchange Ratio. The
Exchange Ratio may be adjusted as provided herein. Shareholders are advised
to obtain current market quotations for FNB Common Stock. No assurance can be
given as to the market price of FNB Common Stock after the Effective Time. For
additional information regarding the market prices of the FNB Common Stock and
the IRSB Common Shares during the previous two years, see "PRICE RANGE OF
COMMON STOCK AND DIVIDENDS -- Market Prices."

The Merger Agreement permits IRSB to declare and pay semi-annual cash
dividends to its shareholders for the first half of 1997, payable in June 1997,
in an amount not to exceed $0.25 per share and for the second half of 1997 (if
the Closing of the Merger has not occurred), payable in December 1997, in an
amount not to exceed $0.50 per share.

RECENT DEVELOPMENTS

On July 29, 1997, FNB entered into a definitive agreement to acquire
Mercantile Bank of Southwest Florida ("Mercantile"), a Florida state banking
corporation located in Naples, Florida, for a cash price of $17.72 per share of
Mercantile common stock. Mercantile operates three commercial banking offices
in Collier County, Florida and as of June 30, 1997, had total assets of
approximately $116 million. Subject to certain conditions, including the
approval of Mercantile's shareholders, closing is expected to occur in the
fourth quarter of 1997.

COMPARATIVE UNAUDITED PER SHARE DATA

The following table sets forth (a) selected comparative per share data
for FNB and IRSB on an historical basis and (b) selected unaudited pro forma
comparative per share data assuming that FNB and IRSB have been combined during
the periods presented. The per share data for FNB has been restated giving
effect to the acquisitions of Southwest and West Coast, which were accounted
for as poolings-of-interests. The unaudited pro forma data have been prepared
giving effect to the Merger as a pooling-of-interests. For a description of the
effect of pooling-of-interests accounting on the Merger and the historical
financial statements of FNB, see "THE MERGER -- Accounting Treatment." The IRSB
pro forma equivalent amounts are presented with respect to each set of pro
forma information.

The comparative per share data presented are based on and derived
from, and should be read in conjunction with, the supplemental consolidated
financial statements and the related notes thereto of FNB, which are
incorporated by reference herein and of IRSB, which are included herein. The
pro forma amounts are not necessarily indicative of results of operations or
combined financial position that would have resulted had the Merger been
consummated at the beginning of the period indicated or which will be attained
in the future.

9
<PAGE> 14

THREE MONTHS
ENDED
YEAR ENDED DECEMBER 31 MARCH 31,
---------------------- ---------------
1996 1994 1995 1997 1996
---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C>
EARNINGS PER COMMON SHARE
FNB COMMON STOCK
Historical (primary) . . . . . . . . . . . . . . $1.35 $1.45 $1.06 $0.47 $0.42
Historical (fully diluted) . . . . . . . . . . . 1.32 1.41 1.05 0.45 0.41
Pro forma combined (primary) . . . . . . . . . . 1.34 1.43 1.05 0.46 0.41
Pro forma combined (fully diluted) . . . . . . . 1.32 1.40 1.04 0.45 0.40

IRSB COMMON STOCK
Historical . . . . . . . . . . . . . . . . . . . $2.30 $2.15 $2.02 $0.60 $0.58
Pro forma equivalent (1)
Primary . . . . . . . . . . . . . . . . . . 2.68 2.86 2.10 0.92 0.82
Fully Diluted . . . . . . . . . . . . . . . 2.64 2.80 2.08 0.90 0.80

CASH DIVIDENDS DECLARED PER COMMON SHARE
FNB historical . . . . . . . . . . . . . . . . . . 0.60 0.33 0.24 0.15 0.15
IRSB historical . . . . . . . . . . . . . . . . . . 0.70 0.60 0.55 -- --
IRSB pro forma equivalent (2) 1.20 0.66 0.48 0.30 0.30

MARCH 31, DECEMBER 31,
1997 1996
-------------- --------------
BOOK VALUE PER COMMON SHARE (PERIOD END)
FNB historical . . . . . . . . . . . . . . . . . . . . . $ 13.86 $13.70
FNB pro forma combined . . . . . . . . . . . . . . . . . 13.65 13.54
IRSB historical . . . . . . . . . . . . . . . . . . . . 21.02 20.77
IRSB pro forma equivalent (1) . . . . . . . . . . . . . 27.30 27.08
</TABLE>
---------------
(1) IRSB pro forma equivalent amounts are calculated by multiplying the
pro forma combined amounts for FNB by the Exchange Ratio of two (2)
shares of FNB Common Stock for each IRSB Common Share. The Exchange
Ratio is subject to adjustment in certain circumstances. See "THE
MERGER -- Modification, Waiver and Termination" and "THE MERGER --
Description of the Merger."

(2) IRSB pro forma equivalent amounts are calculated by multiplying the
historical amounts for FNB by the Exchange Ratio of two (2) shares of
FNB Common Stock for each IRSB Common Share. The Exchange Ratio is
subject to adjustment in certain circumstances. See "THE MERGER --
Modification, Waiver and Termination" and "THE MERGER -- Description of
the Merger."

10
<PAGE> 15

SELECTED FINANCIAL DATA

The following tables present summary selected financial data for FNB and IRSB
on an historical basis. The selected financial data for FNB has been restated
giving effect to the acquisitions of Southwest and West Coast, which were
accounted for as poolings-of-interests. For a description of the effect of
pooling-of-interests accounting on the Merger and the historical financial
statements of FNB, see "THE MERGER -- Accounting Treatment." The selected
financial data for the three month periods ended March 31, 1997 and 1996 are
derived from the unaudited consolidated financial statements of FNB and the
unaudited consolidated financial statements of IRSB. The unaudited
consolidated financial statements include all adjustments, consisting of normal
recurring accruals, which the respective managements consider necessary for a
fair presentation of the consolidated financial condition and results of
operations for these periods. Operating results for the three months ended
March 31, 1997 are not necessarily indicative of the results that may be
attained for the entire year ended December 31, 1997.

<TABLE>
<CAPTION>
Three Months Ended
Year Ended December 31, March 31,
----------------------- ----------------------
1996 1995 1994 1993 1992 1997 1996
---- ---- ---- ---- ---- ---- -----
<C> <C> <C> <C> <C> <C> <C>
F.N.B. CORPORATION:
Earnings (In thousands, except per
share data)
Interest income . . . . . . $183,583 $172,512 $149,275 $144,251 $141,844 $47,942 $45,146
Interest expense . . . . . 77,616 74,754 59,895 62,858 69,798 20,363 19,299
Net interest income . . . . 105,967 97,758 89,380 81,393 72,046 27,579 25,847
Provision for loan losses . 9,791 6,930 9,177 9,863 15,796 2,228 1,727
Net income . . . . . . . . 19,879 21,079 15,190 12,219 8,310 6,788 6,076
Earnings per common share
Primary . . . . . . . . 1.35 1.45 1.06 0.93 0.68 0.47 0.42
Fully diluted . . . . . 1.32 1.41 1.05 0.93 0.68 0.45 0.41

Cash dividends declared per
common share:
FNB . . . . . . . . . . 0.60 0.33 0.24 0.23 0.21 0.15 0.15

<CAPTION>
As of December 31, As of March 31,
------------------ ---------------
1996 1995 1994 1993 1992 1997 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance sheet (period end in thousands)
Total assets . . . . . . . . . . . $2,418,407 $2,238,525 $2,087,816 $1,982,920 $1,935,643 $ 2,448,018 $2,281,67
Total loans and leases net of
unearned income and
allowance for loan losses . . . 1,700,332 1,525,940 1,437,809 1,209,018 1,156,577 1,727,089 1,556,561
Total deposits . . . . . . . . . . 2,013,888 1,896,145 1,748,718 1,714,527 1,694,527 2,054,978 1,932,523
Long-term debt and obligations
under capital leases . . . . . . 58,179 50,784 56,614 32,528 33,198 45,735 41,565
Stockholders' equity . . . . . . . 199,285 188,146 167,096 142,277 125,869 201,940 191,372
</TABLE>

<PAGE> 16

Three Months
Ended
Year Ended December 31, March 31,
------------------------------------------------------ -----------------
1996 1995 1994 (1) 1993 (1) 1992 (1) 1997 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
IRSB: (unaudited)
Earnings (In thousands, except per
share data)
Interest income . . . . . . . . $4,634 $4,449 $3,881 $3,812 $4,211 $1,282 $1,117
Interest expense . . . . . . . . 1,926 1,954 1,433 1,397 1,797 566 449
Net interest income . . . . . . 2,708 2,495 2,448 2,415 2,414 716 668
Provision for loan losses . . . 30 12 18 22 39 9 5
Net income . . . . . . . . . . . 805 754 708 720 802 210 203
Earnings per common share
Primary . . . . . . . . . . 2.30 2.15 2.02 2.06 2.29 0.60 0.58
Fully diluted . . . . . . . 2.30 2.15 2.02 2.06 2.29 0.60 0.58
Cash dividends declared per
common share . . . . . . . . . 0.70 0.60 0.55 0.50 0.45 -- --

<CAPTION>
As of December 31, As of March 31,
------------------ ---------------
1996 1995 1994 (1) 1993 (1) 1992 (1) 1997 1996
---- ---- ---- ---- ---- ---- ----
<S> <C> <C> <C> <C> <C> <C> <C>
Balance sheet (period end in (unaudited)
thousands)
Total assets . . . . . . . . . . $75,493 $64,291 $66,677 $61,716 $59,329 $78,407 $64,902
Total loans, net of unearned
discount . . . . . . . . . . . 30,964 29,728 28,741 25,843 23,096 31,609 28,947
Total deposits . . . . . . . . . 61,784 53,692 57,703 54,004 51,761 64,400 54,451
Repurchase agreements . . . . . 5,911 3,255 2,693 1,763 1,906 6,200 2,972
Stockholders' equity . . . . . . 7,268 6,717 5,954 5,630 5,053 7,357 6,886
</TABLE>

___________________
(1) Unaudited.

<PAGE> 17

THE SPECIAL MEETING OF SHAREHOLDERS OF IRSB

GENERAL

This Proxy Statement-Prospectus is first being furnished to the
holders of IRSB Common Shares on or about August 13, 1997, and is accompanied
by the Notice of Special Meeting and a form of proxy that is solicited by the
IRSB Board for use at the Special Meeting of Shareholders of IRSB to be held at
the Largo Cultural Center, 105 Central Park Drive, Largo, Florida 33771 on
Thursday, October 9 1997, at 3:00 p.m., local time, and at any adjournments or
postponements thereof. The purpose of the Special Meeting is to take action
with respect to the approval of the Merger Agreement and the transactions
contemplated thereby.

VOTING AND REVOCATION OF PROXIES

A shareholder of IRSB may use the accompanying proxy if such
shareholder is unable to attend the Special Meeting in person or wishes to have
his or her shares voted by proxy even if such shareholder does attend the
meeting. A shareholder may revoke any proxy given pursuant to this solicitation
by delivering to the Cashier of IRSB, prior to or at the Special Meeting, a
written notice revoking the proxy or a duly executed proxy relating to the same
shares bearing a later date, or by attending the Special Meeting and voting in
person at the Special Meeting. Attendance of a shareholder at the Special
Meeting will not, in and of itself, constitute a revocation of the proxy. All
written notices of revocation and other communications with respect to the
revocation of IRSB proxies should be addressed to Indian Rocks State Bank,
12360 Indian Rocks Road, Largo, Florida 33774 Attention: Cashier. For such
notice of revocation or later proxy to be valid, however, it must actually be
received by IRSB prior to the vote of the shareholders. All shares represented
by valid proxies received pursuant to this solicitation, and not revoked before
they are exercised, will be voted in the manner specified therein. If a proxy
is signed and returned without indicating any voting instructions, it will be
voted FOR the proposal to approve the Merger Agreement. The IRSB Board is
unaware of any other matters that may be presented for action at the Special
Meeting. If other matters do properly come before the Special Meeting, however,
it is intended that shares represented by proxies in the accompanying form will
be voted or not voted by the persons named in the proxies in their discretion.

SOLICITATION OF PROXIES

Solicitation of proxies may be made in person or by mail, telephone,
or facsimile, or other form of communication by directors, officers, and
employees of IRSB, who will not be specially compensated for such solicitation.
Nominees, fiduciaries, and other custodians will be requested to forward
solicitation materials to beneficial owners and to secure their voting
instructions, if necessary, and will be reimbursed for the expenses incurred in
sending proxy materials to beneficial owners.

No person is authorized to give any information or to make any
representation not contained in this Proxy Statement-Prospectus and, if given
or made, such information or representation should not be relied upon as having
been authorized by IRSB, FNB, or any other person. The delivery of this Proxy
Statement-Prospectus shall not, under any circumstances, create any implication
that there has been no change in the business or affairs of IRSB or FNB since
the date of the Proxy Statement-Prospectus.

All costs of solicitation of proxies from IRSB shareholders will be
borne by IRSB; provided, however, that FNB and IRSB have each agreed to pay
one-half of the printing costs of this Proxy Statement-Prospectus and related
materials.

RECORD DATE AND VOTING RIGHTS

The IRSB Board has fixed the close of business on August 12, 1997 as
the Record Date for the determination of shareholders of IRSB entitled to
receive notice of and to vote at the Special Meeting. At the close of business
on the Record Date, there were outstanding 350,000 IRSB Common Shares held by

<PAGE> 18

approximately [338] holders of record. Each IRSB Common Share outstanding on the
Record Date is entitled to one vote as to (i) the approval of the Merger
Agreement and the transactions contemplated thereby and (ii) any other proposal
that may properly come before the Special Meeting.

As of the Record Date, the directors and executive officers of IRSB
and their affiliates held approximately an aggregate of 108,704 shares, or
31.1%, of IRSB Common Shares.

Under the National Bank Act, the affirmative vote of two-thirds of the
issued and outstanding capital stock entitled to vote on the matter is required
in order to approve a proposed merger transaction of a state bank with and into
a national bank, unless the articles of incorporation or the board of directors
require a greater number of votes. Neither the Articles of Incorporation of
IRSB nor its Board requires a greater number of votes. Since approval of the
Merger requires the affirmative vote of two-thirds of the issued and
outstanding IRSB Common Shares as of the Record Date, the failure to vote the
shares in favor of the Merger for any reason whatsoever - whether by
withholding the vote, by abstaining, or by causing a broker non-vote - will
have the same effect as a vote cast opposing the Merger.

A broker non-vote generally occurs when a broker who holds shares in
street name for a customer does not have the authority to vote on certain
non-routine matters because its customer has not provided any voting
instructions with respect to the matter.

BECAUSE APPROVAL OF THE MERGER AGREEMENT REQUIRES THE AFFIRMATIVE VOTE
OF TWO-THIRDS OF THE ISSUED AND OUTSTANDING IRSB COMMON SHARES ENTITLED TO VOTE
AT THE SPECIAL MEETING, ABSTENTIONS AND BROKER NON-VOTES WILL HAVE THE SAME
EFFECT AS NEGATIVE VOTES. ACCORDINGLY, THE IRSB BOARD URGES ITS SHAREHOLDERS TO
COMPLETE, DATE, AND SIGN THE ACCOMPANYING PROXY AND RETURN IT PROMPTLY IN THE
ENCLOSED, POSTAGE-PAID ENVELOPE.

In order to take action on any other matter submitted to shareholders
at a meeting where a quorum is present, the votes cast in favor of the action
must exceed the votes cast opposing the action, unless the articles of
incorporation or state law requires a greater number of votes. All abstentions
and broker non-votes will be counted as present for purposes of determining the
existence of a quorum; but since they are neither votes cast in favor of, nor
votes cast opposing, a proposed action, abstentions and broker non-votes
typically will have no impact on the outcome of the matter and will not be
counted as a vote cast on such matters.

RECOMMENDATION OF THE IRSB BOARD

THE IRSB BOARD HAS UNANIMOUSLY APPROVED THE MERGER AGREEMENT AND THE
TRANSACTIONS CONTEMPLATED THEREBY, BELIEVES THAT THE MERGER IS IN THE BEST
INTERESTS OF IRSB AND ITS SHAREHOLDERS, AND RECOMMENDS THAT THE SHAREHOLDERS OF
IRSB VOTE "FOR" APPROVAL OF THE MERGER AGREEMENT.

In the course of reaching its decision to approve the Merger Agreement
and the transactions contemplated thereby, the IRSB Board, among other things,
consulted with its legal advisors regarding the legal terms of the Merger
Agreement and with its financial advisor, Ewing, as to the fairness, from a
financial point of view, of the consideration to be received by the holders of
IRSB Common Shares in connection with the Merger. For a discussion of the
factors considered by the IRSB Board in reaching its conclusion, see "THE
MERGER -- Background of and Reasons for the Merger."

14
<PAGE> 19

Pursuant to the terms of the Merger Agreement, the members of the IRSB
Board will vote their shares in favor of the Merger Agreement and the
transactions contemplated thereby at the Special Meeting.

IRSB SHAREHOLDERS SHOULD NOT SEND
ANY STOCK CERTIFICATES WITH THEIR PROXY CARDS.

15
<PAGE> 20

THE MERGER

The following summary of certain terms and provisions of the Merger
Agreement and Stock Option Agreement is qualified in its entirety by reference
to the Merger Agreement and Stock Option Agreement, which are incorporated
herein by reference and, with the exception of certain exhibits thereto, are
included as Appendix A and Appendix B, respectively, to this Proxy
Statement-Prospectus. All shareholders are urged to read the Merger Agreement,
Stock Option Agreement, and the other Appendices hereto in their entirety.

DESCRIPTION OF THE MERGER

At the Effective Time, IRSB will be merged with and into Interim.
Interim will be the surviving entity and, immediately upon consummation of the
Merger, FNB will transfer 100% of its ownership of Interim to Southwest so that
Interim will become a wholly owned subsidiary of Southwest. The Interim Charter
and Bylaws in effect at the Effective Time will continue to govern Interim
until amended or repealed in accordance with applicable law. The Merger is
subject to the approval of the Federal Reserve Board, the Comptroller of the
Currency and the Florida Department of Banking and Finance. See "-- Bank
Regulatory Matters."

At the Effective Time, except as described herein, each IRSB Common
Share outstanding immediately prior to the Effective Time will be converted
automatically into the right to receive two (2) shares (subject to possible
adjustment as provided below) of FNB Common Stock (the "Exchange Ratio")
unless: (i) the average of the closing bid and asked price per share of FNB
Common Stock for a specified period prior to Closing ("FNB Average Price") is
equal to or greater than $27 but less than $30, in which case the exchange
ratio shall be adjusted so that the value of FNB Common Stock to be received
for each IRSB Common Share will be $54, (ii) the FNB Average Price is $30 or
greater, in which case the exchange ratio shall be 1.8 shares of FNB Common
Stock for each IRSB Common Share, or (iii) the FNB Average Price is less than
$22, in which case the exchange ratio will be adjusted so that the value of FNB
Common Stock to be received for each IRSB Common Share will be $44. Cash will
be paid in lieu of fractional shares. Under the terms of the Merger
Agreement, the FNB Average Price shall be the average of the closing bid and
asked prices of FNB Common Stock in the over-the-counter market as reported by
Nasdaq (or such other trading system or exchange upon which the FNB Common
Stock shall be traded) for the ten consecutive full trading days in which such
shares are traded prior to the fifth business day preceding the Determination
Date (as defined in the Merger Agreement). The Merger Agreement further
provides that the Exchange Ratio may be adjusted, subject to certain
exceptions, to prevent dilution in the event FNB changes the number of shares
of FNB Common Stock issued and outstanding prior to the Effective Time as a
result of a stock split, stock dividend, recapitalization, reclassification or
similar transaction. At the Effective Time, any IRSB Common Shares held by
IRSB, FNB, or any FNB subsidiary, other than in a fiduciary capacity or as a
result of debts previously contracted, will be canceled and retired without
consideration being paid. IRSB has represented that, as of the Effective Time,
there will be no more than 350,000 IRSB Common Shares issued and outstanding.
Following the Effective Time and assuming that 350,000 IRSB Common Shares are
outstanding at the Effective Time, the former shareholders of IRSB would own,
assuming no adjustment of the Exchange Ratio, 700,000 shares, or approximately
4.7%, of the then outstanding FNB Common Stock (assuming 14,082,000 shares of
FNB Common Stock outstanding immediately prior to the Effective Time).
However, if the FNB Average Price is less than $20.00, FNB will not be required
to consummate the Merger, and, at its option, may terminate the Merger
Agreement.

In addition, pursuant to the terms of the Merger Agreement, IRSB
declared and paid a semi-annual cash dividend for the first half of 1997 to its
shareholders in June 1997 of $0.25 per share and in December 1997 IRSB may
declare and pay a cash dividend (if the Closing of the Merger has not occurred)
in an amount not to exceed $0.50 per share for the second half of 1997.

No fractional shares of FNB Common Stock will be issued in the Merger.
Instead, each holder of IRSB Common Shares who would otherwise have been
entitled to receive a fraction of a share of FNB Common Stock (after taking
into account all certificates delivered by such holder) will receive, in lieu

<PAGE> 21
thereof, cash (without interest) in an amount equal to such fractional part of
a share of FNB Common Stock multiplied by the market value of one share of FNB
Common Stock at the Closing, which is defined in the Merger Agreement as the
average of the high bid and low asked prices of one share of FNB Common Stock
in the over-the-counter market as reported by Nasdaq (or, if not reported
thereby, by any other authoritative source selected by FNB) on the last trading
day preceding the Closing. No such holder will be entitled to dividends, voting
rights or any other rights as a shareholder in respect of any fractional
shares. See "-- Exchange of Certificates."

The shares of FNB capital stock outstanding immediately prior to the
Merger will continue to be outstanding after the Effective Time.

EFFECTIVE TIME OF THE MERGER

The Effective Time will occur on the date and at the time
certification of the Merger is received from the Comptroller of the Currency or
such other later date and time as is agreed to by the parties as specified in
the Articles of Merger. Unless otherwise agreed by FNB and IRSB, the parties
have agreed to use their best efforts to cause the Effective Time to occur on
the date of the Closing and to use their reasonable best efforts to cause the
Closing to take place on, but not prior to, the fifth business day following
the last to occur of: (i) the effective date of the last required consent of
any state or federal regulatory authority having authority over the Merger
(including the expiration of any applicable waiting periods following such
consents or the delivery of appropriate notices), or (ii) the date on which the
IRSB shareholders approve the Merger Agreement. There can be no assurance,
however, as to whether or when the Merger will occur.

EXCHANGE OF CERTIFICATES

Before or as soon as practicable after the Effective Time, Chemical
Mellon Shareholder Services (the "Exchange Agent") will mail to each holder of
record of IRSB Common Shares as of the Effective Time a letter of transmittal
and related forms (the "Letter of Transmittal") for use in forwarding stock
certificates previously representing IRSB Common Shares for surrender and
exchange for certificates representing FNB Common Stock. Risk of loss and title
to the certificates theretofore representing IRSB Common Shares shall pass only
upon proper delivery of such certificates to the Exchange Agent.

IRSB SHAREHOLDERS SHOULD NOT SEND IN THEIR STOCK CERTIFICATES UNTIL
THEY RECEIVE THE LETTER OF TRANSMITTAL FROM THE EXCHANGE AGENT.

Upon surrender to the Exchange Agent of one or more certificates for
IRSB Common Shares, together with a properly completed Letter of Transmittal,
there will be issued and mailed to the holder thereof a certificate or
certificates representing the aggregate number of whole shares of FNB Common
Stock to which such holder is entitled pursuant to the Exchange Ratio, together
with all declared but unpaid dividends or other distributions in respect of
such shares, and, where applicable, a check for the amount (without interest)
representing any fractional share. A certificate for shares of FNB Common
Stock, or any check representing cash in lieu of a fractional share or declared
but unpaid dividends, may be issued in a name other than the name in which the
surrendered certificate is registered only if (i) the certificate surrendered
is properly endorsed, accompanied by a guaranteed signature if required by the
Letter of Transmittal and otherwise in proper form for transfer, and (ii) the
person requesting the issuance of such certificate either pays to the Exchange
Agent any transfer or other taxes required by reason of the issuance of a
certificate for such shares in a name other than the registered holder of the
certificate surrendered or establishes to the satisfaction of the Exchange
Agent that such tax has been paid or is not applicable. The Exchange Agent will
issue stock certificates evidencing FNB Common Stock in exchange for lost,
stolen, mutilated, or destroyed certificates of IRSB Common Shares only upon
receipt of a lost stock affidavit and a bond indemnifying FNB against any claim
arising out of the allegedly lost, stolen, mutilated, or destroyed certificate.
In no event will the Exchange Agent, FNB, or IRSB be liable to any persons for
any FNB Common Stock or dividends thereon or

<PAGE> 22
cash delivered in good faith to a public official pursuant to any applicable
abandoned property, escheat, or similar law.

On and after the Effective Time and until the surrender of
certificates of IRSB Common Shares to the Exchange Agent, each certificate that
represented IRSB Common Shares outstanding immediately prior to the Effective
Time will be deemed to evidence the shares of FNB Common Stock into which such
shares are converted pursuant to the Merger Agreement. Until 90 days after the
Effective Time, former shareholders of IRSB shall be entitled to vote at any
meeting of FNB stockholders the whole number of shares of FNB Common Stock into
which IRSB Common Shares are converted, regardless of whether such holders have
exchanged their certificates representing IRSB Common Shares for shares
representing FNB Common Stock. After 90 days, former holders of IRSB Common
Shares must surrender their certificates to the Exchange Agent in order to
exercise their voting rights. Beginning 30 days after the Effective Time, no
shareholder will, however, receive dividends or other distributions on such FNB
Common Stock until the certificates representing IRSB Common Shares are
surrendered. Upon surrender of IRSB Common Shares certificates, IRSB
shareholders will be paid any dividends or other distributions on FNB Common
Stock that are payable to holders as of any dividend record date on or
following the Effective Time. No interest will be payable with respect to
withheld dividends or other distributions.

BACKGROUND OF AND REASONS FOR THE MERGER

BACKGROUND OF THE MERGER.

In December 1996, Peter Mortenson, Chairman of the Board and President
of FNB, had an informal meeting with Dr. Harold M. Ward, C.R. Roberts, and
Robert C. George, Chairman, Vice Chairman, and President, respectively of IRSB.
At this meeting, Mr. Mortenson indicated generally that FNB may be interested
in exploring a potential business combination but no formal indication of
interest was made at that time. Thereafter the parties agreed that a formal
meeting should be arranged.

On March 20, 1997, Mr. Mortenson and James S. Lindsay, a director of
Southwest met with Messrs. Ward, Roberts, and George, and indicated that it
was FNB's desire to explore whether there was a basis for discussing a future
business affiliation between FNB and IRSB. At this meeting, the general
philosophy of FNB to operate its Florida acquisitions as community banks was
explained and, subject to a preliminary due diligence review of IRSB, a
possible price range scenario was mentioned. IRSB representatives indicated
that they could not determine whether there would be a basis for discussions
prior to receiving additional information from FNB, including a term sheet
outlining the specific proposal terms of any such transaction.

Following this meeting, the IRSB directors were advised informally
over the next few days of the preliminary discussions held with FNB. After
being advised of the general discussions held at this meeting, the directors
each indicated their interest in pursuing discussions further with FNB.

On April 10, 1997, the IRSB Board held a special meeting at which FNB
representatives, including Mr. Mortenson, John D. Waters, Vice President and
Chief Financial Officer of FNB, and Gary Tice, Executive Vice President of FNB
and President and Chief Executive Officer of Southwest, made a full
presentation to the IRSB Board containing a detailed overview of FNB, its
recent accomplishments, future potential, and its proposed plan to affiliate
with IRSB. This presentation addressed the proposed structure of such a
transaction pursuant to which IRSB would be held by Southwest, the continued
operation of IRSB as a community-type banking institution following the
transaction, the role of management in the successor institution, the manner in
which IRSB employees would be treated, and the potential benefits that they
believed IRSB shareholders would receive from the ownership of FNB Common Stock
which is actively traded in the public market. The IRSB directors asked
numerous questions concerning FNB and its plan and proposals, including its
plans in the State of Florida. After the FNB representatives were excused from
the meeting, it was the consensus of the IRSB Board that further

18
<PAGE> 23

consideration of a proposed affiliation should be postponed until such
time as counsel has been engaged to assist it in pursuing any further
discussions with FNB.

On April 21, 1997, the Board of Directors held a meeting at which it
formally engaged counsel and established a special committee ("Special
Committee") consisting of Messrs. Ward, George, and William Jonassen, a
director of IRSB, to negotiate the terms of any proposed transaction. Counsel
was present at this meeting and advised the Board and the Special Committee of
their duties and responsibilities in connection with the consideration of a
proposed business combination.

A formal term sheet was furnished to IRSB by FNB on April 23, 1997
setting forth the specific terms of its proposal. Pursuant to the term sheet,
FNB proposed acquiring IRSB in a merger transaction pursuant to which holders
of IRSB Common Shares would receive, based on the closing price of FNB Common
Stock on April 22, 1997, a purchase price equal to $47.25 per IRSB Common
Share, payable in FNB Common Stock at a fixed exchange ratio of two (2) shares
of FNB Common Stock for each IRSB Common Share.

From April 24, 1997 through May 7, 1997, representatives of the
parties and their respective counsel negotiated the terms and conditions of the
proposed merger. During the early stages of negotiations, it was determined
that IRSB should engage the services of an investment banker or other financial
professional to assist them in analyzing the fairness, from a financial point
of view, of the consideration being offered by FNB. Representatives of the
Special Committee held discussions with, received proposed terms of engagement
from, and interviewed, several banking and financial consulting firms. At the
conclusion of its interviews and the negotiation of the terms of engagement, on
May 1, 1997 IRSB retained the services of Ewing, a firm specializing in
financial institutions, to assist it in analyzing the fairness, from a
financial point of view, of the terms of the Merger to the shareholders of IRSB.
Ewing was selected based on its knowledge of financial institutions and its
expertise as a financial advisor in mergers and acquisitions of financial
institutions. Consistent with the terms of the engagement, Ewing did not
participate in negotiating the terms of the Merger.

Upon conclusion of the negotiation of the terms of the proposed
merger, the IRSB Board of Directors held a special meeting on May 8, 1997 to
review and consider FNB's offer, including the material terms of the proposed
definitive merger agreement. Ewing made a presentation to the Board which
included a detailed analysis evaluating the terms of the offer. Ewing
presented a comparison of IRSB's historical financial results with those of
other banks in Florida and the financial terms of recent Florida bank
acquisitions. In addition, Ewing provided an analysis of the recent stock
performance of FNB Common Stock and noted the lack of liquidity for IRSB Common
Shares. The presentation also included an analysis of FNB's operating
performance and the relevant dividend payouts by both FNB and IRSB to their
respective shareholders. Ewing compared the financial terms of the offer to
those comparable transactions of similar institutions and orally expressed its
opinion to the IRSB Board that the terms of the Merger were fair, from a
financial point of view, to the shareholders of IRSB. As a result of the
foregoing, the Board of Directors unanimously agreed to approve the merger, and
authorized the Special Committee to finalize and execute a definitive merger
agreement. On May 10, 1997, the parties entered into a definitive merger
agreement.

On August 7, 1997, the parties discussed the terms of the Merger
Agreement which provided IRSB with the right to terminate the transaction in
the event the FNB Average Price is $30 or greater. Because the FNB Common
Stock has from time to time closed at a price in excess of $30 per share during
the period between June 30, 1997 and August 7, 1997, the parties determined that
it would be prudent to discuss a possible revision of the Merger Agreement.
After discussing this matter throughout the day, it was determined and agreed
to by the parties that in the event the FNB Average Price was $30 or greater,
the Exchange Ratio would be fixed at 1.8 shares of FNB Common Stock for each
IRSB Common Share. This adjustment will permit IRSB shareholders to
participate in any increase in the value of FNB Common Stock over $30, rather
than such value being fixed at $54 per IRSB Common Share. In return, IRSB
agreed to surrender its right to terminate the Merger Agreement if the FNB
Average Price should exceed $30. On August 8, 1997, the parties entered into
the first amendment to the Merger Agreement reflecting the agreement of the
parties.

IRSB REASONS FOR THE MERGER.

In evaluating and determining to approve the Merger Agreement, the
IRSB Board, with the assistance of Ewing and outside legal counsel, considered
a variety of factors and based its opinion as to the fairness of the
transactions contemplated by the Merger Agreement primarily on the following
factors:

(i) The financial terms of the Merger, including the
value of the consideration offered, the premium to book value paid,
the prices paid in comparable transactions, relative earnings per
share and shareholders' equity of FNB and IRSB, and the ability to
continue to pay semi-annual dividends to IRSB shareholders pending the
consummation of the Merger. The IRSB Board also

<PAGE> 24
considered the current lack of liquidity for the IRSB Common Shares
and the active trading market for the FNB Common Stock.

(ii) The future prospects of IRSB and possible
alternatives to the proposed Merger of IRSB, including the prospects
of continuing as an independent institution. The IRSB Board
considered the timing of the offer and the prospects for receiving a
better financial offer from another institution having the same
commitment to providing community bank-type services to its customers
following a merger.

(iii) The opinion of Ewing that the terms of the Merger as
provided in the Merger Agreement were fair, from a financial point of
view, to IRSB's shareholders. The opinion of Ewing is set forth in
Appendix C to this Proxy Statement-Prospectus.

(iv) Information with respect to the financial condition,
results of operations, business and prospects of IRSB and the current
industry, economic, and market conditions, as well as the risks
associated with achieving those prospects.

(v) The non-financial terms and structure of the proposed
Merger, in particular, the fact that the Merger is intended to qualify
as a tax-free reorganization to IRSB's shareholders.

(vi) The business and financial condition and earnings
prospects of FNB, the potential growth in FNB Common Stock, and the
competence, experience, and integrity of FNB and its management. In
this regard, the IRSB also considered the increasing commitment of FNB
to the Florida banking market and the prospects for additional growth
in the Florida market.

(vii) The social and economic effects of the Merger on IRSB
and its employees, depositors, loan and other customers, creditors,
and other constituencies of the communities in which IRSB is located.
The IRSB Board considered the terms of the employee benefits to be
received, the proposed structure and operation of the resultant
financial institution as a community bank following the Merger, and
the commitment to customer quality and service that FNB would provide
to IRSB's customers and depositors.

(viii) The likelihood of the proposed Merger being approved
by appropriate regulatory authorities.

Each of the above factors support, directly or indirectly, the
determination of the IRSB Board as to the fairness of the proposed Merger. The
IRSB Board did not quantify or attempt to assign relative weights to the
specific factors considered in reaching its determination; however, the IRSB
Board placed special emphasis on the consideration payable in the proposed
Merger and the receipt of a favorable fairness opinion from its financial
advisor. See "-- Opinion of IRSB's Financial Advisor."

FNB REASONS FOR THE MERGER.

The FNB Board recognized that the proposed Merger with IRSB provides
an opportunity to continue to employ FNB's growing capital in southwest
Florida, one of the fastest growing markets in the United States. This is in
contrast to the more mature market areas of Pennsylvania, eastern Ohio, and
southwestern New York where FNB had traditionally operated, prior to its
acquisitions of Southwest and West Coast. FNB management believes that the
proposed Merger complements FNB's acquisitions of Southwest and West Coast, and
will provide for the Company's entrance into Pinellas County, which includes
the cities of Clearwater, St. Petersburg and Largo. Following the Merger, IRSB
will continue to operate as a stand-alone community bank (although it will be
converted to a national bank), but will be able to draw upon the resources and
competencies of FNB's other Florida affiliates to provide a broader range of
services and product delivery channels.

<PAGE> 25

OPINION OF IRSB'S FINANCIAL ADVISOR

GENERAL. IRSB retained Ewing to render an opinion to the IRSB Board
as to the fairness, from a financial point of view, of the Merger to the
shareholders of IRSB. At the May 8, 1997 meeting of the IRSB Board, Ewing
rendered an oral opinion to the IRSB Board to the effect that the terms of the
Merger were fair, from a financial point of view, to the shareholders of IRSB.
On May 7, 1997, the day before Ewing delivered its oral opinion to the IRSB
Board, the closing price of FNB Common Stock was $23.50 per share. On
August 8, 1997, Ewing updated its oral opinion by delivering a written
opinion that, as of such date, the terms of the Merger were fair, from a
financial point of view, to the shareholders of IRSB. On August 7, 1997,
the day before Ewing delivered its written opinion, the closing price of FNB
Common Stock was $30.50 per share. The text of Ewing's written opinion is set
forth in Appendix C to this Proxy Statement-Prospectus and should be read in
its entirety by shareholders of IRSB.

No limitations were imposed on the scope of Ewing's analysis or the
procedures followed by Ewing in rendering its opinion. Ewing was not requested
to and it did not make any recommendations to the IRSB Board as to the amount
of consideration to be paid to IRSB shareholders. The consideration to be
received by IRSB shareholders in the Merger was determined by IRSB and FNB
through arms-length negotiations. Consistent with the limited scope of its
engagement, Ewing did not participate in the negotiations of the financial
terms contained in the Merger Agreement or solicit or receive acquisition
proposals from other potential acquirors.

Ewing's opinion is directed to the Board of Directors of IRSB and
addresses only the fairness, from a financial point of view, of the
consideration to be received by the shareholders of IRSB in the Merger, based
on conditions as they existed and could be evaluated as of the date of the
opinion. Ewing's opinion does not constitute a recommendation to any IRSB
shareholder as to how such shareholder should vote at the Special Meeting nor
does Ewing's opinion address the underlying business decision to effect the
Merger.

In connection with its opinion, Ewing reviewed, analyzed, and relied
upon information and material bearing upon the Merger and the financial and
operating condition of IRSB and FNB, including, among other things, the
following: (i) the Merger Agreement; (ii) audited financial statements for
IRSB for the two years ended December 31, 1996; (iii) Directors' Examinations
for IRSB as of November 30, 1994 and 1993; (iv) certain unaudited interim
financial information for IRSB for various periods for the year 1997; (v)
Annual Reports to Shareholders and Annual Reports on Form 10-K for FNB for the
three years ended December 31, 1996; (vi) Quarterly Report on Form 10-Q filed
by FNB for the quarter ended March 31, 1997; (vii) other financial information
concerning the business and operations of IRSB furnished by IRSB to Ewing for
purposes of its analysis, including certain internal forecasts for IRSB
prepared by its senior management; (viii) information concerning the limited
market for the IRSB Common Shares; and (ix) certain publicly available
information concerning the trading of, and the trading market for, FNB Common
Stock. Ewing also held discussions with the management of IRSB concerning its
operations, financial condition, and prospects, as well as the results of
regulatory examinations.

Ewing also considered such further financial, economic, regulatory,
and other factors as it deemed relevant and appropriate under the
circumstances, including among others the following: (i) certain publicly
available information concerning the financial terms of certain mergers and
acquisitions of other financial institutions in Florida and the financial
position and operating performance of the institutions acquired in those
transactions; and (ii) certain publicly available information concerning the
trading of, and the trading market for, the publicly-traded common stocks of
certain other financial institutions. Ewing also took into account its
assessment of general economic, market, and financial conditions and its
experience in other transactions, as well as its experience in securities
valuation and its knowledge of the banking and thrift industry generally.

In conducting its review and arriving at its opinion, Ewing relied
upon and assumed the accuracy and completeness of all of the financial and
other information provided to it or publicly available, and Ewing did

<PAGE> 26

not attempt to verify such information independently. Ewing relied upon the
management of IRSB as to the reasonableness and achievability of the financial
and operational forecasts and projections (and the assumptions and bases
therefor) provided to Ewing and assumed that such forecasts and projections
reflected the best estimates and judgments of management then available and that
such forecasts and projections would be realized in the amounts and in the time
periods then estimated by management. Ewing also assumed, without independent
verification, that the aggregate allowances for loan and other losses for IRSB,
Southwest, Interim, and FNB were adequate to cover such losses. Ewing did not
make or obtain any inspections, evaluations, or appraisals of the assets or
liabilities of IRSB, Southwest, Interim, or FNB, nor did Ewing examine any
individual loan, property, or securities files. Ewing was informed by IRSB, and
assumed for purposes of its opinion, that the Merger will be recorded as a
pooling of interests under generally accepted accounting principles. Ewing also
assumed that the conditions to the Merger as set forth in the Merger Agreement
would be satisfied and that the Merger would be consummated on a timely basis as
contemplated by the Merger Agreement.

VALUATION METHODOLOGIES. In connection with its written opinion with
respect to the terms of the Merger and the presentation of its oral opinion to
IRSB's Board of Directors, Ewing performed several analyses. Set forth below
is a brief summary of these analyses, as updated in connection with the
delivery of Ewing's written opinion.

ANALYSIS OF TERMS OF THE MERGER. Ewing calculated the imputed value
of the Merger to the holders of IRSB Common Stock based upon the Exchange Ratio
contained in the Merger Agreement and varying assumptions concerning the FNB
Average Price. Under the terms of the Merger Agreement, the Exchange Ratio
will depend upon the FNB Average Price during the applicable calculation period
prior to the Closing of the Merger. If the FNB Average Price is equal to or
greater than $22 and less than $27, the Exchange Ratio will be fixed at 2.0
shares of FNB Common Stock for each IRSB Common Share. If the FNB Average
Price is equal to or greater than $30, the Exchange Ratio will be fixed at 1.8
shares of FNB Common Stock for each IRSB Common Share. If the FNB Average Price
is less than $22 or equal to or greater than $27 but less than $30, the
Exchange Ratio will be adjusted in accordance with the formula described in the
Merger Agreement. See "THE MERGER -- Description of the Merger." FNB may
terminate the Merger Agreement and abandon the Merger if the FNB Average Price
is less than $20. See "THE MERGER -- Modification, Waiver and Termination."
Using assumed FNB Average Prices ranging from $19 to $33, Ewing's analysis
produced an imputed value for each IRSB Common Share ranging from $44 to $59.40
("Assumed Range of Merger Value"). This analysis showed that the value of FNB
Common Stock issued for each IRSB Common Share would (i) be fixed at $44 if the
FNB Average Price is less than $22; (ii) range from $44 to $53.99 if the FNB
Average Price is equal to or greater than $22 and less than $27; (iii) be fixed
at $54 if the FNB Average Price is equal to or greater than $27 and less than
$30; or (iv) range from $54 to $59.40 if the FNB Average Price is equal to or
greater than $30 but not greater than $33 (and would increase further if the
FNB Average Price exceeds $33). Because the market price of FNB Common Stock
at or after the Effective Time of the Merger may be greater or less than the
FNB Average Price used in Ewing's analysis, the market value of the shares of
FNB Common Stock received by IRSB shareholders may differ from the values
produced in Ewing's analysis.

STOCK TRADING HISTORY. Ewing examined the recent history of trading
prices for FNB Common Stock and the relationship between movements of those
stock prices and movements in the Keefe Bruyette & Woods, Inc. Bank Sector
Index (the "Keefe Index"), a capital weighted index traded on the Philadelphia
Stock Exchange (trading symbol BKX) composed of 24 listed and over-the-counter
stocks representing national money center and leading regional bank holding
companies.

This analysis showed that the price growth per share of FNB Common
Stock (excluding cash dividends but adjusted for stock dividends and stock
splits) was 5.0%, 40.7%, 5.0%, 44.2%, and 11.7% during the years ended December
31, 1992, 1993, 1994, 1995 and 1996, respectively, and 40.4% during the period
from December 31, 1996 through August 5, 1997. This analysis also showed that,
during the period from December 31, 1992 through August 5, 1997, the price
growth per share of FNB Common Stock generally exceeded the growth of the Keefe
Index. During this period, the price of FNB Common Stock increased by
approximately 234% and the Keefe Index increased by approximately 176%. In
considering these analyses, Ewing noted that prior performance is not
necessarily indicative of future performance.

Ewing also examined recent trading volume history for FNB Common
Stock, which began trading on the Nasdaq National Market in June 1997 and prior
thereto traded on the Nasdaq Small Cap Market, and the trading volume and
prices for IRSB Common

<PAGE> 27

Shares. Based upon this analysis, Ewing concluded that an active trading
market exists for FNB Common Stock and no active trading market exists for IRSB
Common Shares. Because IRSB Common Shares are not traded actively, Ewing
placed relatively little weight on the market price of IRSB Common Shares.

COMPARABLE TRANSACTION ANALYSIS. Ewing performed an analysis of the
premiums paid in comparable acquisition transactions. For such purposes, Ewing
considered comparable transactions to be acquisitions announced from January 1,
1995 to June 30, 1997, where the target institution was a bank or bank holding
company located in Florida with total assets less than $100 million. In each
of the selected transactions, Ewing analyzed the premium to the target
institution's book value, tangible book value, previous four quarters'
earnings, total deposits, and total assets. Ewing then compared the ranges of
these premiums to the Assumed Range of Merger Value. This analysis produced
the following premium ranges for the selected comparable transactions and the
Assumed Range of Merger Value: (i) price offered as a multiple of the target
institution's book value of 1.42 times to 2.89 times, with a mean of 2.04 times
and a median of 2.04 times, compared to a premium ranging from 2.03 times to
2.74 times for the Assumed Range of Merger Value based upon IRSB's book value
at June 30, 1997; (ii) price offered as a multiple of the target institution's
tangible book value of 1.42 times to 2.89 times, with a mean of 2.04 and a
median of 2.04 times, compared to a premium ranging from 2.03 times to 2.74
times for the Assumed Range of Merger Value based upon IRSB's tangible book
value at June 30, 1997; (iii) price offered as a multiple of the target
institution's previous four quarters' earnings of 10.17 times to 34.81 times,
with a mean of 19.03 times and a median of 16.87 times, compared to a premium
ranging from 18.39 times to 24.82 times for the Assumed Range of Merger Value
based upon IRSB's previous four quarters' earnings at June 30, 1997; (iv) price
offered as a percentage of the target institution's total deposits of 11.69% to
31.05%, with a mean of 19.75% and a median of 20.01% compared to 24.33% to
32.85% for the Assumed Range of Merger Value based upon IRSB's total deposits
at June 30, 1997; and (v) price offered as a percentage of the target
institution's total assets of 10.81% to 27.26%, with a mean of 17.41% and a
median of 17.14%, compared to 19.19% to 25.91% for the Assumed Range of Merger
Value based upon IRSB's total assets at June 30, 1997. No target institution or
transaction used as a comparison in the analysis described above is identical
to IRSB or the Merger. Accordingly, an analysis of the foregoing necessarily
involves complex considerations and judgments, as well as other factors that
affect the acquisition value of the companies being compared.

DISCOUNTED CASH FLOW ANALYSIS. Using discounted cash flow analysis,
Ewing estimated the present value of the future stream of after-tax cash flows
that IRSB might be expected to produce through 2001, under various
circumstances, assuming that IRSB performed in accordance with the earnings
projections of IRSB management. Ewing estimated the terminal value of IRSB at
the end of the period by applying multiples of earnings (ranging from 14.0
times to 16.0 times) and then discounting the cash flow streams and terminal
value using differing discount rates (ranging from 12.0% to 15.0%) chosen to
reflect different assumptions about the required rates of return of IRSB and
the inherent risk surrounding the underlying projections by the management of
IRSB. This discounted cash flow analysis indicated a reference range of $12.8
million to $15.8 million, or $36.45 to $45.26 for each IRSB Common Share.

DIVIDEND ANALYSIS. Ewing analyzed the effect of the Merger on the
cash dividends received by IRSB shareholders. During the year ended December
31, 1996, IRSB paid a cash dividend of $0.70 per share. During the period from
January 1, 1997 through June 30, 1997, IRSB declared a cash dividend of $0.25
per share, payable July 15, 1997. The Merger Agreement permits IRSB to declare
an additional cash dividend, not to exceed $0.50 per share, payable in December
1997, if the Closing of the Merger has not occurred.

Based upon the indicated annual cash dividend payable on FNB Common
Stock at June 30, 1997, Ewing noted that IRSB shareholders would receive $0.64
in annual cash flow for each share of FNB Common Stock received in the Merger,
or an estimated annual cash flow of $1.28 or $1.15 for each IRSB Common Share
converted in the Merger, assuming an Exchange Ratio of 2.0 or 1.8, respectively.

<PAGE> 28

The summary set forth above does not purport to be a complete
description of the analyses performed by Ewing. The preparation of a fairness
opinion is not necessarily susceptible to partial analysis or summary
description. Ewing believes that its analyses and the summary set forth above
must be considered as a whole and that selecting portions of its analyses
without considering all analyses, or selecting part or all of the above summary
without considering all factors and analyses, would create an incomplete view
of the process underlying the analyses reflected in Ewing's opinion. In
addition, Ewing 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, so that the ranges of valuations resulting from any
particular analysis described above should not be taken to be Ewing's view of
the actual value of IRSB. The fact that any specific analysis has been
referred to in the summary above is not intended to indicate that such analysis
was given greater weight than any other analysis.

In performing its analyses, Ewing made numerous assumptions with
respect to industry performance, general business and economic conditions and
other matters, many of which are beyond the control of IRSB and FNB. The
analyses performed by Ewing are not necessarily indicative of actual values or
actual future results which may be significantly more or less favorable than
suggested by such analyses. Such analyses were prepared solely as part of
Ewing's analysis of the fairness, from a financial point of view, of the terms
of the Merger to the shareholders of IRSB. The analyses do not purport to be
appraisals or to reflect the prices at which a company actually might be sold
or the prices at which any securities may trade at the present time or at any
time in the future. In addition, as described above, Ewing's opinion is just
one of many factors taken into consideration by the Board of Directors of IRSB
in determining to enter into the Merger Agreement.

COMPENSATION OF EWING. IRSB has paid Ewing $12,500 for its services.
IRSB has also agreed to indemnify and hold harmless Ewing and its directors,
officers, and employees against certain liabilities, including liabilities
under the federal securities laws, in connection with its services.

As a part of its investment banking business, Ewing is regularly
engaged in the valuation of securities in connection with mergers and
acquisitions, underwritings, private placements, trading and market making
activities, and valuations for various other purposes. IRSB's Board of
Directors decided to engage Ewing based on its experience as a financial
advisor in mergers and acquisitions of financial institutions, particularly
transactions in Florida, and its general investment banking experience in the
financial services industry.

The summary set forth above does not purport to be a complete
description, but is a brief summary, of the material analysis and procedures
performed by Ewing in the course of arriving at its opinions.

CONDITIONS PRECEDENT TO THE MERGER

The Merger will occur only if the Merger Agreement is approved by the
requisite vote of the shareholders of IRSB. Consummation of the Merger is
subject to the satisfaction of certain other conditions, unless waived, to the
extent legally permitted. Such conditions include (i) the receipt of all
required regulatory and governmental consents, approvals, authorization,
clearances, exemptions, waivers, and similar affirmations (including the
expiration of all applicable waiting periods following the receipt of such
items or the delivery of appropriate notices), provided that such approvals
shall not have imposed any condition or restriction that, in the reasonable
judgment of the Board of Directors of either party, would so materially
adversely impact the economic or business benefits of the transactions
contemplated by the Merger Agreement that, had such condition or requirement
been known, such party would not, in its reasonable judgment, have entered into
the Merger Agreement; (ii) the receipt, with certain exceptions, of all
consents required for consummation of the Merger and the preventing of any
default under any contract of such party which, if not obtained or made, is
reasonably likely to have, individually or in the aggregate, a material adverse
effect on such party; (iii) the absence of any action by a court or
governmental or regulatory authority that restricts, prohibits or makes illegal
the transactions contemplated by the Merger Agreement; (iv) the effectiveness
of the Registration Statement under the Securities Act and the receipt of all
necessary approvals under state securities laws, the Securities Act or the
Exchange Act relating to the issuance or trading of the

<PAGE> 29

shares of FNB Common Stock issuable pursuant to the Merger; (v) the receipt
of a letter dated as of the Effective Time from Ernst & Young LLP to the effect
that the Merger qualifies to be accounted for as a pooling-of-interests under
GAAP; and (vi) the receipt of the tax opinion referred to in "-- Certain Federal
Income Tax Consequences."

In addition, unless waived, each party's obligation to effect the
Merger is subject to the accuracy of the other party's representations and
warranties at the Effective Time and the performance by the other party of its
obligations under the Merger Agreement and the receipt of certain closing
certificates and legal opinions from the other party. The obligation of FNB to
effect the Merger also is subject to the receipt of agreements from affiliates
of IRSB restricting their ability to sell or otherwise transfer their IRSB
Common Shares prior to consummation of the Merger or their shares of FNB Common
Stock received upon consummation of the Merger, to the extent necessary to
assure, in the reasonable judgment of FNB, that the transactions contemplated
by the Merger Agreement will qualify for pooling-of-interests accounting. The
obligation of IRSB to effect the Merger is further subject to (i) IRSB's
receipt from Ewing of a letter, dated not more than five business days prior to
the date of this Proxy Statement-Prospectus, stating that in the opinion of
Ewing, the consideration to be paid in the Merger to IRSB shareholders in
accordance with the Merger Agreement is fair, from a financial point of view,
to the holders of IRSB Common Shares; and (ii) FNB having delivered to the
Exchange Agent the consideration to be paid to holders of the IRSB Common
Shares. No assurances can be provided as to when or if all of the conditions
precedent to the Merger can or will be satisfied or waived by the party
permitted to do so.

Either IRSB or FNB may waive certain of the conditions imposed with
respect to its or their respective obligations to consummate the Merger, except
for requirements that the Merger be approved by IRSB's shareholders and that
all required regulatory approvals be received.

CONDUCT OF BUSINESS PRIOR TO THE MERGER

Under the terms of the Merger Agreement, IRSB has agreed, except as
otherwise contemplated by the Merger Agreement, to (i) operate its business
only in the usual, regular and ordinary course, (ii) use its reasonable best
efforts to preserve intact its business organization and assets and maintain
its rights and franchises, (iii) use its reasonable best efforts to maintain
its current employee relationships, and (iv) take no action which would
materially adversely affect the ability of any party to obtain any consent or
approvals required for the transactions contemplated by the Merger Agreement
without imposition of a condition or restriction which in the reasonable
judgement of the Board of Directors of either party would so materially
adversely impact the economic or business benefits of the transactions
contemplated by the Merger Agreement that, had such condition or requirement
been known, such party would not, in its reasonable judgement, have entered
into the Merger Agreement.

In addition, IRSB has agreed that it will not, without the prior
written consent of FNB:

(a) amend the Articles of Incorporation, Bylaws, or other
governing instruments of IRSB except as contemplated by the Merger Agreement;

(b) make any unsecured loan or other extension of credit
to any person (except those who received a commitment for a loan or extension
of credit prior to the date of the Merger Agreement) in excess of $100,000 or
make any fully secured loan (except for loans secured by a first mortgage on a
single family owner-occupied real estate) in excess of $250,000; provided,
however, that in either case FNB shall object thereto within two (2) business
days or FNB shall be deemed to have approved such loan or extension of credit;

<PAGE> 30

than in connection with deposits, repurchase agreements, bankers acceptances,
"treasury tax and loan" accounts established in the ordinary course of business,
the satisfaction of legal requirements in the exercise of trust powers, and
already existing liens);

(d) repurchase, redeem, or otherwise acquire or exchange
(other than exchanges in the ordinary course under employee benefit plans),
directly or indirectly, any shares, or any securities convertible into any
shares, of the capital stock of IRSB, or declare or pay any dividend or make
any other distribution in respect of its capital stock (except for (i) the
regular semi-annual dividends paid in accordance with the Merger Agreement, and
(ii) acquisitions of IRSB Common Shares by IRSB in a fiduciary or trust
capacity in the ordinary course of business);

(e) except for the Merger Agreement, or pursuant to the
Stock Option Agreement, issue, sell, pledge, encumber, authorize the issuance
of, enter into any contract to issue, sell, pledge, encumber, or authorize the
issuance of, or otherwise permit to become outstanding, any additional IRSB
Common Shares or any other capital stock of IRSB, or any stock appreciation
rights, or any option, warrant, conversion, or other right to acquire any such
stock, or any security convertible into any such stock;

(f) adjust, split, combine, or reclassify the capital
stock of IRSB or issue or authorize the issuance of any other securities in
respect of or in substitution for IRSB Common Shares or sell, lease, mortgage,
or otherwise dispose of or otherwise encumber (i) any shares of capital stock
of IRSB or (ii) any asset other than in the ordinary course of business for
reasonable and adequate consideration;

(g) except for purchases of United States Treasury
securities or United States government agency securities, which in either case
have maturities of five years or less, purchase any securities or make any
material investment, either by purchase of stock or securities, contributions
to capital, asset transfers, or purchase of any assets, in any person, or
otherwise acquire direct or indirect control over any person, other than in
connection with (i) foreclosures in the ordinary course of business, (ii)
acquisitions of control by IRSB in its fiduciary capacity, or (iii) the
creation of new wholly-owned subsidiaries organized to conduct or continue
activities otherwise permitted by the Merger Agreement;

(h) grant any material increase in compensation or
benefits to the employees or officers of IRSB, except in accordance with past
practice or as required by law; pay any severance or termination pay or any
bonus other than pursuant to written policies or written contracts in effect on
the date of the Merger Agreement or as otherwise disclosed; enter into or amend
any severance agreements with officers of IRSB; grant any material increase in
fees or other compensation to directors of IRSB except in accordance with past
practice; or voluntarily accelerate the vesting of any IRSB stock-based
compensation or employee benefits;

(i) except as otherwise disclosed in the Merger Agreement
and excluding employment agreements that may be entered into pursuant to the
terms of the Merger Agreement, enter into or amend any employment contract
(unless such amendment is required by law) that IRSB does not have the
unconditional right to terminate without liability (other than liability for
services already rendered) at any time on or after the Effective Time;

(j) except as otherwise disclosed in the Merger
Agreement, adopt any new employee benefit plan of IRSB or make any material
change in or to any existing employee benefit plans of IRSB other than such
changes required by law or to maintain the tax qualified status of any such
plan;

(k) make any significant change in any tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in tax laws, regulatory accounting
requirements or GAAP;

<PAGE> 31

(l) except as otherwise disclosed in the Merger
Agreement, commence any litigation other than in accordance with past practice
or settle any litigation for material money damages or restrictions upon the
operations of IRSB;

(m) except in the ordinary course of business, modify,
amend, or terminate any material contract, other than renewals without a
material adverse change of terms, or waive, release, compromise, or assign any
material rights or claims;

(n) except as otherwise disclosed in the Merger Agreement
and, except for transactions in the ordinary course of business consistent with
past practice, make any investment in excess of $100,000 either by purchase of
stock or securities, contributions to capital, property transfers, or purchase
of any property or assets of any other individual, corporation or other entity
other than a wholly owned subsidiary thereof;

(o) sell, transfer, mortgage, encumber or otherwise
dispose of any of its material properties or assets to any individual,
corporation or other entity, or cancel, release or assign any indebtedness to
any such person or any claims held by any such person, except in the ordinary
course of business consistent with past practice or pursuant to contracts or
agreements in force at the date of the Merger Agreement; or

(p) agree to, or make any commitment to, take any of the
actions prohibited by the above paragraphs.

The Merger Agreement also provides that, except for the transactions
contemplated thereby, neither IRSB nor its affiliates or representatives shall,
directly or indirectly, solicit any tender offer or exchange offer or any
proposal for a merger, consolidation, acquisition of all of the stock or assets
of, or other business combination involving IRSB or any proposal or offer to
acquire in any manner a substantial equity interest in, or a substantial
portion of the assets of, IRSB ("Acquisition Proposal"). Additionally, except
to the extent necessary to comply with the fiduciary duties of the IRSB Board,
as advised by counsel, neither IRSB nor its affiliates or representatives will
provide any non-public information that it is not legally obligated to furnish
or negotiate with respect to any Acquisition Proposal, although IRSB may
communicate information about such Acquisition Proposal to its shareholders if
and to the extent that it is required to do so in order to comply with its
legal obligations, as advised by counsel.

In the Merger Agreement, FNB has agreed (i) to conduct its business
and the business of its subsidiaries in a manner designed, in its reasonable
judgment, to enhance the long-term value of the FNB Common Stock and its
business prospects and (ii) to take no action which would materially adversely
affect the ability of any party to obtain any consents or approvals required by
the Merger Agreement or to perform its covenants and agreements under the
Merger Agreement; provided that FNB or any of its subsidiaries may discontinue
or dispose of any of its assets or business if FNB determines that such action
is desirable in the conduct of its business. FNB further agreed that it will
not, without the prior written consent of the Chief Executive Officer of IRSB,
which consent shall not be unreasonably withheld, amend the FNB Charter or the
FNB Bylaws in any manner adverse to the holders of IRSB Common Shares.

MODIFICATION, WAIVER AND TERMINATION

The Merger Agreement provides that, to the extent permitted by law, it
may be amended by a subsequent writing signed by each party upon the approval
of each of their respective Board of Directors, whether before or after
shareholder approval of the Merger Agreement has been obtained. However, no
amendment may be made after the Special Meeting which would reduce or modify in
any material respect the consideration to be received by the holders of the
IRSB Common Shares without the further approval of the holders of the issued
and outstanding shares of IRSB Common Shares entitled to vote thereon.

<PAGE> 32

The Merger Agreement provides that prior to the Effective Time, each
party may, in a signed writing by a duly authorized officer, (i) waive any
default in the performance of any term of the Merger Agreement by the other
party, (ii) waive or extend the time for compliance of fulfillment by the other
party of any of its obligations under the Merger Agreement and (iii) waive any
or all of the conditions precedent to its obligations to consummate the Merger
to the extent legally permitted. Neither of the parties intends, however, to
waive any conditions of the Merger if such waiver would, in the judgment of the
waiving party, have a material adverse effect on its shareholders.

The Merger Agreement may be terminated by mutual agreement of the FNB
Board and the IRSB Board. The Merger Agreement may also be terminated by either
the FNB Board or the IRSB Board (i) in the event of inaccuracies of any
representation or warranty of the other party contained in the Merger Agreement
which cannot be or has not been cured within 30 days of written notice of such
inaccuracies and which inaccuracy would provide the terminating party the
ability to refuse to consummate the Merger under the applicable standard set
forth in the Merger Agreement; provided that such terminating party is not then
in breach of any representation or warranty contained in the Merger Agreement
or in material breach of any covenant or other agreement contained in the
Merger Agreement; (ii) in the event of a material breach of any covenant,
agreement, or obligation in the Merger Agreement by the other party that cannot
or has not been cured within 30 days of written notice of such breach; (iii) if
the required approval of the IRSB shareholders or any applicable regulatory
authority is not obtained; (iv) if the Merger is not consummated by January 2,
1998; provided that the failure to consummate the Merger by such date is not
caused by any breach of the Merger Agreement by the terminating party.

In addition, the Merger Agreement may be terminated by FNB if persons
owning more than 10% of the issued and outstanding shares of IRSB Common Stock
perfect their dissenters' rights or if the FNB Average Price is less than
$20.00. The Merger Agreement may also be terminated by IRSB if at any time
prior to the Effective Time, the fairness opinion of Ewing is withdrawn or,
prior to the Effective Time, a corporation, partnership, person or other entity
or group shall have made a bona fide Acquisition Proposal that the IRSB Board
determines in its good faith judgment and in the exercise of its fiduciary
duties, with respect to legal matters on the written opinion of legal counsel
and as to financial matters on the written opinion of an investment banking
firm of national reputation, is more favorable to the IRSB shareholders and
that the failure to terminate the Merger Agreement and accept such alternative
Acquisition Proposal would be inconsistent with the proper exercise of such
fiduciary duties. IRSB has the further right to terminate the Merger Agreement
if the FNB Average Price is equal to or greater than $30.00 (each of the
foregoing a "Termination Event"). There can be no assurance that either the
FNB Board or the IRSB Board would exercise its right to terminate the Merger
Agreement if a Termination Event exists. In making such decision, both the
FNB Board and the IRSB Board would, consistent with their respective fiduciary
duties, take into account all relevant facts and circumstances that exist at
such time, and would consult with its financial advisors and legal counsel.

Approval of the Merger Agreement by the shareholders of IRSB at the
Special Meeting will confer on the IRSB Board the power, consistent with its
fiduciary duties, to elect to consummate the Merger in the event of a
Termination Event without any further action by, or resolicitation of, the
shareholders of IRSB.

EXPENSES

In the Merger Agreement, each of the parties has agreed to pay its own
expenses in connection with the Merger and one-half of the cost of printing
this Proxy Statement-Prospectus and related materials; provided, however, that
in the event of any termination of the Merger Agreement following the
occurrence of an Initial Triggering Event (as defined in the Stock Option
Agreement), with certain exceptions enumerated in the Merger Agreement, FNB
shall be entitled to a cash payment from IRSB in an amount equal to $250,000
upon the occurrence of any Subsequent Triggering Event (as defined in the Stock
Option Agreement) within 12 months following the date of such termination (or
such longer period as shall exist under the Stock Option Agreement until the
occurrence of an Exercise Termination Date (as defined in the

28
<PAGE> 33

Stock Option Agreement)). In the event the Merger Agreement is terminated as
a result of FNB's failure to satisfy any of its representations, warranties or
covenants set forth therein, FNB shall reimburse IRSB for its reasonable
out-of-pocket expenses relating to the Merger in an amount not to exceed
$150,000.

CERTAIN FEDERAL INCOME TAX CONSEQUENCES

Smith, Gambrell & Russell, LLP has delivered to FNB and IRSB its
opinion that, based upon certain customary assumptions and representations,
under federal law as currently in effect, (a) the proposed Merger will
constitute a reorganization within the meaning of Section 368(a) of the Code;
(b) no gain or loss will be recognized by the shareholders of IRSB on the
exchange of their IRSB Common Shares for FNB Common Stock pursuant to the terms
of the Merger to the extent of such exchange; (c) the federal income tax basis
of the FNB Common Stock for which IRSB Common Shares are exchanged pursuant to
the Merger will be the same as the basis of such IRSB Common Shares exchanged
therefor (including basis allocable to any fractional interest in any share of
FNB Common Stock); (d) the holding period of FNB Common Stock for which IRSB
Common Shares are exchanged will include the period that such shares of IRSB
Common Shares were held by the holder, provided that such shares were capital
assets of the holder; and (e) the receipt of cash in lieu of fractional shares
will be treated as if the fractional shares were distributed as part of the
exchange and then redeemed by FNB, and gain or loss will be recognized in an
amount equal to the difference between the cash received and the basis of the
fractional share of FNB Common Stock surrendered, which gain or loss will be
capital gain or loss if the IRSB Common Shares was a capital asset in the hands
of the shareholder.

THE FOREGOING IS A SUMMARY OF THE ANTICIPATED FEDERAL INCOME TAX
CONSEQUENCES OF THE PROPOSED MERGER UNDER THE CODE AND IS FOR GENERAL
INFORMATION ONLY. IT DOES NOT INCLUDE CONSEQUENCES OF STATE, LOCAL OR OTHER TAX
LAWS OR SPECIAL CONSEQUENCES TO PARTICULAR SHAREHOLDERS HAVING SPECIAL
SITUATIONS. SHAREHOLDERS OF IRSB SHOULD CONSULT THEIR OWN TAX ADVISORS
REGARDING SPECIFIC TAX CONSEQUENCES OF THE MERGER TO THEM, INCLUDING THE
APPLICATION AND EFFECT OF FEDERAL, STATE AND LOCAL TAX LAWS AND TAX
CONSEQUENCES OF SUBSEQUENT SALES OF FNB COMMON STOCK.

INTERESTS OF CERTAIN PERSONS IN THE MERGER

GENERAL. Certain members of IRSB's management and of the IRSB Board
have interests in the Merger that are in addition to any interests they may
have as shareholders of IRSB generally. These interests include, among others,
provisions in the Merger Agreement relating to the election or appointment of
all members of the IRSB Board to the board of directors of Interim, certain
proposed employment agreements and other employee benefits and indemnification
of IRSB directors and officers, as hereinafter described.

MANAGEMENT POST-MERGER; IRSB EMPLOYMENT AGREEMENTS. Immediately
following the Effective Time and for a period of one year thereafter, FNB will
cause the present directors of IRSB to be nominated and elected directors of
Interim at a rate of compensation for their services in an amount at least
equal to what they were receiving from IRSB as of the date of the Merger
Agreement. In addition, IRSB has entered into Employment Agreements with
Robert C. George, George F. Bossa, Jr., and Bernie K. Kline to become
effective on the date of the Merger. The Employment Agreement with Mr. George
is for a term of three years with an automatic renewal term of two years,
unless either party has elected to fix the expiration date of Mr. George's term
of employment, provides for an annual base salary of $110,000 (to be adjusted
from time to time to reflect merit and cost of living increases) and
participation in incentive compensation and bonus plans, contains a two year
covenant-not-to-compete and provides for the provision of vacation and group
life and health insurance. The Employment Agreements for Messrs. Bossa and
Kline are for terms of two years, contain other terms substantially similar to
Mr. George's Employment Agreement and provide for annual base salaries of
$65,000 and $77,000, respectively.

<PAGE> 34

As a condition to the new employment contracts, Messrs. George, Bossa,
and Kline have cancelled and terminated certain change in control agreements
with IRSB dated January 1, 1997. The change in control agreements provided
that upon the occurrence of, among other things, a change in beneficial
ownership of IRSB, the executive may terminate his employment if he is (i)
reassigned to a position inconsistent with the duties, responsibilities, and
status he had with the bank immediately prior to the change in control, (ii)
required to relocate anywhere outside of Pinellas County, Florida for purposes
of his future employment, (iii) subjected to a reduction in salary, or (iv) not
allowed to participate in the Bank's long-term and short-term incentive plans.
Upon termination by the executive for any of the foregoing reasons, the change
in control agreements provided that the executive shall be entitled to payment
of his annual base salary for one year (in 12 equal monthly installments or in
one lump sum payment equal to the present value of such obligation) and for the
continuation of health benefits for a period of 18 months.

INDEMNIFICATION. FNB has agreed that it will, following the Effective
Time, indemnify, defend, and hold harmless the current and former directors,
officers, employees, and agents of IRSB against all losses, expenses, claims,
damages, or liabilities arising out of actions or omissions occurring at or
prior to the Effective Time to the fullest extent then permitted under Florida
law and by the IRSB Charter and IRSB Bylaws as in effect on the date of the
Merger Agreement, including provisions relating to advances of expenses
incurred in defense of any litigation.

OTHER MATTERS RELATING TO IRSB EMPLOYEE BENEFIT PLANS. The Merger
Agreement also provides that, following the Effective Time, FNB will provide
generally to officers and employees of IRSB employee benefits under employee
benefit plans (other than stock option or other plans involving the potential
issuance of FNB Common Stock), on terms and conditions which when taken as a
whole are no less favorable than those currently provided by IRSB or those
currently provided by FNB or its subsidiaries to their similarly situated
officers and employees, whichever is more favorable to officers and employees
of IRSB.

For purposes of participation and vesting (but not benefit accrual
under any employee benefit plans of FNB and its subsidiaries other than the
IRSB Benefit Plans (as defined in the Merger Agreement)) under such employee
benefit plans, the service of the employees of IRSB prior to the Effective Time
will be treated as service with FNB or any of its subsidiaries participating in
such employee benefit plans. FNB and its subsidiaries will honor, in
accordance with their terms, all employment, severance, consulting and other
compensation contracts disclosed in the Merger Agreement between IRSB and any
current or former director, officer, or employee thereof, and all provisions
for vested benefits or other vested amounts earned or accrued through the
Effective Time under the IRSB Benefit Plans; provided, however, that the
benefits that accrue under the IRSB bonus plan for IRSB employees and under
the IRSB profit sharing plan for IRSB employees shall continue through December
31, 1997, at which time the employees of IRSB will participate in such similar
employee benefit plans currently provided by FNB and its subsidiaries.

STOCK OPTION AGREEMENT

As an inducement and a condition to FNB to enter into the Merger
Agreement, FNB and IRSB entered into the Stock Option Agreement whereby IRSB
granted FNB the irrevocable Stock Option entitling FNB to purchase, subject to
certain adjustments, up to 86,953 IRSB Common Shares, at an exercise price,
subject to certain adjustments, of $30.00 per share, payable in cash under the
circumstances described below.

Pursuant to the Stock Option Agreement, FNB may purchase that number
of shares of IRSB Common Stock that would represent not greater than 19.9% of
the IRSB Common Shares issued and outstanding (after giving effect to exercise
of the Stock Option).

The number of IRSB Common Shares subject to the Stock Option will be
increased to the extent that IRSB issues additional IRSB Common Shares
(otherwise than pursuant to an exercise of the Stock Option) such that the
number of IRSB Common Shares subject to the Stock Option is equal to 19.9% of
the IRSB Common Shares then issued and outstanding, after giving effect to the
issuance of IRSB Common Shares

<PAGE> 35

pursuant to an exercise of the Stock Option. In the event of any change in the
IRSB Common Shares by reason of stock dividends, split-ups, mergers,
recapitalizations, combinations, subdivisions, conversions, exchanges of shares,
or the like, the type and number of IRSB Common Shares subject to the Stock
Option, and the applicable exercise price per Stock Option Share, will be
appropriately adjusted and proper provision will be made so that, in the event
that any additional IRSB Common Shares are to be issued or otherwise become
outstanding as a result of any such change (other than pursuant to an exercise
of the Stock Option), the number of IRSB Common Shares that remain subject to
the Stock Option will be increased so that, after such issuance and together
with IRSB Common Shares previously issued pursuant to the exercise of the Stock
Option, such number is equal to 19.9% of the number of IRSB Shares then issued
and outstanding.

FNB or any other holder or holders of the Stock Option (collectively,
the "Holder") may exercise the Stock Option, in whole or in part, by sending
written notice after the occurrence of an "Initial Triggering Event" and a
"Subsequent Triggering Event" (as such terms are defined herein) prior to
termination of the Stock Option. The term "Initial Triggering Event" is defined
as the occurrence of any of the following events:

(i) IRSB or any of its subsidiaries, without having
received FNB's prior written consent, shall have entered into an agreement to
engage in an Acquisition Transaction (as hereinafter defined) with any person
other than FNB or any of its subsidiaries or the IRSB Board shall have
recommended that the stockholders of IRSB approve or accept any such
Acquisition Transaction. For purposes of the FNB Option Agreement, "Acquisition
Transaction" means (x) a merger or consolidation, or any similar transaction
involving IRSB, (y) a purchase, lease, or other acquisition of all or
substantially all of the assets or deposits of IRSB, or (z) a purchase or other
acquisition (including by way of merger, consolidation, share exchange or
otherwise) of securities representing 15% or more of the voting power of IRSB,
other than securities acquired by the IRSB officers and directors;

(ii) Any person (other than the officers and directors of
IRSB) other than FNB or one of FNB's subsidiaries acting in a fiduciary
capacity shall have acquired beneficial ownership or the right to acquire
beneficial ownership of 15% or more of the outstanding IRSB Common Shares (the
term "beneficial ownership" for purposes of the Stock Option Agreement having
the meaning assigned thereto in Section 13(d) of the Exchange Act, and the
rules and regulations thereunder pursuant to which a person is the beneficial
owner of all shares that such person has direct or indirect voting power or
investment power over whether through any contract, arrangement, understanding,
relationship or otherwise);

(iii) The shareholders of IRSB shall not have approved the
transactions contemplated by the Merger Agreement at the Special Meeting held
for that purpose or any adjournment thereof, or such Special Meeting shall not
have been held or shall have been canceled prior to termination of the Merger
Agreement, in either case, after the IRSB Board shall have withdrawn or
modified (or publicly announced its intention to withdraw or modify or interest
in withdrawing or modifying) its recommendation that the stockholders of IRSB
approve the transactions contemplated by the Merger Agreement, or after IRSB
without having received FNB's prior written consent, shall have authorized,
recommended, proposed, or publicly announced its intention to authorize,
recommend, or propose, to engage in an Acquisition Transaction with any person
other than FNB or one of its subsidiaries;

(iv) IRSB shall have willfully and materially breached any
material covenant or obligation contained in the Merger Agreement in
anticipation of engaging in an Acquisition Transaction and such breach would
entitle FNB to terminate the Merger Agreement; or

(v) Any person other than FNB or one of its subsidiaries,
other than in connection with a transaction to which FNB has given its prior
written consent, shall have filed an application or notice with the Federal
Reserve Board, or other federal or state bank regulatory authority, which
application or notice has been accepted for processing, for approval to engage
in an Acquisition Transaction.

31
<PAGE> 36

The term "Subsequent Triggering Event" is defined as either (A) the
acquisition by any person of beneficial ownership of 25% or more of the then
outstanding IRSB Common Shares, or (B) the occurrence of the Initial Triggering
Event described in clause (i) above, except that the percentage referred to in
subclause (z) thereof shall be 25%.

After a Subsequent Triggering Event prior to the termination of the
Stock Option, FNB (on behalf of itself or any subsequent Holder) may demand by
written notice to IRSB that the Stock Option and the related Option Shares be
issued to FNB (or any subsequent holder). If prior notification to or approval
of the Federal Reserve Board or any other regulatory agency is required in
connection with such purchase, FNB or any subsequent Holder of the option must
file the required notice or application for approval and is required to notify
IRSB of such filing. IRSB will issue the option shares not earlier than three
business days nor later than 10 business days from the date on which any
required notification periods have expired or been terminated or such approvals
have been obtained and any requisite waiting period or periods have passed.

FNB or any subsequent Holder shall pay to IRSB the purchase price for
the option shares and IRSB shall deliver to FNB or any subsequent Holder a
certificate(s) representing the option shares purchased to be endorsed with a
restrictive legend indicating restrictions on transfer of the option shares
arising under the Securities Act of 1933, as amended. IRSB will remove the
restrictive legend by delivery of a substitute share certificate(s) upon
receipt of a letter from the staff of the SEC, or an opinion of counsel, in
form and substance satisfactory to IRSB to the effect that the restrictive
legend is not required for purposes of the 1933 Act.

Upon the giving by FNB (or any subsequent Holder) of written notice
of exercise of the option to IRSB, FNB (or any subsequent Holder) will be
deemed to be the holder of record of the option shares issuable upon such
exercise, notwithstanding that the stock transfer books of IRSB have been
closed or that certificate representing such shares are not then actually
deliverable to the holder. IRSB is responsible for the payment of all
expenses, and any taxes and other changes that may be payable in connection
with the preparation, issue and delivery of the stock certificates.

FNB may further demand, upon the occurrence of a Subsequent Triggering
Event, that the option shares be registered under the Securities Act. Upon such
demand, IRSB must effect such registration promptly, subject to certain
exceptions. FNB is entitled to two such registrations, the first of which is to
be made at IRSB's expense up to $40,000 (with any amount in excess of $40,000
to be paid by FNB) . In addition, if at any time after the occurrence of a
Subsequent Triggering Event that occurs prior to an Exercise Termination Event,
IRSB proposes to register any of its equity securities under the Securities
Act, whether for sale for its own account or for the account of any other
person, on a form and in a manner which would permit registration of the Option
Shares for sale to the public under the Securities Act, IRSB must give written
notice to FNB of its intention to do so, describing such securities and
specifying the form and manner and the other relevant facts involved in such
proposed registration, and upon the written request of FNB, IRSB is required,
subject to certain exceptions, to use its best efforts to effect the
registration under the Securities Act of all Common Stock which IRSB has been
requested to register by FNB. IRSB is obligated to effect only one such
"piggy-back" registration.

The Stock Option terminates at or upon the following, each of which
constitutes an "Exercise Termination Event": (i) the Effective Time of
the Merger, (ii) termination of the Merger Agreement in accordance with the
terms thereof prior to the occurrence of an Initial Triggering Event, (iii) the
passage of 12 months (subject to extension to obtain regulatory approvals for so
long as the Holder is using commercially reasonable efforts to obtain such
regulatory approvals) to allow statutory waiting periods to expire, and to avoid
liability under Section 16(b) of the Exchange Act (which provides for the
disgorgement to the issuer of any profit realized by an insider as a result of a
purchase and sale or sale and purchase of certain equity securities occurring
within a six-month period) after termination of the Merger Agreement following
the occurrence of an Initial Triggering Event (other than termination due to (A)
the failure of FNB to satisfy a condition to closing, (B) the failure to obtain
the requisite regulatory approvals, the failure to have a

<PAGE> 37

Registration Statement declared effective under the Securities Act of 1933, the
failure to qualify for pooling of interests accounting treatment or as a
tax-free exchange, or as a result of any law, order or other action entered
or taken by a court, governmental or regulatory authority of competent
jurisdiction which restricts or makes illegal consummation of the transactions
contemplated by the Merger Agreement or (C) the withdrawal by Ewing of its
fairness opinion), or (iv) such other date as to which the Holder and IRSB
agree.

Under applicable law, FNB may not acquire 5% or more of the issued and
outstanding shares of IRSB Common Shares without the prior approval of the
Federal Reserve Board. In considering whether to approve the acquisition by FNB
of shares pursuant to the exercise of the Stock Option, the Federal Reserve
Board will generally apply the same standards as in considering whether to
approve the Merger. See "-- Bank Regulatory Matters -- Federal Reserve Board."
Certain other regulatory approvals may also be required before such an
acquisition could be completed. FNB anticipates submitting an application
seeking Federal Reserve Board approval of its acquisition of up to 19.9% of the
outstanding IRSB Common Shares pursuant to a potential exercise of the Stock
Option.

Upon the occurrence of a Repurchase Event (as defined herein) that
occurs prior to an Exercise Termination Event (i) at the request of the Holder
delivered prior to the Exercise Termination Event (subject to extension to
obtain regulatory approvals (for so long as the Holder is using commercially
reasonable efforts to obtain such regulatory approvals), to allow statutory
waiting periods to expire, and to avoid liability under Section 16(b) of the
Exchange Act), IRSB shall repurchase the Stock Option from the Holder at a
price ("Option Repurchase Price") equal to the amount by which (x) the
Market/Offer Price (as defined herein) exceeds (y) the Stock Option exercise
price, multiplied by the number of shares for which the Stock Option may then
be exercised; and (ii) at the request of the owner of Option Shares from time
to time (the "Owner"), delivered prior to the occurrence of an Exercise
Termination Event, IRSB shall repurchase such number of Stock Option Shares
from the Owner as the Owner designates at a price per share (the "Option Share
Repurchase Price") equal to the Market/Offer Price multiplied by the number of
Option Shares so designated. "Market/Offer Price" means the highest of (A)
the price per share of IRSB Common Shares at which a tender offer or
exchange offer therefor has been made, (B) the price per share of IRSB Common
Shares to be paid by any third party pursuant to an agreement with IRSB, or (C)
in the event of the sale of all or a substantial portion of IRSB's assets or
deposits, the sum of the net price paid in such sale for such assets or
deposits and the current market value of the remaining net assets of IRSB
divided by the number of IRSB Common Shares then outstanding. In determining
the Market/Offer Price, the value of consideration other than cash shall be
determined by a nationally recognized investment banking firm selected by the
Holder or Owner, as the case may be. "Repurchase Event" means (i) the
consummation of certain mergers, consolidations or similar transactions
involving IRSB or any purchase, transfer or other acquisition of all or a
substantial portion of the assets or deposits of IRSB or a significant
subsidiary of IRSB by any person other than FNB or one of its subsidiaries,
(such transactions being more fully described in clauses (i), (ii) and (iii) of
the paragraph immediately following this paragraph) or (ii) the acquisition by
any person of beneficial ownership of 50% or more of the then outstanding IRSB
Common Shares.

In the event that prior to an Exercise Termination Event, IRSB enters
into an agreement (i) to consolidate with or merge into any person other than
FNB or one of its subsidiaries and shall not be the continuing or surviving
corporation of such consolidation or merger, (ii) to permit any person other
than FNB or one of its subsidiaries to merge into IRSB with IRSB as the
continuing or surviving corporation, but in connection therewith the then
outstanding IRSB Common Shares are changed into or exchanged for securities of
any other person or cash or any other property, or the then outstanding IRSB
Common Shares after such merger represent less than 50% of the outstanding
shares and share equivalents of the merged company, or (iii) to sell or
transfer all or substantially all of its assets or deposits to any person other
than FNB or one of its subsidiaries, then such agreement shall provide that the
Stock Option be converted into or exchanged for an option (a "Substitute
Option") to purchase shares of common stock of, at the Holder's option, either
(x) the continuing or surviving corporation of a merger or consolidation or the
transferee of all or substantially all of IRSB's assets or deposits, or (y) the
person controlling such continuing or surviving corporation or transferee. The
number of shares subject to the Substitute Option and the exercise price per
share will be determined in

<PAGE> 38

accordance with a formula in the Stock Option Agreement. To the extent
possible, the Substitute Option will contain terms and conditions that are the
same as those in the Stock Option.

The issuer of the Substitute Option will be required to repurchase the
Substitute Option at the request of the holder thereof and to repurchase any
shares of such issuer's common stock ("Substitute Common Stock") issued upon
exercise of a Substitute Option ("Substitute Shares") at the request of the
owner thereof. The repurchase price for a Substitute Option will equal the
amount by which (A) the Highest Closing Price (as defined herein) exceeds (B)
the exercise price of the Substitute Option, multiplied by the number of shares
of Substitute Common Stock for which the Substitute Option may then be
exercised. The repurchase price for the Substitute Shares shall equal the
Highest Closing Price multiplied by the number of Substitute Shares to be
repurchased. As used herein, "Highest Closing Price" means the highest closing
price for shares of Substitute Common Stock within the three-month period
immediately preceding the date the holder gives notice of the required
repurchase of the Substitute Option or the owner gives notice of the required
repurchase of Substitute Shares, as the case may be.

Neither IRSB nor FNB may assign any of its respective rights and
obligations under the Stock Option Agreement or the Stock Option to any other
person without the other party's express written consent, except that if a
Subsequent Triggering Event occurs prior to termination of the Stock Option,
FNB, subject to the express provisions of the Stock Option Agreement, may
assign in whole or in part its rights and obligations thereunder; provided,
however, that until 30 days after the Federal Reserve Board approves an
application by FNB to acquire the Stock Option Shares, FNB may not assign its
rights under the Stock Option except in (i) a widely dispersed public
distribution, (ii) a private placement in which no one party acquires the right
to purchase in excess of 2% of the voting shares of IRSB, (iii) an assignment
to a single party (such as a broker or investment banker) for the purpose of
conducting a widely dispersed public distribution on FNB's behalf, or (iv) any
other manner approved by the Federal Reserve Board.

No shares shall be issued pursuant to the exercise of the Stock Option
if (i) at the time of the Initial Triggering Event and at the time of exercise,
FNB is in material breach under the Merger Agreement, or (ii) a preliminary or
permanent injunction has been issued by a court of proper jurisdiction
enjoining such exercise.

The rights and obligations of IRSB and FNB under the Stock Option
Agreement are subject to receipt of any required regulatory approvals, and both
parties have agreed to use their best efforts in connection therewith. These
include, but are not limited to, applying to the Federal Reserve Board for
approval to acquire the Stock Option Shares.

The purpose of the Stock Option Agreement and the Stock Option is to
increase the likelihood that the Merger will occur by making it more difficult
for another party to acquire IRSB. The ability of FNB to exercise the Stock
Option and to cause, subject to certain adjustments, up to an additional 86,953
IRSB Common Shares to be issued may be considered a deterrent to other
potential acquisitions of control of IRSB, as it is likely to increase the cost
of an acquisition of all the IRSB Common Shares which would then be
outstanding.

DISSENTERS' RIGHTS OF IRSB SHAREHOLDERS

Pursuant to the Florida Banking Code and the National Bank Act, each
shareholder of IRSB entitled to vote on the Merger who objects to the Merger
shall be entitled to the rights and remedies of dissenting shareholders
provided under 12 U.S.C. Section 215a and any such shareholder who follows the
procedures specified in 12 U.S.C. Section 215a will be entitled to receive the
value of his shares of IRSB Common Stock in cash. AN IRSB SHAREHOLDER MUST
COMPLY STRICTLY WITH THE PROCEDURES SET FORTH IN 12 U.S.C. Section 215A.
FAILURE TO FOLLOW ANY OF THOSE PROCEDURES MAY RESULT IN A TERMINATION OR WAIVER
OF HIS DISSENTERS' RIGHTS.

34
<PAGE> 39

To perfect dissenters' rights, a holder of IRSB Common Shares must (a)
vote against the Merger or otherwise notify the Secretary of IRSB in writing at
or prior to the Special Meeting that he dissents from the Merger and (b) within
thirty days after the Closing of the Merger, deliver to FNB a written request
for the value of his IRSB Common Shares in cash accompanied by the surrender of
his certificates representing such IRSB Common Shares. Such written requests
should be delivered either in person or by mail (certified mail, return receipt
requested, being the recommended form of transmittal) to F.N.B. Corporation,
Hermitage Square, Hermitage Pennsylvania 16148, Attention: Secretary.

The value of the IRSB Common Shares held by a dissenting shareholder
will be determined, as of the Effective Date of the Merger, by an appraisal
made by a committee of three appraisers, one to be selected by the holders of a
majority of the IRSB Common Shares (the owners of which have exercised their
dissenters' rights), one to be selected by the directors of FNB, and one to be
selected by the two appraisers so selected. The valuation agreed upon by any
two of the three appraisers will govern. If the value so fixed is not
satisfactory to any dissenting shareholder who has requested payment, that
shareholder may, within five (5) days after being notified of the appraised
value of his shares, appeal to the Comptroller of the Currency who will cause a
reappraisal to be made that will be final and binding as to the value of the
shares of such shareholder. If, within 90 days from the Closing of the Merger,
for any reason one or more of the appraisers is not selected, or the appraisers
so selected fail to determine the value of the IRSB Common Shares, the
Comptroller of the Currency will cause an appraisal of such shares to be made
upon the written request of any interested party, and such appraisal will be
final and binding on all parties. FNB will pay the expenses of the Comptroller
of the Currency in making any appraisal or reappraisal described above.

The value of the IRSB Common Shares held by dissenting shareholders
ascertained as described above will be promptly paid by FNB to the dissenting
shareholders. The shares of FNB Common Stock that would have been delivered to
the dissenting IRSB shareholders had they not requested payment in accordance
with 12 U.S.C. Section 215a must be sold at any advertised public auction, and
FNB has the right to purchase any or all of such shares at such auction if it
is the highest bidder, for the purpose of reselling such shares within thirty
days thereafter. If the shares of FNB Common Stock are sold at the public
auction at a price greater than the amount paid to the dissenting IRSB
shareholders, the excess in such sale price must be paid to such dissenting
shareholders.

Prior to the Effective Date of the Merger, dissenting shareholders of
IRSB should send any communications regarding their rights to Indian Rocks
State Bank, 12360 Indian Rocks Road, Largo, Florida 33774. On or after the
effective date of the Merger, dissenting shareholders should send any
communications regarding their rights to F.N.B. Corporation, Hermitage Square,
Hermitage Pennsylvania 16148, Attention: Secretary. All such communications
should be signed by or on behalf of the dissenting IRSB shareholder in the form
in which his shares are registered on the books of IRSB.

FNB has the right to terminate the Merger if the number of IRSB Common
Shares as to which the holders thereof, on the Effective Date of the Merger,
legally entitled to assert dissenting shareholders' rights is equal to or
greater than 10% of the issued and outstanding IRSB Common Shares. See "THE
MERGER -- Modification, Waiver and Termination."

ACCOUNTING TREATMENT

It is intended that the Merger will be accounted for as a
pooling-of-interests under GAAP. IRSB and FNB have agreed to use their
reasonable efforts to cause the Merger, and to take no action that would cause
the Merger not, to qualify for pooling-of-interests treatment.

Under the pooling-of-interests method of accounting, the historical
basis of the assets and liabilities of FNB and IRSB will be combined at the
Effective Time of the Merger and carried forward at their

<PAGE> 40

previously recorded amounts, and the shareholders' equity accounts of IRSB and
FNB will be combined on FNB's consolidated balance sheet and no goodwill or
other intangible assets will be created.

BANK REGULATORY MATTERS

FEDERAL RESERVE BOARD. The Merger is subject to prior approval by the
Federal Reserve Board under the BHCA. The BHCA requires the Federal Reserve
Board, when approving a transaction such as the Merger, to take into
consideration the financial and managerial resources (including the competence,
experience and integrity of the officers, directors and principal shareholders)
and future prospects of the existing and proposed institutions and the
convenience and needs of the communities to be served. In considering financial
resources and future prospects, the Federal Reserve Board will, among other
things, evaluate the adequacy of the capital levels of the parties to a
proposed transaction.

The BHCA prohibits the Federal Reserve Board from approving a merger
if it would result in a monopoly or would be in furtherance of any combination
or conspiracy to monopolize or to attempt to monopolize the business of banking
in any part of the United States, or if its effect in any section of the
country would be substantially to lessen competition or to tend to create a
monopoly, or if it would in any other manner result in a restraint of trade,
unless the Federal Reserve Board finds that the anti-competitive effects of a
merger are clearly outweighed in the public interest by the probable effect of
the transaction in meeting the convenience and needs of the communities to be
served. In addition, under the Community Reinvestment Act of 1977, as amended
(the "CRA"), the Federal Reserve Board must take into account the record of
performance of the existing institutions in meeting the credit needs of the
entire community, including low- and moderate-income neighborhoods, served by
such institutions. Four of FNB's seven banking subsidiaries have an outstanding
CRA rating with the appropriate federal regulator. The other three of FNB's
banking subsidiaries have a satisfactory rating with the appropriate federal
regulator.

Applicable federal law provides for the publication of notice and
public comment on applications filed with the Federal Reserve Board and
authorizes such agency to permit interested parties to intervene in the
proceedings. If an interested party is permitted to intervene, such
intervention could delay the regulatory approvals required for consummation of
the Merger.

The Merger generally may not be consummated until between 15 and 30
days following the date of applicable federal regulatory approval, during which
time the United States Department of Justice may challenge the Merger on
antitrust grounds. The commencement of an antitrust action would stay the
effectiveness of the regulatory agency's approval unless a court specifically
ordered otherwise. FNB and IRSB believe that the Merger does not raise
substantial antitrust or other significant regulatory concerns and that any
divestitures that may be required in order to consummate the Merger will not be
material to the financial condition or results of operations of FNB or IRSB
prior to the Effective Time, or FNB after the Effective Time.

In addition, FNB's right to exercise the Stock Option under the Stock
Option Agreement is also subject to the prior approval of the Federal Reserve
Board, because the exercise of the Stock Option under the Stock Option
Agreement would result in FNB owning more than 5% of the outstanding IRSB
Common Shares. In considering whether to approve FNB's right to exercise the
Stock Option, the Federal Reserve Board would generally apply the same
statutory criteria it would apply to its consideration of approval of the
Merger.

The Merger is also subject to the approval of the Comptroller of the
Currency and the Florida Department of Banking and Finance.

STATUS OF REGULATORY APPROVALS AND OTHER INFORMATION. FNB and IRSB
have filed all applications and notices and have taken (or will take) other
appropriate action with respect to any requisite

36
<PAGE> 41

approvals or other action of any governmental authority. FNB has submitted an
application seeking Federal Reserve Board approval of the Merger and of its
acquisition of up to 19.9% of the outstanding IRSB Common Shares pursuant to a
potential exercise of the Stock Option.

The Merger Agreement provides that the obligation of each of FNB and
IRSB to consummate the Merger is conditioned upon the receipt of all requisite
regulatory approvals, including the approvals of the Federal Reserve Board.
There can be no assurance that any governmental agency will approve or take any
other required action with respect to the Merger, and, if approvals are
received or action is taken, there can be no assurance as to the date of such
approvals or action, that such approvals or action will not be conditioned upon
matters that would cause the parties to abandon the Merger, or that no action
will be brought challenging such approvals or action, including a challenge by
the United States Department of Justice or, if such a challenge is made, the
result thereof.

FNB and IRSB are not aware of any governmental approvals or actions
that may be required for consummation of the Merger other than as described
above. Should any other approval or action be required, FNB and IRSB currently
contemplate that such approval or action would be sought.

THE MERGER CANNOT PROCEED IN THE ABSENCE OF THE REQUISITE REGULATORY
APPROVALS. THERE CAN BE NO ASSURANCES THAT SUCH REGULATORY APPROVALS WILL BE
OBTAINED OR AS TO THE DATES OF ANY SUCH APPROVALS. THERE CAN ALSO BE NO
ASSURANCE THAT SUCH APPROVALS WILL NOT CONTAIN A CONDITION OR REQUIREMENT WHICH
CAUSES SUCH APPROVALS TO FAIL TO SATISFY THE CONDITIONS SET FORTH IN THE MERGER
AGREEMENT. SEE "-- CONDITIONS PRECEDENT TO THE MERGER." THERE LIKEWISE CAN BE
NO ASSURANCE THAT THE UNITED STATES DEPARTMENT OF JUSTICE WILL NOT CHALLENGE
THE MERGER, OR, IF SUCH A CHALLENGE IS MADE, AS TO THE RESULT THEREOF.

See "-- Effective Time of the Merger," "-- Conditions Precedent to the
Merger" and "-- Modification, Waiver and Termination."

RESTRICTIONS ON RESALES BY AFFILIATES

The shares of FNB Common Stock to be issued to shareholders of IRSB in
the Merger have been registered under the Securities Act. Such shares may be
traded freely and without restriction by those shareholders not deemed to be
"affiliates" of IRSB or FNB as that term is defined under the Securities Act.
Any subsequent transfer of such shares, however, by any person who is an
affiliate of IRSB at the time the Merger is submitted for vote or consent of
the shareholders of IRSB will, under existing law, require either (a) the
further registration under the Securities Act of the shares of FNB Common Stock
to be transferred, (b) compliance with Rule 145 promulgated under the
Securities Act (permitting limited sales under certain circumstances), or (c)
the availability of another exemption from registration. An "affiliate" of
IRSB, as defined by the rules promulgated pursuant to the Securities Act, is a
person who directly, or indirectly through one or more intermediaries,
controls, is controlled by, or is under common control with IRSB. In addition,
under requirements for pooling-of-interests method of accounting, the shares of
FNB Common Stock issued to affiliates are not transferable until such time as
financial results covering at least 30 days of combined operations of FNB and
IRSB have been published. The foregoing restrictions are expected to apply to
the directors, executive officers, and the beneficial holders of 10% or more of
the IRSB Common Shares (and to certain relatives or the spouse of any such
person and any trusts, estates, corporations, or other entities in which any
such person has a 10% or greater beneficial or equity interest). Stop transfer
instructions will be given by FNB to the transfer agent with respect to the FNB
Common Stock to be received by persons subject to the restrictions described
above. IRSB has agreed that, not later than 10 days prior to the Effective
Time, it will use its best efforts to obtain from

37
<PAGE> 42
each of those persons identified by IRSB as affiliates appropriate agreements
that each such individual will not make any further sales of shares of FNB
Common Stock received upon consummation of the Merger except in compliance with
the restrictions described in this paragraph.

VOLUNTARY DIVIDEND REINVESTMENT AND STOCK PURCHASE PLAN

FNB has a voluntary dividend reinvestment and stock purchase plan that
provides, for those shareholders which elect to participate, that dividends on
FNB Common Stock or FNB Preferred Stock (as defined herein) will be used to
purchase either original issue common shares or shares of FNB Common Stock in
the open market at the market value of FNB Common Stock on a quarterly basis.
The plan also permits participants to invest in additional shares of FNB Common
Stock through voluntary cash payments, within certain dollar limitations, at
the then-current market price of such stock at the time of purchase on any of
12 monthly investment dates each year. It is anticipated that FNB will continue
its voluntary dividend reinvestment and stock purchase plan and that
shareholders of IRSB who receive shares of FNB Common Stock in the Merger will
have the right to participate therein.

<PAGE> 43

PRICE RANGE OF COMMON STOCK AND DIVIDENDS

MARKET PRICES

Since July 16, 1997, FNB Common Stock has traded on the Nasdaq
National Market under the trading symbol "FBAN." Prior to June 16, 1997, the
FNB Common Stock traded on the Nasdaq SmallCap Market under the same symbol.
Stock prices have been adjusted to reflect the 5% stock dividend paid on May
31, 1997. As of August 8, 1997, FNB Common Stock was held of record by
approximately 5,000 persons. The following table sets forth the high ask and
low bid prices of the FNB Common Stock as reported by the Nasdaq Stock Market
for the periods indicated.

<TABLE>
<CAPTION>
FNB
HIGH ASK LOW BID
-------- -------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1994:
First Quarter 13 11/64 10 45/64
Second Quarter 14 1/4 10 29/32
Third Quarter 15 35/64 13 11/64
Fourth Quarter 14 15/32 12 47/64

YEAR ENDED DECEMBER 31, 1995:
First Quarter 14 11/16 12 47/64
Second Quarter 17 15/64 13 53/64
Third Quarter 19 17/64 16 21/64
Fourth Quarter 19 47/64 17 7/8

YEAR ENDING DECEMBER 31, 1996:
First Quarter 21 35/64 18 9/64
Second Quarter 22 47/64 21 29/32
Third Quarter 24 3/64 22 9 /64
Fourth Quarter 22 31/32 21 43/64

YEAR END DECEMBER 31, 1997:
First Quarter 25 15/32 21 43/64
Second Quarter 32 1/4 21 25/32
Third Quarter (through August 8, 1997) 31 19/32 29 1/2
</TABLE>

There is no established public market for the IRSB Common Shares. As
of the Record Date, there were 350,000 IRSB Common Shares held by approximately
338 holders of record. According to records kept by management, since
January 1, 1996, there have been only seven trades in the IRSB Common Shares
involving an aggregate of 2,800 shares. To the best of management's knowledge,
which is based on limited and incomplete information, IRSB believes that
recently negotiated sales of IRSB Common Shares have ranged between $27.50 and
$30.00 per share. In view of the extremely limited volume of transactions and
the lack of reliable pricing information (because such information is not
required to be forwarded to IRSB), there is no assurance that the stated prices
paid for the IRSB Common Shares provide a reliable or relevant indication of
the value of IRSB Common Shares.

39
<PAGE> 44

DIVIDENDS

The following table sets forth the per share cash dividends declared
on FNB Common Stock and IRSB Common Shares, respectively, for the periods
indicated. The FNB dividends have been adjusted to reflect a 5% stock dividend
paid on May 31, 1997. The ability of either FNB or IRSB to pay dividends to
its shareholders is subject to certain restrictions. See "INFORMATION ABOUT
FNB" and "INFORMATION ABOUT IRSB."

<TABLE>
<CAPTION>
FNB IRSB
DIVIDENDS DIVIDENDS
--------- ---------
<S> <C> <C>
YEAR ENDED DECEMBER 31, 1994:
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . 0.06 --
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . 0.06 0.20
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . 0.06 --
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . 0.06 0.35

YEAR ENDED DECEMBER 31, 1995:
First Quarter . . . . . . . . . . . . . . . . . . . . . . . . 0.06 --
Second Quarter . . . . . . . . . . . . . . . . . . . . . . . 0.06 0.20
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . . 0.09 --
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . . 0.12 0.40

YEAR ENDING DECEMBER 31, 1996:
First Quarter . . . . . . . . . . . . . . . . . . . . . . . 0.15 --
Second Quarter . . . . . . . . . . . . . . . . . . . . . . 0.15 0.23
Third Quarter . . . . . . . . . . . . . . . . . . . . . . . 0.15 --
Fourth Quarter . . . . . . . . . . . . . . . . . . . . . . 0.15 0.47

YEAR ENDING DECEMBER 31, 1997:
First Quarter . . . . . . . . . . . . . . . . . . . . . . . 0.15 --
Second Quarter . . . . . . . . . . . . . . . . . . . . . . 0.16 0.25
</TABLE>

INFORMATION ABOUT FNB

FNB is a financial services holding company headquartered in
Hermitage, Pennsylvania. It provides a broad range of financial services to its
customers through its bank and consumer finance subsidiaries in Pennsylvania,
southwestern Florida, eastern Ohio and southwestern New York. FNB's main
office is located at Hermitage Square, Hermitage, Pennsylvania 16148 and its
telephone number is (412) 981-6000.

FNB was formed in 1974 as the holding company of its then sole
subsidiary, First National, formerly First National Bank of Mercer County.
Since its formation, FNB has acquired and currently operates six other bank
subsidiaries and one consumer finance company in Pennsylvania, southwestern
Florida, eastern Ohio and southwestern New York. On January 21, 1997, FNB
acquired Southwest, a Florida corporation and registered bank holding company
under the BHCA, with banking subsidiaries located in Naples and Cape Coral,
Florida. On April 18, 1997, FNB acquired West Coast Bancorp, Inc. ("West
Coast"), a Florida corporation and registered bank holding company under the
BHCA, located in Cape Coral, Florida, with assets of approximately $170
million. On June 30, 1997, FNB sold its wholly owned subsidiary, Bucktail Bank
and Trust Company, a Pennsylvania state-chartered bank to Sun Bancorp, Inc.
("Sun") in exchange for 13.8% of the outstanding stock of Sun. As of June 30,
1997, on a consolidated basis, FNB had approximately $2.37 billion in assets,
approximately $1.95 billion in deposits and 99 offices.

FNB, through its subsidiaries, provides a full range of financial
services, principally to consumers and small- to medium-sized businesses in its
market areas. FNB's business strategy has been to focus primarily on providing
quality, community-based financial services adapted to the needs of each of the
markets it serves. FNB has emphasized its community orientation by preserving
the names and local boards of directors of its subsidiaries, by allowing its
subsidiaries autonomy in decision-making and thus enabling

40
<PAGE> 45

them to respond to customer requests more quickly, and by concentrating on
transactions within its market areas. However, while FNB has sought to preserve
the identities and autonomy of its subsidiaries, it has established centralized
credit analysis, loan review, investment, audit, and data processing functions.
The centralization of these processes has enabled FNB to maintain consistent
quality of these functions and to achieve certain economies of scale.

FNB's lending philosophy is to minimize credit losses by following
uniform credit approval standards (which include independent analysis of
realizable collateral value), diversifying its loan portfolio, maintaining a
relatively modest average loan size, and conducting ongoing review and
management of the loan portfolio. FNB is an active residential mortgage lender,
and its commercial loans are generally to established local businesses. FNB
does not have a significant amount of construction loans, and has no highly
leveraged transaction loans or loans to foreign countries.

No material portion of the deposits of FNB's bank subsidiaries has
been obtained from a single or small group of customers, and the loss of any
customer's deposits or a small group of customers' deposits would not have a
material adverse effect on the business of FNB.

FNB has three other operating subsidiaries, Penn-Ohio Life Insurance
Company ("Penn-Ohio"), Mortgage Service Corporation, and F.N.B. Building
Corporation. Penn-Ohio underwrites, as a reinsurer, credit life and accident
and health insurance sold by FNB's subsidiaries. These activities are
incidental to FNB banking business. Mortgage Service Corporation services
mortgage loans for unaffiliated financial institutions. F.N.B. Building
Corporation owns real estate that is leased to certain of its affiliates.

As of June 30, 1997, FNB and its subsidiaries had approximately 1,000
full-time equivalent employees.

As part of its operations, FNB regularly evaluates the potential
acquisition of, and holds discussions with, various financial institutions and
other businesses of a type eligible for bank holding company investment. In
addition, FNB regularly analyzes the values of, and submits bids for, the
acquisition of customer-based funds and other liabilities and assets of such
financial institutions and other businesses. As a general rule, FNB publicly
announces such material acquisitions when a definitive agreement has been
reached.

For further information about FNB, reference is made to the FNB Annual
Report on Form 10-K for the year ended December 31, 1996, the Quarterly Report
on Form 10-Q for the quarter ended March 31, 1997 and the Current Reports on
Form 8-K filed on January 24, 1997, March 5, 1997, April 22, 1997, and July 22,
1997 all of which are incorporated herein by reference. Shareholders of IRSB
desiring copies of such documents may contact FNB at its address or telephone
number indicated under "INCORPORATION OF CERTAIN INFORMATION BY REFERENCE."

RECENT DEVELOPMENTS

<PAGE> 46

INFORMATION ABOUT INDIAN ROCKS STATE BANK

GENERAL

IRSB, headquartered in Largo, Florida, was organized in February 1986
and granted its state bank charter in April 1986. IRSB engages in a general
commercial banking and related businesses from its three full service banking
locations located in Pinellas County, Florida. These offices include IRSB's
main office located on Indian Rocks Road in Largo, Florida and branch offices
located on Oakhurst Road in Seminole, Florida ("Oakhurst Branch") and on Gulf
Boulevard in Indian Rocks Beach, Florida ("Beach Branch"). At March 31, 1997,
IRSB had total assets of approximately $78.4 million, net portfolio loans of
approximately $31.6 million, total deposits of approximately $64.4 million, and
shareholders' equity of approximately $7.4 million.

The business of IRSB consists primarily of attracting deposits from
the general public in the areas served by its banking offices and applying
those funds, together with funds derived from other sources, to the origination
of loans for various types of collateralized and uncollateralized consumer and
commercial loans, and loans for the purchase, construction, financing and
refinancing of commercial and residential real estate in the west central
portion of Pinellas County, consisting of Largo, Seminole, Indian Rocks Beach,
and surrounding communities. The revenues of IRSB are derived primarily from
interest on, and fees received in connection with its lending activities, and
from interest and dividends from investment securities, and short-term
investments. The principal sources of funds for IRSB's lending and investment
activities are deposits, amortization and prepayment of loans, the repayment of
loans, and proceeds from the sale of investment securities. The principal
expenses of IRSB are the interest paid on deposits and operating and general
and administrative expenses.

IRSB originates commercial, consumer, and real estate loans to
individuals and businesses. Commercial loans include both collateralized and
uncollateralized loans for working capital (including inventory and
receivables), business expansion (including real estate acquisitions and
improvements), and purchases of equipment and machinery. Consumer loans
include collateralized and uncollateralized loans for financing automobiles,
boats, home improvements, and personal investments. IRSB also originates a
variety of residential real estate loans, including conventional mortgages
collateralized by first mortgage liens to enable borrowers to purchase,
refinance, construct upon or improve real property. Such loans include loans
made to individual borrowers collateralized by first mortgage interests on
unimproved parcels of real estate zoned for residential homes on which such
borrower intends to erect his personal residence.

IRSB is a general commercial bank which provides a variety of
corporate and personal banking services to individuals, businesses, and other
institutions located in its market area. Deposit services include certificates
of deposit, individual retirement accounts ("IRAs") and other time deposits,
checking and other demand deposit accounts, interest paying checking accounts
("NOW accounts"), savings accounts and money market accounts. The transaction
accounts and time certificates are tailored to the principal market areas at
rates competitive to those in the area. All deposit accounts are insured by
the FDIC up to the maximum limits permitted by law.

IRSB also offers ATM cards (with access to local, state, national, and
international networks), safe deposit boxes, wire transfers, direct deposit,
and automatic drafts for various accounts. IRSB provides personal and
corporate credit cards, VISA(TM) or MasterCard(TM) credit cards, as issued by
a correspondent bank which assumes all liabilities relating to underwriting of
the credit applicant. IRSB does not provide fiduciary or appraisal services.

IRSB is subject to examination and comprehensive regulation by the
Florida Department of Banking and Finance (the "Department"), the FRB, and the
FDIC. As is the case with banking institutions generally, IRSB's operations
are materially and significantly influenced by general economic conditions and
by related monetary and fiscal policies of financial institution regulatory
agencies. Deposit flows and cost of funds are

<PAGE> 47
influenced by interest rates on competing investments and general market rates
of interest. Lending activities are affected by the demand for financing of
real estate and other types of loans, which in turn are affected by the interest
rates at which such financing may be offered and other factors affecting local
demand and availability of funds. IRSB faces strong competition in the
attraction of deposits (its primary source of lendable funds) and in the
origination of loans.

MARKET AREA AND SERVICES

IRSB's operations are based in Largo, Florida and its market area
covers the west central portion of Pinellas County. Management of IRSB
believes that its principal markets have been residential customers and small
businesses. Specifically, IRSB has targeted businesses with annual gross
revenues up to $10 million, and all households within the primary market areas.
Businesses have been solicited through the personal efforts of IRSB's directors
and officers.

The primary source of income generated by IRSB is from the interest
earned from both its loan and investment portfolios. Emphasis has been placed
on the borrower's ability to generate cash flow sufficient to support its debt
obligations and other cash related expenses. Current lending activities
presently include commercial and consumer loans and loans for residential
purposes. Commercial real estate loans are originated for commercial
construction, acquisition or remodeling. Consumer loans include the
origination of conventional mortgages, residential lot loans and residential
acquisition, development or construction loans for the purchase or construction
of single family housing or lots.

At March 31, 1997, IRSB's net loan portfolio consisted of 61.9%
commercial (consisting of commercial real estate mortgage loans and other
commercial loans) and financial loans, 32.2% residential real-estate mortgage
loans, 1.2% real estate construction and development loans, and 5.7%
installment or consumer loans.

COMPETITION

IRSB encounters competition both in making loans and attracting
deposits. The deregulation of the banking industry and the widespread
enactment of state laws which permit multi-bank holding companies as well as a
degree of interstate banking has created a highly competitive environment for
commercial banking in IRSB's primary market area. In one or more aspects of
its business, IRSB has competed with other commercial banks, savings and loan
associations, credit unions, finance companies, mutual funds, insurance
companies, brokerage and investment banking companies and other financial
intermediaries operating in its market area and elsewhere. Most of these
competitors, some of which are affiliated with large bank holding companies,
have substantially greater resources and lending limits, and may offer certain
services, such as trust services, that IRSB does not provide.

IRSB's primary market area is served by 10 commercial banks with 28
offices, four savings and loan associations with four offices, for a total of
32 offices. As of March 31, 1997, the total reported deposits in the primary
market area were approximately $1.3 billion.

Competition among financial institutions is based upon interest rates
offered on deposit accounts, interest rates charged on loans and other credit
and service charges, the quality of the services rendered, the convenience of
banking facilities and, in the case of loans to commercial borrowers, relative
lending limits.

EMPLOYEES

At March 31, 1997, IRSB employed 25 full-time and 8 part-time
employees. None of these employees are covered by a collective bargaining
agreement and management believes that its employee relations are good.

43
<PAGE> 48

DESCRIPTION OF PROPERTY

The principal executive and administrative offices of IRSB located at
12360 Indian Rocks Road, Largo, Florida 33774 serves as IRSB's primary banking
facility. This facility, consisting of approximately 8,500 square feet on two
floors, is situated on a 1.41 acre parcel of land owned by IRSB located on the
southwest corner of Indian Rocks Road and Josephine Road. The first floor which
is a comprised of a lobby, executive and customer service offices, six inside
teller stations, safe deposit booths and related non-vault area, and vault
operations, is the location of the primary retail banking operations at the main
office. The second floor houses a conference room facility and the data
processing operations of the Bank. IRSB's main office also includes three
outside drive-in teller operations. In addition, located south of the main
office at 12310 Indian Rocks Road is a single family residence of approximately
2,500 square feet which is owned by IRSB and presently is being leased, with 4
bedrooms and 2.5 baths as a residence.

The Beach Branch is a 2,000 square foot branch office located at 1101
Gulf Boulevard, Indian Rocks Beach, Florida. The facility includes a lobby,
with four teller stations, one executive office, a safe deposit/vault area and
two outside drive-in teller operations. IRSB owns the land, consisting of
approximately 1/2 acre located on the east side of Gulf Boulevard, and all
improvements thereon.

The Oakhurst Branch is a 2,000 square foot branch office located at
9111 Oakhurst Road, Seminole, Florida. The facility includes a lobby, with
five teller stations, one executive office, a safe deposit/vault area and two
outside drive-in teller operations. IRSB owns the land, of approximately 0.86
acre, located on the east side of Oakhurst Road, and all improvements thereon.

LEGAL PROCEEDINGS

IRSB has periodically been a party to or otherwise involved in legal
proceedings arising in the normal course of business such as claims to enforce
liens, foreclose on loan defaults, claims involving the making and servicing of
real property loans and other issues incident to IRSB's business. Management
is not aware of any proceeding threatened or pending against IRSB which, if
determined adversely, would have a material effect on the business or financial
position of IRSB.

CERTAIN RELATIONSHIPS AND RELATED TRANSACTIONS

IRSB has had various loan and other banking transactions in the
ordinary course of business with the directors, executive officers and
principal shareholders of IRSB (or an associate of such person). All such
transactions: (i) have been made in the ordinary course of business; (ii) have
been made on substantially the same terms, including interest rates and
collateral on loans, as those prevailing at the time for comparable
transactions with unrelated persons; and (iii) in the opinion of management do
not involve more than the normal risk of collectibility or present other
unfavorable features. At March 31, 1997, the total dollar amount of extensions
of credit to directors and executive officers and principal shareholders of
IRSB identified below, and any of their associates (excluding extensions of
credit which were less than $60,000 to any one such person and their
associates) were $131,842, which represented approximately 1.8% of total
shareholders' equity.

Messrs. George, Bossa and Kline entered into certain severance
agreements dated January 1, 1997 providing for the payment of their annual base
salary for a one-year period and the continuation of health benefits for a
period of 18 months following their termination after a change of control. As a
condition to entering into new employment agreements, each of Messrs. George,
Bossa and Kline cancelled such severance agreements. See "THE MERGER -
Interest of Certain Persons in the Merger -- Management Post Merger; IRSB
Employment Agreements."

<PAGE> 49
During the fiscal years ended December 31, 1996 and 1995, each
non-employee director of IRSB was paid a $500 fee for each meeting of IRSB's
Board of Directors attended. No fee is paid for attending committee meetings.

SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT

The following table sets forth certain information regarding the
beneficial ownership of the outstanding IRSB Common Shares as of July 31,
1997, by (i) each person known to IRSB to own beneficially more than 5% of its
outstanding Common Shares, (ii) each director and certain executive officers of
IRSB, and (iii) all directors and executive officers of IRSB as a group.
Except as otherwise indicated, the persons named in the table have sole voting
and investment power with respect to all IRSB Common Shares owned by them.

<TABLE>
<CAPTION>
CURRENT BENEFICIAL OWNERSHIP
-----------------------------------
NUMBER PERCENT
NAME OF BENEFICIAL OWNER OF SHARES (2) OF CLASS
- ------------------------ ------------- --------
<S> <C> <C> <C>
Robert C. George(1) . . . . . . . . . . . . . . . . . . . . . . . . . . 5,000 (3) 1.43%
William S. Jonassen . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000 *
10785 Ulmerton Road
Largo, Florida 33778
Duke L. Mitchell . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,500 (4) 2.43%
14290 Walsingham Road
Largo, Florida 33774
Cloyd A. Petro . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24,739 (5) 7.07%
604 Gulf Boulevard
Indian Rocks Beach, Florida 33785
Charles R. Roberts(1) . . . . . . . . . . . . . . . . . . . . . . . . . 9,840 (6) 2.81%
J. Eric Taylor, Jr., D.O. . . . . . . . . . . . . . . . . . . . . . . . 3,200 *
2025 Indian Rocks Road
Largo, Florida 33774
Robert T. Tong . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31,320 (7) 8.95%
11580 Oakhurst Road
Largo, Florida 33774
Harold M. Ward, D.O. . . . . . . . . . . . . . . . . . . . . . . . . . 18,390 (8) 5.25%
12464 Indian Rocks Road
Largo, Florida 33774
Lee Wasson(1) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,500 (9) 1.29%

All Directors and Executive Officers as a group (11 persons) . . . . . 108,704 31.06%
</TABLE>

- --------------------
* Less than 1%
(1) The business address for Messrs.
George, Roberts and Wasson is 12360 Indian Rocks Road, Largo, Florida
33774.
(2) In accordance with Rule 13d-3 promulgated under the Exchange Act, a
person is deemed to be the beneficial owner of
a security for purposes of the rule if he or she has or shares voting
power or dispositive power with respect to such security or has the right
to acquire such ownership with sixty days. As used herein, "voting power"
is the power to vote or direct the voting of shares, and "dispositive
power" is the power to dispose or direct the disposition of shares,
irrespective of any economic interest therein.
(3) Includes 1,375 shares held by his spouse.
(4) Includes 4,100 shares held by Mitchell Consolidated, Inc., a wholly-owned
Florida corporation.
(5) Includes 3,800 shares held by his spouse.
(6) Includes 3,420 shares held by his spouse.
(7) Includes 7,350 shares held by his spouse.
(8) Includes 3,390 shares held as custodian for grandson.
(9) Includes 1,500 shares held by his spouse.

45
<PAGE> 50

MANAGEMENT'S DISCUSSION AND ANALYSIS OR
PLAN OF OPERATIONS OF IRSB

GENERAL

IRSB conducts a general commercial banking business which consists of
attracting deposits from the general public and applying those funds to the
origination of loans for commercial, consumer, and residential purposes. IRSB
profitability depends primarily on net interest income, which is the difference
between interest income generated from interest-earning assets (i.e., loans and
investments) less the interest expense incurred on interest-bearing liabilities
(i.e., customer deposits and borrowed funds). Net interest income is affected
by the relative amounts of interest- earning assets and interest-bearing
liabilities and the interest rate paid on these balances.

Net interest income is dependent upon IRSB's interest rate spread,
which is the difference between the average yield earned on its
interest-earning assets and the average rate paid on its interest-bearing
liabilities. When interest-earning assets approximate or exceed
interest-bearing liabilities, any positive interest rate spread will generate
net interest income. Accordingly, net interest income is strongly impacted by
levels of deposits which do not bear interest costs. During 1996, IRSB
maintained a net yield on average earning assets of 4.34%. The net yield is
impacted by interest rates, deposit flows, and loan demands.

Additionally, IRSB's profitability also is affected by such factors as
the level of non-interest income and expenses, the provision for loan losses
and the effective tax rate. Non-interest income consists primarily of service
charges and other fees, rental income and sales of investment securities.
Non-interest expenses primarily consist of compensation and benefits, occupancy
related expenses, and other operating expenses.

Since the commencement of banking operations in April 1986, IRSB has
experienced a steady growth of assets to its present $78.4 million level. IRSB
has sustained its growth and maintained its capital position through internally
generated profits.

In an effort to increase the flow of funds from its deposit products,
IRSB adopted a more aggressive pricing strategy and introduced new certificate
of deposit products. The resulting growth in new deposits also resulted in
other profitable cross-selling opportunities. This strategy had an anticipated
negative effect on IRSB's costs of funds at a level considered to be acceptable
which was assembled in exchange for the growth of funds.

The following discussion and analysis of earnings and related
financial data is presented herein to assist investors in understanding the
financial condition and results of operations of IRSB for the fiscal years
ended December 31, 1996 and 1995, and with respect to the three month period
ended March 31, 1997 compared to the three month period ended March 31, 1996.
Results for the three month period ended March 31, 1997, may not be indicative
of the results for the entire year ending on December 31, 1997. This
discussion should be read in conjunction with the consolidated financial
statements and related footnotes presented elsewhere herein.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended March 31, 1997 and 1996.

For the three months ended March 31, 1997, IRSB reported net income of
approximately $210,000, or $0.60 per share, as compared to net income of
$203,000, or $0.58 per share for the three month period ending March 31, 1996,
an increase of approximately $7,000. Net income for the three month period
ending March 31, 1997 was approximately 3.4% higher than the three months ended
March 31, 1996 due principally

<PAGE> 51
to an increase in assets. Net interest income increased to approximately
$716,000 for the three months ended March 31, 1997 compared with approximately
$668,000 for the three months ended March 31, 1996. A substantial portion of
this increase was attributable to an increase in assets. The increase in net
interest income was partially offset by a $10,000 increase in operating
expenses, a substantial portion of which was incurred in connection with data
processing.

Total assets at March 31, 1997 were approximately $78.4 million, an
increase of $13.5 million or 17.2%, from March 31, 1996. This increase was
funded by an increase in certificates of deposits and repurchase agreements
achieved through competitive pricing strategies employed by management.

IRSB's loans at March 31, 1997, totaled approximately $31.6 million,
net, or approximately 40% of total assets. As noted above, of the
approximately $31.6 million net portfolio loans, $19.8 million were commercial
loans, $9.9 million were residential real estate construction and mortgage
loans and $1.8 million were installment loans. The allowance for loan losses
has increased from approximately $310,000 at March 31, 1996 to $344,000 at
March 31, 1997. The loan loss allowance represents approximately 1.09% of
total loans, up from 1.07% at March 31, 1996.

Comparison of the Fiscal Years Ended December 31, 1996 and 1995

For the year ended December 31, 1996, IRSB reported net income of
approximately $805,000, or $2.30 per share, as compared to net income of
approximately $754,000 or $2.15 per share for the year ended December 31, 1995.
The 1996 net income compares favorably to net income for the year ended
December 31, 1995 due principally to an increase in earning assets. Net
interest income on a fully taxable equivalent basis for the year ended December
31, 1996 was approximately $2,749,000, or 4.34% of average earning assets, as
compared to $2,405,000, or 4.08%, for the year ended December 31, 1995. The
increase in net interest income was due to increased earning assets. The
increase in net interest income was partially offset by a $27,000 increase in
operating expenses. Additionally, in 1996 IRSB made a $30,000 provision for
loan losses, an increase of $19,000 from 1995. See "Management's Discussion
and Analysis or Plan of Operations of IRSB -Results of Operations -- Net
Interest Income" and "-- Provisions for Loan Losses".

IRSB's total assets at December 31, 1996 were approximately $75.5
million, an increase of approximately $11.2 million or 17.4%, from December 31,
1995. This increase was due to an increase in certificates of deposits and
repurchase agreements achieved through competitive pricing strategies employed
by management.

IRSB's loans at December 31, 1996, totaled approximately $31.0
million, net, or approximately 41% of total assets. As noted above, of the
$31.0 million net loans, $19.8 million were commercial loans, $9.9 million were
residential real estate construction and mortgage loans and $1.8 million were
installment loans. The allowance for loan losses has increased from $305,000
at December 31, 1995 to $335,000 at December 31, 1996. The loan loss allowance
represents approximately 1.08% of total loans, up from 1.03% at December 31,
1995. Management believes the current level in the allowance for loan losses
is adequate to absorb potential losses in the loan portfolio. See
"Management's Discussion and Analysis or Plan of Operations of IRSB - Results
of Operations -- Provisions for Loan Losses."

NET INTEREST INCOME

Net interest income, which has constituted the principal source of
income for IRSB, represents the difference between interest income on
interest-earning assets and interest expense on interest-bearing liabilities.
The principal interest-earning assets are loans made to businesses and
individuals. Interest-bearing liabilities primarily consist of time deposits,
interest paying checking accounts ("NOW accounts"), retail savings deposits and
money market accounts. Funds attracted by these interest-bearing liabilities
are invested in interest-earning assets. Accordingly, net interest income
depends upon the volume of average interest-earning assets and average
interest-bearing liabilities and the interest rates earned or paid on them.

<PAGE> 52

Net interest income for the three month periods ended March 31, 1997 and
1996 was approximately $716,000 and $668,000, respectively, and the net yields
on average interest-earning assets were 3.98% and 4.41%, respectively.

Net interest income for the fiscal years ended December 31, 1996 and 1995
totaled approximately $2,708,000 and $2,495,000, respectively, and the net
yields on average interest-earning assets were 4.27% and 4.08%, respectively.
Total interest expense for the years ended December 31, 1996 and 1995, was
approximately $1,926,000 and $1,953,000, respectively, and the average cost of
interest bearing liabilities for each period was 3.68% and 3.76%, respectively.

The following table shows for each category of interest-earning assets and
interest-bearing liabilities the average amount outstanding, the interest
earned or paid on such amount, and the average rate earned or paid for the
three months ended March 31, 1997 and 1996, and for the years ended December
31, 1996 and 1995. The table also shows the average rate earned on all
interest-earning assets, the average rate paid on all interest-bearing
liabilities and the net yield on average interest-earning assets for the same
periods.

COMPARATIVE AVERAGE BALANCES, INTEREST, AND AVERAGE YIELDS

<TABLE>
<CAPTION>
MARCH 31,
------------------------------------------------------
1997 1996
--------------------------- -------------------------
INTEREST INTEREST
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE(1) RATE BALANCE EXPENSE RATE
------- ---------- ------ ------- ------- ------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
INTEREST-EARNING ASSETS:
Loans receivable, net ................... $31,605 $ 685 8.67% $29,790 $ 661 8.88%
Investment securities, taxable .......... 35,593 539 6.06 27,475 415 6.04
Investment securities, nontaxable (3) 1,713 30 7.01 2,325 39 6.71
Federal funds sold ...................... 2,976 38 5.11 1,034 15 5.80
------- ---------- ------ ------- -------- ------
Total interest-earning assets ....... 71,887 $ 1,292 7.19% 60,624 $ 1,130 7.46%
------- ---------- ------ ------- -------- ------

Non-interest earning assets:
Cash and due from banks ................. $2,260 $2,361
Other assets ............................ 2,268 2,209
------- -------
Total noninterest-earning assets ......... 4,528 4,570
------- -------
Total assets ........................ $76,415 $65,194
======= =======

INTEREST-BEARING LIABILITIES:
Deposits:
Interest-bearing demand and NOW
deposits ........................... $6,623 25 1.51% 6,862 27 1.57%
Savings deposits ..................... 7,471 36 1.93 8,053 41 2.04
Money market deposits ................ 11,678 84 2.88 9,587 55 2.29
Time deposits ........................ 27,488 353 5.14 22,255 285 5.12
Repurchase agreements ................... 6,119 68 4.45 3,133 41 5.23
------- ---------- ------ ------- -------- ------
Total interest-bearing liabilities .. 59,379 $ 566 3.81% 49,890 $ 449 3.60%
------- ---------- ------ ------- -------- ------

Non-interest bearing liabilities:
Non-interest bearing deposits ........ 8,670 7,337
Other liabilities .................... 1,034 1,160
------- -------
Total non-interest bearing liabilities ... 9,704 8,497
------- -------

Stockholders' equity ..................... 7,332 6,807
------- -------
Total liabilities and shareholders'
equity .......................... $76,415 $65,194
======= =======

NET INTEREST INCOME (3) .................. $726 $681

NET YIELD ON AVERAGE
EARNING ASSETS (3) (4) ............... 4.04% 4.49%

<CAPTION>
YEARS ENDED DECEMBER 31,
------------------------------------------------------
1996 1995
--------------------------- -------------------------
INTEREST INTEREST
AVERAGE INCOME/ YIELD/ AVERAGE INCOME/ YIELD/
BALANCE EXPENSE RATE BALANCE(2) EXPENSE RATE
------- -------- ------ ---------- -------- ------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
INTEREST-EARNING ASSETS:
Loans receivable, net ................... $30,747 $ 2,715 8.83% $ 28,759 $ 2,605 9.06%
Investment securities, taxable .......... 29,047 1,739 5.99 27,915 1,606 5.75
Investment securities, nontaxable (3) 1,766 121 6.85 3,415 238 6.97
Federal funds sold ...................... 1,838 100 5.44 1,100 85 7.73
------- -------- ------ ---------- -------- ------
Total interest-earning assets ....... 63,398 $ 4,675 7.37% 61,189 $ 4,534 7.41%
------- -------- ------ ---------- -------- ------

Non-interest earning assets:
Cash and due from banks ................. $ 2,312 $ 2,231
Other assets ............................ 2,264 2,554
------- ----------
Total noninterest-earning assets ......... 4,576 4,785
------- ----------
Total assets ........................ $67,974 $ 65,974
======= ==========

INTEREST-BEARING LIABILITIES:
Deposits:
Interest-bearing demand and NOW
deposits ........................... $ 6,485 $ 99 1.53% $ 6,873 $ 124 1.80%
Savings deposits ..................... 7,848 156 1.99 8,265 202 2.44
Money market deposits ................ 9,745 249 2.56 10,395 266 2.56
Time deposits ........................ 23,774 1,209 5.09 23,253 1,201 5.16
Repurchase agreements ................... 4,420 213 4.82 3,093 161 5.21
------- -------- ------ ---------- -------- ------
Total interest-bearing liabilities .. 52,272 $1,926 3.68% 51,879 $ 1,954 3.76%
------- -------- ------ ---------- -------- ------

Non-interest bearing liabilities:
Non-interest bearing deposits ........ 7,585 6,474
Other liabilities .................... 1,483 1,173
------- ----------
Total non-interest bearing liabilities ... 9,068 7,647
------- ----------

Stockholders' equity ..................... 6,634 6,448
------- ----------
Total liabilities and shareholders'
equity .......................... $67,974 $ 65,974
======= ==========

NET INTEREST INCOME (3) .................. $2,749 $2,580

NET YIELD ON AVERAGE
EARNING ASSETS (3) (4) ............... 4.34% 4.22%
</TABLE>

- -------------------
(1) Annualized for comparability with full year data.
(2) Average based on quarterly information.
(3) Provided on a tax equivalent basis using a 34% rate for federal income tax
purposes.
(4) The net yield on average earning assets is the net interest income divided
by average interest-earning assets.

48
<PAGE> 53

The effect on interest income, interest expense, and net interest income
for the periods indicated, of changes in average balance and rate, is shown
below. The effect of a change in average balance has been determined by
applying the average rate at the year-end for the earlier period to the change
in average balance at the year-end for the later period. Changes resulting
from average balance/rate variances are included in changes resulting from
volume.

RATE/VOLUME ANALYSIS OF NET INCOME

<TABLE>
<CAPTION>
THREE MONTHS ENDED YEAR ENDED
MARCH 31, DECEMBER 31,
1997 COMPARED TO 1996 1996 COMPARED TO 1995
--------------------------- -------------------------------
INCREASE (DECREASE) DUE TO INCREASE (DECREASE) DUE TO
--------------------------- -------------------------------
AVERAGE AVERAGE TOTAL AVERAGE AVERAGE TOTAL
VOLUME RATE CHANGE VOLUME RATE CHANGE
------- ------- ------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)

INTEREST EARNED ON:
Loans receivable, net (1) .............. $ 39 $ (15) $ 24 $ 176 $ (66) $ 110
Investment securities, taxable ......... 123 1 124 68 65 133
Investment securities, nontaxable (2) .. (11) 2 (9) (113) (4) (117)
Federal funds sold ..................... 25 (2) 23 40 (25) 15
------- ------- ------- --------- --------- ---------
Total interest income ................ $ 176 $ (14) $ 162 $ 171 $ (30) $ 141
------- ------- ------- --------- --------- ---------

INTEREST PAID ON:
Interest-bearing demand and NOW
deposits ............................. $ (1) $ (1) $ (2) $ (6) $ (19) $ (25)
Savings deposits ....................... (3) (2) (5) (8) (38) (46)
Money market accounts .................. 15 14 29 (17) 0 (17)
Time deposits .......................... 67 1 68 27 (18) 9
Repurchase Agreements .................. 33 (6) 27 64 (12) 52
------- ------- ------- --------- --------- ---------
Total interest expense ............... $ 112 $ 5 $ 117 $ 60 $ (87) $ (27)
------- ------- ------- --------- --------- ---------

Change in net interest income. ....... $ 65 $ (20) $ 45 $ 111 $ 57 $ 168
======= ======= ======= ========= ========= =========

<CAPTION>
YEAR ENDED
DECEMBER 31,
1995 COMPARED TO 1994
-------------------------------
INCREASE (DECREASE) DUE TO
-------------------------------
AVERAGE AVERAGE TOTAL
VOLUME RATE CHANGE
--------- --------- ---------
<S> <C> <C> <C>
(DOLLARS IN THOUSANDS)

INTEREST EARNED ON:
Loans receivable, net (1) .............. $ 177 $ 160 $ 337
Investment securities, taxable ......... 175 121 296
Investment securities, nontaxable (2) .. (60) 73 13
Federal funds sold ..................... (23) 30 7
--------- --------- ---------
Total interest income ................ $ 268 $ 385 $ 653
--------- --------- ---------

INTEREST PAID ON:
Interest-bearing demand and NOW
deposits ............................. $ 0 $ (2) $ (2)
Savings deposits ....................... (24) 4 (20)
Money market accounts .................. (20) 4 (16)
Time deposits .......................... 507 (27) 480
Repurchase Agreements .................. 25 53 78
--------- --------- ---------
Total interest expense ............... $ 488 $ 32 $ 520
--------- --------- ---------

Change in net interest income. ....... $ (220) $ 353 $ 133
========= ========= =========
</TABLE>

- -------------------
(1) Includes loan fees.
(2) Provided on a tax equivalent basis using a 34% rate for federal income tax
purposes.

PROVISION FOR LOAN LOSSES

Through the three month period ended March 31, 1997, a provision for loan
losses was made in the amount of approximately $9,000 as compared to $5,000 for
the three month period ended March 31, 1996. The provision for loan losses was
$30,000 and $11,500 for the years ended December 31, 1996 and 1995,
respectively. IRSB has determined its loan loss allowance from an analysis of
its actual operating experience as applied to its particular loan portfolio,
which management believes more accurately reflects the risks associated with
its loan portfolio.

The level of loan loss allowance has been based upon management's
continual review of the loan portfolio. Management reviews the loans by type
and nature of collateral and establishes an appropriate provision for loan
losses based upon historical charge-off experience, the present and prospective
financial condition of specific borrowers, industry concentrations within the
loan portfolio, size of the credit, existence and quality of any collateral,
profitability, and general economic conditions.

The total allowance for loan and lease losses has increased from
approximately $305,000 (or 1.03% of total loans) in 1995 to approximately
$335,000 (or 1.08% of total loans) in 1996. IRSB did not have any non-accrual
loans as of March 31, 1997 and 1996, or December 31, 1996 and 1995,
respectively.

Although management uses the best information available to make
determinations with respect to the allowance for loan losses, future
adjustments may be necessary if economic conditions differ substantially from
the assumptions used. Material additions to IRSB's allowance for loan losses
would result in a decrease

49
<PAGE> 54

in IRSB's net income and capital. See "Management's Discussion and Analysis or
Plan of Operations of IRSB - Results of Operations -- Allowance for Loan
Losses."

NON-INTEREST INCOME

For the three months ended March 31, 1997 and 1996, non-interest income
was approximately $55,000 and $71,000, respectively, a decrease of
approximately 29%. The decrease was due to reduced revenues from service
charges and fees, and due to the fact that there were no sales of investment
securities during the first quarter of 1997.

Non-interest income decreased to approximately $254,000 for the year ended
December 31, 1996, from $255,000 for year ended December 31, 1995, a decrease
of 0.4%. The decrease in non-interest income was primarily the result of a
reduction in service fees. This was offset in part by an increase in income
from the sale of investment securities.

The following table compares the various categories of non-interest income
for the periods indicated.

<TABLE>
<CAPTION>
THREE MONTHS ENDED YEARS ENDED
MARCH 31, DECEMBER 31,
---------------------------------- --------------------------------
1997 1996 1996 1995
---------------------------------- --------------------------------
<S> <C> <C> <C> <C>

Service charges and other fees .. $ 54,091 $ 58,437 $ 236,503 $ 249,918
Rental Income ................... 800 1,200 4,800 4,800
Securities gain (loss), net ..... 0 12,136 12,418 0
---------------- ---------------- --------------- ---------------
Total non-interest income ..... $ 54,891 $ 71,773 $ 253,721 $ 254,718
================ ================ =============== ===============
</TABLE>

NON-INTEREST EXPENSE

Non-interest expense for the three months ended March 31, 1997 and 1996,
totaled approximately $436,000 and $426,000, respectively, due primarily to an
increase in data processing expenses.

Non-interest expense increased from approximately $1,648,000 for the year
ended December 31, 1995, to $1,675,000 for the year ended December 31, 1996,
due primarily to increased salary and equipment expenses.

The following table summarizes the various categories of non-interest
expense for periods indicated.

Salaries and employee benefits ..... $ 240 $ 240 $ 942 $ 875
Occupancy expense .................. 37 34 142 142
Marketing and advertising .......... 5 3 22 18
Data processing fees ............... 12 3 14 80
Furniture and equipment ............ 28 30 165 122
FDIC premiums ...................... 1 0 2 66
Professional fees .................. 5 5 20 20
Printing, stationery and supplies .. 15 16 57 42
Director fees and expenses ......... 13 12 46 41
Postage ............................ 8 8 30 30
Other expenses ..................... 72 75 235 212
Total non-interest expenses ...... $ 436 $ 426 $ 1,675 $ 1,648
================ ================ =============== ===============
</TABLE>

50
<PAGE> 55

INCOME TAXES

For the three-month periods ended March 31, 1997 and 1996, IRSB's
provision for income taxes was approximately $116,000 and $108,000,
respectively. The increase was the result of increased earnings for the
three-month period in 1997 as compared to 1996.

For the year ended December 31, 1996, IRSB's provision for income taxes
was approximately $451,000, as compared to $336,000 for the year ended December
31, 1995, as a result of increased earnings during 1996.

ASSET/LIABILITY MANAGEMENT

IRSB seeks to maintain a program of asset and liability management
designed to limit its vulnerability to interest rate risk. The principal
measure of IRSB's exposure to interest rate risk is its interest rate
sensitivity "gap" which is the difference between interest rate sensitive
assets and liabilities. An asset or liability is considered to be interest
rate sensitive if it will reprice or mature within the time period analyzed,
usually one year. A gap is considered positive when the amount of interest
rate sensitive assets exceeds the amount of interest rate sensitive
liabilities. When the opposite occurs, the gap is considered to be negative.
During periods of increasing interest rates, a negative gap would tend to
adversely affect net income while a positive gap would tend to result in an
increase in net interest income. During periods of decreasing interest rates,
the inverse would tend to occur. If the maturities of IRSB's assets and
liabilities were equally flexible and moved concurrently, the impact of any
material or prolonged increase (or decrease) in interest rates or net interest
income would be minimal.

IRSB's asset and liability policies are directed toward matching, to the
extent possible, its interest rate sensitive assets and liabilities to achieve
and maintain a satisfactory differential between its interest income and
interest expense regardless of the general level and movement of interest
rates. To this end, an Asset and Liability Management Committee ("ALCO
Committee") reviews on a regular basis the duration of asset and liability
categories.

The following tables set forth the interest rate-sensitive assets and
liabilities of IRSB at March 31, 1997, and December 31, 1996, which are
expected to mature or are subject to repricing in each of the time periods
indicated. The tables may not be indicative of IRSB's rate sensitive position
at other points in time. The balances have been derived based on the financial
characteristics of the various assets and liabilities. Adjustable and floating
rate assets are included in the period in which interest rates are next
scheduled to adjust rather than their scheduled maturity dates. Fixed rate
loans are shown in the periods in which they are scheduled to be repaid.
Repricing of time deposits is based on their scheduled maturities. Deposits
without a stated maturity are repriced based on known characteristics of the
deposit product.

51
<PAGE> 56

INTEREST RATE SENSITIVITY ANALYSIS AS OF MARCH 31, 1997

<TABLE>
<CAPTION>
TERM TO REPRICING
------------------------------------------------
90 DAYS 91-180 181 DAYS MORE THAN
OR LESS DAYS TO 1 YEAR 1 YEAR (1)(2) TOTAL
--------- ----------- ----------- ------------- -------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
INTEREST-EARNING ASSETS:
Federal funds sold (3) ................... $ 4,195 $ $0 $ $0 $ 0 $ 4,195
Investment securities .................... 1,545 2,120 4,635 30,642 38,942
Loans .................................... 8,249 1,054 2,070 20,605 31,978
--------- ----------- ----------- ------------- -------
Total interest-earning assets ......... $ 13,989 $ $3,174 $ $6,705 $ 51,247 $75,115
--------- ----------- ----------- ------------- -------

INTEREST-BEARING LIABILITIES:
Interest-bearing demand and
NOW accounts .......................... $ 6,663 $ 0 $ 0 $ 0 $ 6,663
Savings deposits ......................... 7,284 0 0 0 7,284
Money market deposits .................... 12,560 0 0 0 12,560
Time deposits ............................ 8,049 3,957 7,836 9,087 28,929
Repurchase Agreements .................... 3,827 500 1,752 100 6,179
--------- ----------- ----------- ------------- -------
Total interest-bearing liabilities .... $ 38,383 $ 4,457 $ 9,588 $ 9,187 $61,615
--------- ----------- ----------- ------------- -------

Interest sensitivity gap per period ....... $ (24,394) $ (1,283) $ (2,883) $ 42,060 $13,500
========= =========== =========== ============= =======

Cumulative gap ............................ $ (24,394) $ (25,677) $ (28,560) $ 13,500
========= =========== =========== =============

Cumulative ratio of interest-earning assets
to interest-bearing liabilities .......... .36 .40 .46 1.22

Cumulative gap to total assets ............ (.31) (.33) (.36) .17
</TABLE>

- -----------------------------
(1) Total rate sensitive assets 1 to 5 years total $44,430, and over 5 years
total $6,817.
(2) Total rate sensitive liabilities 1 to 5 years total $35,243, and over 5
years total $6,817.
(3) Based on an average monthly balance.

52
<PAGE> 57

INTEREST RATE SENSITIVITY ANALYSIS AS OF DECEMBER 31, 1996

<TABLE>
<CAPTION>
TERM TO REPRICING
------------------------
90 DAYS 91-180 181 DAYS MORE THAN
OR LESS DAYS TO 1 YEAR 1 YEAR(1)(2) TOTAL
--------- ----------- ----------- ------------ -------
<S> <C> <C> <C> <C> <C>
(DOLLARS IN THOUSANDS)
INTEREST-EARNING ASSETS:
Federal funds sold (3) ................... $ 2,363 $ $0 $ $0 $ $0 $ 2,363
Investment securities .................... 6,095 2,345 9,960 18,547 36,947
Loans .................................... 7,514 1,386 2,244 20,109 31,253
--------- ----------- ----------- ------------ -------
Total interest-earning assets ......... $ 15,972 $ $3,731 $ $12,204 $ $38,656 $70,563
--------- ----------- ----------- ------------ -------

INTEREST-BEARING LIABILITIES:
Interest-bearing demand and
NOW accounts .......................... $ 7,190 $ 0 $ 0 $ 0 $ 7,190
Savings deposits ......................... 7,548 0 0 0 7,548
Money market deposits .................... 10,981 0 0 0 10,981
Time deposits ............................ 7,254 5,687 3,744 10,376 27,061
Repurchase Agreements .................... 3,709 900 1,000 302 5,911
--------- ----------- ----------- ------------ -------
Total interest-bearing liabilities .... $ 36,682 $ 6,587 $ 4,744 $ 10,678 $58,691
--------- ----------- ----------- ------------ -------

Interest sensitivity gap per period ....... $ (20,710) $ ( 2,856) $ 7,460 $ 27,978 $11,872
========= =========== =========== ============ =======

Cumulative gap ............................ $ (20,710) $ (23,566) $ (16,106) $ 11,872
========= =========== =========== ============

Cumulative ratio of interest-earning assets
to interest-bearing liabilities .......... .44 .46 .66 1.20

Cumulative gap to total assets ............ (.27) (.31) (.21) .16
</TABLE>

- -----------------------------
(1) Total rate sensitive assets 1 to 5 years total $35,503 and over 5 years
total $5,153.
(2) Total rate sensitive liabilities 1 to 5 years total $22,825 and over 5
years total $5,153.
(3) Based on an average monthly balance.

FINANCIAL CONDITION

LENDING ACTIVITIES

A primary source of income for IRSB is the interest earned on loans. At
December 31, 1996, IRSB's total assets were approximately $78.4 million as
compared to $64.9 million at December 31, 1995, and net loans of $31.0 million
representing 41% of the total assets for 1996 as compared to net loans of $28.9
million representing 44.6% of the total assets in 1995. Management believes
that the increase in net loans from 1995 to 1996 is primarily attributable to
increased loan demand resulting from a stronger local economy as well as its
reputation among business and individuals located in its primary market area as
an independent community bank.

53
<PAGE> 58

The following table summarizes the composition of IRSB's loan portfolio by
type of loan on the dates indicated.

LOAN PORTFOLIO COMPOSITION

<TABLE>
<CAPTION>
MARCH 31, YEAR ENDED DECEMBER 31,
1997 1996 1995
-------------------- --------------------------------------------------
AMOUNT % AMOUNT % AMOUNT %
--------- --------- ----------- ----------- ----------- -----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C>
TYPE OF LOAN:
Commercial and financial (1) ...... $ 19,803 61.9% $ 19,813 63.2% $ 20,267 67.4%
Real estate construction (2) ...... 370 1.2 247 8.8 103 0.3
Real estate mortgage (3) .......... 9,970 31.2 9,533 30.4 8,012 26.7
Installment loans to individuals .. 1,837 5.7 1,736 5.6 1,695 5.6
--------- --------- ----------- ----------- ----------- -----------
Total loans ...................... $ 31,980 100.0 $ 31,329 100.0 $ 30,077 100.0

LESS:
Unearned loan fees ................ 27 30 43
Allowance for loan losses ......... 344 335 305
--------- ----------- -----------
Total loans, net ................. $ 31,609 $ 30,964 $ 29,729
========= =========== ===========
</TABLE>

- --------------
(1) Commercial and financial consists of commercial real estate mortgage loans
and other commercial loans.
(2) Real estate construction consists of construction loans on residential real
estate mortgages.
(3) Real estate mortgage consists of residential real estate mortgages.

IRSB generally does not retain long-term fixed rate residential mortgage
loans in its portfolio.

The following tables set forth the maturities of loans (excluding
residential real estate mortgages and installment loans) outstanding at
December 31, 1996, and an analysis of sensitivities of all loans due to changes
in interest rates.

LOAN MATURITY SCHEDULE

<TABLE>
<CAPTION>
AT DECEMBER 31, 1996
-------------------------------------------------
DUE AFTER 1
DUE IN 1 YEAR BUT DUE AFTER
YEAR OR LESS BEFORE 5 YEARS 5 YEARS TOTAL
------------ -------------- ----------- -----
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C>
Commercial and financial loans .. $ 581 $1,254 $ 0 $ 1,835
Commercial real estate .......... 7,453 7,934 2,591 17,978
Real Estate - Construction (1) .. 247 0 0 247
</TABLE>

- ---------------------
(1) Consists of construction loans on residential real estate mortgages.

The following table sets forth as of March 31, 1997, and December 31,
1996, the dollar amounts of loans due after one year which had predetermined
interest rates and which had floating or adjustable rates.

<TABLE>
<CAPTION>
DOLLAR AMOUNT OF LOANS
------------------------------------------
MARCH 31, 1997 DECEMBER 31, 1996
------------------------------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
Type of Interest Rate:
Predetermined ........... $ 25,347 $ 24,496
Floating or adjustable .. 6,633 6,833
-------------------- --------------------
Total .................. $ 31,980 $ 31,329
==================== ====================
</TABLE>

54
<PAGE> 59

ASSET QUALITY

Management has sought to maintain a high quality of assets through
conservative underwriting and sound lending practices. Management has followed
this policy even though it may have caused it to forego the funding of higher
yielding loans. Approximately 84% of the loans in IRSB's portfolio are
collateralized by first mortgage liens in commercial real estate and
one-to-four-family residences which historically have carried relatively low
credit risk. As of March 31, 1997 and December 31, 1996, approximately 51% and
33% respectively, of the total loan portfolio was collateralized by this type
of property. The level of delinquent loans and real estate owned as of the
period end also is relevant to the credit quality of the loan portfolio. As of
December 31, 1996 and as of March 31, 1997, there were no non-performing loans
or real estate owned.

In an effort to maintain the quality of the loan portfolio, management has
sought to minimize higher risk types of lending and additional precautions have
been taken when such loans are made in order to reduce IRSB's risk of loss.
With respect to its real estate related loans, there can be no assurance that a
downturn in the value of the real estate on the central west coast of Florida
will not have a material adverse impact on the profitability of IRSB's loans.
However, as part of its loan portfolio management strategy, IRSB has typically
required a substantial percentage of the purchase price as a down payment.
Management believes that such precautions have reduced IRSB's exposure to the
risks associated with a downturn in real estate values.

Commercial and financial loans also entail certain additional risks since
they usually involve large loan balances to single borrowers or a related group
of borrowers, resulting in a more concentrated loan portfolio. Further, since
their repayment is usually dependent upon the successful operation of the
commercial enterprise, they also are subject to adverse conditions in the
economy. Commercial loans are generally riskier than residential mortgages
because they are typically made on the basis of the ability to repay from the
cash flow of a business rather than on the ability of the borrower or guarantor
to repay. Further, the collateral underlying commercial loans may depreciate
over time, occasionally cannot be appraised with as much precision as
residential real estate and may fluctuate in value based on the success of the
business.

While there is no assurance that IRSB will not suffer any losses on its
construction loans or its commercial real estate loans, management believes
that it has reduced the risks associated therewith because, among other things,
substantially all of such loans relate to projects where the borrower has
demonstrated to management that its business will generate sufficient income to
repay the loan. In this regard, IRSB has made a few land acquisition and
development loans and construction loans to developers of residential
properties for the construction of real estate subdivisions and multi-family
housing projects. IRSB primarily enters into agreements with individuals who
are familiar to IRSB and are residents of IRSB's primary market area.

In addition to maintaining high quality assets, management has attempted
to limit IRSB's risk exposure to any one borrower or borrowers with similar or
related entities. As of March 31, 1997, IRSB has extended credit in excess of
$1 million to only 6 borrowers. The current outstanding balance of these 6
credits is approximately $7.7 million. As of March 31, 1997, all of these
loans were performing in accordance with their contractual terms and none of
them are considered to be potential problem loans.

Loan concentrations are defined as amounts loaned to a number of borrowers
engaged in similar activities which would cause them to be similarly impacted
by economic or other conditions. IRSB, on a routine basis, evaluates these
concentrations for purposes of policing its concentrations and to make
necessary adjustments in its lending practices that most clearly reflect the
economic times, loan to deposit ratios, and industry trends. As of March 31,
1997, IRSB did not have any concentration of loans to any particular group of
customers engaged in similar activities or having similar economic
characteristics. However, as indicated

55
<PAGE> 60

above, a substantial natural geographical concentration of credit risk exists
within IRSB's primary market area. Concentrations of loans in the following
categories exceed 10% of the total loan portfolio:

Real Estate Mortgage Loans 33%
Commercial Real Estate Loans 51%

The Board of Directors of IRSB concentrates its efforts and resources, and
that of its senior management and lending officials, on loan review and
underwriting procedures. IRSB's Loan Committee reviews monthly all loans
subject to close monitoring due to internal policy guidelines. In addition,
senior loan officers of IRSB have established a review process with the
objective of quickly identifying, evaluating, and initiating necessary
corrective action for marginal loans. The goal of the loan review process is
to address substandard and non-performing loans as early as possible.
Combined, these components are integral elements of IRSB's loan program which
has resulted in its loan portfolio performance to date. Nonetheless,
management maintains a cautious outlook in anticipating the potential effects
of uncertain economic conditions (both locally and nationally) and the
possibility of more stringent regulatory standards.

CLASSIFICATION OF ASSETS

Generally, interest on loans is accrued and credited to income based upon
the principal balance outstanding. It is management's policy to discontinue
the accrual of interest income and classify a loan as non-accrual when
principal or interest is past due 90 days or more and the loan is not
adequately collateralized, or when in the opinion of management, principal or
interest is not likely to be paid in accordance with the terms of the
obligation. Consumer installment loans will be charged-off after 90 days of
delinquency unless adequately collateralized and in the process of collection.
Loans are not returned to accrual status until principal and interest payments
are brought current and future payments appear certain. Interest accrued and
unpaid at the time a loan is placed on non-accrual status is charged against
interest income. Subsequent payments received are applied to the outstanding
principal balance.

Real estate acquired by IRSB as a result of foreclosure or acceptance of
deeds in lieu of foreclosure is classified as real estate owned ("REO"). These
properties are recorded on the date acquired at the lower of fair value less
estimated selling costs or the recorded investment in the related loan. If the
fair value after deducting the estimated selling costs of the acquired property
is less than the recorded investment in the related loan, the estimated loss is
charged to the allowance for loan losses at that time. The resulting carrying
value established at the date of foreclosure becomes the new cost basis for
subsequent accounting. After foreclosure, if the fair value less estimated
selling costs of the property becomes less than its cost, the deficiency is
charged to the provision for losses on other real estate owned. Costs relating
to the developmental improvement of the property are capitalized, whereas those
relating to holding the property for sale are charged as an expense.

As of December 31, 1996 and 1995, respectively, and for the periods ending
March 31, 1997 and 1996, respectively, IRSB did not have any non-accrual or
potential problem loans.

ALLOWANCE FOR LOAN LOSSES

In originating loans, IRSB recognizes that credit losses will be
experienced and that the risk of loss will vary with, among other things, the
type of loan being made, the creditworthiness of the borrower over the term of
the loan and, in the case of a collateralized loan, the quality of the
collateral for the loan as well as general economic conditions. It is
management's policy to maintain an adequate allowance for loan losses based on,
among other things, IRSB's historical loan loss experience, evaluation of
economic conditions and regular reviews of delinquencies and loan portfolio
quality.

56
<PAGE> 61

IRSB adopted Statement of Financial Accounting Standards No. 114
"Accounting by Creditors for Impairment of a Loan," (SFAS No. 114) on January
1, 1995. Under this standard, a loan is considered impaired, based on current
information and events, if it is probable that IRSB will be unable to collect
the scheduled payments of principal or interest when due according to the
contractual terms of the loan agreement. IRSB evaluates individual loans for
impairment from internally generated watch lists and other sources. Loans
meeting the criteria for impairment may or may not be placed on non-accrual
status, based on the loan's current status. The measurement of impaired loans
is generally based on the present value of expected future cash flows
discounted at the historical effective interest rate, except that all
collateral-dependent loans are measured for impairment based on the fair value
of the collateral. The adoption of SFAS No. 114 resulted in no additional
provision of loan losses.

The allowance for loan losses has been established through charges to
earnings in the form of a provision for loan losses. Increases and decreases
in the allowance due to changes in the measurement of the impaired loans are
included in the provision for credit losses. Loans continue to be classified
as impaired unless they are brought fully current and the collection of
scheduled interest and principal is considered probable. When a loan or
portion of a loan is determined to be uncollectible, the portion deemed
uncollectible is charged against the allowance and is considered probable.

In October 1993, FASB issued Statement of Financial Accounting Standards
No. 118, "Accounting by Creditors for Impairment of a Loan -- Income
Recognition and Disclosures," (SFAS No. 118). SFAS No. 118 amends SFAS No. 114
to allow a creditor to use existing methods for recognizing interest income on
any impaired loan, rather than the methods prescribed in SFAS No. 114.

Loans, including impaired loans, generally, have been classified by IRSB
as nonaccrual if they are past due as to maturity or payment of principal or
interest for a period of more than ninety (90) days, unless such loans are well
collateralized and in the process of collection. If a loan or a portion of a
loan is classified as doubtful or is partially charged off, the loan is
classified as nonaccrual. Loans that are on a current payment status or past
due less than ninety (90) days may also be classified as nonaccrual if
repayment in full of principal and/or interest is in doubt.

While a loan is classified as nonaccrual and the future collectibility of
the recorded loan balance is doubtful, collections of interest and principal
are generally applied as a reduction to principal outstanding. When the future
collectibility of the recorded loan balance is expected, interest income may be
recognized on a cash basis. In the case where a nonaccrual loan has been
partially charged off, recognition of interest on a cash basis is limited to
that which would have been recognized on the recorded loan balance at the
contractual interest rate. Cash interest receipts in excess of that amount are
recorded as recoveries to the allowance for credit losses until prior
charge-offs have been fully recovered.

Management continues to actively monitor IRSB's asset quality and to
charge-off loans against the allowance for loan losses when appropriate or to
provide specific loss allowances when necessary. Although management believes
it uses the best information available to make determinations with respect to
the allowance for loan losses, future adjustments may be necessary if economic
conditions differ from the economic conditions in the assumptions used in
making the initial determinations.

IRSB's allowance for loan losses was $344,000 at March 31, 1997 (1.08% of
total loans), an increase of $9,000 over the allowance for loan losses at
December 31, 1996. The allowance for loan losses represents 1.08% of portfolio
loans at March 31, 1997 and December 31, 1996. IRSB did not have any
charge-offs or recoveries on previously charged-off loans for the three month
period ended March 31, 1997, or for the fiscal year ended December 31, 1996.
Management increased the loan loss allowance of $335,000 at December 31, 1996,
to $344,000 at March 31, 1997 in an effort by management to maintain an
allowance for loan losses at a level it believed to be adequate to cushion it
against the reasonably expected economic losses that may result from an
economic slowdown.

57
<PAGE> 62

The following table sets forth an analysis of IRSB's allowance for
possible loan losses for the periods indicated.

SUMMARY OF LOAN LOSS EXPERIENCE

<TABLE>
<CAPTION>
THREE MONTHS ENDED MARCH 31, YEARS ENDED DECEMBER 31,
---------------------------------- --------------------------------
1997 1996 1996 1995
---------------- ---------------- --------------- ---------------
[(DOLLARS IN THOUSANDS)]
<S> <C> <C> <C> <C>

Total net loans outstanding at end of period .......... $ 31,608 $ 28,946 $ 30,963 $ 29,728
================ ================ =============== ===============
Average net loans outstanding during the year ......... $ 31,533 $ 29,482 $ 30,428 $ 28,759
================ ================ =============== ===============
Allowance for loan losses, beginning of period ........ 335 305 305 294
Loans charged-off during the period:
Commercial and financial ........................... 0 0 0 0
Real estate mortgage ............................... 0 0 0 0
Real estate construction ........................... 0 0 0 0
Installment loans to individuals ................... 0 0 0 0
---------------- ---------------- --------------- ---------------
Total loans charged-off ........................ 0 0 0 0
---------------- ---------------- --------------- ---------------
Recoveries of loans previously charged-off:
Commercial and financial ........................... 0 0 0 0
Real estate mortgage ............................... 0 0 0 0
Real estate construction ........................... 0 0 0 0
Installment loans to individuals ................... 0 0 0 0
---------------- ---------------- --------------- ---------------
Total recoveries ............................... 0 0 0 0
---------------- ---------------- --------------- ---------------
Net loans charged-off during the period ............... 0 0 0 0
---------------- ---------------- --------------- ---------------
Provisions for loan losses ............................ 9 5 30 11
---------------- ---------------- --------------- ---------------
Allowance for loan losses, end of period .............. $ 344 $ 310 $ 335 $ 305
================ ================ =============== ===============
Non-performing loans, end of period ................... $ 0 $ 0 $ 0 $ 0
Net charge-offs during year to average net loans ...... 0 0 0 0
Allowance as a percentage of non-performing loans(1) .. - - - -
</TABLE>

- ------------------
(1) Not applicable. IRSB does not have any non-performing loans for the
periods indicated in this table.

As a result of IRSB's lack of non-accrual loans and charge-off history,
all of the allowance for loan losses are unallocated.

INVESTMENT ACTIVITIES

Securities that management has the positive intent and IRSB has the ability
at the time of purchase to hold until maturity are classified as securities
held to maturity. Securities in this category are carried at amortized cost
adjusted for accretion of discounts and amortization of premiums using the
effective interest method over the estimated life of the securities. If a
security has a decline in fair value below its amortized cost that is other
than temporary, then the security will be written down to its new cost basis by
recording a loss in statement of operations. Securities to be held for
indefinite periods of time and not intended to be held to maturity are
classified as available for sale. Assets included in this category are those
assets that management intends 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 rate and
resultant prepayment risk changes. Securities available for sale are recorded
at fair value. Both unrealized holding gains and losses on securities
available for sale, net of taxes, are included as a separate component of
shareholders' equity in the consolidated balance sheets until these gains or
losses are realized. The cost of investment securities sold is determined by
the specific identification method. If a security has a decline in fair value
that it other than temporary, then the securities will be written down to its
fair value by recording a loss in the consolidated statement of operations.
These securities are recorded at fair value. Both unrealized gains and losses
are included in the balance sheets. IRSB currently has no securities
classified as trading securities.

At March 31, 1997, IRSB had an unrealized loss, net of taxes, of $102,349.
This unrealized loss was shown as a decrease of shareholders' equity for the
first quarter of 1997 as compared to gain of $18,815, net of taxes, as of
December 31, 1996.

58
<PAGE> 63

At March 31, 1997, IRSB's investment portfolio totaled approximately
$38,794,000, compared to $37,893,000 at December 31, 1996. The portfolio at
March 31, 1997 primarily consisted of United States treasury securities,
federal agency obligations, obligations of states and political subdivisions,
and mortgage-backed securities held for sale. The portfolio includes
approximately $364,000 of Collateralized Mortgage Obligations ("CMOs") which
meet all regulatory requirements for investment purposes.

The following table summarizes the carrying value of IRSB's investment
portfolio as of the dates indicated.

INVESTMENT SECURITIES PORTFOLIO

<TABLE>
<CAPTION>
AT MARCH 31, AT DECEMBER 31,
----------------------- ------------------------------------------------
1997 1996 1995
----------------------- ----------------------- -----------------------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C>
Investment securities, available for sale (1):
U.S. treasury securities .......................... $ 8,989 $ 9,987 $ 8,794
U.S. government agencies .......................... 14,020 9,841 1,317
Other securities .................................. 974 595 302
----------------------- ----------------------- -----------------------
Total investment securities, available for sale .. $ 23,983 $ 20,423 $ 10,413
======================= ======================= =======================

Investment securities, held to maturity:
U.S. treasury securities .......................... $ 1,998 $ 1,998 $ 4,497
U.S. government agencies .......................... 9,110 11,110 12,595
Obligations of state and political subdivisions ... 1,927 1,906 2,584
Other securities .................................. 364 407 0
----------------------- ----------------------- -----------------------
Total investment securities, held to maturity .... $ 13,399 $ 15,421 $ 19,676
======================= ======================= =======================

Mortgage-backed securities available for sale ...... $ 1,412 $ 972 $ 0
======================= ======================= =======================
</TABLE>

- -----------------
(1) Does not include Federal Reserve stock valued at $105,000, $105,000, and
$102,000 at the periods ending March 31, 1997, December 31, 1996, and
December 31, 1995, respectively.

59
<PAGE> 64

The following table sets forth the weighted average yield of the
investment portfolio of IRSB as of March 31, 1997. The calculation of the
weighted average interest yields is based on yield, weighted by the respective
costs of the securities.

<TABLE>
<CAPTION>
AVERAGE
AMOUNT (1) YIELD
---------- -------
(DOLLARS IN THOUSANDS)
<S> <C> <C>
INVESTMENT CATEGORY:

Obligations of U.S. treasury and agencies - available for sale:
0-1 year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 4,999 5.70%
1-5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18,010 6.30%
------ -----
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23,009 6.17%
------ -----
Other securities available for sale:
Over 10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974 6.16%
------- -----
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 974 6.16%
------- -----
Mortgage-backed securities - available for sale:
1-5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,412 6.66%
------- -----
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,412 6.66%
------- -----
Obligations of U.S. treasury and agencies - held to maturity:
0-1 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,500 6.24%
1-5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,108 6.02%
5-10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 500 6.50%
------- -----
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11,108 6.09%
------- -----
Obligations of state and political subdivisions - held to maturity (2):
0-1 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 620 5.28%
1-5 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,106 4.46%
5-10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 4.70%
------- -----
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,927 4.75%
------- -----
Other securities - held to maturity:
5-10 years . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364 6.02%
------- -----
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 364 6.02%
------- -----

Total mortgage-backed and investment securities . . . . . . . . . . . . . . . . . . . . $38,794 6.09%
======= =====
</TABLE>

- ------------------
(1) Yields on tax-exempt obligations have not been computed on a fully tax
equivalent basis.
(2) Does not include Federal Reserve stock held by IRSB valued at $105,000 as
of the period ended March 31, 1997.

DEPOSIT ACTIVITIES

Deposits are the major source of IRSB's funds for lending and other
investment purposes. In addition to deposits, IRSB derives funds from interest
payments, loan principal payments, loan sales, and funds provided from
operations. Scheduled loan repayments are a relatively stable source of funds,
while deposit inflows are significantly influenced by general interest rates
and money market conditions. IRSB may use borrowings on a short-term basis if
necessary to compensate for reductions in the availability of other sources of
funds. They also may be used on a longer-term basis for general business
purposes.

Deposits are attracted principally from within IRSB's primary market
area through the offering of a broad variety of deposit instruments including
checking accounts, money market accounts, regular savings accounts, term
certificate accounts (including "jumbo" certificates in denominations of
$100,000 or more) and retirement savings plans. As of December 31, 1996, jumbo
certificates accounted for approximately $2.9 million of IRSB's deposits. Of
this amount, $1.8 million had a term of twelve months or less. IRSB has not
aggressively attempted to obtain large denomination, high interest-bearing
certificates of deposit in the past.

Maturity terms, service fees and withdrawal penalties are established
by IRSB on a periodic basis. The determination of rates and terms is
predicated on funds acquisition and liquidity requirements, rates paid by
competitors, growth goals and federal regulations.

60
<PAGE> 65

Regulations promulgated by the FDIC pursuant to the FDICIA place
limitations on the ability of insured depository institutions to accept, renew
or roll-over deposits by offering rates of interest which are significantly
higher than the prevailing rates of interest on deposits offered by other
insured depository institutions having the same type of charter in such
depository institution's normal market area. Under these regulations, "well
capitalized" depository institutions may accept, renew or roll such deposits
over without restriction, "adequately capitalized" depository institutions may
accept, renew or roll such deposits over with a waiver from the FDIC (subject
to certain restrictions on payments of rates), and "undercapitalized"
depository institutions may not accept, renew or roll such deposits over. The
regulations contemplate that the definitions of "well capitalized," "adequately
capitalized" and "undercapitalized" will be the same as the definitions adopted
by the agencies to implement the corrective action provisions of the FDICIA.
As of March 31, 1997, IRSB met the definition of a "well capitalized"
depository institution.

The following table sets forth the average balances and average
weighted rates for IRSB's categories of deposits for the periods indicated.

THREE MONTHS FISCAL YEARS ENDED DECEMBER 31,
ENDED MARCH 31, -----------------------------------------------------------
1997 1996 1995
---------------------------- --------------------------- ----------------------------
AVERAGE AVERAGE % OF TOTAL AVERAGE AVERAGE % OF TOTAL AVERAGE AVERAGE % OF TOTAL
BALANCE RATE DEPOSITS BALANCE RATE DEPOSITS BALANCE RATE DEPOSITS
------- ------- ---------- -------- ------- ---------- -------- ------- ----------
(DOLLARS IN THOUSANDS)
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Non-interest bearing demand
deposits . . . . . . . . . . . . .
$ 8,670 0.00% 14.00% $ 7,585 0.00% 13.68% $ 6,474 0.00% 11.72%

Interest bearing demand and
NOW deposits . . . . . . . . . . . 6,623 1.51% 10.69 6,485 1.53% 11.70 6,873 1.80% 12.44
Savings account deposits . . . . . . 7,471 1.93% 12.06 7,848 1.99% 14.16 8,265 2.44% 14.96
Money market accounts
deposits. . . . . . . . . . . . 11,678 2.88% 18.86 9,745 2.56% 17.58 10,395 2.56% 18.81
Time deposits . . . . . . . . . . . . 27,488 5.14% 44.39 23,774 5.09% 42.88 23,253 5.16% 42.08
------- ------ ------ ------- ------ ------ ------- ------ -----

Total . . . . . . . . . . . . . $61,931 100% $55,437 100% $55,260 100%
======= ==== ======= ==== ======= =====
Weighted Average Rate (all
deposits) . . . . . . . . . . . . 3.22% 3.09% 3.24%
====== ====== =====
</TABLE>

At December 31, 1996, certificates of deposit represented approximately
43.8% of IRSB's total deposits, up from 41.6% at December 31, 1995.
Non-brokered time deposits over $100,000 represented 4.1% of total liabilities.
IRSB does not have a concentration of deposits from any one source, the loss of
which would have a material adverse effect on the business of IRSB. Management
believes that substantially all of IRSB's depositors are residents, either full
or part time, in its primary market area.

The following table indicates the amount of IRSB's certificates of deposit
of $100,000 or more by time remaining until maturity at March 31, 1997.

<TABLE>
<CAPTION>
CERTIFICATES OF
$100,000 OR GREATER
-----------------------
MATURITY PERIOD (DOLLARS IN THOUSANDS)
- ---------------
<S> <C>
Under three months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 723
Over three months through twelve months . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,083
Over twelve months . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,142
------
Totals . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,947
======
</TABLE>

<PAGE> 66

RETURN ON EQUITY AND ASSETS

The following table sets forth the IRSB's performance ratios for the
periods indicated.

<TABLE>
<CAPTION>
AT DECEMBER 31,
-------------------------------
1996 1995
------------------ --------------
<S> <C> <C>
Return on average assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1.18% 1.11%
Return on average equity . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12.14% 11.69%
Dividend payout ratio . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30.43% 27.91%
Year-end equity to year-end total assets . . . . . . . . . . . . . . . . . . . . 9.63% 10.45%
Average interest-earning assets to average interest-bearing liabilities . . . . . 121.28% 127.17%
Non-performing loans and other real estate owned to average total assets . . . . 0 0
Non-performing loans to total loans . . . . . . . . . . . . . . . . . . . . . . . 0 0
Allowance for loan losses to total loans . . . . . . . . . . . . . . . . . . . . 1.08% 1.03%
Net charge-offs to average net loans . . . . . . . . . . . . . . . . . . . . . . 0 0

</TABLE>

LIQUIDITY AND CAPITAL RESOURCES

IRSB's principal sources of funds are deposits, principal and interest
payments on loans, interest on investments, and sale of investments. During
1996, IRSB received $8.1 million from deposit growth. Management is unaware of
any trends in the sources or uses of cash by IRSB that are expected to have a
material adverse impact on its liquidity position. Management believes that it
maintains a sufficient level of liquidity to meet current and future liquidity
requirements.

At March 31, 1997, shareholders' equity was approximately $7,357,000,
or 9.4% of total assets, compared to $7,268,000, or 9.63% of total assets, as
of December 31, 1996. At March 31, 1997 and December 31, 1996, respectively,
IRSB's Tier I risk based capital ratios were 20.14% and 20.22%, its Tier II
capital ratios were 21.07% and 21.25%, and its leverage ratios were 9.87% and
9.75%, all in excess of guidelines for a "well capitalized" bank.

IMPACT OF INFLATION AND CHANGING PRICES

The financial statements and related financial data concerning IRSB
presented in this Proxy Statement-Prospectus 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 changes in the relative purchasing power of money over time due to
inflation. The primary impact of inflation on the operations of IRSB is
reflected in increased operating costs. Unlike most industrial companies,
virtually all of the assets and liabilities of a financial institution are
monetary in nature. As a result, changes in interest rates have a more
significant impact on the performance of a financial institution than do the
effects of changes in the general rate of inflation and changes in prices.
Interest rates do not necessarily move in the same direction or in the same
magnitude as the prices of goods and services.

FEDERAL AND STATE TAXATION

Federal Income Taxation. Although a bank's income tax liability is
determined under provisions of the Internal Revenue Code of 1986, as amended
(the "Code"), which is applicable to all taxpayers or corporations, Sections
581 through 597 of the Code apply specifically to financial institutions.

The two primary areas in which the treatment of financial institutions
differ from the treatment of other corporations under the Code are in the areas
of bond gains and losses and bad debt deductions. Bond gains and losses
generated from the sale or exchange of portfolio instruments are generally
treated for financial institutions as ordinary gains and losses as opposed to
capital gains and losses for other corporations,

<PAGE> 67

as the Code considers bond portfolios held by banks to be inventory in a trade
or business rather than capital assets. Banks are allowed a statutory method
for calculating a reserve for bad debt deductions.

State Taxation. IRSB files state income tax returns in Florida.
Florida taxes banks under primarily the same provisions as other corporations.
Generally, state taxable income is calculated under applicable Code sections
with some modifications required by state law.

DESCRIPTION OF FNB CAPITAL STOCK AND IRSB CAPITAL STOCK

FNB COMMON STOCK

GENERAL. FNB is authorized to issue 100,000,000 shares of FNB Common
Stock, of which 14,081,550 shares were outstanding as of June 30, 1997. FNB
Common Stock is traded on the Nasdaq National Market under the trading symbol
"FBAN." Chemical Mellon acts as the transfer agent and the registrar for FNB
Common Stock.

As of June 30, 1997, 2,470,636 shares of FNB Common Stock were
reserved for issuance under various employee benefit plans and the voluntary
dividend reinvestment plan of FNB. After taking into account the shares
reserved as described above, the number of authorized shares of FNB Common
Stock available for other corporate purposes as of June 30, 1997 was
83,447,814. Since that date, 700,000 additional shares have been reserved for
issuance in connection with the Merger.

VOTING AND OTHER RIGHTS. The holders of FNB Common Stock are entitled
to one vote per share, and, in general, a majority of votes cast with respect
to a matter is sufficient to authorize action upon routine matters. Directors
are elected by a plurality of the votes cast, and each shareholder entitled to
vote in such election is entitled to vote each share of stock for as many
persons as there are directors to be elected. In elections for directors,
shareholders do not have the right to cumulate their votes. The FNB Series A
Preferred Stock (as defined herein) votes as a class with the FNB Common Stock.
See "-- FNB Preferred Stock"; "COMPARISON OF SHAREHOLDER RIGHTS -- Amendment of
Articles of Incorporation and Bylaws" and "-- Vote Required for Extraordinary
Corporate Transaction."

In the event of liquidation, holders of FNB Common Stock would be
entitled to receive pro rata any assets legally available for distribution to
shareholders with respect to shares held by them, subject to any prior rights
of any FNB Preferred Stock (as defined and described below) then outstanding.

FNB Common Stock does not have any preemptive rights, redemption
privileges, sinking fund privileges or conversion rights. All the outstanding
shares of FNB Common Stock are, and upon issuance the shares of FNB Common
Stock to be issued to shareholders of IRSB will be, validly issued, fully paid
and nonassessable.

DISTRIBUTIONS. The holders of FNB Common Stock are entitled to
receive such dividends or distributions as the FNB Board may declare out of
funds legally available for such payments. The payment of distributions by FNB
is subject to the restrictions of Pennsylvania law applicable to the
declaration of distributions by a business corporation. A corporation generally
may not authorize and make distributions if, after giving effect thereto, it
would be unable to meet its debts as they become due in the usual course of
business or if the corporation's total assets would be less than the sum of its
total liabilities plus the amount that would be needed, if it were to be
dissolved at the time of distribution, to satisfy claims upon dissolution of
shareholders who have preferential rights superior to the rights of the holders
of its common stock. In addition, the payment of distributions to shareholders
is subject to any prior rights of outstanding FNB Preferred Stock. Share
dividends, if any are declared, may be paid from authorized but unissued
shares.

63
<PAGE> 68

The ability of FNB to pay distributions is affected by the ability of
its subsidiaries to pay dividends. The ability of FNB's subsidiaries, as well
as of FNB, to pay dividends in the future is influenced by bank regulatory
requirements and capital guidelines.

FNB PREFERRED STOCK

GENERAL. FNB has authorized 20,000,000 shares of preferred stock,
$10.00 par value (the "FNB Preferred Stock"). The FNB Board has the authority
to issue FNB Preferred Stock in one or more series and to fix the dividend
rights, dividend rate, liquidation preference, conversion rights, voting
rights, rights and terms of redemption (including sinking fund provisions), and
the number of shares constituting any such series, without any further action
by the shareholders unless such action is required by applicable rules or
regulations or by the terms of other outstanding series of FNB Preferred Stock.
Any shares of FNB Preferred Stock which may be issued may rank prior to shares
of FNB Common Stock as to payment of dividends and upon liquidation. FNB had
23,588 shares of FNB Series A Preferred Stock (the "FNB Series A Preferred
Stock") issued and outstanding as of June 30, 1997 and 282,467 shares of FNB
Series B 7 1/2% Cumulative Convertible Preferred Stock (the "FNB Series B
Preferred Stock") issued and outstanding as of June 30, 1997.

THE FOLLOWING SUMMARY OF THE FNB SERIES A PREFERRED STOCK AND FNB
SERIES B PREFERRED STOCK IS QUALIFIED IN ITS ENTIRETY BY REFERENCE TO THE
DESCRIPTION THEREOF CONTAINED IN THE FNB CHARTER ATTACHED AS EXHIBIT 3.1 TO THE
CORPORATION'S ANNUAL REPORT ON FORM 10-K FOR THE YEAR ENDED DECEMBER 31, 1992,
WHICH IS INCORPORATED HEREIN BY REFERENCE.

FNB SERIES A PREFERRED STOCK. The FNB Series A Preferred Stock was
created for the purpose of acquiring Reeves Bank. Holders of the FNB Series A
Preferred Stock are entitled to 5.1 votes for each share held (as adjusted for
the FNB Stock Dividend). The holders of the FNB Series A Preferred Stock do not
have cumulative voting rights in the election of directors. Dividends on the
FNB Series A Preferred Stock are cumulative from the date of issue and are
payable at a rate of $.42 per share each quarter. The FNB Series A Preferred
Stock is convertible at the option of the holder into shares of the FNB Common
Stock having a market value of $25.00 at time of conversion. FNB has the right
to require the conversion of the balance of all outstanding shares at the
conversion rate at any time after 50% of the 49,512 shares issued are no longer
outstanding. Through June 30, 1997, no shares of the FNB Series A Preferred
Stock were converted to FNB Common Stock. At June 30, 1997, 21,118 shares of
FNB Common Stock were reserved by FNB for the conversion of the remaining
23,588 outstanding shares.

FNB SERIES B PREFERRED STOCK. The FNB Series B Preferred Stock was
issued during 1992 for the purpose of raising capital for the acquisition of 13
banking branches in the Erie, Pennsylvania area. Holders of the FNB Series B
Preferred Stock have no voting rights. Dividends on the FNB Series B Preferred
Stock are cumulative from the date of issue and are payable at a rate of
$.46875 per share each quarter. The FNB Series B Preferred Stock has a stated
value of $25.00 per share and is convertible at the option of the holder at any
time into shares of FNB Common Stock at a price of $12.83 per share. FNB has
the right to redeem the FNB Series B Preferred Stock for cash on or after May
15, 1996, as set forth in the prospectus dated May 8, 1992. Through June 30,
1997, 46,476 shares of FNB Series B Preferred Stock were converted to 96,226
shares of FNB Common Stock. At June 30, 1997, 606,614 shares of FNB Common
Stock were reserved by FNB for the conversion of the remaining 282,467
outstanding shares of FNB Series B Preferred Stock.

IRSB COMMON SHARES

GENERAL. IRSB is authorized to issue 500,000 IRSB Common Shares, of
which 350,000 shares were issued and outstanding as of the Record Date. IRSB
Common Shares are not publicly traded and it acts as its own transfer agent and
the registrar for the IRSB Common Shares. IRSB has only one class of common
stock and is not authorized to issue, and does not have any outstanding,
preferred stock.

<PAGE> 69

COMPARISON OF SHAREHOLDER RIGHTS

At the Effective Time, the shareholders of IRSB, a Florida state
banking corporation, will become shareholders of FNB, a Pennsylvania
corporation, and Pennsylvania law will govern shareholder rights after the
Merger. Differences between the Florida Banking Code (which is the primary law
regulating Florida banks and supersedes the FBCA except when the provisions of
the Florida Banking Code and the FBCA are not in direct conflict) and the FBCA,
where applicable, (collectively the "Florida Laws") and the PBCL and between
the IRSB Charter and the IRSB Bylaws and the FNB Charter and the FNB Bylaws
will result in various changes in the rights of shareholders of IRSB.

The following is a summary of all material differences between the
rights of FNB shareholders under Pennsylvania law, the FNB Charter and the FNB
Bylaws, as compared with those of IRSB shareholders under the Florida Laws, the
IRSB Charter and the IRSB Bylaws. This summary does not purport to be a
complete description of the provisions discussed and is qualified in its
entirety by the PBCL, the FBCA, the Florida Banking Code, the IRSB Charter, the
IRSB Bylaws, the FNB Charter and the FNB Bylaws, to which IRSB shareholders are
referred.

REMOVAL OF DIRECTORS; FILLING VACANCIES ON THE BOARD OF DIRECTORS

Under the PBCL, an FNB director may be removed without cause by the
FNB shareholders entitled to elect the director or by the class of directors in
which such director had been chosen. The FNB Charter contains a provision that
requires the affirmative vote of at least 75% of the outstanding shares of FNB
Common Stock entitled to vote to remove the entire FNB Board, a class of
directors, or any member of the FNB Board during his term without cause.

Under the FBCA, an IRSB director may be removed by the IRSB
shareholders with or without cause at a duly convened special meeting of
shareholders called for that purpose when a quorum is present if the votes cast
in favor of removal exceed the vote cast opposing removal; provided that, if a
director is elected by a voting group, only the shareholders of that voting
group may participate in the vote to remove him. Such action also may be taken
in action by written consent where a majority of the outstanding shares consent
to the removal of the director.

The PBCL and the FNB Bylaws provide that vacancies on the FNB Board,
including vacancies resulting from an increase in the number of directors, may
be filled by a majority vote of the remaining directors, though less than a
quorum, or by a sole remaining director, and each person so selected shall
serve until the next selection of the class for which such director has been
chosen, and until a successor has been selected and qualified.

The IRSB Charter and Bylaws provide generally that upon the occurrence
of any vacancy on the IRSB Board, the Board of Directors may fill such vacant
position for the remainder of the relevant term. The FBCA provides that
vacancies on the IRSB Board, including vacancies resulting from an increase in
the number of directors and resulting from removal of a director from office,
may be filled by a majority vote of the remaining directors, though less than a
quorum, or by the shareholders at any meeting held during the existence of such
vacancy. If, however, vacancies are due to an increase in the size of the
Board of Directors, the IRSB Charter and the Florida Banking Code limit the
number of vacancies that can be filled by the Board of Directors to two per
year. A director elected to fill a vacancy shall have the same remaining term
as that of his or her predecessor in office. If the number of directors is
increased, the additional director(s) will hold office until the next
succeeding annual meeting of shareholders.

<PAGE> 70

QUORUM OF SHAREHOLDERS

The PBCL and the FNB Bylaws provide that a quorum for a meeting of
shareholders of FNB consists of the presence of shareholders, in person or
represented by proxy, entitled to cast at least a majority of the votes that
all shareholders are entitled to cast on a particular matter to be acted upon
at the meeting.

The FBCA and the IRSB Bylaws provide that the holders of a majority of
the stock issued, outstanding and entitled to vote thereon, present in person
or represented by proxy, shall constitute a quorum at all meetings of the
shareholders of IRSB. The FBCA further provides that in no event shall a
quorum consist of less than one-third of the shares entitled to vote.

ADJOURNMENT AND NOTICE OF SHAREHOLDER MEETINGS

The FNB Bylaws provide that, if a quorum is not present or represented
at a shareholder meeting, the shareholders entitled to vote may adjourn the
meeting without notice other than an announcement at the meeting. The FBCA
also provides that whenever a meeting is adjourned to another time or place, it
generally shall not be necessary to give any notice of the adjourned meeting as
long as notice of the time and place of the next meeting is given at the
adjourned meeting. The FNB Bylaws further provide that the determination of
shareholders of record entitled to notice of or to vote at any meeting of
shareholders will apply to any adjournment thereof. The IRSB Bylaws are silent
on this point.

Under the PBCL and the FNB Bylaws, notice of shareholder meetings must
be given at least ten days prior to any meeting called to consider a
fundamental corporate change or at least five days prior to the meeting in any
other case. Under the FBCA, notice of shareholder meetings must be provided to
each shareholder of record entitled to vote at such meeting not less than ten
nor more than 60 days prior to the meeting. The IRSB Bylaws provide that
notice of shareholder meetings shall be mailed to the shareholders of record at
least fifteen calendar days prior to the date of the meeting.

CALL OF SPECIAL SHAREHOLDER MEETINGS

The FNB Bylaws provide that special meetings of the shareholders may
be called only by the Chairman of the Board, the President or the Secretary of
FNB pursuant to a resolution or at the written direction of at least 75% of the
members of the FNB Board. The IRSB Bylaws provide that special meetings of the
shareholders may be called by the Board of Directors upon an affirmative vote
of at least 75% of the Board members or by the shareholders whenever requested
in writing by 75% of the registered holders of the voting stock of IRSB.

SHAREHOLDER CONSENT IN LIEU OF MEETING

The PBCL permits any action which may be taken at a meeting of the
shareholders may be taken without a meeting, if, prior or subsequent to the
action, a consent thereto of all the shareholders who would be entitled to vote
at a meeting for such purpose is filed with the Secretary of FNB.

The FBCA provides that any action required to be taken at any annual
or special meeting of shareholders, or any action which may be taken at any
annual or special meeting of such shareholders, may be taken without a meeting,
without prior notice, and without a vote if a consent in writing, setting forth
the action so taken, shall be signed by the holders of outstanding stock having
not less than the minimum number of votes that would be necessary to authorize
or take such action at a meeting at which all shares entitled to vote thereon
were present and voted. Under Florida law, within ten days after obtaining
such authorization by written consent, notice must be given to those
shareholders who have not consented in writing. The notice must summarize the
material features of the authorized action, and, if the action voted on was a
merger, consolidation, or sale or exchange of assets for which dissenters'
rights are provided under Florida law, the

<PAGE> 71

notice shall contain a clear statement of the right of shareholders dissenting
therefrom to be paid the fair value of their shares upon compliance with
further provisions of Florida law regarding the rights of dissenting
shareholders.

DISSENTERS' RIGHTS

Under the PBCL, shareholders may perfect dissenters' rights with
regard to corporate actions involving certain mergers; consolidations; sale,
lease or exchange of substantially all the assets of the corporation (under
limited circumstances); or elimination of cumulative voting.

Under Florida law, in the event of a merger transaction in which the
surviving entity will be a Florida state bank, shareholders of the acquired
institution shall be afforded dissenters' rights under the Florida Banking
Code. If the shareholders of the acquired institution properly perfect their
rights of dissent, they shall have the following rights with respect to those
shares. Under the Florida Banking Code, on or promptly after the effective
date of the merger, the surviving state bank may fix an amount which it will
pay in cash to dissenting shareholders of the acquired institution. If the
surviving state bank fixes such an amount (which it is not legally required to
do), it shall offer to pay such amount to the holders of all dissenting shares
of the acquired institution. The owners of dissenting shares who have accepted
the offer shall be entitled to receive the amount so offered upon surrender of
their stock certificates at any time within thirty (30) days after the
effective date of the merger. Those owners who have not accepted such an offer
for their shares shall have the value of their dissenting shares determined as
of the effective date of the merger by three appraisers; one to be selected by
the owners of at least two-thirds (2/3) of such dissenting shares, one to be
selected by the board of directors for the surviving bank, and the third to be
selected by the other two appraisers so chosen. The value agreed upon by any
two of the three appraisers shall control and be final and binding on all
parties. If, within ninety (90) days from the effective date of the merger,
for any reason one or more of the appraisers is not selected as required under
the Florida Banking Code, or the appraisers fail to determine the value of the
dissenting shares, the Department shall cause an appraisal of the dissenting
shares to be made, which appraisal shall be paid by the surviving state bank.
Upon conclusion of the appraisal process, the value determined pursuant to the
appraisal shall be paid to all dissenting shareholders in cash upon surrender
of the stock certificates representing such shares within thirty (30) days
after the appraisal has been made.

However, when a Florida state bank merges with and into a national
bank such that the national bank is the surviving entity, the Florida state
bank shareholders' dissenters' rights are those set forth in 12 U.S.C. Section
215a and not those outlined under the Florida Banking Code. See "THE MERGER --
Dissenters' Rights of IRSB Shareholders."

Under the corporate laws of Florida and Pennsylvania, dissenters'
rights generally are denied in the case of a merger or share exchange or a
proposed sale or exchange of property when a corporation's shares are listed on
a national securities exchange or the Nasdaq National Market or held of record
by at least 2,000 persons. The Florida Banking Code does not contain any
similar exemption from the application of dissenters' rights.

DERIVATIVE ACTIONS

Derivative actions to enforce a secondary right against any present or
former officer or director of the corporation because the corporation refuses
to enforce rights that may properly be asserted by it may be brought under the
PBCL by a shareholder, even if the shareholder was not a shareholder at the
time of the alleged wrongdoing, if there is a strong prima facie case in favor
of the claim asserted and if the court determines in its discretion that
serious injustice will result without such action.

<PAGE> 72

Under the FBCA, a derivative action may be brought only by a person
who was a shareholder of the corporation at the time of the alleged wrongdoing
unless the person became a shareholder through transfer by operation of law
from one who was a shareholder at that time.

DIVIDENDS AND DISTRIBUTIONS

Subject to any restrictions in a corporation's charter, the PBCL
generally provides that a corporation may make distributions to shareholders
unless after giving effect thereto (1) the corporation would not be able to pay
its debts as they become due in the usual course of business, or (2) the
corporation's total assets would be less than the sum of its total liabilities
plus the amount that would be needed upon the dissolution of the corporation to
satisfy the preferential rights of shareholders having superior preferential
rights to those shareholders receiving the distribution. The FNB Charter does
not contain any restrictions on the payment of dividends or the making of
distributions to shareholders.

The payment of dividends or distributions by IRSB is subject to the
restrictions of the FBCA and the Florida Banking Code. Under the FBCA, a
corporation may not generally authorize and make distributions if, after giving
effect thereto, it would be unable to satisfy its debts as they become due in
the ordinary course of business or if the corporation's total assets would be
less than its total liabilities plus the amount that would be needed, if it
were to be dissolved at the time of the distribution, to satisfy preferential
rights of shareholders whose preferential rights are superior to those of the
class of shareholders receiving the dividend or other distribution. Further,
the Florida Banking Code provides that dividends may only be made if, after
charging-off bad debts, depreciation, worthless assets and making provision
for anticipated future losses their remains any net profit for that period. If
net profit for the period remains, the Florida Banking Code permits a
distribution of such profits along with such amount as has been accrued to
retained net profits for the preceding two years. No Florida bank is permitted
to declare a dividend when the bank's net income for the current year combined
with its net income for the preceding two years is a loss.

DIRECTOR QUALIFICATIONS AND NUMBER

The articles of incorporation or bylaws of a Pennsylvania corporation
specify the number of directors. If not otherwise fixed, a Pennsylvania
corporation shall have three directors. The PBCL and the FNB Bylaws provide
that the directors need not be state residents or shareholders of the
corporation to qualify to serve.

The FNB Bylaws also provide that the FNB Board shall consist of such
number of directors as may be determined by the FNB Board, which number shall
be not less than five nor more than 25. By resolution, the FNB Board has set
the present size of the FNB Board at 22 directors. The FNB Bylaws further
provide that the FNB Board shall be divided into four classes, with each
director having a four-year term.

The Florida Banking Code requires that a bank's board must consist of
at least five elected directors. The Florida Banking Code further requires
that at all times not less than a majority of directors must be citizens of the
United States and at least three-fifths of the directors must have resided in
Florida for at least one year preceding their election and must be residents of
Florida during their continuance in office. In addition, the Florida Banking
Code requires that at least one outside director of IRSB must have at least one
year's experience as an executive officer, regulator or director of a financial
institution within the last three years. Under the FBCA, directors must be at
least 18 years of age but need not be shareholders of the corporation. The
IRSB Articles of Incorporation provide that the IRSB Board shall consist of not
less than seven nor more than fifteen persons. By resolution, the IRSB Board
has set the present size at __ directors. The IRSB shareholders are entitled to
elect all of the members of the IRSB Board. The IRSB Bylaws further provide
that the IRSB Board members shall hold office for one year or until the next
annual meeting of shareholders.

<PAGE> 73

After the Merger, all members of the IRSB Board will be elected
members of the board of directors of Interim for a term of one year.

INDEMNIFICATION OF OFFICERS AND DIRECTORS

The PBCL permits a corporation to indemnify its directors and officers
against expenses, judgments, fines and amounts paid in settlement incurred by
them in connection with any pending, threatened or completed action or
proceeding, and permits such indemnification against expenses incurred in
connection with any pending, threatened or completed derivative action, if the
director or officer has acted in good faith and in a manner he or she
reasonably believed to be in or not opposed to the best interests of the
corporation and, with respect to any criminal proceeding, had no reasonable
cause to believe his or her conduct was unlawful. Furthermore, Pennsylvania law
provides that expenses incurred in defending any action or proceeding may be
paid by the corporation in advance of the final disposition upon receipt of an
undertaking by or on behalf of the director or officer to repay the amount if
it is ultimately determined that the director or officer is not entitled to be
indemnified by the corporation.

In Pennsylvania, the statutory provisions for indemnification and
advancement of expenses are non-exclusive with respect to any other rights,
such as contractual rights (or under a bylaw or vote of shareholders or
disinterested directors), to which a person seeking indemnification or
advancement of expenses may be entitled. Such contractual or other rights may,
for example, provide for indemnification against judgments, fines and amounts
paid in settlement incurred by the indemnified person in connection with
derivative actions. The PBCL permits such derivative action indemnification in
any case except where the act or failure to act giving rise to the claim for
indemnification is determined by a court to have constituted willful misconduct
or recklessness.

The PBCL permits a corporation to purchase and maintain insurance on
behalf of any director or officer of the corporation against any liability
asserted against the director or officer and incurred in such capacity, whether
or not the corporation would have the power to indemnify the director or
officer against such liability. FNB has directors' and officers' liability
insurance underwritten by Reliance Insurance Company.

The FNB Charter provides that its directors, officers and any other
person designated by the FNB Board are entitled to be indemnified to the
fullest extent now permitted by law.

The FBCA permits a corporation to indemnify a director and officer who
was or is a party to any threatened, pending or completed action, suit or other
type of proceeding, whether civil, criminal, administrative or investigative,
whether formal or informal (other than an action by or any right of the
corporation) by reason of the fact that he or she is or was a director or
officer or is now serving at the request of the corporation as a director or
officer of another corporation, partnership, joint venture, trust or other
enterprise, against expenses (including attorneys' fees), judgments, fines,
penalties and amounts paid in settlement actually and reasonably incurred by
him in connection with such action, suit or proceeding. These indemnification
rights apply if the director or officer acted in good faith and in a manner in
which he or she reasonably believed to be in or not opposed to the best
interest of the corporation and, with respect to criminal action or proceeding,
had no reasonable cause to believe his or her conduct was unlawful. In
addition, under the FBCA, IRSB may indemnify and hold harmless an officer or
director who is a party in an action by or in the right of the corporation
against expenses (including attorneys' fees) and amounts paid in settlement not
exceeding estimated expenses of litigating the action to conclusion, actually
and reasonably incurred in connection with the defense or settlement of such
proceeding, including any appeal thereof. Such indemnification shall be
authorized if the director or officer has acted in good faith and in a manner
in which he or she reasonably believed to be in or not opposed to the best
interest of the corporation, except indemnification is not authorized where
there is an adjudication of liability, unless the court in which such
proceeding was brought, or any other court of competent jurisdiction, shall
determine, in view of all the

<PAGE> 74

circumstances, that such person is fairly and reasonably entitled to indemnity
for such expenses which such court shall deem proper.

Florida law provides that indemnification of the costs and expenses of
defending any action is required to be made to any officer or director who is
successful (on the merits or otherwise) in defending an action of the type
referred to in the immediately preceding paragraph. Except with regard to the
costs and expenses of successfully defending an action as may be ordered by a
court, indemnification as described in the previous paragraph is only required
to be made to a director or officer if a determination is made that
indemnification is proper under the circumstances. Such determination shall be
made: (i) by IRSB's Board by a majority vote of a quorum consisting of
directors who were not parties to such action, suit or proceeding; (ii) by a
majority vote of a committee duly designated by the IRSB Board consisting of
two or more directors not at the time parties to the action, suit or
proceeding; (iii) by independent legal counsel selected by specified groupings
of the IRSB Board; or (iv) by the IRSB shareholders by a majority vote of a
quorum consisting of shareholders who were not parties to such action, suit or
proceeding, or, if no such quorum is obtainable, by a majority vote of
shareholders who were not parties to such action, suit or proceeding. The
reasonableness of the expenses to be indemnified is determined in the same
manner as the determination of whether the indemnification is permissible.
Florida law further provides that expenses incurred in defending any action or
proceeding may be paid by the corporation in advance of the final disposition
upon receipt of an undertaking by or on behalf of the director or officer to
repay the amount if it is ultimately determined that the director or officer is
not entitled to be indemnified by the corporation.

Under Florida law, the provisions for indemnification and advancement
of expenses are not exclusive. Accordingly, a corporation may make any other
or further indemnification or advancement of expenses of any of its officers or
directors under any bylaw, agreement, vote of shareholders or disinterested
directors, or otherwise, both as to action in his or her official capacity and
as to action in another capacity while holding such office. Under the FBCA,
indemnification or advancement of expenses, however, shall not be made to or on
behalf of any officer or director if a judgment or other final adjudication
establishes that his or her actions or omissions were material to the cause of
action so adjudicated and constitute: (i) a violation of the criminal law,
unless the officer or director had reasonable cause to believe that his or her
conduct was lawful or had no reasonable cause to believe that his or her
conduct was unlawful; (ii) a transaction from which the officer or director
derived an improper personal benefit; (iii) in the case of a director, a
circumstance under which the liability provisions of the FBCA Section 607.0834
(relating to unlawful distributions) are applicable; or (iv) willful misconduct
or a conscious disregard for the best interest of the corporation in a
proceeding by or in the right of the corporation to procure a judgment in its
favor or in a proceeding by or in the right of a shareholder. The IRSB
Articles of Incorporation and Bylaws have no provision for indemnifying
officers and directors.

Florida law permits a corporation to purchase and maintain insurance
on behalf of any director or officer of the corporation against any liability
asserted against the director or officer and incurred in such capacity, whether
or not the corporation would have the power to indemnify the director or
officer against such liability.

DIRECTOR LIABILITY

The bylaws of a Pennsylvania corporation may include a provision
limiting the personal liability of directors for monetary damages for actions
taken as a director, except to the extent that the director has breached or
failed to perform his or her duties to the corporation and the breach or
failure to perform constitutes self-dealing, willful misconduct, or
recklessness. The FNB Bylaws contain such a provision limiting the liability of
its directors to the fullest extent permitted by law.

Under Florida law, a director is not liable for monetary damages for
any statement, vote, decision, or failure to act, regarding corporate
management or policy, unless the director breached or failed to perform his

<PAGE> 75

duties as a director and the director's breach of, or failure to perform, those
duties constitutes a violation of criminal law, self dealing, willful
misconduct, or recklessness.

AMENDMENT OF ARTICLES OF INCORPORATION AND BYLAWS

The PBCL requires the affirmative vote of the holders entitled to cast
at least a majority of the votes actually cast on an amendment to the articles
of incorporation, provided that shareholder approval is not required for
certain non-material amendments, such as a change in the corporate name, a
provision for perpetual existence, or, if the corporation has only one class of
shares outstanding, a change in the number and par value of the authorized
shares to effect a stock split. The FNB Charter provides that the FNB Charter
may be amended by FNB as provided by the PBCL and all rights conferred upon the
shareholders therein are granted subject to such reservation. Under the PBCL,
the power to adopt, amend or repeal bylaws may be vested by the bylaws in the
directors, with certain statutory exceptions for certain actions and subject to
the power of shareholders to change such action. The PBCL provides that, unless
the articles of incorporation otherwise provide, the board of directors does
not have the authority to adopt or change a bylaw on any subject that is
committed expressly to the shareholders by statute. The FNB Charter and the FNB
Bylaws provide that the FNB Bylaws may be amended by the affirmative vote of at
least 75% of the FNB Board or by the affirmative vote of the holders of at
least 75% of the outstanding FNB Common Stock entitled to vote thereon.

The FBCA generally requires the affirmative vote of the holders of at
least a majority of the votes actually cast on an amendment to the articles of
incorporation; provided, however, a majority of the votes entitled to be cast
on the amendment is required with respect to an amendment that would create
dissenters' rights. Under Florida corporate law, shareholder approval is not
required for certain non-material amendments.

Under Florida law, a corporation's bylaws may be amended or repealed
by the board of directors or shareholders; provided, however, that the board
may not amend or repeal the corporation's bylaws if the articles of
incorporation reserve such power to the shareholders, or the shareholders, in
amending or appealing the bylaws, expressly provide that the board of directors
may not amend or repeal the bylaws or a particular bylaw provision. The IRSB
Bylaws provide that the IRSB Bylaws may be amended by the vote of a majority of
stockholders present and voting, in person or by proxy, at an annual meeting or
at a special meeting provided a statement of the proposed amendment(s) was
included in the notice of such meeting. The Bylaws may also be amended by an
affirmative vote of at least 75% of the directors present at any regular or
special meeting of the board of directors provided that a statement of the
proposed amendment is provided to the directors at least five days prior to the
meeting at which the amendment is voted on.

VOTE REQUIRED FOR EXTRAORDINARY CORPORATE TRANSACTIONS

Under the PBCL, generally, a merger, consolidation, share exchange,
dissolution or sale of substantially all of a corporation's assets other than
in the ordinary course of business must be approved by the affirmative vote of
a majority of the votes cast by all shareholders entitled to vote thereon.
Except as otherwise provided by the bylaws of a corporation, the shareholders
of a corporation do not have to approve a board of directors-approved plan of
merger if, among other situations, (i) the surviving or new corporation is a
domestic business corporation with articles of incorporation that are identical
to the articles of incorporation of the constituent corporation (except for
changes permitted by a board of directors without shareholder approval under
the PBCL), (ii) each share of the constituent corporation outstanding
immediately prior to the effective date of the merger is to continue to be or
to be converted into an identical share of the surviving or new corporation
after the effective date of the merger, and (iii) the shareholders of the
constituent corporation are to hold in the aggregate shares of the surviving or
new corporation to be outstanding immediately after effectiveness of the plan
of merger entitled to cast at least a majority of the votes entitled to be cast
generally for the election of directors.

<PAGE> 76

The FNB Charter requires the affirmative vote of at least 75% of the
outstanding shares of FNB Common Stock entitled to vote to approve a merger,
consolidation, or sale, lease, exchange or other disposition, in a single
transaction or series of related transactions, of all or substantially all or a
substantial part of the properties or assets of FNB, unless the FNB Board has
approved and recommended the transaction prior to the consummation thereof.

Under the FBCA, generally, a merger, consolidation, share exchange,
dissolution or sale of substantially all of a corporation's assets other than
in the ordinary course of business must be approved by the affirmative vote of
the holders of a majority of the shares entitled to vote thereon. The IRSB
Articles of Incorporation and Bylaws have no provisions governing voting
approval for extraordinary corporate transactions.

Shareholder approval of the Merger is governed by the National Bank
Act, and not the FBCA, since IRSB, a Florida state bank, is merging with and
into Interim, a national bank. The National Bank Act requires the affirmative
vote of IRSB shareholders owning at least two-thirds of the IRSB capital stock
issued and outstanding at the time of the Merger for approval of the Merger.

INTERESTED SHAREHOLDER TRANSACTIONS

The PBCL provides that, if a shareholder of a corporation is a party
to a sale of assets transaction, share exchange, merger or consolidation
involving the corporation or a subsidiary, or if a shareholder is to be treated
differently in a corporate dissolution from other shareholders of the same
class, then approval must be obtained of the shareholders entitled to cast at
least a majority of the votes which all shareholders other than the interested
shareholder are entitled to cast with respect to the transaction, without
counting the votes of the interested shareholder. Such additional shareholder
approval is not required if the consideration to be received by the other
shareholders in such transaction for shares of any class is not less than the
highest amount paid by the interested shareholder in acquiring shares of the
same class, or if the proposed transaction is approved by a majority of the
board of directors other than certain directors ("disqualified directors")
affiliated or associated with, or nominated by, the interested shareholder. The
PBCL provides that a director who has held office for at least 24 months prior
to the date of vote on the proposed transaction is not a disqualified director.

Further, the PBCL prohibits certain business combinations between the
corporation and an interested shareholder except under specified circumstances.
An "interested shareholder" in this instance is one who, directly or
indirectly, is the beneficial owner of shares entitling that person to cast at
least 20% of the votes that all shareholders would be entitled to cast in an
election of directors of the corporation or is an affiliate or associate of
such corporation and at any time within the five-year period immediately prior
to the date in question was the beneficial owner, directly or indirectly, of
shares entitling that person to cast at least 20% of the votes that all
shareholders would be entitled to cast in an election of directors of the
corporation. A "business combination" includes a merger, consolidation, share
exchange or division of the corporation or any subsidiary of the corporation
with the interested shareholder or with, involving or resulting in any other
corporation which is, or, after the merger, consolidation, share exchange or
division would be, an affiliate or associate of the interested shareholder. A
"business combination" also includes a sale or other disposition to the
interested shareholder or any affiliate or associate of the interested
shareholder of assets of the corporation or any subsidiary (i) having an
aggregate market value equal to 10% or more of the aggregate market value of
the corporation's consolidated assets, (ii) having an aggregate market value
equal to 10% or more of the aggregate market value of all the outstanding
shares of such corporation, or (iii) representing 10% or more of the
consolidated earning power or net income of such corporation. A "business
combination" also includes certain transactions with an interested shareholder
involving the issuance of shares of a corporation or its subsidiary having an
aggregate market value equal to 5% or more of the aggregate market value of all
outstanding shares under certain circumstances, the adoption of a plan for the
liquidation or dissolution of the corporation pursuant to certain agreements
with an interested shareholder and certain reclassifications and loans
involving the interested shareholder. The prohibition against such business
combinations does not apply

<PAGE> 77

under specified circumstances and if the corporation has opted out of this
provision. FNB has not opted out of this statutory provision.

Under the FBCA, any merger, consolidation, disposition of all or a
substantial part of the assets of the corporation or a subsidiary of the
corporation, or exchange of securities requiring shareholder approval (a
"Business Combination"), if an Interested Person is a party to such
transaction, shall be approved by the affirmative vote of the holders of
two-thirds of the voting shares other than the shares beneficially owned by the
Interested Person; provided, that such approval is not required if (a) the
Interested Shareholder Transaction has been approved by a majority of the
disinterested directors; (b) the corporation has not had more than 300
shareholders of record at any time during the three years preceding the
announcement date; (c) the Interested Person has been the beneficial owner of
at least 80% of the corporation's outstanding voting shares for at least five
years preceding the announcement date; (d) the Interested Person is the
beneficial owner of at least 90% of the outstanding voting shares of the
corporation, exclusive of shares acquired directly from the corporation in a
transaction not approved by a majority of the disinterested directors; (e) the
corporation is an investment company registered under the Investment Company
Act of 1940; or (f) the consideration to be received by holders of the stock of
the corporation meets certain minimum levels determined by a formula under
Section 607.0901(4)(f) of the FBCA (generally, the highest price paid by the
Interested Person for any shares which she or he has acquired). The IRSB
Articles of Incorporation and Bylaws have no provisions governing voting
approval for interested shareholder transactions.

FIDUCIARY DUTY

Under the PBCL a director may, in considering the best interests of a
corporation, consider (i) the effects of any action on shareholders, employees,
suppliers, customers and creditors of the corporation, and upon communities in
which offices or other facilities of the corporation are located, (ii) the
short-term and long-term interests of the corporation, including the
possibility that the best interests of the corporation may be served by the
continued independence of the corporation, (iii) the resources, intent and
conduct of any person seeking to acquire control of the corporation, and (iv)
all other pertinent factors.

The FNB Charter provides that the FNB Board, in evaluating a proposal
for an extraordinary corporate transaction, shall consider all relevant
factors, including the economic effect, both immediate and long-term, upon the
FNB shareholders, including shareholders, if any, who will not participate in
the transaction; the social and economic effect on the employees, depositors
and customers of, and others dealing with, FNB and its subsidiaries and on the
communities in which FNB and its subsidiaries operate or are located; whether
the proposal is acceptable based on the historical and current operating
results or financial condition of FNB; whether a more favorable price could be
obtained for FNB's securities in the future; the reputation and business
practices of the offeror and its management and affiliates as they would affect
the employees, depositors and customers of FNB and its subsidiaries; and the
future value of FNB's stock; and any antitrust or other legal and regulatory
issues that are raised by the proposal. The FNB Charter further provides that,
if the FNB Board determines that such a proposal should be rejected, it may
take any lawful action to accomplish its purposes.

Under Florida law, a director is required to discharge his or her
duties in good faith, with the care an ordinarily prudent person in the like
position would exercise under similar circumstances and in a manner reasonably
believed to be in the best interest of the corporation. In discharging his or
her duties, a director is entitled to rely on: (i) information, opinions,
reports, or statements, including financial statements and other financial
data, if presented or prepared by officers or employees of the corporation whom
the director reasonably believes to be reliable and competent in the matters
presented; (ii) legal counsel, public accountants or other persons as to
matters the director reasonably believes are within the person's professional
or expert competence; or (iii) a committee of the board of which the director
is not a member if the director reasonably believes the committee merits
confidence. In addition, in discharging his or her duties, a director may
consider such factors as the director deems relevant, including the long-term
prospectus and

<PAGE> 78

interest of the corporation and its shareholders, and the social, economic,
legal, or other effects of any action on the employees, suppliers, customers of
the corporation or its subsidiaries, the communities and society in which the
corporation or its subsidiaries operate, and the economy of the state and the
nation.

PROVISIONS WITH POSSIBLE ANTI-TAKEOVER EFFECTS

FNB is subject to various statutory "anti-takeover" provisions of the
PBCL, including Subchapters 25E, 25F, 25G and 25H of the PBCL. Subchapter 25E
of the PBCL (relating to control transactions) provides that, if any person or
group acquires 20% or more of the voting power of a covered corporation, the
remaining shareholders may demand from such person or group the fair value of
their shares, including a proportionate amount of any control premium.
Subchapter 25F of the PBCL (relating to business combinations) delays for five
years and imposes conditions upon business combinations between an interested
shareholder and the corporation. As described above, the term "business
combination" is defined broadly to include various transactions utilizing a
corporation's assets for purchase price amortization or refinancing purposes,
and an "interested shareholder" is defined generally as the beneficial owner of
at least 20% of a corporation's voting shares. See "-- Interested Shareholder
Transactions." Subchapter 25G of the PBCL (relating to control-share
acquisitions) prevents a person who has acquired 20% or more of the voting
power of a covered corporation from voting such shares unless the disinterested
shareholders approve such voting rights. Failure to obtain such approval
exposes the owner to the risk of a forced sale of stock to the issuer. If
shareholder approval is obtained, the corporation is also subject to
Subchapters 25I and 25J of the PBCL. Subchapter 25I of the PBCL provides for a
minimum severance payment to certain employees terminated within two years of
the approval. Subchapter 25J of the PBCL prohibits the abrogation of certain
labor contracts prior to their stated date of expiration. Subchapter 25H of the
PBCL (relating to disgorgement) applies in the event that (1) any person or
group publicly discloses that the person or group may acquire control of the
corporation or (2) a person or group acquires (or publicly discloses an offer
or intent to acquire) 20% or more of the voting power of the corporation and,
in either case, sells shares within 18 months thereafter. Any profits from
sales of equity securities of the corporation by the person or group during the
18-month period belong to the corporation if the securities that were sold were
acquired during the 18-month period or within 24 months prior thereto.
Subchapters 25E, 25F, 25G and 25H of the PBCL contain a wide variety of
transactional and status exemptions, exclusions and safe harbors.

In addition, the PBCL permits an amendment of the corporation's
charter or other corporation action, if approved by shareholders generally, to
provide mandatory special treatment for specified groups of nonconsenting
shareholders of the same class by providing, for example, that shares of common
stock held only by designated shareholders of record, and no other shares of
common stock, shall be cashed out at a price determined by the corporation,
subject to applicable dissenters' rights. The PBCL also provides that directors
may, in discharging their duties, consider the interests of a number of
different constituencies, including shareholders, employees, suppliers,
customers, creditors and the communities in which the corporation is located.
Directors are not required to consider the interests of shareholders to a
greater degree than other constituencies' interests. The PBCL expressly
provides that directors do not violate their fiduciary duties solely by relying
on poison pills or the anti-takeover provisions of the PBCL.

The business combination provisions of the PBCL may have the effect of
deterring merger proposals, tender offers or other attempts to effect changes
in control of FNB that are not negotiated with and approved by the FNB Board.
FNB is not aware of any effort or intent to gain control of FNB or any effort
to organize a proxy contest or to accumulate FNB's shares.

Additionally, the following provisions of the FNB Charter and the FNB
Bylaws may be considered to have anti- takeover implications: (1) the ability
of the FNB Board to fill the vacancies (but only until the next selection of
the class of directors for which such director has been chosen) resulting from
an increase in the number of directors; (2) the ability of the FNB Board to
issue substantial amounts of FNB Common Stock without the need for shareholder
approval, which FNB Common Stock, among other things and in certain

<PAGE> 79

circumstances, may be used to dilute the stock ownership of holders of FNB
Common Stock seeking to obtain control of FNB; (3) the ability of the FNB Board
to establish the rights of, and to issue, substantial amounts of FNB Preferred
Stock without the need for shareholder approval which FNB Preferred Stock,
among other things, may be used to create voting impediments with respect to
changes in control of FNB or, to dilute the stock ownership of holders of FNB
Common Stock seeking to obtain control of FNB; (4) the supermajority voting
requirements for certain extraordinary corporate transactions; and (5) the
broad range of factors that the FNB Board may consider in evaluating such a
proposal, and the broad range of actions it may take to reject such a proposal,
if it so decides.

Section 607.0902 of the FBCA restricts the voting rights of certain
shares of a corporation's stock when those shares are acquired by a party who,
by such acquisition, would control at least one-fifth of all voting rights of
the corporation's issued and outstanding stock. The statute provides that the
acquired shares (the "control shares") will, upon such acquisition, cease to
have any voting rights. The acquiring party may, however, petition the
corporation to have voting rights re-assigned to the control shares by way of
an "acquiring person's statement" submitted to the corporation in compliance
with the requirements of the statute. Upon receipt of such request, the
corporation must submit, for shareholder approval, the acquiring person's
request to have voting rights re-assigned to the control shares. Voting rights
may be reassigned to the control shares by a resolution of a majority of the
corporation's shareholders for each class and series of stock. If such a
resolution is approved, and the voting rights re-assigned to the control shares
represent a majority of all voting rights of the corporation's outstanding
voting stock, then, unless the corporation's articles of incorporation or
bylaws provide otherwise, all shareholders of the corporation shall be able to
exercise dissenter's rights in accordance with Florida law.

A corporation may, by amendment to its articles of incorporation or
bylaws, provide that, if the party acquiring the control shares does not submit
an acquiring person's statement in accordance with the statute, the corporation
may redeem the control shares at any time during the period ending 60 days
after the acquisition of control shares. If the acquiring party files an
acquiring person's statement, the control shares are not subject to redemption
by the corporation unless the shareholders, acting on the acquiring party's
request, deny full voting rights to the control shares.

The statute does not alter the voting rights of any stock of the
corporation acquired in any of the following manners: (i) pursuant to the laws
of intestate succession or pursuant to a gift or testamentary transfer; (ii)
pursuant to the satisfaction of a pledge or other security interest created in
good faith and not for the purpose of circumventing the statute; (iii) pursuant
to either a merger or share exchange if the corporation is a party to the
agreement or plan of merger or share exchange; (iv) pursuant to any savings,
employee stock ownership or other benefit plan of the corporation; or (v)
pursuant to an acquisition of shares specifically approved by the board of
directors of the corporation.

In addition, the ability of the IRSB Board to fill vacancies (but only
until the next selection of the class of directors for which such director has
been chosen) resulting from an increase in the number of directors may serve as
an anti-takeover protection. However, IRSB may only add two new positions to
the Board in any year.

Neither FNB nor IRSB currently has a shareholders' rights plan.
Shareholders' rights plans, in a variety of forms, are common to many
corporations incorporated in the United States and serve to afford a
corporation's board of directors the opportunity to withstand an unsolicited
takeover attempt while providing the board sufficient time to evaluate the
offer and its adequacy and to consider alternative measures or transactions
that may be appropriate in responding to the offer. Both the PBCL and FBCA
permit shareholders' rights plans in general and permit the adoption of
shareholders' rights plans by a board of directors without shareholder
approval.

<PAGE> 80

LEGAL OPINIONS

The legality of the shares of FNB Common Stock to be issued to the
holders of IRSB Common Stock pursuant to its Merger will be passed upon by
Cohen & Grigsby, P.C., Pittsburgh, Pennsylvania. Cohen & Grigsby, P.C. has from
time to time acted as counsel in advising FNB and its affiliates with respect
to certain matters and in connection with various transactions. Cohen &
Grigsby, P.C. did not act as counsel to FNB or its affiliates with respect to
the Merger or any transaction in connection therewith.

The Merger Agreement provides as a condition to each party's
obligation to consummate the Merger that FNB and IRSB receive the opinion of
Smith, Gambrell & Russell, LLP, Atlanta, Georgia, special counsel to FNB,
substantially to the effect that the Merger will constitute a "reorganization"
under Section 368(a) of the Code.

EXPERTS

The consolidated financial statements of FNB incorporated by reference
in FNB's Annual Report on Form 10-K for the year ended December 31, 1996, have
been audited by Ernst & Young LLP, independent auditors, as set forth in their
report thereon, incorporated therein and incorporated herein by reference. The
supplemental consolidated financial statements of FNB at December 31, 1996 and
for each of the three years in the period ended December 31, 1996 included in
FNB's Current Report on Form 8-K dated July 22, 1997, and the supplemental
consolidated financial statements of FNB at December 31, 1995 and 1994 and for
each of the three years in the period ended December 31, 1995 included in FNB's
Current Report on Form 8-K dated March 5, 1997, have been audited by Ernst &
Young LLP, independent auditors, as set forth in their reports thereon
incorporated by reference herein, which are based, in part, on the reports of
Hill, Barth & King, Inc., independent auditors, who audited Southwest Banks,
Inc. and Coopers & Lybrand, L.L.P., independent auditors, who audited West
Coast Bancorp, Inc. The financial statements referred to above are
incorporated herein by reference in reliance upon such reports given upon the
authority of such firms as experts in accounting and auditing.

The financial statements of IRSB for the year ended December 31, 1996
are included herein in reliance on the report of Bobbitt, Pittenger & Company,
P.A., Sarasota, Florida, independent accountants, given on the authority of
that firm as experts in accounting and auditing. Compiled financial statements
of IRSB for the quarter ended March 31, 1997, which were prepared by Bobbitt,
Pittenger and Company, P.A., are also included herein.

OTHER MATTERS

As of the date of this Proxy Statement-Prospectus, the IRSB Board
knows of no matters that will be presented for consideration at the Special
Meeting other than as described in this Proxy Statement-Prospectus. However, if
any other matters shall properly come before the Special Meeting or any
adjournments or postponements thereof and be voted upon, the enclosed proxies
shall be deemed to confer discretionary authority on the individuals named as
proxies therein to vote the shares represented by such proxies as to any such
matters. The persons named as proxies intend to vote or not to vote in
accordance with the recommendation of the management of IRSB.

<PAGE> 81

INDEX TO
INDIAN ROCKS STATE BANK
FINANCIAL STATEMENTS

<TABLE>
<S> <C>
AUDITED FINANCIAL STATEMENTS

Report of Bobbitt, Pittenger & Company, P.A., independent auditors . . . . . . . . . . . . . . . . . . . . . . . . . F-2
Statements of Financial Condition at December 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . F-3
Statements of Income for the years ended
December 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-4
Statements of Changes in Stockholders' Equity for the years
ended December 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-5
Statements of Cash Flows for the years ended December 31, 1996 and 1995 . . . . . . . . . . . . . . . . . . . . . . . F-6
Notes to Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-8

UNAUDITED FINANCIAL STATEMENTS

Report of Bobbitt, Pittenger & Company, P.A., independent auditors . . . . . . . . . . . . . . . . . . . . . . . . F-16
Statements of Financial Condition at March 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . F-17
Statements of Income for the three months ended
March 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-18
Statements of Changes in Stockholders' Equity
for the three months ended March 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-19
Statements of Cash Flows for the three months ended
March 31, 1997 and 1996 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . F-20
</TABLE>

F-1

<PAGE> 82

January 17, 1997

BOARD OF DIRECTORS
Indian Rocks State Bank
Largo, Florida

REPORT OF INDEPENDENT PUBLIC ACCOUNTANTS

We have audited the accompanying statements of financial condition of Indian
Rocks State Bank as of December 31, 1996 and 1995, and the related statements
of income, changes in stockholders' equity and cash flows for the years then
ended. These financial statements are the responsibility of the Bank's
management. Our responsibility is to express an opinion on these financial
statements based on our audits.

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

In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Indian Rocks State Bank as of
December 31, 1996 and 1995, and the results of its operations and its cash
flows for the years then ended in conformity with generally accepted accounting
principles.

Bobbitt, Pittenger & Company, P.A.

Certified Public Accountants

F-2
<PAGE> 83

INDIAN ROCKS STATE BANK

STATEMENTS OF FINANCIAL CONDITION

<TABLE>
<CAPTION>
December 31,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
ASSETS

Cash and due from banks $ 3,129,295 $ 1,734,738
Federal funds sold 1,900,000
Investment securities
Held to maturity, at cost 15,421,399 19,676,271
Available for sale, at market 21,528,458 10,557,487
Loans, net of allowance for loan
losses of $335,467 in 1996,
and $305,467 in 1995 30,963,733 29,728,484
Premises and equipment, net 1,784,969 1,882,639
Accrued interest receivable 692,984 620,807
Other assets 72,146 90,130
----------- -----------

Total Assets $75,492,984 $64,290,556
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Demand deposits $ 9,005,237 $ 7,103,185
NOW and Super NOW deposits 7,191,127 7,201,642
Money market deposits 10,981,016 9,278,246
Savings deposits 7,547,858 7,758,725
Time deposits (under $100,000) 23,874,696 18,850,577
Time deposits ($100,000 and over) 3,184,014 3,499,420
----------- -----------

Total Deposits 61,783,948 53,691,795

Securities sold under agreement to repurchase 5,910,522 3,255,156
Accounts payable and accrued expenses 366,006 486,476
Dividends declared and unpaid 164,500 140,000
----------- -----------

Total Liabilities 68,224,976 57,573,427
----------- -----------

STOCKHOLDERS' EQUITY
Common stock, $4.00 par value; 500,000
shares authorized; 350,000 shares issued
and outstanding in 1996 and 1995 1,400,000 1,400,000
Additional paid-in capital 2,100,000 2,100,000
Retained earnings 3,749,192 3,189,072
Net unrealized appreciation on securities
available for sale, net of taxes of
$10,131 in 1996 and $15,108 in 1995 18,816 28,057
----------- -----------

Total Stockholders' Equity 7,268,008 6,717,129
----------- -----------

Total Liabilities and Stockholders' Equity $75,492,984 $64,290,556
=========== ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-3
<PAGE> 84

INDIAN ROCKS STATE BANK

STATEMENTS OF INCOME

<TABLE>
<CAPTION>
Year Ended December 31,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>

INTEREST INCOME
Loans receivable $ 2,714,342 $ 2,601,029
Investment securities 1,819,818 1,763,568
Federal funds sold 99,691 84,114
------------ ------------

Total interest income 4,633,851 4,448,711
------------ ------------

INTEREST EXPENSE
NOW and Super NOW 99,059 124,400
Money market 248,880 265,769
Savings 156,198 202,046
Time 1,208,976 1,200,459
Repurchase agreements 213,047 161,428
------------ ------------

Total interest expense 1,926,160 1,954,102
------------ ------------

Net interest income 2,707,691 2,494,609

PROVISION FOR LOAN LOSSES 30,000 11,500
------------ ------------

Net interest income after
provision for loan losses 2,677,691 2,483,109
------------ ------------

NONINTEREST INCOME
Service charges and fees 141,003 166,587
Other income 112,718 88,131
------------ ------------

Total noninterest income 253,721 254,718
------------ ------------

NONINTEREST EXPENSE
Salaries and employee benefits 987,959 915,684
Occupancy expense 141,803 142,280
Furniture and equipment expense 164,950 122,281
Other operating expenses 380,777 467,814
------------ ------------

Total noninterest expense 1,675,489 1,648,059
------------ ------------

INCOME BEFORE INCOME TAX 1,255,923 1,089,768

PROVISION FOR INCOME TAXES 450,803 335,894
------------ ------------

NET INCOME $ 805,120 $ 753,874
============ ============

NET INCOME PER SHARE $ 2.30 $ 2.15
============ ============
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-4
<PAGE> 85

INDIAN ROCKS STATE BANK

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY

<TABLE>
<CAPTION>
Net Unrealized
(Depreciation)
Additional Appreciation Total
Common Paid-in Retained On Securities Stockholders'
Stock Capital Earnings Available for Sale Equity
---------- ---------- ---------- ------------------ -------------
<S> <C> <C> <C> <C> <C>
BALANCE,
January 1, 1995 $1,400,000 $2,100,000 $2,645,198 $ (190,716) $ 5,954,482

Net income for 1995 753,874 753,874

Net change in unrealized
appreciation on securities
available for sale, net of
taxes of $117,801 218,773 218,773

Cash dividend
$.60 per share (210,000) (210,000)
---------- ---------- ---------- ------------ -----------

BALANCE,
December 31, 1995 1,400,000 2,100,000 3,189,072 28,057 6,717,129

Net income for 1996 805,120 805,120

Net change in unrealized
depreciation on securities
available for sale, net of
taxes of $4,977 (9,241) (9,241)

Cash dividends
$.70 per share (245,000) (245,000)
---------- ---------- ---------- ------------ -----------

BALANCE,
December 31, 1996 $1,400,000 $2,100,000 $3,749,192 $ 18,816 $ 7,268,008
========== ========== ========== ============ ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-5
<PAGE> 86

INDIAN ROCKS STATE BANK

STATEMENTS OF CASH FLOWS

<TABLE>
<CAPTION>
December 31,
--------------------------
1996 1995
------------ ------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 4,561,674 $ 4,374,991
Noninterest income 244,480 473,491
Interest paid (2,032,593) (1,791,802)
Salaries and benefits paid (987,959) (915,684)
Other expenditures (527,881) (452,014)
Taxes paid (450,803) (295,483)
------------ -----------

NET CASH PROVIDED BY OPERATING ACTIVITIES 806,918 1,393,499

CASH FLOWS FROM INVESTING ACTIVITIES
Net (increase) decrease in federal funds sold (1,900,000) 1,300,000
Purchase of available for sale securities (15,558,607) (1,506,875)
Proceeds from sale of available for sale securities 1,312,594
Proceeds from maturities of available for sale securities 3,275,042 3,507,570
Purchase of held to maturity securities (6,747,780) (4,771,914)
Proceeds from maturities of held to maturity securities 11,002,652 3,709,116
Net increase in loans (1,265,249) (998,679)
Net purchases of premises and equipment (58,032) (288,320)
------------ -----------

NET CASH (PROVIDED) USED IN INVESTING ACTIVITIES (9,939,380) 950,898

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase (decrease) in demand deposits 1,902,052 (67,441)
Net increase (decrease) in NOW and
money market deposits 1,692,255 (2,754,312)
Net decrease in savings deposits (210,867) (896,805)
Net increase (decrease) in time deposits 4,708,713 (292,926)
Net increase in securities sold under
agreement to repurchase 2,655,366 561,711
Dividends paid (220,500) (192,500)
------------ -----------

NET CASH PROVIDED (USED) IN FINANCING ACTIVITIES 10,527,019 (3,642,273)
------------ -----------

NET INCREASE (DECREASE) IN
CASH AND DUE FROM BANKS 1,394,557 (1,297,876)

CASH AND DUE FROM BANKS,
beginning of period 1,734,738 3,032,614
------------ -----------

CASH AND DUE FROM BANKS,
end of period $ 3,129,295 $ 1,734,738
============ ===========
</TABLE>

The accompanying notes are an integral part of these financial statements.

F-6
<PAGE> 87

<TABLE>
<CAPTION>
December 31,
--------------------
1996 1995
--------- ---------
<S> <C> <C>
RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES

NET INCOME $ 805,120 $ 753,874

ADJUSTMENTS TO RECONCILE NET
CASH USED IN OPERATING ACTIVITIES
Provision for loan losses 30,000 11,500
Depreciation and amortization 155,702 110,014
Increase in interest receivable (72,177) (73,720)
Decrease in other assets 17,984 89,559
(Decrease) increase in accounts payable
and accrued expenses (95,970) 300,999
Dividends declared and unpaid (24,500) (17,500)
Net investment securities (losses) gains (9,241) 218,773
--------- ----------

NET CASH PROVIDED BY OPERATING ACTIVITIES $ 806,918 $1,393,499
========= ==========
</TABLE>

F-7
<PAGE> 88

INDIAN ROCKS STATE BANK

NOTES TO FINANCIAL STATEMENTS
YEARS ENDED DECEMBER 31, 1996 AND 1995

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Organization and Operations

Indian Rocks State Bank (the "Bank") is a state chartered bank incorporated
under the laws of the State of Florida. The Bank is a member of the Federal
Reserve System and commenced banking operations on April 9, 1986.

Investments in Securities

The Bank's investments in securities are classified in two categories and
accounted for as follows:

- - Securities to be Held to Maturity. Bonds, notes and debentures for which the
Bank has the positive intent and ability to hold to maturity are reported at
cost, adjusted for amortization of premiums and accretion of discounts which
are recognized in interest income using the interest method over the period
to maturity.

- - Securities Available for Sale. Securities available for sale consist of
bonds, notes, debentures, and certain equity securities not classified as
trading securities nor as securities to be held to maturity.

Declines in the fair value of individual held-to-maturity and
available-for-sale securities below their costs that are other than temporary
would result in write-downs of the individual securities to their fair value.
The Bank presently has experienced no such declines.

Unrealized holding gains and losses, net of tax, on securities available for
sale are reported as a net amount in a separate component of stockholders'
equity until realized.

Gains and losses on the sale of securities available for sale are determined
using the specific-identification method.

Loans and Allowance for Loan Losses

Loans are stated at the amount of unpaid principal, reduced by unearned
discount and an allowance for loan losses. Interest on loans is calculated by
using the simple interest method on daily balances of the principal amount
outstanding. The allowance for loan losses is established through a provision
for loan losses charged to expense. Loans are charged against the allowance
for loan losses when management believes that the collectibility of the
principal is unlikely. The allowance is an amount that management believes
will be adequate to absorb possible losses on existing loans that may become
uncollectible, based on evaluations of the collectibility of loans and the
prior loan loss experience of the Bank. The evaluations take into
consideration such factors as changes in the quality, nature and volume of the
loan portfolio, review of specific problem loans, and current economic
conditions that may affect the borrower's ability to pay.

F-8
<PAGE> 89

INDIAN ROCKS STATE BANK

NOTES TO FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Premises and Equipment

Premises and equipment are stated at cost less accumulated depreciation.
Depreciation expense is computed on the straight-line basis over the estimated
useful life of each type of asset. Additions to premises and equipment and
major improvements are capitalized. Maintenance and repairs are expensed as
incurred.

Income Recognition

Interest income on loans is accrued on the principal amounts outstanding.
Nonrefundable fees associated with the origination of loans are deferred and
recognized over the life of the loan using a method which approximates the
interest method.

Use of Estimates

The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets and liabilities and disclosure of
contingent assets and liabilities at the date of the financial statements and
the reported amounts of revenues and expenses during the reporting period.
Actual results could differ from those estimates.

Income Taxes

Provision for income taxes is based on taxes payable or refundable for the
current year (after exclusion of non-taxable income such as interest on state
and municipal securities) and deferred taxes on temporary differences between
the amount of taxable income and pretax financial income and between the tax
bases of assets and liabilities and their reported amounts in the financial
statements. Deferred tax assets and liabilities are included in the financial
statements at currently enacted income tax rates applicable to the period in
which the deferred tax assets and liabilities are expected to be realized or
settled as prescribed in FASB Statement No. 109, Accounting for Income Taxes.
As changes in tax laws or rates are enacted, deferred tax assets and
liabilities are adjusted through the provision for income taxes.

Net Income per Share of Common Stock

Net income per share of common stock is computed based upon the weighted
average of common stock outstanding during the year, after retroactive
adjustment for any stock dividends or splits.

Financial Instruments

The Bank accounts for off balance sheet financial instruments which have been
entered into in the ordinary course of business when the instruments are funded
or related fees are incurred or received. These instruments consist of
commitments to extend credit, commercial letters of credit and standby letters
of credit.

F-9
<PAGE> 90

INDIAN ROCKS STATE BANK

NOTES TO FINANCIAL STATEMENTS

NOTE A - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

Statements of Cash Flows

For purposes of reporting cash flows, cash and cash equivalents are defined as
those amounts included in the Statement of Financial Condition caption "Cash
and Due From Banks".

Reclassifications

Certain reclassifications have been made to the 1995 financial statements to
conform with the 1996 financial statement presentation. Such reclassifications
had no effect on net income as previously reported.

NOTE B - INVESTMENT SECURITIES

The carrying amounts of investment securities as shown in the statements of
financial condition of the Bank and their approximate fair values were as
follows:

<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- -------- ------- -----------
<S> <C> <C> <C> <C>
SECURITIES TO BE HELD TO MATURITY
December 31, 1996:
Federal agency securities $11,517,083 $ 30,346 $42,017 $11,505,412
U.S. Treasury securities 1,998,176 4,486 7,347 1,995,315
State and municipal securities 1,746,140 11,494 861 1,756,773
Other securities 160,000 872 160,872
----------- -------- ------- -----------

$15,421,399 $ 47,198 $50,225 $15,418,372
=========== ======== ======= ===========

December 31, 1995:
Federal agency securities $12,595,117 $ 92,368 $23,688 $12,663,797
U.S. Treasury securities 4,497,374 30,607 5,471 4,522,510
State and municipal securities 2,423,780 17,628 2,589 2,438,819
Other securities 160,000 1,864 161,864
----------- -------- ------- -----------

$19,676,271 $142,467 $31,748 $19,786,990
=========== ======== ======= ===========
</TABLE>

F-10
<PAGE> 91

INDIAN ROCKS STATE BANK

NOTES TO FINANCIAL STATEMENTS

NOTE B - INVESTMENT SECURITIES (CONTINUED)

<TABLE>
<CAPTION>
Gross Gross
Amortized Unrealized Unrealized Fair
Cost Gains Losses Value
----------- -------- ------- -----------

<S> <C> <C> <C> <C>
SECURITIES AVAILABLE FOR SALE
December 31, 1996:
U.S. Treasury securities $ 9,986,714 $25,945 $17,174 $ 9,995,485
Federal agency securities 11,407,798 33,602 13,427 11,427,973
Federal reserve bank stock 105,000 105,000
----------- ------- ------- -----------

$21,499,512 $59,547 $30,601 $21,528,458
=========== ======= ======= ===========

December 31, 1995:
U.S. Treasury securities $ 8,794,283 $45,453 $13,032 $ 8,826,704
Federal agency securities 1,618,039 10,744 1,628,783
Federal reserve bank stock 102,000 102,000
----------- ------- ------- -----------

$10,514,322 $56,197 $13,032 $10,557,487
=========== ======= ======= ===========
</TABLE>

Assets, principally U.S. Treasury securities, carried at approximately
$11,535,000 at December 31, 1996 and $8,328,500 at December 31, 1995 were
pledged to secure public deposits, securities sold under agreements to
repurchase and for other purposes as required by statutes or agreements.

Proceeds from the sale of securities (available for sale) during 1996 amounted
to $1,312,594 and a gain of $12,594 was realized on the sale. During 1995
there were no sales of debt securities.

Expected maturities may differ from contractual maturities because borrowers
may have the right to call or prepay obligations with or without call or
prepayment penalties.

The scheduled maturities of securities to be held to maturity and securities
available for sale at December 31, 1996 were as follows:

<TABLE>
<CAPTION>
Securities Securities
Held to Maturity Available for Sale
------------------------ ------------------------
Amortized Fair Amortized Fair
Cost Value Cost Value
----------- ----------- ----------- -----------
<S> <C> <C> <C> <C>

Common stock $ - $ - $ 105,000 $ 105,000
Due in one year or less 4,865,086 4,882,383 4,874,230 4,883,392
Due from one year to five years 9,399,656 9,374,795 15,548,360 15,571,666
Due from five years to ten years 1,156,657 1,161,194 971,922 968,400
----------- ----------- ----------- -----------

$15,421,399 $15,418,372 $21,499,512 $21,528,458
=========== =========== =========== ===========
</TABLE>

F-11
<PAGE> 92

INDIAN ROCKS STATE BANK

NOTES TO FINANCIAL STATEMENTS

NOTE C - LOANS AND ALLOWANCE FOR LOAN LOSSES

Major classifications of loans are as follows:

<TABLE>
<CAPTION>
December 31,
------------------------
1996 1995
----------- -----------
<S> <C> <C>
Mortgage $26,091,585 $24,933,982
Commercial 3,349,611 3,465,025
Consumer 1,610,804 1,531,475
Construction 247,200 103,469
----------- -----------

31,299,200 30,033,951
Less - allowance for loan losses 335,467 305,467
----------- -----------

$30,963,733 $29,728,484
=========== ===========
</TABLE>

Mortgage loans include primarily intermediate term loans secured by real estate
and payable in periodic installments. Commercial loans include those loans to
businesses and individuals generally for the purposes of providing working
capital and/or financing the acquisition of assets and are payable on demand or
in full at the loan's maturity. Consumer loans are installment loans made to
both businesses and individuals and personal lines of credit. Construction
loans include loans to finance the construction of property and become payable
upon completion of construction.

An analysis of the allowance for loan losses is as follows:

<TABLE>
<CAPTION>
December 31,
------------------
1996 1995
-------- --------
<S> <C> <C>
Beginning balance $305,467 $293,967
Provision for loan losses 30,000 11,500
Charge-offs - -
Recoveries - -
-------- --------

Ending balance $335,467 $305,467
======== ========
</TABLE>

As of December 31, 1996 and 1995, there were no loans on nonaccrual status.

NOTE D - CONCENTRATION OF CREDIT RISK

A credit risk concentration results when a Bank has a significant credit
exposure to an individual or a group engaged in similar activities or having
similar economic characteristics that would cause their ability to meet
contractual obligations to be similarly affected by changes in economic or
other conditions.

F-12
<PAGE> 93

INDIAN ROCKS STATE BANK

NOTES TO FINANCIAL STATEMENTS

NOTE D - CONCENTRATION OF CREDIT RISK (CONTINUED)

Most of the Bank's business activity is with customers located within the
Pinellas County area. The loan portfolio is diversified among individuals and
types of industries. Loans are expected to be repaid from cash flows or
proceeds from the sale of selected assets from borrowers. The amount of
collateral obtained upon extension of credit is based upon the Bank's credit
evaluation of the customer. Collateral primarily includes residential homes,
income producing commercial properties, accounts receivable, inventory,
property and equipment.

NOTE E - FINANCIAL INSTRUMENTS WITH OFF-BALANCE SHEET RISK

In the normal course of business to meet the financing needs of customers, the
Bank is party to financial instruments with off-balance sheet risk. These
instruments are comprised of commitments to extend credit and involve, in
varying degrees, elements of credit and interest rate risk in excess of the
amounts recognized in the financial statements.

The Bank's exposure to credit loss in the event of nonperformance by the other
party to the financial instrument for commitments to extend credit is
represented by the contract amount of those instruments. The Bank uses the
same credit policies in making commitments as they do for on-balance sheet
instruments.

Unfunded commitments, which generally have fixed expiration dates or
termination clauses, are legally binding agreements to lend to a customer as
long as there are no violations of any conditions established in the contract.
Since many commitments are expected to expire without being drawn upon, the
total commitment amounts do not necessarily represent future liquidity
requirements. Fixed rate commitments to extend credit are subject to market
risk should interest rates rise above contracted rates during the commitment
period. Total unfunded commitments for loans and letters of credit were
$1,816,000 at December 31, 1996.

NOTE F - PREMISES AND EQUIPMENT

Major classifications of premises and equipment are as follows:

<TABLE>
<Capiton>
Estimated December 31,
----------- -----------------------------
Useful life 1996 1995
----------- ------------ -----------
<S> <C> <C> <C>
Land $ 647,391 $647,391
Building 5-39 years 1,052,621 1,045,198
Furniture and equipment 3-20 years 1,251,370 1,200,762
----------- -----------

2,951,382 2,893,351
Less - accumulated depreciation
and amortization (1,166,413) (1,010,712)
----------- -----------

$ 1,784,969 $ 1,882,639
=========== ===========
</TABLE>

Depreciation expense for the years ended December 31, 1996 and 1995 was
$155,702 and $110,014, respectively.

F-13
<PAGE> 94

INDIAN ROCKS STATE BANK

NOTES TO FINANCIAL STATEMENTS

NOTE G - DEPOSITS

The scheduled maturities of certificates of deposit at December 31, 1996 are as
follows:

<TABLE>
<S> <C>
1997 $14,635,939
1998 12,132,132
1999 197,011
2000 and thereafter 93,628
-----------

$27,058,710
===========
</TABLE>

NOTE H - TAXES ON INCOME

There are no significant differences in the Bank's current income tax liability
and its income tax expense for the years ended December 31, 1996 and 1995.
Normal and recurring temporary differences between accounting and taxable
income are with respect to the loan loss reserve, depreciation and accrual of
income and expense on certain financial instruments. The Bank normally has
significant income from municipal obligations which is not subject to income
tax.

Deferred income tax of $10,000 and $15,000, which does not affect the Bank's
earnings, has been provided on the net unrealized appreciation at December 31,
1996 and 1995, respectively, applicable to securities available for sale.

NOTE I - RELATED PARTIES

The Bank has made loans and issued lines of credit to various directors and/or
their related interests. These loans and lines of credit were granted in
accordance with normal lending policies at the Bank. The total balances
outstanding were approximately $112,000 and $122,000 at December 31, 1996 and
1995, respectively. In addition, deposits totaling approximately $1,854,000
and $1,320,000 and securities sold under agreements to repurchase totaling
$200,000 and $300,000 from related parties were on hand at December 31, 1996
and 1995, respectively.

NOTE J - REGULATORY RESTRICTIONS

The Bank is subject to various regulatory capital requirements administered by
the federal banking agencies. Failure to meet minimum capital requirements can
initiate certain mandatory--and possibly additional discretionary--actions by
regulators that, if undertaken, could have a direct material effect on the
Bank's financial statements. Under capital adequacy guidelines and the
regulatory framework for prompt corrective action, the Bank must meet specific
capital guidelines that involve quantitative measures of the Bank's assets,
liabilities, and certain off-balance-sheet items as calculated under regulatory
accounting practices. The Bank's capital amounts and classification are also
subject to qualitative judgments by the regulators about components, risk
weightings, and other factors.

F-14
<PAGE> 95

INDIAN ROCKS STATE BANK

NOTES TO FINANCIAL STATEMENTS

NOTE J - REGULATORY RESTRICTIONS (CONTINUED)

The Bank is required to maintain minimum amounts of capital to total "risk
weighted" assets, as defined by banking regulators. At December 31, 1996, the
Bank is required to have minimum tier 1 and total capital ratios of 4% and 8%,
respectively, to be adequately capitalized. The most recent notification from
the Federal Reserve Bank categorized the Bank as well capitalized. There are
no conditions or events since that notification that management believes have
changed the institution's category. The Bank's actual ratios at December 31,
1996 were 9.75% and 20.22%, respectively.

The State of Florida banking regulations limit the amount of dividends that may
be paid without prior approval of the Bank's regulatory agency. The Bank
cannot pay dividends in any one year that exceed the sum of net income for that
year plus net income after dividends for the two preceding years.

The Bank maintains a deposit balance with the Federal Reserve Bank to pay for
treasury tax and loan services and certain other transactions. These deposits
at December 31, 1996 and 1995 aggregated approximately $110,000 and $112,000,
respectively.

NOTE K - PROFIT SHARING PLAN

The Bank has a profit sharing retirement plan with a 401(k) deferred
compensation provision that covers substantially all of the employees.
Contributions to the plan by the Bank are discretionary and are limited to
fifteen percent (15%) of the total compensation to all participants. Each
participant may also elect to make a pre-tax contribution to the plan,
generally not to exceed $9,240. Contributions of approximately $26,000 and
$22,000 were authorized and charged to operations during 1996 and 1995,
respectively.

F-15
<PAGE> 96
July 16, 1997

BOARD OF DIRECTORS
Indian Rocks State Bank
Largo, Florida

We have compiled the accompanying statements of financial condition of Indian
Rocks State Bank as of March 31, 1997 and 1996, and the related statements of
income, changes in stockholders' equity and cash flows for the three months
then ended, in accordance with Statements on Standards for Accounting and
Review Services issued by the American Institute of Certified Public
Accountants.

A compilation is limited to presenting in the form of financial statements
information that is the representation of management. We have not audited or
reviewed the accompanying financial statements, and accordingly, do not express
an opinion or any other form of assurance on them.

Management has elected to omit substantially all of the disclosures required by
generally accepted accounting principles. If the omitted disclosures were
included in the financial statements, they might influence the user's
conclusions about the Bank's financial position, results of operations, and
cash flows. Accordingly, these financial statements are not designed for those
who are not informed about such matters.

Bobbitt, Pittenger & Company, Inc.

Certified Public Accountants

F-16
<PAGE> 97

INDIAN ROCKS STATE BANK

STATEMENTS OF FINANCIAL CONDITION
MARCH 31, 1997 AND 1996
(SEE ACCOUNTANTS' COMPILATION REPORT)

<TABLE>
<CAPTION>
1997 1996
----------- -----------
<S> <C> <C>
ASSETS

Cash and due from banks $ 2,997,928 $ 2,657,217
Federal funds sold 2,500,000
Investment securities
Held to maturity, at cost 13,398,595 18,047,667
Available for sale, at market 25,343,332 12,647,223
Loans, net of allowance for loan
losses of $344,467 in 1997,
and $309,967 in 1996 31,608,534 28,946,552
Premises and equipment, net 1,753,646 1,894,678
Accrued interest receivable 663,188 614,662
Other assets 141,598 93,838
----------- -----------

Total Assets $78,406,821 $64,901,837
=========== ===========

LIABILITIES AND STOCKHOLDERS' EQUITY

LIABILITIES
Demand deposits $ 9,739,502 $ 8,202,146
NOW and Super NOW deposits 6,531,836 6,744,580
Money market deposits 12,816,352 9,589,245
Savings deposits 7,284,211 8,011,993
Time deposits (under $100,000) 25,079,900 18,603,188
Time deposits ($100,000 and over) 2,948,332 3,299,420
----------- -----------

Total Deposits 64,400,133 54,450,572

Securities sold under agreement to repurchase 6,200,479 2,971,529
Accounts payable and accrued expenses 449,331 593,966
----------- -----------

Total Liabilities 71,049,943 58,016,067
----------- -----------

STOCKHOLDERS' EQUITY
Common stock, $4.00 par value; 500,000
shares authorized; 350,000 shares issued
and outstanding in 1997 and 1996 1,400,000 1,400,000
Additional paid-in capital 2,100,000 2,100,000
Retained earnings 3,959,228 3,391,644
Net unrealized depreciation on securities
available for sale, net of taxes of
$55,111 in 1997 and $3,162 in 1996 (102,350) (5,874)
----------- -----------

Total Stockholders' Equity 7,356,878 6,885,770
----------- -----------

Total Liabilities and Stockholders' Equity $78,406,821 $64,901,837
=========== ===========
</TABLE>

F-17
<PAGE> 98

INDIAN ROCKS STATE BANK

STATEMENTS OF INCOME
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1997 AND 1996
(SEE ACCOUNTANTS' COMPILATION REPORT)

INTEREST INCOME
Loans receivable $ 684,655 $ 661,489
Investment securities 559,262 440,932
Federal funds sold 37,951 14,722
---------- ----------

Total interest income 1,281,868 1,117,143
---------- ----------

INTEREST EXPENSE
NOW and Super NOW 25,002 26,646
Money market 84,009 55,099
Savings 36,346 41,126
Time 352,833 285,060
Repurchase agreements 67,980 40,736
---------- ----------

Total interest expense 566,170 448,667
---------- ----------

Net interest income 715,698 668,476

PROVISION FOR LOAN LOSSES 9,000 4,500
---------- ----------

Net interest income after
provision for loan losses 706,698 663,976
---------- ----------

NONINTEREST INCOME
Service charges and fees 29,661 35,127
Other income 25,232 36,646
---------- ----------

Total noninterest income 54,893 71,773
---------- ----------

NONINTEREST EXPENSE
Salaries and employee benefits 252,808 251,373
Occupancy expense 37,038 34,099
Furniture and equipment expense 38,069 42,079
Other operating expenses 107,165 98,068
---------- ----------

Total noninterest expense 435,080 425,619
---------- ----------

INCOME BEFORE INCOME TAX 326,511 310,130

PROVISION FOR INCOME TAXES 116,475 107,560
---------- ----------

NET INCOME $ 210,036 $ 202,570
========== ==========

NET INCOME PER SHARE $ .60 $ .58
========== ==========
</TABLE>

F-18
<PAGE> 99

INDIAN ROCKS STATE BANK

STATEMENTS OF CHANGES IN STOCKHOLDERS' EQUITY
(SEE ACCOUNTANTS' COMPILATION REPORT)

<TABLE>
<CAPTION>
(Depreciation)
Additional Appreciation Total
Common Paid-in Retained On Securities Stockholders'
Stock Capital Earnings Available for Sale Equity
---------- ---------- ---------- ------------------ -------------
<S> <C> <C> <C> <C> <C>

BALANCE,
January 1, 1996 $1,400,000 $2,100,000 $3,189,074 $ 28,057 $6,717,131

Net income for the period
January 1, 1996 to
March 31, 1996 202,570 202,570

Net change in unrealized
depreciation on securities
available for sale, net of
taxes of $18,271 (33,931) (33,931)
---------- ---------- ---------- ---------- ----------

BALANCE,
March 31, 1996 $1,400,000 $2,100,000 $3,391,644 $ (5,874) $6,885,770
========== ========== ========== ========== ==========

BALANCE
January 1, 1997 $1,400,000 $2,100,000 $3,749,192 $ 18,816 $7,268,008

Net income for the period
January 1, 1997 to
March 31, 1997 210,036 210,036

Net change in unrealized
depreciation on securities
available for sale, net of
taxes of $65,243 (121,166) (121,166)
---------- ---------- ---------- --------- ----------

BALANCE,
March 31, 1997 $1,400,000 $2,100,000 $3,959,228 $(102,350) $7,356,878
========== ========== ========== ========= ==========
</TABLE>

F-19
<PAGE> 100

INDIAN ROCKS STATE BANK

STATEMENTS OF CASH FLOWS
FOR THE THREE MONTH PERIODS ENDED MARCH 31, 1997 AND 1996
(SEE ACCOUNTANTS' COMPILATION REPORT)

CASH FLOWS FROM OPERATING ACTIVITIES
Interest received $ 1,311,663 $ 1,123,288
Noninterest (expense) income (66,273) 37,842
Interest paid (610,517) (436,005)
Salaries and benefits paid (252,808) (251,373)
Other expenditures (252,093) (183,636)
Taxes paid (116,475) (107,560)
----------- -----------

NET CASH PROVIDED BY OPERATING ACTIVITIES 13,497 182,556
----------- -----------

CASH FLOWS FROM INVESTING ACTIVITIES
Net increase in federal funds sold (600,000)
Purchase of available for sale securities (5,664,874) (4,389,736)
Proceeds from sale of available for sale securities 1,300,000
Proceeds from maturities of available for sale securities 1,850,000 1,000,000
Purchase of held to maturity securities (222,196) (3,081,396)
Proceeds from maturities of held to maturity securities 2,245,000 4,710,000
Net (decrease) increase in loans (653,801) 777,432
Net purchases of premises and equipment (5,135) (51,527)
----------- -----------

NET CASH (USED) PROVIDED BY INVESTING ACTIVITIES (3,051,006) 264,773
----------- -----------

CASH FLOWS FROM FINANCING ACTIVITIES
Net increase in demand deposits 734,265 1,098,961
Net increase (decrease) in NOW and
money market deposits 1,176,045 (146,063)
Net (decrease) increase in savings deposits (263,647) 253,268
Net increase (decrease) in time deposits 969,522 (447,389)
Net increase (decrease) in securities sold under
agreement to repurchase 289,957 (283,627)
----------- -----------

NET CASH PROVIDED BY FINANCING ACTIVITIES 2,906,142 475,150
----------- -----------

NET (DECREASE) INCREASE IN
CASH AND DUE FROM BANKS (131,367) 922,479

CASH AND DUE FROM BANKS,
beginning of period 3,129,295 1,734,738
----------- -----------

CASH AND DUE FROM BANKS,
end of period $ 2,997,928 $ 2,657,217
=========== ===========
</TABLE>

F-20
<PAGE> 101

RECONCILIATION OF NET INCOME TO NET
CASH PROVIDED BY OPERATING ACTIVITIES

NET INCOME $ 210,036 $202,570

ADJUSTMENTS TO RECONCILE NET
CASH PROVIDED BY OPERATING ACTIVITIES
Provision for loan losses 9,000 4,500
Depreciation and amortization 36,459 39,490
Decrease in interest receivable 29,795 6,145
Increase in other assets (69,452) (3,708)
Decrease in accounts payable
and accrued expenses (81,175) (32,510)
Net investment securities (losses) (121,166) (33,931)
--------- --------

NET CASH PROVIDED BY OPERATING ACTIVITIES $ 13,497 $182,556
========= ========
</TABLE>

F-21
<PAGE> 102

APPENDIX A

AGREEMENT AND PLAN OF MERGER
BY AND AMONG
F.N.B. CORPORATION,
SOUTHWEST BANKS, INC.
AND
INDIAN ROCKS STATE BANK

Dated as of May 10, 1997

<PAGE> 103

TABLE OF CONTENTS
<TABLE>
<CAPTION>
Page
----
<S> <C>
PREAMBLE . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
ARTICLE 1 - TRANSACTIONS AND TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.1 Merger . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1
1.2 Time and Place of Closing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.3 Effective Time . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
1.4 Execution of Stock Option Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 2 - TERMS OF MERGER . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.1 Charter . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.2 Bylaws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
2.3 Directors and Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
ARTICLE 3 - MANNER OF CONVERTING SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.1 Conversion of Shares . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2
3.2 Anti-Dilution Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3
3.3 Shares Held by IRSB or FNB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
3.4 Fractional Shares. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
ARTICLE 4 - EXCHANGE OF SHARES . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.1 Exchange Procedures . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4
4.2 Rights of Former IRSB Shareholders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
ARTICLE 5 - REPRESENTATIONS AND WARRANTIES OF IRSB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 5
5.2 Authority; No Breach by Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6
5.4 No IRSB Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.5 Regulatory Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.6 Notes and Obligations. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.7 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7
5.8 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
5.9 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.10 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.11 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9
5.12 Labor Relations . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.13 Employee Benefit Plans . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10
5.14 Material Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.15 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.16 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 11
5.17 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.18 Accounting, Tax and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.19 Articles of Incorporation Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
5.20 Derivatives Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12
ARTICLE 6 - REPRESENTATIONS AND WARRANTIES OF FNB, SOUTHWEST AND INTERIM . . . . . . . . . . . . . . . . . . . . . . 12
6.1 Organization, Standing, and Power . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.2 Authority; No Breach By Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 13
6.3 Capital Stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.4 FNB Subsidiaries . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 14
6.5 SEC Filings; Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.6 Absence of Certain Changes or Events . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.7 Tax Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15
6.8 Compliance With Laws . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.9 Assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16
6.10 Legal Proceedings . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.11 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
</TABLE>

A-i

<PAGE> 104

<TABLE>
<S> <C> <C> <C>
6.12 Statements True and Correct . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17
6.13 Accounting, Tax and Regulatory Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.14 Environmental Matters . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.15 Derivatives Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.16 Outstanding IRSB Common Stock. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18
6.17 Material Contracts. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
ARTICLE 7 - CONDUCT OF BUSINESS PENDING CONSUMMATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.1 Affirmative Covenants of IRSB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.2 Negative Covenants of IRSB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19
7.3 Covenants of FNB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.4 Adverse Changes In Condition . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
7.5 Reports . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21
ARTICLE 8 - ADDITIONAL AGREEMENTS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.1 Registration Statement; Proxy Statement; Shareholder Approval . . . . . . . . . . . . . . . . . . . 22
8.2 Applications . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.3 Filings With Regulatory Authorities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.4 Agreement As To Efforts To Consummate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22
8.5 Access to Information; Confidentiality . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23
8.6 Dividend Payments; and Payments under Plans. . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.7 Current Information. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.7 Other Actions. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.8 Press Releases . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.9 No Solicitation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24
8.10 Certain Purchases. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.11 Accounting and Tax Treatment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.12 Articles of Incorporation Provisions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.13 Agreement of Affiliates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25
8.14 Employee Benefits and Contracts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.15 Retention of Directors . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.16 Employment Contracts of Certain Officers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
8.17 Indemnification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26
ARTICLE 9 - CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.1 Conditions to Obligations of Each Party . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28
9.2 Conditions to Obligations of FNB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29
9.3 Conditions to Obligations of IRSB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30
ARTICLE 10 - TERMINATION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.1 Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 31
10.2 Effect of Termination . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
10.3 Non-Survival of Representations and Covenants . . . . . . . . . . . . . . . . . . . . . . . . . . . 32
ARTICLE 11 - MISCELLANEOUS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.1 Definitions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 33
11.2 Expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.3 Brokers and Finders . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39
11.4 Entire Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.5 Amendments . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.6 Obligations of FNB . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.7 Waivers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.8 Assignment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.9 Notices . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 40
11.10 Governing Law . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.11 Counterparts . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.12 Captions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.13 Enforcement of Agreement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
11.14 Severability . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 42
</TABLE>

A-ii

<PAGE> 105

LIST OF EXHIBITS

EXHIBIT
NUMBER DESCRIPTION
- ------- -----------

1. Form of Stock Option Agreement (Section 1.4).
2. Form of Agreement of Affiliates of IRSB (Section 8.13).

A-iii

<PAGE> 106

AGREEMENT AND PLAN OF MERGER

THIS AGREEMENT AND PLAN OF MERGER (this "Agreement") is made and
entered into as of May 10, 1997, by and among F.N.B. CORPORATION ("FNB"), a
Pennsylvania corporation having its principal office located in Hermitage,
Pennsylvania; SOUTHWEST BANKS, INC. ("Southwest"), a Florida corporation having
its principal office located in Naples, Florida, and a wholly owned subsidiary
of FNB; to be joined in by SOUTHWEST INTERIM BANK, N.A., a national bank to be
chartered under the laws of the United States and to become a wholly owned
subsidiary of FNB ("Interim"); and INDIAN ROCKS STATE BANK ("IRSB"), a Florida
state banking corporation having its principal office located in Indian Rocks
Beach, Florida.

PREAMBLE

The Boards of Directors of IRSB, FNB, and once it is chartered,
Interim, are of the opinion that the acquisition described herein is in the
best interests of the parties and their respective shareholders. This Agreement
provides for the acquisition of IRSB by FNB pursuant to the merger of IRSB with
and into Interim (the "Merger"), which will be a new national bank chartered by
FNB as soon as practicable after the execution of this Agreement. At the
effective time of such Merger, the outstanding shares of the capital stock of
IRSB shall be converted into the right to receive shares of the common stock of
FNB (except as provided herein). As a result, shareholders of IRSB shall become
shareholders of FNB. Immediately upon consummation of the Merger, FNB shall
transfer 100% of its ownership of Interim to Southwest so that Interim will
become a wholly-owned subsidiary of Southwest. The transactions described in
this Agreement are subject to the approvals of the shareholders of IRSB, the
Board of Governors of the Federal Reserve System, the Florida Department of
Banking and Finance, the Comptroller of the Currency, and the satisfaction of
certain other conditions described in this Agreement. It is the intention of
the parties to this Agreement that the Merger for federal income tax purposes
shall qualify as a "reorganization" within the meaning of Section 368(a) of the
Internal Revenue Code, and for accounting purposes shall qualify for treatment
as a pooling of interests.

Immediately after the execution and delivery of this Agreement, as a
condition and inducement to FNB's willingness to enter into this Agreement,
IRSB and FNB are entering into a stock option agreement (the "Stock Option
Agreement"), in substantially the form of Exhibit 1, pursuant to which IRSB is
granting to FNB an option to purchase shares of IRSB Common Stock.

Certain terms used in this Agreement are defined in Section 11.1 of
this Agreement.

NOW, THEREFORE, in consideration of the above and the mutual
warranties, representations, covenants, and agreements set forth herein, the
parties agree as follows:

ARTICLE 1

TRANSACTIONS AND TERMS OF MERGER

1.1 Merger. Subject to the terms and conditions of this Agreement,
at the Effective Time, IRSB shall be merged with and into Interim in accordance
with the provisions of the National Bank Act and the FFIC. The separate
existence of IRSB shall thereupon cease, and Interim, which shall be a
wholly-owned subsidiary of FNB, shall be the Surviving Corporation resulting
from the Merger, shall have the name "Indian Rocks National Bank," and shall
continue to be governed by the National Bank Act. The Merger shall have the
effects specified in the National Bank Act and the FFIC. The Merger shall be
consummated pursuant to the terms of this Agreement, which has been approved
and adopted by the respective Boards of Directors of IRSB, FNB, Southwest and
Interim.

A-1

<PAGE> 107

1.2 Time and Place of Closing. The closing of the transactions
contemplated by this Agreement (the "Closing"), including the Merger, shall
take place at 10:00 A.M., local time, on a date specified by the Parties as
they, acting through their chief executive officers or chief financial
officers, may mutually agree. Subject to the terms and conditions hereof,
unless mutually agreed upon in writing by each Party, the Parties shall use
their reasonable best efforts to cause the Closing to occur on but not prior to
the fifth business day following the Determination Date.

1.3 Effective Time. The Merger and other transactions contemplated
by this Agreement shall become effective on the date and at the time
certification of the Merger is received from the Comptroller of the Currency
(the "Effective Time"). Unless the Parties otherwise mutually agree in writing,
the Parties shall file the Certificate to Merge on the date of Closing and
shall use their best efforts to cause the Effective Time to occur on the date
of the Closing.

1.4 Execution of Stock Option Agreement. Concurrently with the
execution of this Agreement and as a condition thereto, IRSB is executing and
delivering to FNB the Stock Option Agreement.

ARTICLE 2

TERMS OF MERGER

2.1 Charter. Pursuant to the Merger, the Articles of Association
of Interim in effect at the Effective Time shall be the Articles of Association
of the Surviving Corporation until otherwise amended or repealed in accordance
with applicable Law, except that the name of the Surviving Corporation shall be
changed to "Indian Rocks National Bank."

2.2 Bylaws. Pursuant to the Merger, the Bylaws of Interim in
effect at the Effective Time shall be the Bylaws of the Surviving Corporation
until otherwise amended or repealed in accordance with applicable Law.

2.3 Directors and Officers. The directors and officers of IRSB
immediately prior to the Effective Time shall become directors and officers of
the Surviving Corporation, each to hold office in accordance with the Articles
of Association and Bylaws of the Surviving Corporation.

ARTICLE 3

MANNER OF CONVERTING SHARES

3.1 Conversion of Shares. Subject to the provisions of this
Article 3, at the Effective Time, by virtue of the Merger and without any
action on the part of FNB, Southwest, Interim, or IRSB, or the shareholders of
any of the foregoing, the shares of the constituent corporations shall be
converted as follows:

(a) Each share of common stock of the Surviving Corporation
issued and outstanding immediately prior to the Effective Time shall
remain outstanding and entirely issued to FNB. Immediately following
the Effective Time, FNB shall transfer all of its ownership of the
Surviving Corporation to Southwest, and at such time the Surviving
Corporation shall be a wholly-owned subsidiary of Southwest.

(b) Each share of FNB Capital Stock issued and outstanding
immediately prior to the Effective Time shall remain issued and
outstanding from and after the Effective Time.

A-2

<PAGE> 108

(c) Except for IRSB Common Stock issued and outstanding
immediately prior to the Effective Time as to which dissenters' rights
have been perfected and not withdrawn, and subject to Section 3.4
relating to fractional shares, each share of IRSB Common Stock
(excluding shares to be cancelled pursuant to Section 3.3 of this
Agreement) issued and outstanding at the Effective Time shall cease to
be outstanding and shall be converted into and exchanged for two (2)
shares of FNB Common Stock (the "Exchange Ratio"). The Exchange Ratio
shall be fixed and no adjustment shall be made unless the Designated
Price of FNB Common Stock is less than $22.00 or equal to or greater
than $27.00, in which event the Exchange Ratio shall be adjusted in
accordance with Section 3.1(d) of this Agreement.

(d) If the Designated Price of FNB Common Stock shall be less
than $22.00, then the Exchange Ratio shall be increased to equal the
quotient, rounded to the third decimal point, obtained by dividing (i)
the product of $22.00 and the Exchange Ratio by (ii) the Designated
Price. If the Designated Price shall be less than $20.00, then FNB
may, at any time during the period commencing on the Determination
Date and ending at the close of business on the day before Closing,
terminate the Agreement pursuant to Section 10.1(k) hereof. If the
Designated Price of FNB Common Stock shall be equal to or greater than
$27.00, then the Exchange Ratio shall decrease to equal the quotient,
rounded to the third decimal point, obtained by dividing (x) the
product of $27.00 and the Exchange Ratio by (y) the Designated Price;
provided, however, that if a Change in Control of FNB has occurred,
then the Exchange Ratio shall not decrease and shall be fixed at two
(2) shares of FNB Common Stock for each share of IRSB Common Stock as
provided in Section 3.1(c) of this Agreement. Provided further, that
if the Designated Price of FNB Common Stock shall be equal to or
greater than $30.00, then IRSB may, at any time during the period
commencing on the Determination Date and ending at the close of
business on the day before Closing, terminate the Agreement pursuant
to Section 10.1(g) hereof.

(e) Notwithstanding Section 3.1(c) of this Agreement, IRSB
Common Stock issued and outstanding at the Effective Time which is
held by a holder who has not voted in favor of the Merger and who has
demanded payment of the fair cash value of such shares in accordance
with 12 U.S.C. Section 215a ("Dissenting IRSB Shares") shall not be
converted into or represent the right to receive the FNB Common Stock
payable thereon pursuant to Section 3.1(c) of this Agreement, and
shall be entitled only to such rights of appraisal as are granted by
12 U.S.C. Section 215a ("Dissent Provisions"), unless and until such
holder fails to perfect or effectively withdraws or otherwise loses
his right to appraisal. If after the Effective Time any such holder
fails to perfect or effectively withdraws or loses his right to
appraisal, such shares of IRSB Common Stock shall be treated as if
they had been converted at the Effective Time into the right to
receive the FNB Common Stock payable thereon pursuant to Section
3.1(c) of this Agreement. IRSB shall give FNB prompt notice upon
receipt by IRSB of any written objection to the Merger and such
written demands for payment of the fair value of shares of IRSB Common
Stock, and the withdrawals of such demands, and any other instruments
provided to IRSB pursuant to the Dissent Provisions (any shareholder
duly making such demand being hereinafter called a "Dissenting
Shareholder"). Each Dissenting Shareholder that becomes entitled,
pursuant to the Dissent Provisions, to payment for any shares of IRSB
Common Stock held by such Dissenting Shareholder shall receive payment
therefore from FNB (but only after the amount thereof shall have been
agreed upon or at the times and in the amounts required by the Dissent
Provisions) and all of such Dissenting Shareholders shares of IRSB
Common Stock shall be cancelled. IRSB shall not, except with the
prior written consent of FNB, voluntarily make any payment with
respect to, or settle or offer to settle, any demand for payment by
any Dissenting Shareholder.

3.2 Anti-Dilution Provisions. In the event FNB changes the number
of shares of FNB Common Stock issued and outstanding prior to the Effective
Time as a result of a stock split, stock dividend,

A-3

<PAGE> 109

recapitalization, reclassification, or similar transaction with respect to such
stock and the record date therefor (in the case of a stock dividend) or the
effective date thereof (in the case of a stock split or similar
recapitalization for which a record date is not established) shall be prior to
the Effective Time, the Exchange Ratio shall be proportionately adjusted;
provided, however, that the Exchange Ratio shall not be adjusted in connection
with the 5% stock dividend declared by FNB to shareholders of record on May 1,
1997.

3.3 Shares Held by IRSB or FNB. Each of the shares of IRSB Common
Stock held by IRSB or by any FNB Company, in each case other than those shares
of IRSB Common Stock in a fiduciary capacity or as a result of debts previously
contracted, shall be canceled and retired at the Effective Time and no
consideration shall be issued in exchange therefor.

3.4 Fractional Shares. Notwithstanding any other provision of this
Agreement, each holder of IRSB Common Stock exchanged pursuant to the Merger
who would otherwise have been entitled to receive a fraction of a share of FNB
Common Stock (after taking into account all certificates delivered by such
holder) shall receive, in lieu thereof, cash (without interest) in an amount
equal to such fractional part of FNB Common Stock multiplied by the "market
price" of one share of FNB Common Stock at the Closing. The market price of
one share of FNB Common Stock at the Closing shall be the average of the
closing high bid and low asked prices of such Common Stock in the
over-the-counter market, as reported by Nasdaq (or, if not reported thereby,
any other authoritative source selected by FNB) on the last trading day
preceding the Closing. No such holder will be entitled to dividends, voting
rights, or any other rights as a shareholder in respect of any fractional
shares.

ARTICLE 4

EXCHANGE OF SHARES

4.1 Exchange Procedures. At the Effective Time, FNB shall deposit
or shall cause to be deposited with the exchange agent selected by FNB (the
"Exchange Agent") certificates evidencing shares of FNB Common Stock in such
amount necessary to provide all consideration required to be exchanged by FNB
for IRSB Common Stock pursuant to the terms of this Agreement. Promptly after
the Effective Time, FNB shall cause the Exchange Agent to mail to the former
shareholders of IRSB appropriate transmittal materials (which shall specify
that delivery shall be effected, and risk of loss and title to the certificates
theretofore representing shares of IRSB Common Stock shall pass, only upon
proper delivery of such certificates to the Exchange Agent). After the
Effective Time, each holder of shares of IRSB Common Stock (other than shares
to be canceled pursuant to Section 3.3 of this Agreement) issued and
outstanding at the Effective Time shall surrender the certificate or
certificates representing such shares to the Exchange Agent and shall upon
surrender thereof promptly receive in exchange therefor the consideration
provided in Section 3.1 of this Agreement, together with all declared but
undelivered dividends or distributions in respect of such shares (without
interest thereon) pursuant to Section 4.2 of this Agreement. FNB shall not be
obligated to deliver the consideration to which any former holder of IRSB
Common Stock is entitled as a result of the Merger until such holder surrenders
such holder's certificate or certificates representing the shares of IRSB
Common Stock for exchange as provided in this Section 4.1. The certificate or
certificates of IRSB Common Stock so surrendered shall be duly endorsed as the
Exchange Agent may require. Any other provision of this Agreement
notwithstanding, neither FNB nor the Exchange Agent shall be liable to a holder
of IRSB Common Stock for any amounts paid or property delivered in good faith
to a public official pursuant to any applicable abandoned property Law.

A-4

<PAGE> 110

4.2 Rights of Former IRSB Shareholders. At the Effective Time, the
stock transfer books of IRSB shall be closed as to holders of IRSB Common Stock
immediately prior to the Effective Time and no transfer of IRSB Common Stock by
any such holder shall thereafter be made or recognized. Until surrendered for
exchange in accordance with the provisions of Section 4.1 of this Agreement,
each certificate theretofore representing shares of IRSB Common Stock (other
than shares to be canceled pursuant to Section 3.3 of this Agreement) shall
from and after the Effective Time represent for all purposes only the right to
receive the consideration provided in Sections 3.1 and 3.4 of this Agreement in
exchange therefor, subject, however, to FNB's obligation to pay any dividends
or make any other distributions with a record date prior to the Effective Time
which have been declared or made by IRSB in respect of such shares of IRSB
Common Stock in accordance with the terms of this Agreement and which remain
unpaid at the Effective Time. Until 90 days after the Effective Time, former
shareholders of IRSB shall be entitled to vote at any meeting of FNB
stockholders the number of shares of FNB Common Stock into which shares of IRSB
Common Stock are converted, regardless of whether such holders have exchanged
their certificates representing IRSB Common Stock for shares representing FNB
Common Stock in accordance with the provisions of this Agreement. Whenever a
dividend or other distribution is declared by FNB on the FNB Common Stock, the
record date for which is at or after the Effective Time, the declaration shall
include dividends or other distributions on all shares issuable pursuant to
this Agreement, except for FNB's regular 5% stock dividend declared by FNB to
shareholders of record on May 1, 1997, but beginning 30 days after the
Effective Time no dividend or other distribution payable to the holders of
record of FNB Common Stock as of any time subsequent to the Effective Time
shall be delivered to the holder of any certificate representing shares of IRSB
Common Stock issued and outstanding at the Effective Time until such holder
surrenders such certificate for exchange as provided in Section 4.1 of this
Agreement. However, upon surrender of such IRSB Common Stock certificate, both
the FNB Common Stock certificate (together with all such undelivered dividends
or other distributions without interest) and any undelivered dividends shall be
delivered and paid with respect to each share represented by such certificate.
Any portion of the consideration (including the proceeds of any investments
thereof) which had been made payable to the Exchange Agent pursuant to Section
4.1 of this Agreement that remain unclaimed by the shareholders of IRSB for six
(6) months after the Effective Time shall be paid to FNB. Any shareholders of
IRSB who have not theretofore complied with this Article 4 shall thereafter
look only to FNB for payment of their shares of FNB Common Stock and unpaid
dividends and distributions on the FNB Common Stock deliverable in respect of
each IRSB share of Common Stock such shareholder holds as determined pursuant
to this Agreement, in each case, without any interest thereon.

ARTICLE 5

REPRESENTATIONS AND WARRANTIES OF IRSB

IRSB hereby represents and warrants to FNB as follows:

5.1 Organization, Standing, and Power. IRSB is a state banking
corporation duly organized, validly existing, and in active status under the
laws of the State of Florida, and has the corporate power and authority to
carry on its business as now conducted and to own, lease, and operate its
material Assets. IRSB is duly qualified or licensed to transact business as a
foreign corporation and is in good standing in each jurisdiction where the
character of its Assets or the nature or conduct of its business requires it to
be so qualified or licensed, except for such jurisdictions in which the failure
to be so qualified or licensed is not reasonably likely to have, individually
or in the aggregate, a Material Adverse Effect on IRSB.

A-5

<PAGE> 111

5.2 Authority; No Breach by Agreement.

(a) IRSB has the corporate power and authority necessary to
execute and deliver this Agreement and, subject to the approval and
adoption of this Agreement by the shareholders of IRSB, to perform its
obligations under this Agreement and consummate the transactions
contemplated hereby. The execution, delivery, and performance of this
Agreement by IRSB and the consummation by IRSB of the transactions
contemplated herein, including the Merger, have been duly and validly
authorized by all necessary corporate action in respect thereof on the
part of IRSB, subject to the approval of this Agreement by its
shareholders as contemplated by Section 8.1 of this Agreement. Subject
to such requisite shareholder approval (and assuming due
authorization, execution and delivery by FNB, Southwest and Interim)
and to such Consents of Regulatory Authorities as required by
applicable Law, this Agreement represents a legal, valid, and binding
obligation of IRSB, enforceable against IRSB in accordance with its
terms (except in all cases as such enforceability may be limited by
applicable bankruptcy, insolvency, reorganization, moratorium or
similar Laws affecting the enforcement of creditors' rights generally
and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the
court before which any proceeding may be brought). The IRSB Board of
Directors has received from Allen C. Ewing & Co. a letter dated as of
the date of this Agreement to the effect that, in the opinion of such
firm, the Exchange Ratio is fair, from a financial point of view, to
the holders of IRSB Common Stock.

(b) Except as disclosed in Section 5.2 of the IRSB Disclosure
Memorandum, neither the execution and delivery of this Agreement by
IRSB, nor the consummation by IRSB of the transactions contemplated
hereby, nor compliance by IRSB with any of the provisions hereof, will
(i) conflict with or result in a breach of any provision of IRSB's
Articles of Incorporation or Bylaws, or (ii) constitute or result in a
Default under, or result in the creation of any Lien on any material
Asset of IRSB under, or require a Consent pursuant to, any Contract or
Permit of IRSB, where such Default or Lien, or any failure to obtain
such Consent, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on IRSB, or, (iii) subject to
receipt of the requisite approvals and Consents referred to in
Sections 9.1(a), (b) and (c) of this Agreement, violate any Order, or
to its Knowledge, any Law applicable to IRSB or any of its material
Assets which will have a Material Adverse Effect on IRSB.

(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities
Laws, and rules of the Nasdaq, and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the
Internal Revenue Service or the Pension Benefit Guaranty Corporation
with respect to any employee benefit plans, or under the HSR Act, and
other than Consents, filings, or notifications which, if not obtained
or made, are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on IRSB, no notice to, filing
with, or Consent of, any public body or authority is necessary for the
consummation by IRSB of the Merger and the other transactions
contemplated in this Agreement.

5.3 Capital Stock.

(a) The authorized capital stock of IRSB consists of 500,000
shares of IRSB Common Stock, of which 350,000 shares are issued and
outstanding as of the date of this Agreement and not more than 350,000
shares will be issued and outstanding at the Effective Time. All of
the issued and outstanding shares of IRSB Common Stock are duly and
validly issued and outstanding and are fully paid and nonassessable
under the FFIC. None of the outstanding shares of IRSB Common Stock
has been issued in violation of any preemptive rights. Except for the
Stock Option Agreement, IRSB has issued no options or warrants to
purchase shares of IRSB Common Stock.

A-6

<PAGE> 112

(b) Except as set forth in Section 5.3(a) of this Agreement, or
as provided pursuant to the Stock Option Agreement, there are no
shares of capital stock or other equity securities of IRSB outstanding
and no outstanding Rights relating to the capital stock of IRSB.

5.4 No IRSB Subsidiaries. IRSB does not have any Subsidiaries.

5.5 Regulatory Filings; Financial Statements. IRSB has made
available to FNB copies of the IRSB Financial Statements and all management
letters of its outside independent certified public accountants relating to any
audits performed in connection with the preparation of the IRSB Financial
Statements. Each of the IRSB Financial Statements (including, in each case,
any related notes), including any IRSB Financial Statements filed after the
date of this Agreement until the Effective Time, was prepared in accordance
with GAAP applied on a consistent basis throughout the periods involved (except
as may be indicated therein or in the notes to such financial statements), and
fairly present or will present the financial position of IRSB at the respective
dates and the results of its operations and cash flows at and for the periods
indicated, except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or are not
expected to be material in amount, and except for the absence of certain
footnote information in the unaudited interim financial statements.

5.6 Notes and Obligations.

(a) Except as set forth in Section 5.6 of the IRSB Disclosure
Memorandum or as provided in the loss reserve described in
subparagraph (b) below, without conducting any independent
investigation, IRSB is not aware of any facts which would cause
management of IRSB to believe that any notes receivable or any other
obligations owned by IRSB or due to it shown on the IRSB Interim
Balance Sheet or any such notes receivable and obligations on the date
hereof and as of the Effective Time have not been and will not be
genuine, legal, valid and collectible obligations of the respective
makers thereof and are not and will not be subject to any offset or
counterclaim. Except as set forth in subparagraph (b) below, all such
notes and obligations are evidenced by written agreements, true and
correct copies of which will be made available to FNB for examination
prior to the Effective Time. All such notes and obligations were
entered into by IRSB in the ordinary course of its business and in
compliance with all applicable laws and regulations, except as to any
non-compliance which has not and will not have a Material Adverse
Effect on IRSB.

(b) IRSB has established a loss reserve on the IRSB Interim
Balance Sheet which is adequate to cover anticipated losses which
might result from such items as the insolvency or default of borrowers
or obligors on such loans or obligations, defects in the notes or
evidences of obligation (including losses of original notes or
instruments), offsets or counterclaims properly chargeable to such
reserve, or the availability of legal or equitable defenses which
might preclude or limit the ability of IRSB to enforce the note or
obligation, and the representations set forth in subparagraph (a)
above are qualified in their entirety by the aggregate of such loss
reserves. As of the Effective Time, the ratio of the loss reserve, as
established on such date in good faith by management of IRSB, to total
loans outstanding at such time, shall not exceed the ratio of the loss
reserve to the total loans outstanding as reflected on the IRSB
Interim Balance Sheet (except as otherwise agreed to by IRSB and FNB),
and the representations set forth in subparagraph (a) above made as of
the Effective Time shall be qualified in their entirety by the
aggregate of such loss reserve on such date.

5.7 Absence of Certain Changes or Events. Except as disclosed in
Section 5.7 of the IRSB Disclosure Memorandum, since March 31, 1997, (i) there
have been no events, changes, or occurrences which have had, or are reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
IRSB, and (ii) IRSB has not taken any action, or failed to take any action,
prior to the date of this Agreement,

A-7

<PAGE> 113

which action or failure, if taken after the date of this Agreement, would
represent or result in a material breach or violation of any of the material
covenants and agreements of IRSB provided in Article 7 of this Agreement.

5.8 Tax Matters.

(a) All Tax Returns required to be filed by or on behalf of
IRSB have been timely filed or requests for extensions have been
timely filed, granted, and have not expired for periods ended on or
before December 31, 1996, except to the extent that all such failures
to file, taken together, are not reasonably likely to have a Material
Adverse Effect on IRSB, and, to the Knowledge of IRSB, all Tax Returns
filed are complete and accurate in all material respects. All Taxes
shown on filed Tax Returns have been paid. There is no audit
examination, deficiency, or refund Litigation with respect to any
Taxes that is reasonably likely to result in a determination that
would have, individually or in the aggregate, a Material Adverse
Effect on IRSB, except as reserved against in the IRSB Financial
Statements delivered prior to the date of this Agreement or as
disclosed in Section 5.8 of the IRSB Disclosure Memorandum. All Taxes
and other liabilities due with respect to completed and settled
examinations or concluded Litigation have been paid, accrued, or
provided for as disclosed in Section 5.8 of the IRSB Disclosure
Memorandum.

(b) Except as disclosed in Section 5.8 of the IRSB Disclosure
Memorandum, IRSB has not executed an extension or waiver of any
statute of limitations on the assessment or collection of any material
Tax due that is currently in effect.

(c) Except as disclosed in Section 5.8 of the IRSB Disclosure
Memorandum, adequate provision for any Taxes due or to become due for
IRSB for the period or periods through and including the date of the
respective IRSB Financial Statements has been made and is reflected on
such IRSB Financial Statements,.

(d) Deferred Taxes of IRSB have been adequately provided for in
the IRSB Financial Statements.

(e) To the Knowledge of IRSB, IRSB is in compliance with, and
its records contain all information and documents (including properly
completed Internal Revenue Service Forms W-9) necessary to comply
with, all applicable information reporting and Tax withholding
requirements under federal, state, and local Tax Laws, and such
records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except
for such instances of noncompliance and such omissions as are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on IRSB.

(f) There are no Liens with respect to Taxes upon any of the
material Assets of IRSB, except for loans on IRSB's books generated in
the normal course of business.

(g) IRSB has not filed any consent under Section 341(f) of the
Internal Revenue Code concerning collapsible corporation.

(h) All material elections with respect to Taxes affecting IRSB
as of the date of this Agreement have been or will be timely made as
set forth in Section 5.8 of the IRSB Disclosure Memorandum. After the
date hereof, other than as set forth in Section 5.8 of the IRSB
Disclosure Memorandum, no election with respect to Taxes will be made
without the prior written consent of FNB, which consent will not be
unreasonably withheld.

A-8

<PAGE> 114

5.9 Assets. Except as disclosed in Section 5.9 of the IRSB
Disclosure Memorandum, IRSB has good and marketable title, free and clear of
all Liens (except those Liens which are not likely to have a Material Adverse
Effect on IRSB), to all of its material Assets reflected in the IRSB Financial
Statements as being owned by IRSB as of the date hereof. All material tangible
properties used in the business of IRSB are in good condition, reasonable wear
and tear excepted, and are usable in the ordinary course of business consistent
with IRSB's past practices. All Assets which are material to IRSB's business,
held under leases or subleases by IRSB, are held under valid Contracts
enforceable in accordance with their respective terms (except as enforceability
may be limited by applicable bankruptcy, insolvency, reorganization,
moratorium, or other Laws affecting the enforcement of creditors' rights
generally and except that the availability of the equitable remedy of specific
performance or injunctive relief is subject to the discretion of the court
before which any proceedings may be brought), and each such Contract is in full
force and effect. IRSB currently maintains insurance in amounts, scope, and
coverage as disclosed in Section 5.9 of the IRSB Disclosure Memorandum. IRSB
has not received written notice from any insurance carrier that (i) such
insurance will be canceled or that coverage thereunder will be reduced or
eliminated, or (ii) premium costs with respect to such policies of insurance
will be substantially increased. Except as disclosed in Section 5.9 of the IRSB
Disclosure Memorandum, to the Knowledge of IRSB, there are presently no claims
pending under such policies of insurance and no notices have been given by IRSB
under such policies.

5.10 Environmental Matters.

(a) To the Knowledge of IRSB, except as disclosed in Section
5.10 of the IRSB Disclosure Memorandum, IRSB, its Participation
Facilities, and its Loan Properties are, and have been, in compliance
with all Environmental Laws, except for violations which are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on IRSB.

(b) To the Knowledge of IRSB, except as disclosed in Section
5.10 of the IRSB Disclosure Memorandum, there is no Litigation pending
or threatened before any court, governmental agency, or authority or
other forum in which IRSB or any of its Loan Properties or
Participation Facilities has been or, with respect to threatened
Litigation, may be named as a defendant or potentially responsible
party (i) for alleged noncompliance (including by any predecessor)
with any Environmental Law or (ii) relating to the release into the
environment of any Hazardous Material, whether or not occurring at,
on, under, or involving any of its Loan Properties or Participation
Facilities, except for such Litigation pending or threatened that is
not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on IRSB.

(c) To the Knowledge of IRSB, except as disclosed in Section
5.10 of the IRSB Disclosure Memorandum, during the period of (i)
IRSB's ownership or operation of any of its properties, (ii) IRSB's
participation in the management of any Participation Facility, or
(iii) IRSB's holding a security interest in a Loan Property, there is
no reasonable basis for any Litigation of a type described above in
Section 5.10(b), except such as is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on IRSB.

(d) To the Knowledge of IRSB, except as disclosed in Section
5.10 of the IRSB Disclosure Memorandum, there have been no releases of
Hazardous Material in, on, under, or affecting any Participation
Facility or Loan Property of IRSB, except such as are not reasonably
likely to have, individually or in the aggregate, a Material Adverse
Effect on IRSB.

5.11 Compliance With Laws. Except as disclosed in Section 5.11 of
the IRSB Disclosure Memorandum, IRSB has in effect all Permits necessary for
it to own, lease, or operate its material Assets and to carry on its business
as now conducted, except for those Permits the absence of which are not
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on IRSB, and IRSB is not presently

A-9

<PAGE> 115

in default under any such Permit, other than defaults which are not reasonably
likely to have, individually or in the aggregate, a Material Adverse Effect on
IRSB. Except as disclosed in Section 5.11 of the IRSB Disclosure Memorandum,
IRSB:

(a) to the Knowledge of IRSB, is not in violation of any Laws
or Orders applicable to its business or employees conducting its
business, except for violations which are not reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
IRSB; and

(b) has not received any written notification or communication
from any agency or department of federal, state, or local government
or any Regulatory Authority or the staff thereof (i) asserting that
IRSB is not in substantial compliance with any of the Laws or Orders
which such governmental authority or Regulatory Authority enforces,
where such noncompliance is reasonably likely to have, individually or
in the aggregate, a Material Adverse Effect on IRSB, (ii) threatening
to revoke any Permit, the revocation of which is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
IRSB , or (iii) requiring IRSB to enter into or consent to the
issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or to adopt any Board
resolution or similar undertaking, which restricts materially the
conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies, its management, or the
payment of dividends.

5.12 Labor Relations. IRSB is not the subject of any Litigation
asserting that it has committed an unfair labor practice (within the meaning of
the National Labor Relations Act or comparable state law) or seeking to compel
it to bargain with any labor organization as to wages or conditions of
employment, nor is there any strike or other labor dispute involving IRSB,
pending or, to the Knowledge of IRSB, threatened, nor is there any activity
involving any of IRSB's employees seeking to certify a collective bargaining
unit or engaging in any other organization activity.

5.13 Employee Benefit Plans.

(a) IRSB has disclosed in Section 5.13 of the IRSB Disclosure
Memorandum, and has or will deliver or make available to FNB copies or
summaries of, all material pension, retirement, profit-sharing,
deferred compensation, stock option, employee stock ownership,
severance pay, vacation, bonus, or other material incentive plans, all
other material written employee programs, arrangements, or agreements,
and all other material employee benefit plans or fringe benefit plans,
including, without limitation, all "employee benefit plans" (as that
term is defined in Section 3(3) of ERISA), currently adopted,
maintained by, sponsored in whole or in part by, or contributed to by
IRSB for the benefit of employees, retirees, dependents, spouses,
directors, independent contractors or other beneficiaries are eligible
to participate (collectively, the " IRSB Benefit Plans"). Any of the
IRSB Benefit Plans which is an "employee pension benefit plan" (as
that term is defined in Section 3(2) of ERISA) is referred to herein
as a " IRSB ERISA Plan". No IRSB Benefit Plan is or has been a
multi-employer plan within the meaning of Section 3(37) of ERISA.

(b) Except as disclosed in Section 5.13 of the IRSB Disclosure
Memorandum, all IRSB Benefit Plans are in compliance in all material
respects with the applicable terms of ERISA, the Internal Revenue
Code, and any other applicable Laws, the breach or violation of which
are reasonably likely to have a Material Adverse Effect on IRSB.

(c) Except as disclosed in Section 5.13 of the IRSB Disclosure
Memorandum, no IRSB ERISA Plan which is a "defined benefit pension
plan" (as defined in Section 4140 of the Internal Revenue Code) has
any "unfunded current liability" (as that term is defined in Section
302(d)(8)(A) of ERISA) and the present fair market value of the assets
of any such plan exceeds the plan's "benefit

A-10

<PAGE> 116

liabilities" (as that term is defined in Section 4001(a)(16) of ERISA)
when determined under actuarial factors that would apply if the plan
terminated in accordance with all applicable legal requirements.

(d) Except as disclosed in Section 5.13 of the IRSB Disclosure
Memorandum, neither the execution and delivery of this Agreement nor
the consummation of the transactions contemplated hereby will (i)
result in any payment (including, without limitation, severance,
unemployment compensation, golden parachute, or otherwise) becoming
due to any director or any employee of IRSB from IRSB under any IRSB
Benefit Plan, (ii) increase any benefits otherwise payable under any
IRSB Benefit Plan, or (iii) result in any acceleration of the time of
payment or vesting of any such benefit, where such payment, increase,
or acceleration is reasonably likely to have a Material Adverse Effect
on IRSB.

5.14 Material Contracts. Except as disclosed in Section 5.14 of the
IRSB Disclosure Memorandum, IRSB is not a party to or subject to the following:
(i) any employment, severance, termination, consulting, or retirement Contract
providing for aggregate payments to any Person in any calendar year in excess
of $50,000, (ii) any Contract relating to the borrowing of money by IRSB or the
guarantee by IRSB of any such obligation exceeding $50,000 (other than
Contracts evidencing deposit liabilities, purchases of federal funds,
fully-secured repurchase agreements, and Federal Home Loan Bank advances, trade
payables, and Contracts relating to borrowings or guarantees made in the
ordinary course of business), and (iii) any other material Contract or
amendment thereto as of the date of this Agreement not made in the ordinary
course of business to which IRSB is a party or by which it is bound (together
with all Contracts referred to in Sections 5.9 and 5.13(a) of this Agreement,
the "IRSB Contracts"). With respect to each IRSB Contract and except as
disclosed in Section 5.14 of the IRSB Disclosure Memorandum: (i) the Contract
is in full force and effect; (ii) IRSB is not in default thereunder, other than
defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on IRSB; (iii) IRSB has not repudiated or
waived any material provision of any such IRSB Contract; and (iv) no other
party to any such IRSB Contract is, to the Knowledge of IRSB, in Default in any
material respect, other than defaults which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on IRSB, or has
repudiated or waived any material provision thereunder. Except for Federal Home
Loan Bank advances, all of the indebtedness of IRSB for money borrowed is
prepayable at any time by IRSB without penalty or premium.

5.15 Legal Proceedings. Except as disclosed in Section 5.15 of the
IRSB Disclosure Memorandum, there is no Litigation instituted or pending, or,
to the Knowledge of IRSB, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against IRSB, or against any material Asset, employee
benefit plan, interest, or right of any of them, that is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on IRSB, nor
to the Knowledge of IRSB are there any Orders of any Regulatory Authorities,
other governmental authorities, or arbitrators outstanding against IRSB, that
are reasonably likely to have, individually or in the aggregate, a Material
Adverse Effect on IRSB. Section 5.15 of the IRSB Disclosure Memorandum
includes a summary report of all Litigation as of the date of this Agreement to
which IRSB is a party and which names IRSB as a defendant or cross-defendant
and where the estimated maximum exposure to be $10,000 or more.

5.16 Reports. For the three years ended December 31, 1996, 1995 and
1994, and since January 1, 1997, IRSB has timely filed, and to the extent
permitted by Law has made available for FNB review, all reports and statements,
together with any amendments required to be made with respect thereto, that it
was required to file with any Regulatory Authorities. As of their respective
dates, each of such reports and documents, including the financial statements,
exhibits, and schedules thereto, complied in all material respects with all
applicable Laws enforced or promulgated by the Florida Department of Banking
and Finance or the Board of Governors of the Federal Reserve System, except for
those which would not have a Material

A-11

<PAGE> 117

Adverse Effect on IRSB. As of its respective date, each such report and
document did not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary to make the
statements made therein, in light of the circumstances under which they were
made, not misleading, which untrue statement of a material fact or omission to
state a material fact is likely to have, individually or in the aggregate, a
Material Adverse Effect on IRSB.

5.17 Statements True and Correct. None of the information supplied
or to be supplied by IRSB or any Affiliate thereof for inclusion in the
Registration Statement to be filed by FNB with the SEC will, when the
Registration Statement becomes effective, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by IRSB or any Affiliate thereof for inclusion in the Proxy Statement
to be mailed to IRSB's shareholders in connection with the Shareholders'
Meeting, and any other documents to be filed by IRSB or any Affiliate thereof
with any Regulatory Authority in connection with the transactions contemplated
hereby, will, at the respective time such documents are filed, and with respect
to the Proxy Statement, when first mailed to the shareholders of IRSB, be false
or misleading with respect to any material fact, or omit to state any material
fact necessary to make the statements therein, in light of the circumstances
under which they were made, not misleading, or, in the case of the Proxy
Statement or any amendment thereof or supplement thereto, at the time of the
Shareholders' Meeting, be false or misleading with respect to any material
fact, or omit to state any material fact necessary to correct any statement in
any earlier communication with respect to the solicitation of any proxy for the
Shareholders' Meeting. All documents that IRSB or any Affiliate thereof is
responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.

5.18 Accounting, Tax and Regulatory Matters. To the Knowledge of
IRSB, neither IRSB nor any Affiliate thereof has taken or agreed to take any
action which would, or has any Knowledge of any fact or circumstance that is
reasonably likely to (i) prevent the transactions contemplated hereby,
including the Merger, from qualifying for pooling-of-interests accounting
treatment or as a reorganization within the meaning of Section 368(a) of the
Internal Revenue Code, or (ii) materially impede or delay receipt of any
Consents of Regulatory Authorities referred to in Section 9.1(b) of this
Agreement or result in the imposition of a condition or restriction of the type
referred to in the last sentence of such Section.

5.19 Articles of Incorporation Provisions. IRSB has taken all
action so that the entering into of this Agreement and the consummation of the
Merger and the other transactions contemplated by this Agreement do not and
will not result in any super-majority voting requirement or the grant of any
rights to any Person under the Articles of Incorporation, Bylaws, or other
governing instruments of IRSB or restrict or impair the ability of FNB or any
of its Subsidiaries to vote, or otherwise to exercise the rights of a
shareholder with respect to, shares of IRSB that may be directly or indirectly
acquired or controlled by it.

5.20 Derivatives Contracts. Except as disclosed in Section 5.20 of
the IRSB Disclosure Memorandum, IRSB is neither a party to nor has it agreed to
enter into an exchange-traded or over-the-counter swap, forward, future,
option, cap, floor, or collar financial contract, or any other interest rate or
foreign currency protection contract not included on its balance sheet which is
a financial derivative contract (including various combinations thereof) (each
a "Derivatives Contract").

ARTICLE 6

REPRESENTATIONS AND WARRANTIES OF FNB, SOUTHWEST AND INTERIM

FNB and Southwest hereby represent and warrant to IRSB and Interim,
when formed, will represent and warrant to IRSB as follows:

A-12

<PAGE> 118

6.1 Organization, Standing, and Power.

(a) FNB is a corporation duly organized, validly existing, and
in good standing under the Laws of the Commonwealth of Pennsylvania,
and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its material Assets. FNB
is duly qualified or licensed to transact business as a foreign
corporation in good standing in the States of the United States and
foreign jurisdictions where the character of its Assets or the nature
or conduct of its business requires it to be so qualified or licensed,
except for such jurisdictions in which the failure to be so qualified
or licensed is not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNB.

(b) Southwest is a corporation duly organized, validly
existing, and in active status under the Laws of the State of Florida,
and has the corporate power and authority to carry on its business as
now conducted and to own, lease, and operate its material Assets.
Southwest is duly qualified or licensed to transact business as a
foreign corporation in good standing in the States of the United
States and foreign jurisdictions where the character of its Assets or
the nature or conduct of its business requires it to be so qualified
or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on
Southwest.

(c) Interim will be a national bank organized under the
National Bank Act (as a wholly owned subsidiary of FNB), after the
execution of this Agreement and prior to the Effective Time and shall
have the corporate power and authority to carry on the business of
banking. Interim shall become duly qualified or licensed to transact
business as a foreign corporation, and shall maintain its corporate
status in good standing, in the States of the United States and
foreign jurisdictions where the character of the assets or the nature
or conduct of the business, to be purchased, received or operated by
Interim, shall require it to be so qualified or licensed, except for
such jurisdictions in which the failure to be so qualified or licensed
is not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on Interim.

6.2 Authority; No Breach By Agreement.

(a) Each of FNB and Southwest has, and upon its formation
Interim shall have, the corporate power and authority necessary to
execute, deliver, and perform its obligations under this Agreement and
to consummate the transactions contemplated hereby. The execution,
delivery, and performance of this Agreement and the consummation of
the transactions contemplated herein, including the Merger, have been
duly and validly authorized by all necessary corporate action in
respect thereof on the part of FNB and Southwest and shall be duly and
validly authorized by all necessary corporation action in respect
thereof by Interim upon its formation. This Agreement represents a
legal, valid, and binding obligation of FNB and Southwest and shall
become such an obligation of Interim upon its formation, enforceable
against FNB and Southwest, and to become enforceable against Interim
upon its formation, in accordance with its terms (except in all cases
as such enforceability may be limited by applicable bankruptcy,
insolvency, reorganization, moratorium, or similar Laws affecting the
enforcement of creditors' rights generally and except that the
availability of the equitable remedy of specific performance or
injunctive relief is subject to the discretion of the court before
which any proceeding may be brought).

(b) Neither the execution and delivery of this Agreement by
FNB, Southwest or, upon its formation, Interim, nor the consummation
by FNB, Southwest or Interim of the transactions contemplated hereby,
nor compliance by FNB, Southwest or Interim with any of the provisions

A-13

<PAGE> 119

hereof, will (i) conflict with or result in a breach of any provision
of the Articles of Association or Bylaws of FNB, Southwest or, upon
its formation, Interim, or (ii) constitute or result in a Default
under, or require any Consent pursuant to, or result in the creation
of any Lien on any Asset of any FNB Company, Southwest or Interim
under, any Contract or Permit of any FNB Company, Southwest or
Interim, where such Default or Lien, or any failure to obtain such
Consent, is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNB, Southwest or Interim, or,
(iii) subject to receipt of the requisite Consents referred to in
Section 9.1(b) of this Agreement, violate any Law or Order applicable
to any FNB Company, Southwest or, upon its formation, Interim or any
of their respective material Assets.

(c) Other than in connection or compliance with the provisions
of the Securities Laws, applicable state corporate and securities
Laws, and rules of Nasdaq, and other than Consents required from
Regulatory Authorities, and other than notices to or filings with the
Internal Revenue Service or the Pension Benefit Guaranty Corporation
with respect to any employee benefit plans, or under the HSR Act, and
other than Consents, filings, or notifications which, if not obtained
or made, are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNB, Southwest and, upon its
formation, Interim, no notice to, filing with, or Consent of, any
public body or authority is necessary for the consummation by FNB,
Southwest and Interim of the Merger and the other transactions
contemplated in this Agreement.

6.3 Capital Stock. The authorized capital stock of FNB consists of
(i) 100,000,000 shares of FNB Common Stock, of which 14,047,953 shares were
issued and outstanding as of the date of this Agreement and (ii) 20,000,000
shares of FNB Preferred Stock, of which 318,568 shares were issued and
outstanding as of the date of this Agreement (the "FNB Capital Stock"). All of
the issued and outstanding shares of FNB Capital Stock are, and all of the FNB
Common Stock to be issued in exchange for IRSB Common Stock upon consummation
of the Merger will be, authorized and reserved for issuance prior to the
Effective Time and, when issued in accordance with the terms of this Agreement,
will be, duly and validly issued and outstanding and fully paid and
nonassessable under the PBCL. None of the outstanding shares of FNB Capital
Stock has been, and none of the shares of FNB Common Stock to be issued in
exchange for shares of IRSB Common Stock upon consummation of the Merger will
be, issued in violation of any preemptive rights of the current or past
shareholders of FNB.

6.4 FNB Subsidiaries. Except as disclosed in Section 6.4 of the
FNB Disclosure Memorandum, the list of Subsidiaries of FNB filed by FNB with
its most recent FNB Report on Form 10-K for the fiscal year ended December 31,
1996 is a true and complete list of all of the FNB Subsidiaries as of the date
of this Agreement. Except as disclosed in Section 6.4 of the FNB Disclosure
Memorandum, FNB or one of its Subsidiaries owns all of the issued and
outstanding shares of capital stock of each FNB Subsidiary. No equity
securities of any FNB Subsidiary are or may become required to be issued (other
than to another FNB Company) by reason of any Rights, and there are no
Contracts by which any FNB Subsidiary is bound to issue (other than to another
FNB Company) additional shares of its capital stock or Rights or by which any
FNB Company is or may be bound to transfer any shares of the capital stock of
any FNB Subsidiary (other than to another FNB Company). There are no Contracts
relating to the rights of any FNB Company to vote or to dispose of any shares
of the capital stock of any FNB Subsidiary. All of the shares of capital stock
of each FNB Subsidiary held by a FNB Company are fully paid and nonassessable
under the applicable corporation Law of the jurisdiction in which such
Subsidiary is incorporated or organized (except, in the case of Subsidiaries
that are national banks, for the assessment contemplated by 12 U.S.C. Section
55), and are owned by the FNB Company free and clear of any Lien. Each FNB
Subsidiary is either a bank or a corporation, and is duly organized, validly
existing, and (as to corporations) in good standing under the Laws of the
jurisdiction in which it is incorporated or organized, and has the corporate
power and authority necessary for it to own, lease, and operate its Assets and
to carry on its business as now conducted. Interim, when formed, will be a
national bank formed under the National Bank Act and, as of the date of this
Agreement through

A-14

<PAGE> 120

the Effective Time, shall be a wholly-owned direct Subsidiary of FNB. Each FNB
Subsidiary is duly qualified or licensed to transact business as a foreign
corporation and is in good standing in each jurisdiction where the character of
its Assets or the nature or conduct of its business requires it to be so
qualified or licensed, except for such jurisdictions in which the failure to be
so qualified or licensed is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FNB. Each FNB Subsidiary that is a
depository institution is an "insured institution" as defined in the Federal
Deposit Insurance Act and applicable regulations thereunder, and the deposits
in each such FNB Subsidiary that is a depository institution which are insured
by the Bank Insurance Fund or the Savings Association Insurance Fund.

6.5 SEC Filings; Financial Statements.

(a) FNB has filed and made available to IRSB accurate and
complete copies of all forms, reports, and documents required to be
filed by FNB with the SEC since January 1, 1994, (collectively, the
"FNB SEC Reports"). The FNB SEC Reports (i) at the time filed,
complied in all material respects with the applicable requirements of
the 1933 Act and the 1934 Act, as the case may be, and (ii) did not at
the time they were filed (or if amended or superseded by a filing
prior to the date of this Agreement, then on the date of such filing)
contain any untrue statement of a material fact or omit to state a
material fact required to be stated in such FNB SEC Reports or
necessary in order to make the statements in such FNB SEC Reports, in
light of the circumstances under which they were made, not misleading.
Except for FNB Subsidiaries that are registered as brokers, dealers,
investment advisers, or associated persons thereof, none of the FNB
Subsidiaries is required to file any forms, reports or other documents
with the SEC. None of the FNB Subsidiaries is required to file any
forms, reports, or other documents with the SEC under the 1933 Act or
Sections 12, 13, 14, or 16 of the 1934 Act.

(b) Each of the FNB Financial Statements (including, in each
case, any related notes) contained in the FNB SEC Reports, including
any FNB SEC Reports filed after the date of this Agreement until the
Effective Time, complied, and each SEC Report filed after the date of
this Agreement until the Effective Time will comply, as to form in all
material respects with the applicable published rules and regulations
of the SEC with respect thereto, was prepared in accordance with GAAP
applied on a consistent basis throughout the periods involved (except
as may be indicated in the notes to such financial statements or, in
the case of unaudited statements, as permitted by Form 10-Q of the
SEC), and fairly presented the consolidated financial position of FNB
and its Subsidiaries as at the respective dates and the consolidated
results of its operations and cash flows for the periods indicated,
except that the unaudited interim financial statements were or are
subject to normal and recurring year-end adjustments which were not or
are not expected to be material in amount.

6.6 Absence of Certain Changes or Events. Since January 1, 1997,
(i) there have been no events, changes or occurrences which have had, or are
reasonably likely to have, individually or in the aggregate, a Material Adverse
Effect on FNB, and (ii) the FNB Companies have not taken any action, or failed
to take any action, prior to the date of this Agreement, which action or
failure, if taken after the date of this Agreement, would represent or result
in a material breach or violation of any of the covenants and agreements of
FNB, Southwest, or Interim provided in Articles 7 or 8 of this Agreement.

6.7 Tax Matters.

(a) All Tax Returns required to be filed by or on behalf of any
of the FNB Companies have been timely filed or requests for extensions
have been timely filed, granted, and have not expired for periods
ended on or before March 31, 1997, and on or before the date of the
most recent fiscal year end immediately preceding the Effective Time,
except to the extent that all such failures to file, taken

A-15

<PAGE> 121

together, are not reasonably likely to have a Material Adverse Effect
on FNB, and to the Knowledge of FNB all Tax Returns filed are complete
and accurate in all material respects. All Taxes shown on filed Tax
Returns have been paid. There is no audit examination, deficiency, or
refund Litigation with respect to any Taxes that is reasonably likely
to result in a determination that would have, individually or in the
aggregate, a Material Adverse Effect on FNB, except as reserved
against in the FNB Financial Statements delivered prior to the date of
this Agreement. All Taxes and other liabilities due with respect to
completed and settled examinations or concluded Litigation have been
paid.

(b) Adequate provision for any Taxes due or to become due for
any of the FNB Companies for the period or periods through and
including the date of the respective FNB Financial Statements has been
made and is reflected on such FNB Financial Statements.

(d) To the Knowledge of FNB, each of the FNB Companies is in
compliance with, and its records contain all information and documents
(including properly completed Internal Revenue Service Forms W-9)
necessary to comply with, all applicable information reporting and Tax
withholding requirements under federal, state, and local Tax Laws, and
such records identify with specificity all accounts subject to backup
withholding under Section 3406 of the Internal Revenue Code, except
for such instances of noncompliance and such omissions as are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FNB.

6.8 Compliance With Laws. Both FNB and Southwest are duly
registered as a bank holding company under the BHC Act. Each FNB Company has in
effect all Permits necessary for it to own, lease, or operate its material
Assets and to carry on its business as now conducted, except for those Permits
the absence of which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNB. None of the FNB Companies is
presently in Default under or in violation of any such Permit, other than
Defaults which are not reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNB. No FNB Company:

(a) is in violation of any Laws, Orders, or Permits applicable
to its business or employees conducting its business, except for
violations which are not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FNB; and

(b) has received any notification or communication from any
agency or department of federal, state, or local government or any
Regulatory Authority or the staff thereof (i) asserting that any FNB
Company is not in compliance with any of the Laws or Orders which such
governmental authority or Regulatory Authority enforces, where such
noncompliance is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on FNB, (ii) threatening to
revoke any Permits, the revocation of which is reasonably likely to
have, individually or in the aggregate, a Material Adverse Effect on
FNB, or (iii) requiring any FNB Company to enter into or consent to
the issuance of a cease and desist order, formal agreement, directive,
commitment, or memorandum of understanding, or to adopt any board
resolution or similar undertaking, which restricts materially the
conduct of its business, or in any manner relates to its capital
adequacy, its credit or reserve policies, its management or the
payment of dividends.

6.9 Assets. Except as disclosed in Section 6.9 of the FNB
Disclosure Memorandum, the FNB Companies have good and marketable title, free
and clear of all Liens (except for those Liens which are not likely to have a
Material Adverse Effect on FNB or its Subsidiaries taken as a whole), to all of
their respective

A-16

<PAGE> 122

material Assets, reflected in FNB Financial Statements as being owned by FNB as
of the date hereof. All material tangible properties used in the businesses of
the FNB Companies are in good condition, reasonable wear and tear excepted, and
are usable in the ordinary course of business consistent with FNB's past
practices. All Assets which are material to FNB's business on a consolidated
basis, held under leases or subleases by any of the FNB Companies, are held
under valid Contracts enforceable in accordance with their respective terms
(except as enforceability may be limited by applicable bankruptcy, insolvency,
reorganization, moratorium, or other Laws affecting the enforcement of
creditors' rights generally and except that the availability of the equitable
remedy of specific performance or injunctive relief is subject to the
discretion of the court before which any proceedings may be brought), and each
such Contract is in full force and effect. The FNB Companies currently maintain
insurance in amounts, scope, and coverage as disclosed in Section 6.9 of the
FNB Disclosure Memorandum. None of the FNB Companies has received written
notice from any insurance carrier that (i) such insurance will be canceled or
that coverage thereunder will be reduced or eliminated, or (ii) premium costs
with respect to such policies of insurance will be substantially increased.
Except as disclosed in Section 6.9 of the FNB Disclosure Memorandum, to the
Knowledge of FNB there are presently no occurrences giving rise to a claim
under such policies of insurance and no notices have been given by any FNB
Company under such policies.

6.10 Legal Proceedings. Except as disclosed in Section 6.10 of the
FNB Disclosure Memorandum, there is no Litigation instituted or pending, or, to
the Knowledge of FNB, threatened (or unasserted but considered probable of
assertion and which if asserted would have at least a reasonable probability of
an unfavorable outcome) against any FNB Company, or against any Asset,
interest, or right of any of them, that is reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNB, nor to the
Knowledge of FNB are there any Orders of any Regulatory Authorities, other
governmental authorities, or arbitrators outstanding against any FNB Company,
that are reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FNB.

6.11 Reports. Since January 1, 1994, or the date of organization if
later, each FNB Company has filed all reports and statements, together with any
amendments required to be made with respect thereto, that it was required to
file with Regulatory Authorities (except, in the case of state securities
authorities, failures to file which are not reasonably likely to have,
individually or in the aggregate, a Material Adverse Effect on FNB). As of
their respective dates, each of such reports and documents, including the
financial statements, exhibits, and schedules thereto, complied in all material
respects with all applicable Laws. As of its respective date, each such report
and document did not, in all material respects, contain any untrue statement of
a material fact or omit to state a material fact required to be stated therein
or necessary to make the statements made therein, in light of the circumstances
under which they were made, not misleading.

6.12 Statements True and Correct. None of the information supplied
or to be supplied by any FNB Company or any Affiliate thereof for inclusion in
the Registration Statement to be filed by FNB with the SEC, will, when the
Registration Statement becomes effective, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to make the
statements therein not misleading. None of the information supplied or to be
supplied by any FNB Company or any Affiliate thereof for inclusion in the Proxy
Statement to be mailed to IRSB's shareholders in connection with the
Shareholders' Meeting, and any other documents to be filed by any FNB Company
or any Affiliate thereof with the SEC or any other Regulatory Authority in
connection with the transactions contemplated hereby, will, at the respective
time such documents are filed, and with respect to the Proxy Statement, when
first mailed to the shareholders of IRSB, be false or misleading with respect
to any material fact, or omit to state any material fact necessary to make the
statements therein, in light of the circumstances under which they were made,
not misleading, or, in the case of the Proxy Statement or any amendment thereof
or supplement thereto, at the time of the Shareholders' Meeting, be false or
misleading with respect to any material fact, or omit to state any material
fact necessary to correct any statement in any earlier communication with
respect to the solicitation of any proxy for the Shareholders' Meeting. All
documents that any FNB Company or any Affiliate thereof is

A-17

<PAGE> 123

responsible for filing with any Regulatory Authority in connection with the
transactions contemplated hereby will comply as to form in all material
respects with the provisions of applicable Law.

6.13 Accounting, Tax and Regulatory Matters. No FNB Company or any
Affiliate thereof has taken or agreed to take any action or has any Knowledge
of any fact or circumstance that is reasonably likely to (i) prevent the
transactions contemplated hereby, including the Merger, from qualifying as a
reorganization within the meaning of Section 368(a)(2)(D) of the Internal
Revenue Code, or (ii) materially impede or delay receipt of any Consents of
Regulatory Authorities referred to in Section 9.1(b) of this Agreement or
result in the imposition of a condition or restriction of the type referred to
in the last sentence of such Section.

6.14 Environmental Matters.

(a) To the Knowledge of FNB, except as disclosed in Section
6.14 of the FNB Disclosure Memorandum, each FNB Company, its
Participation Facilities, and its Loan Properties are, and have been,
in compliance with all Environmental Laws, except for violations which
are not reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FNB.

(b) Except as disclosed in Section 6.14 of the FNB Disclosure
Memorandum, there is no Litigation pending, or, to the Knowledge of
FNB, threatened before any court, governmental agency, or authority or
other forum in which any FNB Company or any of its Loan Properties or
Participation Facilities (or any FNB Company in respect of any such
Loan Property or Participation Facility) has been or, with respect to
threatened Litigation, may be named as a defendant or potentially
responsible party (i) for alleged noncompliance (including by any
predecessor) with any Environmental Law or (ii) relating to the
release into the environment of any Hazardous Material, whether or not
occurring at, on, under, or involving any of its Loan Properties or
Participation Facilities, except for such Litigation pending or
threatened that is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FNB.

(c) To the Knowledge of FNB, except as disclosed in Section
6.14 of the FNB Disclosure Memorandum, there is no reasonable basis
for any Litigation of a type described above in Section 6.14(b),
except such as is not reasonably likely to have, individually or in
the aggregate, a Material Adverse Effect on FNB.

(d) To the Knowledge of FNB, except as disclosed in Section
6.14 of the FNB Disclosure Memorandum, during the period of (i) FNB's
or any of its Subsidiaries' ownership or operation of any of their
respective properties, (ii) FNB's or any of its Subsidiaries'
participation in the management of any Participation Facility, or
(iii) FNB's or any of its Subsidiaries' holding a security interest in
a Loan Property, to the Knowledge of FNB there have been no releases
of Hazardous Material in, on, under, or affecting any Participation
Facility or Loan Property of a FNB Company, except such as are not
reasonably likely to have, individually or in the aggregate, a
Material Adverse Effect on FNB.

6.15 Derivatives Contracts. Neither FNB nor any of its Subsidiaries
is a party to or has agreed to enter into a Derivatives Contract, except for
those Derivatives Contracts set forth in Section 6.15 of the FNB Disclosure
Memorandum.

6.16 Outstanding IRSB Common Stock. As of the date of this
Agreement, FNB Companies do not beneficially own any shares of IRSB Common
Stock for their own accounts (not including those held in a fiduciary or trust
capacity for, or on behalf of, unaffiliated third parties). During the term of
this Agreement, no FNB Company, including Interim, shall purchase or otherwise
acquire beneficial ownership of any additional IRSB Common Stock except
pursuant to the terms of this Agreement.

A-18

<PAGE> 124

6.17 Material Contracts. All material Contracts to which FNB is a
party and which are required to be filed as exhibits to FNB SEC Reports have
been so filed and, except as disclosed in Section 6.17 of the FNB Disclosure
Memorandum, as of the date of this Agreement, to the Knowledge of FNB neither
FNB nor any of the FNB Companies is a party to any Contract or amendment
thereto that would be required to be filed as an exhibit to a Form 10-K filed
by FNB with the SEC except for the fact that no such Form 10-K is presently
required to be filed with the SEC as of the date hereof.

ARTICLE 7

CONDUCT OF BUSINESS PENDING CONSUMMATION

7.1 Affirmative Covenants of IRSB. Unless the prior written
consent of FNB shall have been obtained, and except as otherwise expressly
contemplated herein, IRSB shall (i) operate its business only in the usual,
regular, and ordinary course, (ii) use its reasonable best efforts to preserve
intact its business organization and Assets and maintain its rights and
franchises, (iii) use its reasonable best efforts to maintain its current
employee relationships, and (iv) take no action which would materially
adversely affect the ability of any Party to obtain any Consents of Regulatory
Authorities required for the transactions contemplated hereby without
imposition of a condition or restriction of the type referred to in the last
sentence of Section 9.1(b) of this Agreement.

7.2 Negative Covenants of IRSB. Except as disclosed in Section 7.2
of the IRSB Disclosure Memorandum, from the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, IRSB
covenants and agrees that it will not do or agree or commit to do, any of the
following without the prior written consent (except as specifically provided in
this Section 7.2) of the chief executive officer, president, chief financial
officer, or any executive vice president or duly authorized designee of FNB:

(a) amend the Articles of Incorporation, Bylaws, or other
governing instruments of IRSB except as expressly contemplated by this
Agreement; or

(b) except for loans secured by a first mortgage on a single
family owner-occupied real estate, make any unsecured loan or other
extension of credit in excess of $100,000, or make any fully secured
loan, to any Person (except those who have received a commitment for a
loan or extension of credit prior to the date of this Agreement) in
excess of $250,000 (in either case FNB shall object thereto within two
business days, and the failure to provide a written objection within
two business days shall be deemed as the approval of FNB to make such
loan or extend such credit); or

(c) incur any additional debt obligation or other obligation
for borrowed money in excess of an aggregate of $100,000 except in the
ordinary course of the business of IRSB consistent with past practices
(it being understood and agreed that the incurrence of indebtedness in
the ordinary course of business shall include, without limitation,
creation of deposit liabilities, purchases of federal funds, advances
from the Federal Reserve Bank or Federal Home Loan Bank, and entry
into repurchase agreements fully secured by U.S. government or agency
securities), or impose, or suffer the imposition, on any Asset of IRSB
of any Lien or permit any such Lien to exist (other than in connection
with deposits, repurchase agreements, bankers acceptances, "treasury
tax and loan" accounts established in the ordinary course of business,
the satisfaction of legal requirements in the exercise of trust
powers, and Liens in effect as of the date hereof that are disclosed
in the IRSB Disclosure Memorandum); or

A-19

<PAGE> 125

make any other distribution in respect of IRSB's capital stock (except
for the (i) regular semi-annual dividends paid in accordance with
Section 8.6 of this Agreement, and (ii) acquisitions of IRSB Common
Stock by IRSB in a fiduciary or trust capacity in the ordinary course
of business); or

(e) except for this Agreement, or pursuant to the Stock Option
Agreement, or as disclosed in Section 7.2(e) of the IRSB Disclosure
Memorandum, issue, sell, pledge, encumber, authorize the issuance of,
enter into any Contract to issue, sell, pledge, encumber, or authorize
the issuance of, or otherwise permit to become outstanding, any
additional shares of IRSB Common Stock or any other capital stock of
IRSB, or any stock appreciation rights, or any option, warrant,
conversion, or other right to acquire any such stock, or any security
convertible into any such stock; or

(f) adjust, split, combine, or reclassify any capital stock of
IRSB or issue or authorize the issuance of any other securities in
respect of or in substitution for shares of IRSB Common Stock, or
sell, lease, mortgage, or otherwise dispose of or otherwise encumber
(i) any shares of capital stock of IRSB, or (ii) any Asset other than
in the ordinary course of business for reasonable and adequate
consideration; or

(g) except for purchases of United States Treasury securities
or United States Government agency securities, which in either case
have maturities of five years or less, purchase any securities or make
any material investment, either by purchase of stock or securities,
contributions to capital, Asset transfers, or purchase of any Assets,
in any Person, or otherwise acquire direct or indirect control over
any Person, other than in connection with (i) foreclosures in the
ordinary course of business, (ii) acquisitions of control by IRSB in
its fiduciary capacity, or (iii) the creation of new wholly owned
Subsidiaries organized to conduct or continue activities otherwise
permitted by this Agreement (in which case FNB shall object thereto
within two business days, and the failure to provide a written
objection within two business days shall be deemed the approval of FNB
to make such purchase or investment; or

(h) grant any material increase in compensation or benefits to
the employees or officers of IRSB, except in accordance with past
practice disclosed in Section 7.2(h) of the IRSB Disclosure Memorandum
or as required by Law; pay any severance or termination pay or any
bonus other than pursuant to written policies or written Contracts in
effect on the date of this Agreement or as otherwise disclosed in
Section 7.2(h) of the IRSB Disclosure Memorandum; enter into or amend
any severance agreements with officers of IRSB; grant any material
increase in fees or other increases in compensation or other benefits
to directors of IRSB except in accordance with past practice disclosed
in Section 7.2(h) of the IRSB Disclosure Memorandum; or voluntarily
accelerate the vesting of any stock options or other stock-based
compensation or employee benefits; or

(i) except as disclosed in Section 7.2(i) of the IRSB
Disclosure Memorandum or that may be entered into in accordance with
Section 8.16 of this Agreement, enter into or amend any employment
Contract between IRSB and any Person (unless such amendment is
required by Law) that IRSB does not have the unconditional right to
terminate without Liability (other than Liability for services already
rendered), at any time on or after the Effective Time; or

(j) except as disclosed in Section 7.2(j) of the IRSB
Disclosure Memorandum, adopt any new employee benefit plan of IRSB or
make any material change in or to any existing employee benefit plans
of IRSB other than any such change that is required by Law or that, in
the opinion of counsel, is necessary or advisable to maintain the tax
qualified status of any such plan; or

A-20

<PAGE> 126

(k) make any significant change in any Tax or accounting
methods or systems of internal accounting controls, except as may be
appropriate to conform to changes in Tax Laws or regulatory accounting
requirements or GAAP; or

(l) except as disclosed in Section 7.2(l) of the IRSB
Disclosure Memorandum, commence any Litigation other than in
accordance with past practice or settle any Litigation involving any
Liability of IRSB for material money damages or restrictions upon the
operations of IRSB; or

(m) except in the ordinary course of business, modify, amend,
or terminate any material Contract other than renewals without
material adverse change of terms, or waive, release, compromise, or
assign any material rights or claims; or

(n) except as disclosed in Section 7.2(n) of the IRSB
Disclosure Memorandum and except for transactions in the ordinary
course of business consistent with past practice, make any investment
in excess of $100,000 either by purchase of stock or securities,
contributions to capital, property transfers, or purchase of any
property or assets of any other individual, corporation or other
entity other than a wholly owned Subsidiary thereof; or

(o) sell, transfer, mortgage, encumber, or otherwise dispose of
any of its material properties or assets to any individual,
corporation or other entity, or cancel, release or assign any
indebtedness to any such Person or any claims held by any such Person,
except in the ordinary course of business consistent with past
practice or pursuant to contracts or agreements in force at the date
of this Agreement; or

(p) agree to, or make any commitment to, take any of the
actions prohibited by this Section 7.2.

7.3 Covenants of FNB. From the date of this Agreement until the
earlier of the Effective Time or the termination of this Agreement, FNB
covenants and agrees that it shall (i) continue to conduct its business and the
business of FNB Subsidiaries in a manner designed in its reasonable judgment,
to enhance the long-term value of the FNB Common Stock and the business
prospects of the FNB Companies, and (ii) take no action which would (a)
materially adversely affect the ability of any Party to obtain any Consents
required for the transactions contemplated hereby without imposition of a
condition or restriction of the type referred to in the last sentence of
Section 9.1(b) of this Agreement, or (b) materially adversely affect the
ability of any Party to perform its covenants and agreements under this
Agreement; provided, that the foregoing shall not prevent any FNB Company from
discontinuing or disposing of any of its Assets or business if such action is,
in the judgment of FNB, desirable in the conduct of the business of FNB and its
Subsidiaries. FNB further covenants and agrees that it will not, without the
prior written consent of the Chief Executive Officer of IRSB, which consent
shall not be unreasonably withheld, amend the Articles of Incorporation or
Bylaws of FNB, in each case in any manner adverse to the holders of IRSB Common
Stock.

7.4 Adverse Changes In Condition. Except as disclosed in Section
7.4 of the IRSB Disclosure Memorandum, each Party agrees to give written notice
promptly to the other Party upon becoming aware of the occurrence or impending
occurrence of any event or circumstance relating to it or any of its
Subsidiaries which (i) is reasonably likely to have, individually or in the
aggregate, a Material Adverse Effect on it or (ii) would cause or constitute a
material breach of any of its representations, warranties, or covenants
contained herein, and to use its reasonable best efforts to prevent or promptly
to remedy the same.

7.5 Reports. Each Party and their respective Subsidiaries shall
file all reports required to be filed by each of them with Regulatory
Authorities between the date of this Agreement and the Effective Time and shall
deliver to the other Party copies of all such reports promptly after the same
are filed. If financial

A-21

<PAGE> 127

statements are contained in any such reports filed with the SEC, such financial
statements will fairly present the consolidated financial position of the
entity filing such statements as of the dates indicated and the consolidated
results of operations, changes in shareholders' equity, and cash flows for the
periods then ended in accordance with GAAP (subject in the case of interim
financial statements to normal recurring year-end adjustments that are not
material and except for the absence of certain footnote information in the
unaudited financial statements). As of their respective dates, such reports
filed with the SEC will comply in all material respects with the Securities
Laws and will not contain any untrue statement of a material fact or omit to
state a material fact required to be stated therein or necessary in order to
make the statements therein, in light of the circumstances under which they
were made, not misleading. Any financial statements contained in any other
reports to another Regulatory Authority shall be prepared in accordance with
Laws applicable to such reports.

ARTICLE 8

ADDITIONAL AGREEMENTS

8.1 Registration Statement; Proxy Statement; Shareholder Approval.
As soon as practicable after execution of this Agreement (in no event later
than July 30, 1997), FNB shall file the Registration Statement with the SEC,
and shall use its reasonable best efforts to cause the Registration Statement
to become effective under the 1933 Act and take any action required to be taken
under the applicable state blue sky or securities Laws in connection with the
issuance of the shares of FNB Common Stock upon consummation of the Merger.
IRSB shall furnish all information concerning it and the holders of its capital
stock as FNB may reasonably request in connection with such action. IRSB shall
call a Shareholders' Meeting, to be held on a date that is determined by the
Parties to be a mutually desirable date, which date shall be as soon as
practicable after the Registration Statement is declared effective by the SEC,
for the purpose of voting upon approval of this Agreement and such other
related matters as it deems appropriate. In connection with the Shareholders'
Meeting, (i) IRSB shall prepare a Proxy Statement relating to the Merger and
mail such Proxy Statement to its shareholders, (ii) the Parties shall furnish
to each other all information concerning them that they may reasonably request
in connection with such Proxy Statement, (iii) the Board of Directors of IRSB
shall recommend (subject to compliance with their fiduciary duties under
applicable law as advised by counsel) to its shareholders the approval of this
Agreement, (iv) each member of the Board of Directors of IRSB shall vote all
IRSB Common Stock beneficially owned by each in favor of the approval of this
Agreement, and (v) the Board of Directors and officers of IRSB shall (subject
to compliance with their fiduciary duties under applicable law as advised by
counsel) use their reasonable best efforts to obtain such shareholders'
approval.

8.2 Applications. FNB shall promptly prepare and file, and IRSB
shall cooperate in the preparation and, where appropriate, filing of,
applications with all Regulatory Authorities having jurisdiction over the
transactions contemplated by this Agreement seeking the requisite Consents
necessary to consummate the transactions contemplated by this Agreement and
thereafter use its reasonable best efforts to cause the Merger to be
consummated as expeditiously as possible. Further, FNB shall, prior to the
Closing, prepare and file with the National Association of Securities Dealers
the required documents and make payment of the required fees for the shares of
FNB Common Stock to be issued to holders of IRSB Common Stock in connection
with the Merger.

8.3 Filings With Regulatory Authorities. Upon the terms and
subject to the conditions of this Agreement, FNB shall execute and file the
Application to Merge with the Department of Banking of the State of Florida
and the Office of the Comptroller of the Currency in connection with the
Closing.

8.4 Agreement As To Efforts To Consummate. Subject to the terms
and conditions of this Agreement, each Party agrees to use, and to cause its
Subsidiaries, if any, to use, its reasonable best efforts

A-22

<PAGE> 128

to take, or cause to be taken, all actions, and to do, or cause to be done, all
things necessary, proper, or advisable under applicable Laws to consummate and
make effective, as soon as practicable after the date of this Agreement, the
transactions contemplated by this Agreement, including the use of their
respective reasonable best efforts to lift or rescind any Order adversely
affecting its ability to consummate the transactions contemplated herein and to
cause to be satisfied the conditions referred to in Article 9 of this
Agreement; provided, that nothing herein shall preclude either Party from
exercising its rights under this Agreement. Each Party shall use, and shall
cause each of its Subsidiaries, if any, to use, its reasonable best efforts to
obtain all Permits and Consents of all third parties and Regulatory Authorities
necessary or desirable for the consummation of the transactions contemplated by
this Agreement.

8.5 Access to Information; Confidentiality.

(a) From the date hereof to the Effective Time or termination
pursuant to Article 10 of this Agreement, upon reasonable notice and
subject to applicable Laws, FNB and IRSB shall afford each other, and
each other's accountants, counsel, and other representatives, during
normal working hours for the period of time prior to the Effective
Time or termination of this Agreement pursuant to Article 10 hereof,
reasonable access to all of its and its Subsidiaries' properties,
books, contracts, commitments, and records and, during such period,
each shall furnish promptly to the other party (i) a copy of each
report, schedule, and other document filed or received by it or any of
its Subsidiaries during such period pursuant to the requirements of
the Securities Laws, (ii) a copy of all filings made with any
Regulatory Authorities or other governmental entities in connection
with the transactions contemplated by this Agreement and all written
communications received from such Regulatory Authorities and
governmental entities related thereto, and (iii) all other information
concerning FNB or FNB's Subsidiaries' business, properties and
personnel as IRSB may reasonably request, including reports of
condition filed with Regulatory Authorities. In this regard, without
limiting the generality of the foregoing, FNB and its Subsidiaries and
Affiliates shall notify IRSB promptly upon the receipt by it of any
comments from the SEC, or its staff, and of any requests by the SEC
for amendments or supplements to the Registration Statement or for
additional information and will supply IRSB with copies of all
correspondence between it and its representatives, on the one hand,
and the SEC or the members of its staff or any other government
official, on the other hand, with respect to the Registration
Statement. Each Party hereto shall, and shall cause its advisors and
representatives to (x) conduct its investigation in such a manner
which will not unreasonably interfere with the normal operations,
customers or employee relations of the other and shall be in
accordance with procedures established by the parties having the due
regard for the foregoing, and (y) refrain from using for any purposes
other than as set forth in this Agreement, and shall treat as
confidential, all information obtained by each hereunder or in
connection herewith and not otherwise known to them prior to the
Effective Time.

(b) FNB, the FNB Companies and their Affiliates will hold, and
will use their best efforts to cause their officers, directors,
employees, consultants, advisors, representatives, and agents to hold,
in confidence, unless compelled by judicial or other legal process,
all confidential documents and information concerning IRSB furnished
to FNB, any FNB Company, or their Affiliates in connection with the
transactions contemplated by this Agreement, including information
provided in accordance with this Section 8.5, except to the extent
that such information can clearly be demonstrated by FNB to have been
(i) previously known on a nonconfidential basis by FNB, (ii) in the
public domain other than as a result of disclosure by FNB, any FNB
Company, or any of their Affiliates, or (iii) later lawfully acquired
by FNB from sources other than IRSB; provided, however, that FNB may
disclose such information to its officers, directors, employees,
consultants, advisors, representatives, and agents in connection with
the transactions contemplated by this Agreement only to the extent
that such Persons who, in FNB's reasonable judgment, need to know such
information for the purpose of evaluating IRSB (provided that such
Persons shall be informed of the confidential nature of such

A-23

<PAGE> 129

information and shall agree to be bound by the terms of this
provision) and, in any event, such disclosures shall be made only to
the extent necessary for such purposes. If this Agreement is
terminated in accordance with Article 10 hereof, FNB, the FNB
Companies and their Affiliates shall maintain the confidence of such
information and will, and will use their best efforts to cause its
officers, directors, employees, consultants, advisors,
representatives, and agents to, return to IRSB all documents and other
materials, and all copies made thereof, obtained by FNB, any FNB
Company, or any of their Affiliates in connection with this Agreement
that are subject to this Section 8.5.

8.6 Dividend Payments; and Payments under Plans. After the date of
this Agreement until the Effective Time or the termination of this Agreement
pursuant to Article 10 hereof, IRSB may declare and pay semi-annual cash
dividends for the first half of 1997 to its shareholders in June 1997 in an
amount not to exceed $0.25 per share and in December 1997 (if the Closing of
the Merger has not occurred) in an amount not to exceed $0.50 per share for the
second half of 1997.

8.7 Current Information. During the period from the date of this
Agreement until the Effective Time or termination of this Agreement pursuant to
Article 10 hereof, each of IRSB and FNB shall, and shall cause its
representatives to, confer on a regular and frequent basis with representatives
of the other. Each of IRSB and FNB shall promptly notify the other of (i) any
material change in its business or operations, (ii) any material complaints,
investigations, or hearings (or communications indicating that the same may be
contemplated) of any Regulatory Authority, (iii) the institution of threat of
material Litigation involving such party, or (iv) the occurrence or
nonoccurrence, of an event or condition, the occurrence, or nonoccurrence, of
which would be reasonably expected to cause any of such party's representations
or warranties set forth herein in any respect as of the Effective Time; and in
each case shall keep the other fully informed with respect thereto.

8.7 Other Actions. No Party shall, or shall permit any of its
Subsidiaries, if any, to, take any action, except in every case as may be
required by applicable Law, that would or is intended to result in (i) any of
its representations and warranties set forth in this Agreement that are
qualified as to materiality being or becoming untrue, (ii) any of such
representations and warranties that are not so qualified become untrue in any
material manner having a Material Adverse Effect, (iii) any of the conditions
set forth in this Agreement not being satisfied or in a violation of any
provision of this Agreement, or (iv) adversely affecting the ability of any of
them to obtain any of the Consents or Permits from Regulatory Authorities
(unless such action is required by sound banking practice).

8.8 Press Releases. Prior to the Effective Time, IRSB and FNB
shall consult with each other as to the form and substance of any press release
or other public disclosure materially related to this Agreement or any other
transaction contemplated hereby; provided, that nothing in this Section 8.8
shall be deemed to prohibit any Party from making any disclosure which its
counsel deems necessary or advisable in order to satisfy such Party's
disclosure obligations imposed by Law.

8.9 No Solicitation. Except with respect to this Agreement and the
transactions contemplated hereby, from the date of this Agreement until the
Effective Time or termination pursuant to Article 10, neither IRSB nor any
Affiliate thereof, or any Representatives thereof retained by IRSB, shall
directly or indirectly solicit any Acquisition Proposal by any Person. Except
to the extent necessary to comply with the fiduciary duties of IRSB's Board of
Directors determined after consultation with counsel, neither IRSB nor any
Affiliate or Representative thereof shall furnish any nonpublic information
that it is not legally obligated to furnish or negotiate with respect to, any
Acquisition Proposal, but IRSB may communicate information about such an
Acquisition Proposal to its shareholders if and to the extent that it is
required to do so in order to comply with its legal obligations as advised by
counsel. IRSB shall promptly notify FNB orally and in writing in the event that
it receives any inquiry or proposal relating to any such transaction. IRSB
shall (i)

A-24

<PAGE> 130

immediately cease and cause to be terminated any existing activities,
discussions, or negotiations with any Persons conducted heretofore with respect
to any of the foregoing, and (ii) direct and use its reasonable best efforts to
cause of all its Representatives not to engage in any of the foregoing.

8.10 Certain Purchases. Except as contemplated in this Agreement,
for a period of three years after the date of this Agreement, and if this
Agreement is terminated as provided in Section 10.1 hereof, then for a period
of three years from the date of termination, FNB will not (and will ensure that
the FNB Subsidiaries and Affiliates will not), without the prior written
approval of the Board of Directors of IRSB or any committee thereof: (i)
directly purchase or otherwise acquire, or enter into any agreement to purchase
or otherwise acquire, any equity securities of IRSB, any warrants or options to
purchase such equity securities, any securities convertible into such equity
securities, or any other rights to acquire such equity securities, (ii) make or
in any way participate directly or indirectly in any "solicitation" of
"proxies" (as such terms are used in the proxy rules of the SEC), to vote any
equity securities of IRSB (unless any third party shall then be engaged in such
a solicitation and such solicitation relates to a content for control of IRSB
and except that this clause (ii) shall not apply to solicitations made by
IRSB), or (iii) make any public request to waive any provision of this Section
8.10 or to permit any action prohibited by this Section 8.10 to be taken.
Notwithstanding the foregoing, nothing in this Section 8.10 shall prohibit FNB
from indirectly acquiring any equity securities of IRSB by acquiring through
merger, consolidation or otherwise, a financial institution which owns equity
securities of IRSB.

8.11 Accounting and Tax Treatment. Each of the Parties undertakes
and agrees to use its reasonable best efforts to cause the Merger, and to take
no action which would cause the Merger not, to qualify for treatment as a
"reorganization" within the meaning of Section 368(a) of the Internal Revenue
Code for federal income tax purposes. FNB and IRSB undertake and agree to use
their respective reasonable best efforts to cause the Merger, and to take no
action that would cause the Merger not, to qualify for pooling-of-interests
accounting treatment.

8.12 Articles of Incorporation Provisions. IRSB shall take all
necessary action to ensure that the entering into of this Agreement and the
consummation of the Merger and the other transactions contemplated hereby do
not and will not result in any super-majority voting requirements or the grant
of any rights to any Person under the Articles of Incorporation, Bylaws, or
other governing instruments of IRSB or restrict or impair the ability of FNB or
any of its Subsidiaries to vote, or otherwise to exercise the rights of a
shareholder with respect to, shares of IRSB that may be directly or indirectly
acquired or controlled by it.

8.13 Agreement of Affiliates. IRSB has disclosed in Section 8.13 of
the IRSB Disclosure Memorandum all Persons whom it reasonably believes are
"affiliates" of IRSB for purposes of Rule 145 under the 1933 Act. IRSB shall
use its reasonable best efforts to cause each such Person to deliver to FNB not
later than 10 days prior to the Effective Time, a written agreement,
substantially in the form of Exhibit 2 attached hereto, providing that such
Person will not sell, pledge, transfer, or otherwise dispose of the shares of
IRSB Common Stock held by such Person except as contemplated by such agreement
or by this Agreement and will not sell, pledge, transfer, or otherwise dispose
of the shares of FNB Common Stock to be received by such Person upon
consummation of the Merger except in compliance with applicable provisions of
the 1933 Act and the rules and regulations thereunder and until such time as
financial results covering at least 30 days of combined operations of FNB and
IRSB have been published within the meaning of Section 201.01 of the SEC's
Codification of Financial Reporting Policies. Shares of FNB Common Stock issued
to such Affiliates of IRSB in exchange for shares of IRSB Common Stock shall
not be transferable until such time as financial results covering at least 30
days of combined operations of FNB and IRSB have been published within the
meaning of Section 201.01 of the SEC's Codification of Financial Reporting
Policies, regardless of whether each such affiliate has provided the written
agreement referred to in this Section 8.13 (and FNB shall be entitled to place
restrictive legends upon certificates for shares of FNB Common Stock issued to
affiliates of IRSB pursuant to this Agreement to enforce the provisions of this
Section 8.13). FNB shall not

A-25

<PAGE> 131

be required to maintain the effectiveness of the Registration Statement under
the 1933 Act for the purposes of resale of FNB Common Stock by such Affiliates.

8.14 Employee Benefits and Contracts. All employees of IRSB at the
Effective Time shall become employees of Interim. Following the Effective
Time, FNB shall provide generally to officers and employees of IRSB employee
benefits under employee benefit plans (other than stock option or other plans
involving the potential issuance of FNB Common Stock), on terms and conditions
which when taken as a whole are no less favorable than those currently provided
by IRSB or those currently provided by the FNB Companies to their similarly
situated officers and employees, whichever is more favorable to officers and
employees of IRSB. For purposes of participation and vesting (but not benefit
accrual under any employee benefit plans of FNB and its subsidiaries other than
the IRSB Benefit Plans) under such employee benefit plans, the service of the
employees of IRSB prior to the Effective Time shall be treated as service with
a FNB Company participating in such employee benefit plans. FNB shall, and
shall cause its Subsidiaries to, honor in accordance with their terms all
employment, severance, consulting, and other compensation Contracts disclosed
in Section 8.14 of the IRSB Disclosure Memorandum between IRSB and any current
or former director, officer, or employee thereof, and all provisions for vested
benefits or other vested amounts earned or accrued through the Effective Time
under the IRSB Benefit Plans, provided, however, that the benefits that accrue
under the IRSB bonus plan for employees and under the IRSB profit sharing plan
for employees shall continue through December 31, 1997, at which time the
employees of IRSB will participate in such similar employee benefit plans
currently provided by the FNB Companies.

8.15 Retention of Directors. Immediately following the Effective
Time and for a period of one year, FNB shall cause the present directors of
IRSB to be nominated and elected directors of Interim at a rate of compensation
for their services in an amount at least equal to that which they are receiving
from IRSB as of the date of this Agreement.

8.16 Employment Contracts of Certain Officers. Southwest and
Interim, prior to the Effective Time, shall enter into Employment Agreements
with Robert C. George, George F. Bossa, Jr. and Bernie F. Kline containing such
terms and conditions as mutually agreeable. In consideration of the entering
into such employment agreements Messrs. George, Bossa and Kline shall cancel
and terminate the agreements dated as of January 1, 1997, entered into with
IRSB respecting change in control.

8.17 Indemnification.

(a) FNB shall, and shall cause the Surviving Corporation (and
its successors and assigns) to, indemnify, defend, and hold harmless
the present and former directors, officers, employees, and agents of
IRSB (each, an "Indemnified Party") after the Effective Time against
all costs, fees, or expenses (including reasonable attorneys' fees),
judgments, fines, penalties, losses, claims, damages, liabilities, and
amounts paid in settlement in connection with any Litigation arising
out of actions or omissions occurring at or prior to the Effective
Time (including the transactions contemplated by this Agreement) to
the full extent permitted under Florida Law and by IRSB's Articles of
Incorporation and Bylaws as in effect on the date hereof, including
provisions relating to advances of expenses incurred in the defense of
any Litigation. Without limiting the foregoing, in any case in which
approval by FNB is required to effectuate any indemnification, FNB
shall direct, or cause such FNB Company to direct, at the election of
the Indemnified Party, that the determination of any such approval
shall be made by independent counsel mutually agreed upon between FNB
and the Indemnified Party. FNB shall, and shall cause the Surviving
Corporation and all other relevant FNB Companies, to apply such rights
of indemnification in good faith and to the fullest extent permitted
by applicable Law.

A-26

<PAGE> 132

(b) Incident to any information furnished or disclosed by FNB
or any FNB Company in connection with the Registration Statement and
Proxy Statement, and subject to applicable Law, FNB shall indemnify,
defend, and hold harmless the Indemnified Parties against all costs or
expenses (including reasonable attorneys' fees), judgments, fines,
penalties, losses, claims, damages, liabilities, and amounts paid in
settlement in connection with any Litigation, whether civil or
criminal, administrative, or investigative, arising out of or under
the Securities Laws or any state blue sky or securities Laws based in
whole or in part on (i) any untrue statement or alleged untrue
statement of a material fact contained in such documents (including
any amendment or supplement to such document, (ii) any omission or
alleged omission to state in such documents a material fact required
to be stated therein or necessary to make the statements therein not
misleading, or (iii) any violation by FNB or an FNB Company of the
Securities Laws or any state blue sky or securities Laws in connection
with such documents; provided, however, that neither FNB or any FNB
Company will be liable in any such case to the extent that any such
claim, action, suit, proceeding or investigation is based upon any
untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement and Proxy Statement or
any amendment thereto in reliance upon and in conformity with
information furnished in writing to FNB or any FNB Company by IRSB or
any Indemnified Party specifically for use therein.

(c) IRSB and each Indemnified Party, jointly and severally,
shall indemnify and hold harmless FNB, any FNB Company, each of its
directors, officers, employees and agents, and each person who
controls FNB or any FNB Company, against all costs or expenses
(including reasonable attorneys' fees), judgments, fines, penalties,
losses, claims, damages, liabilities, and amounts paid in settlement
in connection with any Litigation, whether civil or criminal,
administrative, or investigative, arising out of or under the
Securities Laws or any state blue sky or securities Laws based in
whole or in part on (i) any untrue statement or alleged untrue
statement of a material fact contained in the Registration Statement
or Proxy Statement (including any amendment or supplement to such
document); or (ii) any omission or alleged omission to state in such
documents material facts required to be stated therein or necessary to
make the statements therein not misleading; provided, however, that
IRSB will not be liable in any such case to the extent that any such
claim, action, suit, proceeding, or investigation is based upon any
untrue statement or alleged untrue statement or omission or alleged
omission made in such Registration Statement or Proxy Statement or any
amendment thereto in reliance upon and conformity with information
furnished in writing to IRSB by FNB specifically for use therein.

(d) If FNB or the Surviving Corporation or any of their
successors or assigns shall consolidate with or merge into any other
Person and shall not be the continuing or surviving Person of such
consolidation or merger or shall transfer all or substantially all of
its assets to any Person, then and in each case, proper provision
shall be made so that the successors and assigns of FNB shall assume
the obligations set forth in this Section 8.17.

(e) The provisions of this Section 8.17 are intended to be for
the benefit of and shall be enforceable by, each Indemnified Party,
his or her heirs and representatives and shall survive the
consummation of the Merger and be binding on all successors and
assigns of FNB and the Surviving Corporation.

A-27

<PAGE> 133

ARTICLE 9

CONDITIONS PRECEDENT TO OBLIGATIONS TO CONSUMMATE

9.1 Conditions to Obligations of Each Party. The respective
obligations of each Party to perform this Agreement and consummate the Merger
and the other transactions contemplated hereby are subject to the satisfaction
of the following conditions, unless waived by both Parties pursuant to Section
11.6 of this Agreement:

(a) Shareholder Approval. The shareholders of IRSB shall have
approved this Agreement, and the consummation of the transactions
contemplated hereby, including the Merger, as and to the extent
required by Law.

(b) Regulatory Approvals. All Consents of, filings and
registrations with, and notifications to, all Regulatory Authorities
required for consummation of the Merger shall have been obtained or
made and shall be in full force and effect and all waiting periods
required by Law shall have expired. No Consent obtained from any
Regulatory Authority which is necessary to consummate the transactions
contemplated hereby shall be conditioned or restricted in a manner
(including requirements relating to the raising of additional capital
or the disposition of Assets) which in the reasonable judgment of the
Board of Directors of either Party would so materially adversely
impact the economic or business benefits of the transactions
contemplated by this Agreement that, had such condition or requirement
been known, such Party would not, in its reasonable judgment, have
entered into this Agreement.

(c) Consents and Approvals. Other than filing the Certificate
to Merge and receipt of a certification to Merger, each Party shall
have obtained any and all Consents required for consummation of the
Merger (other than those referred to in Section 9.1(b) of this
Agreement or listed in Section 9.1(c) of the IRSB Disclosure
Memorandum) or for the preventing of any Default under any Contract or
Permit of such Party which, if not obtained or made, is reasonably
likely to have, individually or in the aggregate, a Material Adverse
Effect on such Party.

(d) Legal Proceedings. No court or governmental or regulatory
authority of competent jurisdiction shall have enacted, issued,
promulgated, enforced, or entered any Law or Order (whether temporary,
preliminary, or permanent) or taken any other action which prohibits,
restricts, or makes illegal consummation of the transactions
contemplated by this Agreement.

(e) Registration Statement. The Registration Statement shall
have been declared effective under the 1933 Act, and no stop orders
suspending the effectiveness of the Registration Statement shall have
been issued, and no action, suit, proceeding, or investigation by the
SEC to suspend the effectiveness thereof shall have been initiated and
be continuing, and all necessary approvals under state securities Laws
or the 1933 Act or 1934 Act relating to the issuance or trading of the
shares of FNB Common Stock issuable pursuant to the Merger shall have
been received.

(f) Pooling of Interests. Ernst & Young LLP, FNB's independent
public accountants, shall have issued a letter dated as of the
Effective Time, to IRSB and FNB, respectively, to the effect that the
Merger shall be accounted for as a pooling-of-interests under GAAP.

(g) Tax Matters. Each Party shall have received a written
opinion or opinions from Smith, Gambrell & Russell, LLP, and in a form
reasonably satisfactory to such Parties (the "Tax Opinion"), to the
effect that (i) the Merger will constitute a reorganization within the
meaning of Section 368(a) of the Internal Revenue Code and (ii) the
exchange in the Merger of IRSB Common Stock for FNB

A-28

<PAGE> 134

Common Stock will not give rise to gain or loss to the shareholders of
IRSB with respect to such exchange. In rendering such Tax Opinion,
such counsel shall be entitled to rely upon representations of
officers of IRSB and FNB reasonably satisfactory in form and substance
to such counsel.

9.2 Conditions to Obligations of FNB. The obligations of FNB to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by FNB pursuant to Section 11.7(a) of this Agreement:

(a) Completion of Due Diligence Investigation. (i) As a result
of FNB's due diligence investigation of IRSB and its business and
operations, which investigation shall be completed within fourteen
(14) calendar days from the date of this Agreement, there shall not
have been discovered by FNB, and reported in writing to IRSB during
such fourteen (14) calendar day period, any circumstance or condition
in connection with a review of IRSB Financial Statements, the general
ledger and subsidiary ledgers maintained by IRSB, IRSB Contracts,
minute books maintained by IRSB of meetings of the Board of Directors,
Committees of the Board and meetings of shareholders, stock transfer
records, credit or loan files, records regarding the calculation of
IRSB's allocation for loan and lease loss, records relating to
transactions in IRSB's securities portfolio, and Reports of
Examination prepared by both the Federal Reserve Bank of Atlanta and
the Florida Department of Banking and Finance which would require
under GAAP a negative adjustment to shareholders' equity as set forth
in the IRSB Financial Statements of an amount equal to or greater than
$250,000. (ii) Upon receipt of such written notice as set forth in
this Section 9.2(a)(i) IRSB shall have thirty (30)days to provide FNB
with written evidence that the circumstance or condition giving rise
to FNB's written notification pursuant to Section 9.2(a)(i) has been
cured. In the event that FNB receives no notification from IRSB
during the thirty (30) days following a written notification to IRSB
pursuant to Section 9.2(a)(i) then IRSB's right to cure under this
provision shall have expired. (iii) No item set forth in the IRSB
Disclosure Memorandum shall serve as a basis for notification by FNB
to IRSB pursuant to Section 9.2(a)(i) hereof.

(b) Representations and Warranties. For purposes of this
Section 9.2(b), the accuracy of the representations and warranties of
IRSB set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). The representations and warranties of IRSB set forth in Section
5.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and
warranties of IRSB set forth in Sections 5.17, 5.18, 5.19, and 5.20 of
this Agreement shall be true and correct in all material respects.
There shall not exist inaccuracies in the representations and
warranties of IRSB set forth in this Agreement (including the
representations and warranties set forth in Sections 5.3, 5.17, 5.18,
5.19, and 5.20) such that the aggregate effect of such inaccuracies
has, or is reasonably likely to have, a Material Adverse Effect on
IRSB; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to
"material" or "Material Adverse Effect" shall be deemed not to include
such qualifications.

(c) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of IRSB to be performed and complied with
pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all respects.

(d) Certificates. IRSB shall have delivered to FNB (i) a
certificate, dated as of the Effective Time and signed on its behalf
by its chief executive officer and its cashier, to the effect that the
conditions of its obligations set forth in Section 9.2(b) and 9.2(c)
of this Agreement have been

A-29

<PAGE> 135

satisfied, and (ii) certified copies of resolutions duly adopted by
IRSB's Board of Directors and shareholders evidencing the taking of
all corporate action necessary to authorize the execution, delivery,
and performance of this Agreement, and the consummation of the
transactions contemplated hereby, all in such reasonable detail as FNB
and its counsel shall request.

(e) Affiliates Agreements. FNB shall have received from each
affiliate of IRSB the affiliates referred to in Section 8.13 of this
Agreement, to the extent necessary to assure in the reasonable
judgment of FNB that the transactions contemplated hereby will qualify
for pooling-of-interests accounting treatment.

(f) Opinion of Counsel. FNB shall have received a written
opinion of Carlton, Fields, Ward, Emmanuel, Smith & Cutler, P.A.,
counsel to IRSB, dated as of the Effective Time, with respect to such
matters and in such form as shall be agreed upon between such firm and
FNB.

9.3 Conditions to Obligations of IRSB. The obligations of IRSB to
perform this Agreement and consummate the Merger and the other transactions
contemplated hereby are subject to the satisfaction of the following
conditions, unless waived by IRSB pursuant to Section 11.7(b) of this
Agreement:

(a) Representations and Warranties. For purposes of this
Section 9.3(a), the accuracy of the representations and warranties of
FNB set forth in this Agreement shall be assessed as of the date of
this Agreement and as of the Effective Time with the same effect as
though all such representations and warranties had been made on and as
of the Effective Time (provided that representations and warranties
which are confined to a specified date shall speak only as of such
date). The representations and warranties of FNB set forth in Section
6.3 of this Agreement shall be true and correct (except for
inaccuracies which are de minimus in amount). The representations and
warranties of FNB set forth in Sections 6.11, 6.12, 6.13 and 6.15 of
this Agreement shall be true and correct in all material respects.
There shall not exist inaccuracies in the representations and
warranties of FNB set forth in this Agreement (including the
representations and warranties set forth in Sections 6.3, 6.11, 6.12,
6.13 and 6.15) such that the aggregate effect of such inaccuracies
has, or is reasonably likely to have, a Material Adverse Effect on
FNB; provided that, for purposes of this sentence only, those
representations and warranties which are qualified by references to
"material" or "Material Adverse Effect" shall be deemed not to include
such qualifications.

(b) Performance of Agreements and Covenants. Each and all of
the agreements and covenants of FNB to be performed and complied with
pursuant to this Agreement and the other agreements contemplated
hereby prior to the Effective Time shall have been duly performed and
complied with in all material respects.

(c) Certificates. FNB shall have delivered to IRSB (i) a
certificate, dated as of the Effective Time and signed on its behalf
by its chief executive officer and its chief financial officer, to the
effect that the conditions of its obligations set forth in Section
9.3(a) and 9.3(b) of this Agreement have been satisfied, and (ii)
certified copies of resolutions duly adopted by FNB's Board of
Directors evidencing the taking of all corporate action necessary to
authorize the execution, delivery, and performance of this Agreement,
and the consummation of the transactions contemplated hereby, all in
such reasonable detail as IRSB and its counsel shall request.

(d) Fairness Opinion. IRSB shall have received from Allen C.
Ewing & Co. a letter, dated not more than five business days prior to
the date of the Proxy Statement, to the effect that, in the opinion of
such firm, the consideration to be paid in the Merger is fair, from a
financial point of view, to the holders of IRSB Common Stock.

A-30

<PAGE> 136

(e) Payment of Consideration. FNB shall have delivered to the
Exchange Agent the consideration to be paid to holders of the IRSB
Common Stock pursuant to Sections 3.1 and 3.4 of this Agreement.

(f) Opinion of Counsel. IRSB shall have received a written
opinion of Smith, Gambrell & Russell, LLP, counsel to FNB, dated as of
the Effective Time, with respect to such matters and in such form as
shall be agreed upon between such firm and IRSB.

ARTICLE 10

TERMINATION

10.1 Termination. Notwithstanding any other provision of this
Agreement, and notwithstanding the approval of this Agreement by the
shareholders of IRSB, this Agreement may be terminated and the Merger abandoned
at any time prior to the Effective Time:

(a) By mutual written consent of the Board of Directors of FNB
and the Board of Directors of IRSB; or

(b) By the Board of Directors of either FNB or IRSB (provided
that the terminating Party is not then in breach of any representation
or warranty contained in this Agreement under the applicable standard
set forth in Section 9.2(b) of this Agreement in the case of IRSB and
Section 9.3(a) in the case of FNB or in material breach of any
covenant or other agreement contained in this Agreement) in the event
of an inaccuracy of any representation or warranty of the other Party
contained in this Agreement which cannot be or has not been cured
within 30 days after the giving of written notice to the breaching
Party of such inaccuracy and which inaccuracy would provide the
terminating Party the ability to refuse to consummate the Merger under
the applicable standard set forth in Section 9.2(b) of this Agreement
in the case of IRSB and Section 9.3(a) of this Agreement in the case
of FNB; or

(c) By the Board of Directors of either FNB or IRSB in the
event of a material breach by the other Party of any covenant,
agreement, or obligation contained in this Agreement which breach
cannot be or has not been cured within 30 days after the giving of
written notice to the breaching Party of such breach; or

(d) By the Board of Directors of either FNB or IRSB in the
event (i) any Consent of any Regulatory Authority required for
consummation of the Merger and the other transactions contemplated
hereby shall have been denied by final nonappealable action of such
authority or if any action taken by such authority is not appealed
within the time limit for appeal, or (ii) the shareholders of IRSB
fail to vote their approval of this Agreement and the transactions
contemplated hereby as required by the FFIC at the Shareholders'
Meeting where the transactions were presented to such shareholders for
approval and voted upon; or

(e) By the Board of Directors of either FNB or IRSB in the
event that the Merger shall not have been consummated by January 2,
1998, if the failure to consummate the transactions contemplated
hereby on or before such date is not caused by any breach of this
Agreement by the Party electing to terminate pursuant to this Section
10.1(e); or

(f) By FNB in the event dissenters' rights are claimed,
pursuant to the applicable provisions of the National Bank Act, by
persons owning in the aggregate more than 10% of the issued and
outstanding IRSB Common Stock; or

A-31

<PAGE> 137

(g) By IRSB, if its Board of Directors determines by a vote of
a majority of the members of its entire Board of Directors, at any
time during the period commencing on the Determination Date and ending
at the closing of business on the day before the Closing, the
Designated Price of FNB Common Shares shall be equal to or greater
than $30.00;

(h) By the Board of Directors of either FNB or IRSB (provided
that the terminating Party is not then in breach of any representation
or warranty contained in this Agreement under the applicable standard
set forth in Section 9.2(b) of this Agreement in the case of IRSB and
Section 9.3(a) in the case of FNB or in material breach of any
covenant or other agreement contained in this Agreement) in the event
that any of the conditions precedent to the obligations of such Party
to consummate the Merger cannot be satisfied or fulfilled by the date
specified in Section 10.1(e) of this Agreement; or

(i) By IRSB, if at any time prior to the Effective Time, the
fairness opinion of Allen C. Ewing & Co. is withdrawn; or

(j) By IRSB if prior to the Effective Time, a corporation,
partnership, person, or other entity or group shall have made a bona
fide Acquisition Proposal that the IRSB Board determines in its good
faith judgment and in the exercise of its fiduciary duties, with
respect to legal matters on the written opinion of legal counsel and
as to financial matters on the written opinion of an investment
banking firm of national reputation, is more favorable to the IRSB
stockholders and that the failure to terminate this Agreement and
accept such alternative Acquisition Proposal would be inconsistent
with the proper exercise of such fiduciary duties.

(k) By FNB, if at any time during the period commencing on the
Determination Date and ending at the close of business on the day
before the Closing, the Designated Price of FNB Common Shares shall be
less than $20.00.

10.2 Effect of Termination. In the event of the termination and
abandonment of this Agreement pursuant to Section 10.1 of this Agreement, this
Agreement shall become void and have no effect, except that (i) the provisions
of this Section 10.2 and Sections 8.5 and 11.1 of this Agreement shall survive
any such termination and abandonment, and (ii) a termination pursuant to
Sections 10.1(b) or 10.1(c), of this Agreement shall not relieve the breaching
Party from liability for an uncured willful breach of a representation,
warranty, covenant, or agreement giving rise to such termination; provided,
further, that in the event of any termination of this Agreement following the
occurrence of an Initial Triggering Event (as defined in the Stock Option
Agreement) other than termination due to: (A) the failure of FNB to satisfy a
condition to closing, (B) determination of FNB pursuant to Section 9.2(a) not
to perform this Agreement, (C) withdrawal of the fairness opinion of Allen C.
Ewing & Co. (so long as such withdrawal is not due to materially inaccurate or
fraudulent information provided by IRSB to Allen C. Ewing & Co.), or (D) the
failure to satisfy the conditions set forth in Section 9.1 paragraphs (b), (d),
(e), (f) and (g), FNB shall be entitled to a cash payment from IRSB in an
amount equal to $250,000 upon the occurrence of any Subsequent Triggering Event
(as defined in the Stock Option Agreement) within twelve (12) months following
the date of such termination (or such longer period as shall exist under the
Stock Option Agreement until the occurrence of an Exercise Termination Date (as
defined in the Stock Option Agreement). In the event this Agreement is
terminated as a result of FNB's failure to satisfy any of its representations,
warranties or covenants set forth herein, FNB shall reimburse IRSB for its
reasonable out-of-pocket expenses relating to the Merger in an amount not to
exceed $150,000, which amount shall not be deemed an exclusive remedy or
liquidated damages.

10.3 Non-Survival of Representations and Covenants. The respective
representations and warranties of the Parties shall not survive the Effective
Time. All agreements of the Parties to this Agreement

A-32

<PAGE> 138

which by their terms are to be performed following the Effective Time shall
survive the Effective Time until performed in accordance with their terms.

ARTICLE 11

MISCELLANEOUS

11.1 Definitions.

(a) Except as otherwise provided herein, the capitalized terms
set forth below shall have the following meanings:

"1933 Act" shall mean the Securities Act of 1933, as amended.

"1934 Act" shall mean the Securities Exchange Act of 1934, as
amended.

"Acquisition Proposal" with respect to a Party shall mean any
tender offer or exchange offer or any proposal for a merger,
consolidation, acquisition of all of the stock or assets of, or other
business combination involving such Party or any of its Subsidiaries
or any proposal or offer to acquire in any manner a substantial equity
interest in, or a substantial portion of the assets of, such Party or
any of its Subsidiaries (other than the transactions contemplated or
permitted by this Agreement).

"Affiliate" of a Person shall mean any other Person directly,
or indirectly through one or more intermediaries, controlling,
controlled by or under common control with such Person.

"Agreement" shall mean this Agreement and Plan of Merger,
including the Exhibits delivered pursuant hereto and incorporated
herein by reference.

"Assets" of a Person shall mean all of the assets, properties,
businesses, and rights of such Person of every kind, nature,
character, and description, whether real, personal, or mixed, tangible
or intangible, accrued or contingent, or otherwise relating to or
utilized in such Person's business, directly or indirectly, in whole
or in part, whether or not carried on the books and records of such
Person, and whether or not owned in the name of such Person or any
Affiliate of such Person and wherever located.

"BHC Act" shall mean the Federal Bank Holding Company Act of
1956, as amended.

"Change in Control of FNB" shall mean that at any time between
the date of this Agreement and the Effective Time, any person,
corporation, or group of associated persons acting individually or in
concert enters into any agreement, understanding, contract, or other
arrangement to acquire, or otherwise acquires (or the right to
acquire) by merger, consolidation, the purchase of capital stock (or
Rights to purchase capital stock) of FNB, or the purchase of
substantially of the Assets of FNB, or otherwise becomes a direct or
indirect beneficial owner of, shares of Common Stock of FNB
representing an aggregate of more than 50% of the votes then entitled
to be cast at an election of directors of FNB.

"Closing" shall have the meaning set forth in Section 1.2 of
this Agreement.

"Consent" shall mean any consent, approval, authorization,
clearance, exemption, waiver, or similar affirmation by any Person.

A-33

<PAGE> 139

"Contract" shall mean any written agreement, commitment,
contract, note, bond, mortgage, indenture, instrument, lease,
obligation, or plan of any kind or character, or other document to
which any Person is a party or that is binding on any Person or its
capital stock or Assets.

"Default" shall mean (i) any breach or violation of or default
under any Contract, (ii) any occurrence of any event that with the
passage of time or the giving of notice or both would constitute a
breach or violation of or default under any Contract, or (iii) any
occurrence of any event that with or without the passage of time or
the giving of notice would give rise to a right to terminate or
revoke, change the current terms of, or renegotiate, or to accelerate,
increase, or impose any liability under, any Contract where, in any
such event, such default is reasonably likely to have a Material
Adverse Effect on a Party.

"Derivatives Contract" shall have the meaning set forth in
Section 5.20 of this Agreement.

"Designated Price" shall mean the average of the closing bid
and ask prices of FNB Common Stock in the over-the-counter market as
reported by Nasdaq or such other trading system or exchange upon which
the FNB Common Stock shall then be traded for the ten (10) consecutive
full trading days in which such shares are traded prior to the fifth
business day preceding the Determination Date.

"Determination Date" shall mean the date on which the last of
the following occurs: (i) the effective date (including expiration of
any applicable waiting period required by Law) of the last required
Consent of any Regulatory Authority having authority over and
approving or exempting the Merger, and (ii) the date on which the
shareholders of IRSB approve this Agreement to the extent that such
approval is required by applicable Law.

"Effective Time" shall have the meaning set forth in Section
1.3 of this Agreement.

"Environmental Laws" shall mean all Laws relating to pollution
or protection of human health or the environment (including ambient
air, surface water, ground water, land surface, or subsurface strata)
and which are administered, interpreted, or enforced by the United
States Environmental Protection Agency and state and local agencies
with jurisdiction over, and including common law in respect of,
pollution or protection of the environment, including the
Comprehensive Environmental Response Compensation and Liability Act,
as amended, 42 U.S.C. 9601 et seq., the Resource Conservation and
Recovery Act, as amended, 42 U.S.C. 6901 et seq., and other Laws
relating to emissions, discharges, releases, or threatened releases of
any Hazardous Material, or otherwise relating to the manufacture,
processing, distribution, use, treatment, storage, disposal,
transport, or handling of any Hazardous Material.

"ERISA" shall mean the Employee Retirement Income Security Act
of 1974, as amended.

"Exchange Agent" shall have the meaning set forth in Section
4.1 of this Agreement.

"Exchange Ratio" shall have the meaning set forth in Section
3.1(c)of this Agreement.

"Exhibits" 1 and 2 shall mean the Exhibits so marked, copies of
which are attached to this Agreement. Such Exhibits are hereby
incorporated by reference herein and made a part hereof, and may be
referred to in this Agreement and any other related instrument or
document without being attached hereto.

A-34

<PAGE> 140

"FFIC" shall mean the Florida Financial Institutions Code,
which includes those Florida Laws identified in Section 655.005(j) of
the Florida Statutes.

"FNB" shall have the meaning set forth in the first paragraph
of this Agreement.

"FNB Capital Stock" shall mean, collectively, the FNB Common
Stock, the FNB Preferred Stock, and any other class or series of
capital stock of FNB.

"FNB Common Stock" shall mean the $2 par value common stock of
FNB.

"FNB Companies" shall mean, collectively, FNB and all FNB
Subsidiaries.

"FNB Disclosure Memorandum" shall mean the written information
entitled "FNB Corporation Disclosure Memorandum" delivered prior to
the date of this Agreement to IRSB describing in reasonable detail the
matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made.

"FNB Financial Statements" shall mean (i) the consolidated
statements of condition (including related notes and schedules, if
any) of FNB as of March 31, 1997, and as of December 31, 1996 and
1995, and the related statements of income, changes in shareholders'
equity, and cash flows (including related notes and schedules, if any)
for the three months ended March 31, 1997, and for each of the three
years ended December 31, 1996, 1995, and 1994, as filed by FNB in SEC
Documents, and (ii) the consolidated statements of condition of FNB
(including related notes and schedules, if any) and related statements
of income, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) included in SEC Documents filed
with respect to periods ended subsequent to March 31, 1997.

"FNB Preferred Stock" shall mean the $10 par value preferred
stock of FNB.

"FNB SEC Reports" shall have the meaning set forth in Section
6.5(a) of this Agreement.

"FNB Subsidiaries" shall mean the Subsidiaries of FNB, which
shall include any corporation, bank, savings association, or other
organization acquired as a Subsidiary of FNB in the future and owned
by FNB at the Effective Time.

"GAAP" shall mean generally accepted accounting principles in
the United States, consistently applied during the periods involved
applicable to banks or bank holding companies, as the case may be.

"Hazardous Material" shall mean (i) any hazardous substance,
hazardous material, hazardous waste, regulated substance, or toxic
substance (as those terms are defined by any applicable Environmental
Laws) and (ii) any chemicals, pollutants, contaminants, petroleum,
petroleum products, or oil (and specifically shall include asbestos
requiring abatement, removal, or encapsulation pursuant to the
requirements of governmental authorities and any polychlorinated
biphenyls).

"HSR Act" shall mean Section 7A of the Clayton Act, as added by
Title II of the Hart-Scott-Rodino Antitrust Improvements Act of 1976,
as amended, and the rules and regulations promulgated thereunder.

A-35

<PAGE> 141

"Indemnified Party" shall have the meaning set forth in Section
8.17 of this Agreement.

"Internal Revenue Code" shall mean the Internal Revenue Code of
1986, as amended, and the rules and regulations promulgated
thereunder.

"IRSB" shall have the meaning set forth in the first paragraph
of this Agreement.

"IRSB Benefits Plans" shall have the meaning set forth in
Section 5.13(a) of this Agreement.

"IRSB Common Stock" shall mean the $4.00 par value common stock
of IRSB.

"IRSB Contract" shall have the meaning set forth in Section
5.14.

"IRSB Disclosure Memorandum" shall mean the written information
entitled "IRSB Corporation Disclosure Memorandum" delivered prior to
the date of this Agreement to FNB describing in reasonable detail the
matters contained therein and, with respect to each disclosure made
therein, specifically referencing each Section of this Agreement under
which such disclosure is being made. Information disclosed with
respect to one Section shall not be deemed to be disclosed for
purposes of any other Section not specifically referenced with respect
thereto.

"IRSB ERISA Plan" shall have the meaning set forth in Section
5.13(a) of this Agreement.

"IRSB Financial Statements" shall mean (i) the consolidated
balance sheets (including related notes and schedules, if any) of IRSB
as of March 31, 1997, and as of December 31, 1996, 1995 and 1994, and
the related statements of income, changes in shareholders' equity, and
cash flows (including related notes and schedules, if any) for the
three months ended March 31, 1997, and for each of the three fiscal
years ended December 31, 1996, 1995, and 1994, as filed by IRSB with
the Federal Reserve Bank of Atlanta and the Florida Department of
Banking and Finance, and (ii) the consolidated balance sheets of IRSB
(including related notes and schedules, if any) and related statements
of income, changes in shareholders' equity, and cash flows (including
related notes and schedules, if any) included in IRSB's Call Reports
filed and published in accordance with applicable federal regulation
with respect to periods ended subsequent to March 31, 1997.

"IRSB Interim Balance Sheet" shall mean the consolidated
balance sheet (including related notes and schedules, if any) of IRSB
as of March 31, 1997.

"Knowledge" as used with respect to a Person (including
references to such Person being aware of a particular matter) shall
mean the personal knowledge of the chairman, president, chief
financial officer, chief accounting officer, chief credit officer,
general counsel, any assistant or deputy general counsel, or any
senior or executive vice president of such Person and the knowledge of
any such Persons obtained or which would have been obtained from a
reasonable investigation.

"Law" shall mean any code, law, ordinance, regulation,
reporting or licensing requirement, rule, or statute applicable to a
Person or its Assets, Liabilities, or business, including those
promulgated, interpreted, or enforced by any Regulatory Authority.

"Lien" with respect to any Asset, shall mean any conditional
sale agreement, default of title, easement, encroachment, encumbrance,
hypothecation, infringement, lien, mortgage, pledge, reservation,
restriction, security interest, title retention, or other security
arrangement, or any adverse right or interest, charge, or claim of any
nature whatsoever of, on, or with respect to any property or property
interest, other than (i) Liens for current property Taxes not yet due
and payable or being

A-36

<PAGE> 142

contested in good faith, (ii) for depository institution Subsidiaries
of a Party, pledges to secure deposits, and (iii) other Liens incurred
in the ordinary course of the banking business.

"Litigation" shall mean any action, arbitration, cause of
action, claim, complaint, criminal prosecution, demand letter,
governmental or other examination or investigation, hearing, inquiry,
administrative or other proceeding, or notice by any Person alleging
potential liability.

"Loan Property" shall mean any property owned, leased, or
operated by the Party in question or by any of its Subsidiaries or in
which such Party or its Subsidiary holds a security or other interest
(including an interest in a fiduciary capacity), and, where required
by the context, includes the owner or operator of such property, but
only with respect to such property.

"market price" shall have the meaning set forth in Section 3.4
of this Agreement.

"Material Adverse Effect" on a Party shall mean an event,
change, or occurrence which, individually or together with any other
event, change, or occurrence, has a material adverse impact on (i) the
financial position, business, or results of operations of such Party
and its Subsidiaries, taken as a whole, or (ii) the ability of such
Party to perform its obligations under this Agreement or to consummate
the Merger or the other transactions contemplated by this Agreement,
provided that "Material Adverse Effect" shall not be deemed to include
the impact of (a) changes in banking and similar Laws of general
applicability or interpretations thereof by courts or governmental
authorities, (b) changes in GAAP or regulatory accounting principles
generally applicable to banks and their holding companies, (c) actions
and omissions of a Party (or any of its Subsidiaries) taken with the
prior informed consent of the other Party in contemplation of the
transactions contemplated hereby, (d) circumstances affecting regional
bank holding companies generally, and (e) the Merger and compliance
with the provisions of this Agreement on the operating performance of
the Parties.

"Merger" shall have the meaning set forth in the Preamble of
this Agreement.

"Nasdaq" shall mean the Nasdaq Stock Market.

"National Banking Act" shall mean 12 U.S.C. 1 et seq.

"Order" shall mean any decree, injunction, judgment, order,
decision or award, ruling, or writ of any federal, state, local, or
foreign or other court, arbitrator, mediator, tribunal, administrative
agency, or Regulatory Authority.

"Participation Facility" shall mean any facility or property in
which the Party in question or any of its Subsidiaries participates in
the management and, where required by the context, said term means the
owner or operator of such facility or property, but only with respect
to such facility or property.

"Party" shall mean either IRSB or FNB or Southwest or Interim,
and "Parties" shall mean IRSB, FNB, Southwest and Interim.

"PBCL" shall mean the Pennsylvania Business Corporation Law.

"Permit" shall mean any federal, state, local, and foreign
governmental approval, authorization, certificate, easement, filing,
franchise, license, notice, permit, or right to which any Person is a
party or that is or may be binding upon or inure to the benefit of any
Person.

A-37

<PAGE> 143

"Person" shall mean a natural person or any legal, commercial,
or governmental entity, such as, but not limited to, a corporation,
general partnership, joint venture, limited partnership, limited
liability company, trust, business association, group acting in
concert, or any person acting in a representative capacity.

"Proxy Statement" shall mean the proxy statement used by IRSB
to solicit the approval of its shareholders of the transactions
contemplated by this Agreement, which shall include the prospectus of
FNB relating to the issuance of the FNB Common Stock to holders of
IRSB Common Stock.

"Registration Statement" shall mean the Registration Statement
on Form S-4, or other appropriate form, including any pre-effective or
post-effective amendments or supplements thereto, filed with the SEC
by FNB under the 1933 Act with respect to the shares of FNB Common
Stock to be issued to the shareholders of IRSB in connection with the
transactions contemplated by this Agreement.

"Regulatory Authorities" shall mean, collectively, the Federal
Trade Commission, the United States Department of Justice, the Board
of the Governors of the Federal Reserve System, the Office of the
Comptroller of the Currency, the Federal Deposit Insurance
Corporation, the SEC, NASD, Nasdaq and all state regulatory agencies
having jurisdiction over the Parties and their respective
Subsidiaries.

"Rights" shall mean all arrangements, calls, commitments,
options, rights to subscribe to, scrip, understandings, warrants, or
other binding obligations of any character whatsoever relating to, or
securities or rights convertible into or exchangeable for, shares of
the capital stock of a Person or any contract, commitments or other
arrangements by which a Person is or may be bound to issue additional
shares of its capital stock or options, warrants, rights to purchase
or acquire any additional shares of its capital stock, or options,
warrants, or rights to purchase or acquire any additional shares of
its capital stock.

"SEC" shall mean the Securities and Exchange Commission.

"SEC Documents" shall mean all forms, proxy statements,
registration statements, reports, schedules, and other documents
filed, or required to be filed, by a Party or any of its Subsidiaries
with any Regulatory Authority pursuant to the Securities Laws.

"Securities Laws" shall mean the 1933 Act, the 1934 Act, the
Investment Company Act of 1940, as amended, the Investment Advisors
Act of 1940, as amended, the Trust Indenture Act of 1939, as amended,
and the rules and regulations of any Regulatory Authority promulgated
thereunder.

"Shareholders' Meeting" shall mean the meeting of the
shareholders of IRSB to be held pursuant to Section 8.1 of this
Agreement, including any adjournment or adjournments thereof.

"Southwest" shall have the meaning set forth in the first
paragraph of this Agreement.

"Stock Option Agreement" shall have the meaning set forth in
the Preamble of this Agreement.

"Subsidiaries" shall mean all those corporations, banks,
associations, or other entities of which the entity in question owns
or controls 50% or more of the outstanding equity securities either

A-38

<PAGE> 144

directly or through an unbroken chain of entities as to each of which
50% or more of the outstanding equity securities is owned directly or
indirectly by its parent; provided, there shall not be included any
such entity acquired through foreclosure or any such entity the equity
securities of which are owned or controlled in a fiduciary capacity.

"Surviving Corporation" shall mean Interim as the surviving
corporation resulting from the Merger.

"Tax" or "Taxes" shall mean all federal, state, local, and
foreign taxes, charges, fees, levies, imposts, duties, or other
assessments, including income, gross receipts, excise, employment,
sales, use, transfer, license, payroll, franchise, severance, stamp,
occupation, windfall profits, environmental, federal highway use,
commercial rent, customs duties, capital stock, paid-up capital,
profits, withholding, Social Security, single business and
unemployment, disability, real property, personal property,
registration, ad valorem, value added, alternative or add-on minimum,
estimated, or other tax or governmental fee of any kind whatsoever,
imposed or required to be withheld by the United States or any state,
local, foreign government or subdivision or agency thereof, including
any interest, penalties or additions thereto.

"Tax Opinion" shall have the meaning set forth in Section
9.1(g) of this Agreement.

"Taxable Period" shall mean any period prescribed by any
governmental authority, including the United States or any state,
local, foreign government or subdivision or agency thereof for which a
Tax Return is required to be filed or Tax is required to be paid.

"Tax Return" shall mean any report, return, information return,
or other information required to be supplied to a taxing authority in
connection with Taxes, including any return of an affiliated or
combined or unitary group that includes a Party or its Subsidiaries.

(b) Any singular term in this Agreement shall be deemed to
include the plural, and any plural term the singular. Whenever the
words "include," "includes," or "including" are used in this
Agreement, they shall be deemed followed by the words "without
limitation."

11.2 Expenses.

(a) Except as otherwise provided in this Section 11.2, each of
FNB and IRSB shall bear and pay all direct costs and expenses incurred
by it or on its behalf in connection with the transactions
contemplated hereunder, including filing, registration, and
application fees, printing fees, and fees and expenses of its own
financial or other consultants, investment bankers, accountants, and
counsel, except that each of FNB and IRSB shall bear and pay one-half
of the printing costs incurred in connection with the printing of the
Registration Statement and the Proxy Statement.

(b) Nothing contained in this Section 11.2 shall constitute or
shall be deemed to constitute liquidated damages for the willful
breach by a Party of the terms of this Agreement or otherwise limit
the rights of the nonbreaching Party.

11.3 Brokers and Finders. Except for Allen C. Ewing & Co., as to
IRSB, each of the Parties represents and warrants that neither it nor any of
its officers, directors, employees, or Affiliates has employed any broker or
finder in connection with this Agreement or the transactions contemplated
hereby. In the event of a claim by any broker or finder based upon his or its
representing or being retained by or allegedly representing or being retained
by IRSB or FNB, each of IRSB and FNB, as the case may be, agrees to indemnify
and hold the other Party harmless of and from any Liability in respect of any
such claim.

A-39

<PAGE> 145

11.4 Entire Agreement. Except as otherwise expressly provided
herein, this Agreement constitutes the entire agreement between the Parties
with respect to the transactions contemplated hereunder and supersedes all
prior arrangements or understandings with respect thereto, written or oral
(except for the Confidentiality Agreements). Nothing in this Agreement
expressed or implied, is intended to confer upon any Person, other than the
Parties or their respective successors, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, other than as provided in
Sections 8.17 of this Agreement.

11.5 Amendments. To the extent permitted by Law, this Agreement may
be amended by a subsequent writing signed by each of the Parties upon the
approval of the Boards of Directors of each of the Parties, whether before or
after shareholder approval of this Agreement has been obtained; provided, that
after any such approval by the holders of IRSB Common Stock, there shall be
made no amendment that reduces or modifies in any material respect the
consideration to be received by holders of IRSB Common Stock without the
further approval of such shareholders.

11.6 Obligations of FNB. Whenever this Agreement requires FNB
(including the Surviving Corporation) to take any action, such requirement
shall be deemed to include an undertaking by FNB to cause the FNB Subsidiaries
to take such action.

11.7 Waivers.

(a) Prior to or at the Effective Time, FNB, acting through its
Board of Directors, chief executive officer, president or other
authorized officer, shall have the right to waive any default in the
performance of any term of this Agreement by IRSB, to waive or extend
the time for the compliance or fulfillment by IRSB of any and all of
its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of FNB under this Agreement,
except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in
writing signed by a duly authorized officer of FNB.

(b) Prior to or at the Effective Time, IRSB, acting through its
Board of Directors, chief executive officer, president or other
authorized officer, shall have the right to waive any default in the
performance of any term of this Agreement by FNB, to waive or extend
the time for the compliance or fulfillment by FNB of any and all of
its obligations under this Agreement, and to waive any or all of the
conditions precedent to the obligations of IRSB under this Agreement,
except any condition which, if not satisfied, would result in the
violation of any Law. No such waiver shall be effective unless in
writing signed by a duly authorized officer of IRSB.

(c) The failure of any Party at any time or times to require
performance of any provision hereof shall in no manner affect the
right of such Party at a later time to enforce the same or any other
provision of this Agreement. No waiver of any condition or of the
breach of any term contained in this Agreement in one or more
instances shall be deemed to be or construed as a further or
continuing waiver of such condition or breach or a waiver of any other
condition or of the breach of any other term of this Agreement.

11.8 Assignment. Except as expressly contemplated hereby, neither
this Agreement nor any of the rights, interests, or obligations hereunder shall
be assigned by any Party hereto (whether by operation of Law or otherwise)
without the prior written consent of the other Party. Subject to the preceding
sentence, this Agreement will be binding upon, inure to the benefit of, and be
enforceable by the Parties and their respective successors and assigns.

11.9 Notices. All notices or other communications which are
required or permitted hereunder shall be in writing and sufficient if delivered
by hand, by facsimile transmission, by registered or certified mail,

A-40

<PAGE> 146

postage pre-paid, or by courier or overnight carrier, to the persons at the
addresses set forth below (or at such other address as may be provided
hereunder), and shall be deemed to have been delivered as of the date so
delivered:

IRSB: 12360 Indian Rocks Road
Indian Rocks Beach, Florida 34635-0007
Telecopy Number: 813-595-3124
Attention: President and Chief Executive
Officer

Copy to Counsel: Carlton Fields
One Harbour Place
777 S. Harbour Island Boulevard
Tampa, Florida 33602-5799
Telecopy Number: 813-229-4133
Attention: Richard A. Denmon, Esq.

A-41

<PAGE> 147

FNB: Hermitage Square
Hermitage, PA 16148
Telecopy Number: 412-983-3515
Attention: Chairman and Chief Executive
Officer

Copy to Counsel: Smith, Gambrell & Russell, LLP
3343 Peachtree Road, NE
Suite 1800
Atlanta, Georgia 30326
Telecopy Number: 404-264-2652
Attention: Robert C. Schwartz

Southwest: 2911 Tamiami Trail North
Naples, Florida 33940
Telecopy Number: 941-435-7658
Attention: Chairman and Chief Executive
Officer

Copy to Counsel: Smith, Gambrell & Russell, LLP
3343 Peachtree Road, NE
Suite 1800
Atlanta, Georgia 30326
Telecopy Number: 404-264-2652
Attention: Robert C. Schwartz

Interim: Hermitage Square
Hermitage, Pennsylvania 16148
Telecopy Number: 412-983-3515
Attention: President

Copy to Counsel: Smith, Gambrell & Russell, LLP
3343 Peachtree Road, NE Suite 1800
Atlanta, Georgia 30326
Telecopy Number: 404-264-2652
Attention: Robert C. Schwartz

11.10 Governing Law. This Agreement shall be governed by and
construed in accordance with the Laws of the Commonwealth of Pennsylvania,
without regard to any applicable conflicts of Laws, except to the extent that
the Laws of the State of Florida relate to the consummation of the Merger.

11.11 Counterparts. This Agreement may be executed in two or more
counterparts, each of which shall be deemed to be an original, but all of which
together shall constitute one and the same instrument.

11.12 Captions. The captions contained in this Agreement are for
reference purposes only and are not part of this Agreement.

11.13 Enforcement of Agreement. The Parties hereto agree that
irreparable damage would occur in the event that any of the provisions of this
Agreement was not performed in accordance with its specific terms or was
otherwise breached. It is accordingly agreed that the Parties shall be entitled
to an injunction or injunctions to prevent breaches of this Agreement and to
enforce specifically the terms and provisions

A-42

<PAGE> 148

hereof in any court of the United States or any state having jurisdiction, this
being in addition to any other remedy to which they are entitled at law or in
equity.

11.14 Severability. Any term or provision of this Agreement which
is invalid or unenforceable in any jurisdiction shall, as to that jurisdiction,
be ineffective to the extent of such invalidity or unenforceability without
rendering invalid or unenforceable the remaining terms and provisions of this
Agreement or affecting the validity or enforceability of any of the terms or
provisions of this Agreement in any other jurisdiction. If any provision of
this Agreement is so broad as to be unenforceable, the provision shall be
interpreted to be only so broad as is enforceable.

A-43

<PAGE> 149

IN WITNESS WHEREOF, each of the Parties has caused this Agreement to
be executed on its behalf and its corporate seal to be hereunto affixed and
attested by officers thereunto as of the day and year first above written.

F.N.B. CORPORATION

By: /s/ Peter Mortensen
--------------------
Name: Peter Mortensen
Title: Chairman of the Board and President

SOUTHWEST BANKS, INC.

By: /s/ Gary L. Tice
----------------
Name: Gary L. Tice
Title: Chairman of the Board, President, and
Chief Executive Officer

INDIAN ROCKS STATE BANK

By: /s/ Robert C. George
--------------------
Name: Robert C. George
Title: President

Southwest Interim Bank, N.A. hereby joins in the foregoing Agreement,
undertakes that it will be bound thereby and that it will duly perform all the
acts and things therein referred to or provided to be done by it.

IN WITNESS WHEREOF, Southwest Interim Bank, N.A. has caused this
undertaking to be made in counterparts by its duly authorized officers and its
corporate seal to be hereunto affixed as of this ___ day of ___________, 1997.

SOUTHWEST INTERIM BANK, N.A.

By:
----------------------------------
Name:
Title: President

Attest:
---------------------------
Secretary

[Corporate Seal]

A-44
<PAGE> 150

EXHIBIT 2.1

FIRST AMENDMENT
TO
AGREEMENT AND PLAN OF MERGER

THIS FIRST AMENDMENT TO AGREEMENT AND PLAN OF MERGER (this "First
Amendment") is made and entered into as of August 8, 1997, by and among F.N.B.
CORPORATION ("FNB"), a Pennsylvania corporation, SOUTHWEST BANKS, INC.
("Southwest"), a Florida corporation and wholly owned subsidiary of FNB, INDIAN
ROCKS STATE BANK ("IRSB"), a Florida state banking corporation and to be joined
in by SOUTHWEST INTERIM BANK, N.A. ("Interim"), a national bank to be chartered
under the laws of the United States and to become a wholly owned subsidiary of
FNB.

PREAMBLE

The parties hereto entered into an Agreement and Plan of Merger (the
"Merger Agreement") dated as of May 10, 1997 whereby FNB, Southwest and IRSB
agreed to the merger of IRSB with and into Interim. The parties now desire to
amend the Merger Agreement on the terms and conditions set forth herein.

NOW, THEREFORE, in consideration of the above and the mutual covenants
and agreements set forth herein, the parties agree as follows:

1. Conversion of Shares. Section 3.1(d) of the Merger Agreement
is hereby amended by deleting Section 3.1(d) in its entirety and by insertion,
in lieu thereof, of the following:

"(d) If the Designated Price of FNB Common Stock shall
be less than $22.00, then the Exchange Ratio shall be increased
to equal the quotient, rounded to the third decimal point,
obtained by dividing (i) the product of $22.00 and the
Exchange Ratio by (ii) the Designated Price. If the Designated
Price shall be less than $20.00, then FNB may, at any time
during the period commencing on the Determination Date and
ending at the close of business on the day before Closing,
terminate the Agreement pursuant to Section 10.1(k) hereof. If
the Designated Price of FNB Common Stock shall be equal to or
greater than $27.00, then the Exchange Ratio shall decrease to
equal the quotient, rounded to the third decimal point,
obtained by dividing (x) the product of $27.00 and the Exchange
Ratio by (y) the Designated Price; provided, however, that in
no event shall the Exchange Ratio be less than 1.8 shares of
FNB Common Stock for each share of IRSB Common Stock; and
provided, further, however, that if a Change in Control of FNB
has occurred, then the Exchange Ratio shall not decrease and
shall be fixed at two (2) shares of FNB Common Stock for each
share of IRSB Common Stock as provided in Section 3.1(c) of
this Agreement."

A-45
<PAGE> 151

2. Termination. Section 10.1 of the Merger Agreement is
amended by deleting subparagraph (g) thereof in its entirety.

3. Defined Terms. All terms which are capitalized herein,
but which are not defined herein, shall have the meanings ascribed to them in
the Merger Agreement.

4. Inconsistent Provisions. All provisions of the Merger
Agreement which have not been amended by this First Amendment shall remain in
full force and effect. Notwithstanding the foregoing to the contrary, to the
extent that there is any inconsistency between the provisions of the Merger
Agreement and the provisions of this First Amendment, the provisions of this
First Amendment shall control and be binding.

[SIGNATURES ON FOLLOWING PAGE]

A-46
<PAGE> 152

IN WITNESS WHEREOF, each of the parties has caused this First Amendment
to be executed on its behalf as of the date first written above.

F.N.B. CORPORATION

By: /s/ Peter Mortensen
-----------------------------------------------
Name: Peter Mortensen
Title: Chairman of the Board and President

SOUTHWEST BANKS, INC.

By: /s/ C.C. Coghill
-----------------------------------------------
Name: C.C. Coghill
Title: Senior Vice President

INDIAN ROCKS STATE BANK

By: /s/ Robert C. George
-----------------------------------------------
Name: Robert C. George
Title: President

SOUTHWEST INTERIM BANK, N.A.

By:
----------------------------------------
Name:
Title: President

Attest:
----------------------
Secretary

[Corporate Seal]

A-47
<PAGE> 153

APPENDIX B

STOCK OPTION AGREEMENT

STOCK OPTION AGREEMENT, dated May 10, 1997, between F.N.B.
Corporation, a Pennsylvania corporation ("FNB"), and Indian Rocks State Bank, a
Florida state banking corporation ("IRSB").

W I T N E S S E T H :

WHEREAS, FNB and IRSB have entered into an Agreement and Plan of
Merger of even date herewith (the "Merger Agreement"), which agreement has been
executed by the parties hereto prior to this Agreement; and

WHEREAS, as a condition and inducement to FNB's pursuit of the
transactions contemplated by the Merger Agreement and in consideration
therefor, IRSB has agreed to grant FNB the Option (as hereinafter defined):

NOW, THEREFORE, in consideration of the foregoing and the mutual
covenants and agreements set forth herein and in the Merger Agreement, the
parties hereto agree as follows:

1. (a) IRSB hereby grants to FNB an irrevocable option (the "Option")
to purchase, subject to the terms hereof, up to 86,953 authorized but unissued
fully paid and nonassessable Common Shares, $4.00 par value, of IRSB ("Common
Shares"), at a price per share equal to $30.00 (as adjusted as set forth
herein, the "Option Price") payable in cash; provided, that in no event shall
the number of shares for which this Option is exercisable, when combined with
the IRSB Common Shares beneficially owned at such time by FNB, exceed 19.9% of
the issued and outstanding Common Shares. The number of Common Shares that may
be received upon the exercise of the Option and the Option Price are subject to
adjustment as herein set forth.

(b) In the event that any additional Common Shares are issued or
otherwise become outstanding after the date of this Agreement (other than
pursuant to this Agreement), the number of Common Shares subject to the Option
shall be increased so that, after such issuance, it equals 19.9% of the number
of Common Shares then issued and outstanding, including Common Shares
beneficially owned by FNB, but without giving effect to any shares subject or
issued pursuant to the Option. Nothing contained in this Section 1(b) or
elsewhere in this Agreement shall be deemed to authorize IRSB or FNB to breach
any provision of the Merger Agreement.

2. (a) Subject to compliance with applicable laws and regulations,
the Holder (as hereinafter defined) may exercise the Option, notwithstanding
the provisions of Section 8.5 of the Merger Agreement in whole or part, if, but
only if, both an Initial Triggering Event (as hereinafter defined) and a
Subsequent Triggering Event (as hereinafter defined) shall have occurred prior
to the occurrence of an Exercise Termination Event (as hereinafter defined).
Each of the following shall be an Exercise Termination Event: (i) the Effective
Time (as defined in the Merger Agreement) of the Merger; (ii) termination of
the Merger Agreement in accordance with the provisions thereof if such
termination occurs prior to the occurrence of an Initial Triggering Event;
(iii) the passage of 12 months (or such longer period as provided in Section 10
of this Agreement) after termination of the Merger Agreement if such
termination follows the occurrence of an Initial Triggering Event (other than a
termination due to: (A) failure of FNB to satisfy a condition to closing the
Merger Agreement, (B) the failure to satisfy the conditions to closing set
forth in Section 9.1 subparagraphs (b), (d), (e), (f), and (g) of the Merger
Agreement, or (C) withdrawal of the fairness opinion of Allen C. Ewing & Co.
(so long as such withdrawal is not due to materially inaccurate or fraudulent
information provided by IRSB to Allen C. Ewing & Co.), in which case an Event
of Termination occurs at the time of termination of the Merger Agreement,
notwithstanding the occurrence of an Initial Triggering Event); or (iv) such
other date as to which the Holder and IRSB agree. The term "Holder" shall mean
the holder or holders of the Option. The rights set forth in Sections 7 and 9
of this Agreement shall terminate

B-1
<PAGE> 154

when the right to exercise the Option terminates (other than as a result of a
complete exercise of the Option) as set forth herein.

(b) The term "Initial Triggering Event" shall mean any of the
following events or transactions occurring after the date hereof:

(i) IRSB, without having received FNB's prior written
consent, shall have entered into an agreement to engage in an Acquisition
Transaction (as hereinafter defined) with any person (the term "person" for
purposes of this Agreement having the meaning assigned thereto in Sections
3(a)(9) and 13(d)(3) of the Securities Exchange Act of 1934 (the "1934 Act"),
and the rules and regulations thereunder) other than FNB or any of its
Subsidiaries (each a "FNB Subsidiary"), or the Board of Directors of IRSB shall
have recommended that the shareholders of IRSB approve or accept any
Acquisition Transaction other than as contemplated by the Merger Agreement or
this Agreement. For purposes of this Agreement, (A) "Acquisition Transaction"
shall mean (x) a merger or consolidation, or any similar transaction involving
IRSB, (y) a purchase, lease, or other acquisition of all or substantially all
of the assets or deposits of IRSB, or (z) a purchase or other acquisition
(including by way of merger, consolidation, share exchange or otherwise) of
securities representing 15% or more of the voting power of IRSB, other than
securities acquired by the IRSB officers and directors, and (B) "Subsidiary"
shall have the meaning set forth in Rule 12b-2 under the 1934 Act;

(ii) Any person (excluding the officers and directors of IRSB)
other than FNB or any FNB Subsidiary acting in a fiduciary capacity shall have
acquired beneficial ownership or the right to acquire beneficial ownership of
15% or more of the outstanding Common Shares (the term "beneficial ownership"
for purposes of this Agreement having the meaning assigned thereto in Section
13(d) of the 1934 Act, and the rules and regulations thereunder);

(iii) The shareholders of IRSB shall not have approved the
transactions contemplated by the Merger Agreement at the meeting held for that
purpose or any adjustment thereof, or such meeting shall not have been held or
shall have been canceled prior to termination of the Merger Agreement, in
either case, after IRSB's Board of Directors shall have withdrawn or modified
(or publicly announced its intention to withdraw or modify or interest in
withdrawing or modifying) its recommendation that the shareholders of IRSB
approve the transactions contemplated by the Merger Agreement, or IRSB, without
having received FNB's prior written consent, shall have authorized,
recommended, or proposed (or publicly announced its intention to authorize,
recommend or propose or interest in authorizing, recommending or proposing) an
agreement to engage in an Acquisition Transaction with any person other than
FNB or a FNB Subsidiary;

(iv) IRSB shall have willfully and materially breached any
material covenant or obligation contained in the Merger Agreement in
anticipation of engaging in an Acquisition Transaction, and such breach would
entitle FNB to terminate the Merger Agreement; or

(v) Any person other than FNB or any FNB Subsidiary, other
than in connection with a transaction to which FNB has given its prior written
consent, shall have filed an application or notice with the Federal Reserve
Board or other federal or state bank regulatory authority, which application or
notice has been accepted for processing, for approval to engage in an
Acquisition Transaction.

(c) The term "Subsequent Triggering Event" shall mean any of the
following events or transactions occurring after the date hereof:

(i) The acquisition by any person of beneficial ownership of
25% or more of the then outstanding Common Shares; or

(ii) The occurrence of the Initial Triggering Event described
in clause (i) of subsection (b) of this Section 2, except that the percentage
referred to in clause (z) shall be 25%.

(d) IRSB shall notify FNB promptly in writing of the occurrence
of any Initial Triggering Event or Subsequent Triggering Event (together, a
"Triggering Event"), it being understood that the giving of such notice by IRSB
shall not be a condition to the right of the Holder to exercise the Option.

B-2
<PAGE> 155

(e) No shares shall be issued pursuant to the exercise of this
Option if (i) at the time of the Initial Triggering Event and at the time of
exercise, FNB is in material breach under the Merger Agreement, or (ii) a
preliminary or permanent injunction has been issued by a court of proper
jurisdiction.

(f) In the event the Holder is entitled to and wishes to exercise
the Option, it shall send to IRSB a written notice prior to an Exercise
Termination Event (the date of which being herein referred to as the "Notice
Date") specifying (i) the total number of shares it will purchase pursuant to
such exercise and (ii) a place and date not earlier than three (3) business
days nor later than ten (10) business days from the Notice Date for the closing
of such purchase (the "Closing Date"); provided that if prior notification to
or approval of the Federal Reserve Board or any other regulatory agency is
required in connection with such purchase, the Holder shall promptly file the
required notice or application for approval, shall promptly notify IRSB of such
filing, and shall expeditiously process the same and the period of time that
otherwise would run pursuant to this sentence shall run instead from the date
on which any required notification periods have expired or been terminated or
such approvals have been obtained and any requisite waiting period or periods
shall have passed. Any exercise of the Option shall be deemed to occur on the
Notice Date relating thereto.

(g) At the closing referred to in subsection (f) of this Section
2, the Holder shall pay to IRSB the aggregate purchase price for the Common
Shares purchased pursuant to the exercise of the Option in immediately
available funds by wire transfer to a bank account designated by IRSB, provided
that failure or refusal of IRSB to designate such a bank account shall not
preclude the Holder from exercising the Option.

(h) At such closing, simultaneously with the delivery of
immediately available funds as provided in subsection (g) of this Section 2,
IRSB shall deliver to the Holder a certificate or certificates representing the
number of Common Shares purchased by the Holder and, if the Option should be
exercised in part only, a new Option evidencing the rights of the Holder
thereof to purchase the balance of the shares purchasable thereunder. In
addition, the Holder shall provide to IRSB a letter agreeing that Holder will
not offer to sell or dispose of such shares in violation of applicable law or
this Agreement

(i) Certificates for Common Shares delivered at a closing
hereunder may be endorsed with a restrictive legend that shall read
substantially as follows:

"The transfer of the shares represented by this certificate is
subject to certain provisions of an agreement between the
registered holder hereof and IRSB and to resale restrictions
arising under the Securities Act of 1933, as amended. A copy
of such agreement is on file at the principal office of IRSB
and will be provided to the holder hereof without charge upon
receipt by IRSB of a written request therefor."

It is understood and agreed that: (i) the reference to the
resale restrictions of the Securities Act of 1933 (the "1933 Act") in the above
legend shall be removed by delivery of a substitute certificate(s) without such
reference if the Holder shall have delivered to IRSB a copy of a letter from
the Staff of the SEC, or an opinion of counsel, in form and substance
satisfactory to IRSB, to the effect that such legend is not required for
purposes of the 1933 Act; (ii) the reference to the provisions of this
Agreement in the above legend shall be removed by delivery of a substitute
certificate(s) without such reference if the shares have been sold or
transferred in compliance with the provisions of this Agreement and under
circumstances that do not require the retention of such reference; and (iii)
the above legend shall be removed in its entirety if the conditions in the
preceding clauses (i) and (ii) are both satisfied. In addition, such
certificates shall bear any other legend as may be required by law.

(j) Upon the giving by the Holder to IRSB of the written notice of
exercise of the Option provided for under subsection (f) of this Section 2 and
the tender of the applicable purchase price in immediately available funds, the
Holder shall be deemed to be the holder of record of the Common Shares issuable
upon such exercise, notwithstanding that the stock transfer books of IRSB shall
then be closed or that certificates representing such Common Shares shall not
then be actually delivered to the Holder. IRSB shall pay all

B-3
<PAGE> 156

expenses, and any and all United States federal, state and local taxes and
other charges that may be payable in connection with the preparation, issue and
delivery of stock certificates under this Section 2 in the name of the Holder
or its assignee, transferee or designee.

3. IRSB agrees: (a) that it shall at all times maintain, free from
preemptive rights, sufficient authorized but unissued or treasury shares of
Common Shares so that the Option may be exercised without additional
authorization of Common Shares after giving effect to all other options,
warrants, convertible securities and other rights to purchase Common Shares;
(b) 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 by IRSB; (c) promptly to take all action as may from time to time be
required (including (i) complying with all premerger notification, reporting
and waiting period requirements specified in 15 U.S.C. Section 18a and
regulations promulgated thereunder and (ii) in the event, under the Bank
Holding Company Act of 1956, as amended, or any state or other federal banking
law, prior approval of or notice to the Federal Reserve Board or to any state
or other federal regulatory authority is necessary before the Option may be
exercised, cooperating fully with the Holder in preparing such applications or
notices and providing such information to the Federal Reserve Board or such
state or other federal regulatory authority as they may require) in order to
permit the Holder to exercise the Option and IRSB duly and effectively to issue
Common Shares pursuant hereto; and (d) promptly to take all action provided
herein to protect the rights of the Holder against dilution as set forth in
Section 5 hereof.

4. This Agreement (and the Option granted hereby) are exchangeable,
without expense, at the option of the Holder, upon presentation and surrender
of this Agreement at the principal office of IRSB, for other Agreements
providing for Options of different denominations entitling the holder thereof
to purchase, on the same terms and subject to the same conditions as are set
forth herein, in the aggregate the same number of Common Shares purchasable
hereunder. The terms "Agreement" and "Option" as used herein include any
Agreements and related Options for which this Agreement (and the Option granted
hereby) may be exchanged. Upon receipt by IRSB of evidence reasonably
satisfactory to it of the loss, theft, destruction or mutilation of this
Agreement, and (in the case of loss, theft or destruction) of reasonably
satisfactory indemnification, and upon surrender and cancellation of this
Agreement, if mutilated, IRSB will execute and deliver a new Agreement of like
tenor and date.

5. The number of Common Shares purchasable upon the exercise of the
Option shall be subject to adjustment from time to time as provided in this
Section 5.

(a) In the event of any change in Common Shares by reason of stock
dividends, splitups, mergers, recapitalizations, combinations, subdivisions,
conversions, exchanges of shares or the like, the type and number of Common
Shares purchasable upon exercise hereof shall be appropriately adjusted and
proper provision shall be made so that, in the event any additional Common
Shares are to be issued or otherwise become outstanding as a result of any such
change (other than pursuant to an exercise of the Option), the number of Common
Shares that remain subject to the Option shall be increased so that, after such
issuance and together with Common Shares previously issued pursuant to the
exercise of the Option (together with the number of Shares previously issued
under this Option and the number of Shares otherwise beneficially owned by FNB)
(as adjusted on account of any of the foregoing changes in the Common Shares),
it equals 19.9% of the number of Common Shares then issued and outstanding.

(b) Whenever the number of Common Shares purchasable upon exercise
hereof is adjusted as provided in this Section 5, the Option Price shall be
adjusted by multiplying the Option Price by a fraction, the numerator of which
shall be equal to the number of Common Shares purchasable prior to the
adjustment and the denominator of which shall be equal to the number of Common
Shares purchasable after the adjustment.

6. Upon the occurrence of a Subsequent Triggering Event that occurs
prior to an Exercise Termination Event, IRSB shall, at the request of FNB
delivered prior to an Exercise Termination Event (or

B-4
<PAGE> 157

such later period as provided in Section 10) (whether on its own behalf or on
behalf of any subsequent holder of this Option (or part thereof) or any of the
Common Shares issued pursuant hereto), promptly prepare, file and keep current
a registration statement under the 1933 Act covering any shares issued and
issuable pursuant to this Option and shall use its best efforts to cause such
registration statement to become effective and remain current in order to
permit the sale or other disposition of any Common Shares issued upon total or
partial exercise of this Option ("Option Shares") in accordance with any plan
of disposition requested by FNB. IRSB will use its best efforts to cause such
registration statement first to become effective and then to remain effective
for such period not in excess of 120 days from the day such registration
statement first becomes effective or such shorter time as may be reasonably
necessary to effect such sales or other dispositions. FNB shall have the right
to demand two such registrations. The first demand registration effected under
this Section 6 shall be at IRSB's expense up to $40,000, such expense in excess
of $40,000 to be paid by FNB, except for underwriting commissions and the fees
and expenses of FNB's counsel attributable to the registration of the Common
Shares. The second demand registration shall be at FNB's expense. In
addition, if at any time after the occurrence of a Subsequent Triggering Event
that occurs prior to an Exercise Termination Event, IRSB proposes to register
any of its equity securities under the 1933 Act, whether for sale for its own
account or for the account of any other person, on a form and in a manner which
would permit registration of the Common Shares issued pursuant hereto for sale
to the public under the 1933 Act, it will each such time give prompt written
notice to FNB of its intention to do so, describing such securities and
specifying the form and manner and the other relevant facts involved in such
proposed registration, and upon the written request of FNB delivered to the
Company within 10 business days after the giving of any such notice (which
request shall specify the Common Shares intended to be disposed of and the
intended method or methods of disposition thereof), IRSB will use its best
efforts to effect the registration under the 1933 Act of all Common Shares
which IRSB has been so requested to register by FNB, to the extent requisite to
permit the disposition of the Common Shares in accordance with the intended
methods thereof as specified by FNB. IRSB shall be obligated to effect only
one such piggy-back registration pursuant to this Section 6. FNB shall pay
such incremental expenses incurred by IRSB in connection with registering the
Common Shares requested to be registered by FNB pursuant to its piggy-back
registration rights under this Section 6, which expenses are in addition to the
expenses that IRSB would have otherwise incurred in registering equity
securities under the 1933 Act. The foregoing notwithstanding, if, at the time
of any request by FNB for registration of Option Shares as provided above, IRSB
has initiated discussions with investment bankers concerning, or is in
registration with respect to, an underwritten public offering of Common Shares,
and if in the good faith judgment of the managing underwriter or managing
underwriters, or, if none, the sole underwriter or underwriters, of such
offering the inclusion of the Option Shares would interfere with the successful
marketing of the Common Shares offered by IRSB, the number of Option Shares
otherwise to be covered in the registration statement contemplated hereby may
be reduced; provided, however, that after any such required reduction the
number of Option Shares to be included in such offering for the account of the
Holder shall constitute at least 25% of the total number of shares to be sold
by the Holder and IRSB in the aggregate; and provided further, however, that if
such reduction occurs, then IRSB shall file a registration statement for the
balance as promptly as practical thereafter as to which no reduction pursuant
to this Section 6 shall be permitted or occur and the Holder shall thereafter
be entitled to one additional registration. Each such Holder shall provide all
information reasonably requested by IRSB for inclusion in any registration
statement to be filed hereunder. If requested by any such Holder in connection
with such registration, IRSB shall become a party to any underwriting agreement
relating to the sale of such shares, but only to the extent of obligating
itself in respect of representations, warranties, indemnities and other
agreements customarily included in such underwriting agreements for IRSB. In
any such registration, IRSB and FNB shall agree to indemnify each other on
customary terms with regard to any information provided by such party. Upon
receiving any request under this Section 6 from any Holder, IRSB agrees to send
a copy thereof to any other person known to IRSB to be entitled to registration
rights under this Section 6, in each case by promptly mailing the same, postage
prepaid, to the address of record of the persons entitled to receive such
copies. The filing of any registration statement under this Section 6 may be
delayed for a period of time, not to exceed 180 days, as may reasonably be
required to facilitate any public distribution by IRSB of its Common Shares (or
of a holding company parent of IRSB).

B-5
<PAGE> 158

7. (a) Upon the occurrence of a Repurchase Event (as hereinafter
defined) that occurs prior to an Exercise Termination Event, (i) at the request
of the Holder, delivered prior to an Exercise Termination Event (or such later
period as provided in Section 10), IRSB shall repurchase the Option from the
Holder at a price (the "Option Repurchase Price") equal to the amount by which
(A) the Market/Offer Price (as defined below) exceeds (B) the Option Price,
multiplied by the number of shares for which this Option may then be exercised
and (ii) at the request of the owner of Option Shares from time to time (the
"Owner"), delivered prior to the occurrence of an Exercise Termination Event
(or such later period as provided in Section 10), IRSB shall repurchase such
number of the Option Shares from the Owner as the Owner shall designate at a
price (the "Option Share Repurchase Price") equal to the Market/Offer Price
multiplied by the number of Option Shares so designated. The term "Repurchase
Event" shall occur if (i) any person other than FNB or any of its Subsidiaries
shall have acquired beneficial ownership, or the right to acquire beneficial
ownership, or any "group" (as such term is defined under the 1934 Act) shall
have been formed which beneficially owns or has the right to acquire beneficial
ownership of 50% or more of the then outstanding Common Shares, or (ii) any of
the transactions described in Section 8(a)(i), 8(a)(ii), or 8(a)(iii) of this
Agreement shall be consummated. The term "Market/Offer Price" shall mean the
highest of (i) the price per share of Common Shares at which a tender or
exchange offer therefor has been made, (ii) the price per share of Common
Shares to be paid by any third party pursuant to an agreement with IRSB, (iii)
in the event of a sale of all or substantially all of IRSB's assets or
deposits, the sum of the net price paid in such sale for such assets or
deposits, the sum of the net price paid in such sale for such assets or
deposits and the current market value of the remaining net assets of IRSB as
determined by a nationally recognized investment banking firm selected by the
Holder or the Owner, as the case may be, divided by the number of Common Shares
of IRSB outstanding at the time of such sale. In determining the Market/Offer
Price, the value of consideration other than cash shall be determined by a
nationally recognized investment banking firm selected by the Holder or Owner,
as the case may be.

(b) The Holder and the Owner, as the case may be, may exercise its
right to require IRSB to repurchase the Option and any Option Shares pursuant
to this Section 7 by surrendering for such purpose to IRSB, at its principal
office, a copy of this Agreement or certificates for Option Shares, as
applicable, accompanied by a written notice or notices stating that the Holder
or the Owner, as the case may be, elects to require IRSB to repurchase this
Option and/or the Option Shares in accordance with the provisions of this
Section 7. As promptly as practicable, and in any event within ten (10)
business days after the surrender of the Option and/or certificates
representing Option Shares and the receipt of such notice or notices relating
thereto, IRSB shall deliver or cause to be delivered to the Holder the Option
Repurchase Price and/or to the Owner the Option Share Repurchase Price therefor
or the portion thereof that IRSB is not then prohibited under applicable law
and regulation from so delivering.

(c) To the extent that IRSB is prohibited under applicable law or
regulation, or as a consequence of administrative policy, from repurchasing the
Option and/or the Option Shares in full, IRSB 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 Option Repurchase Price and the Option Share Repurchase Price,
respectively, that it is no longer prohibited from delivering, within ten (10)
business days after the date on which IRSB is no longer so prohibited;
provided, however, that if IRSB at any time after delivery of a notice of
repurchase pursuant to paragraph (b) of this Section 7 is prohibited under
applicable law or regulation, or as a consequence of administrative policy,
from delivery to the Holder and/or the Owner, as appropriate, the Option
Repurchase Price and the Option Share Repurchase Price, respectively, in full
(and IRSB hereby undertakes to use its best efforts to obtain all required
regulatory and legal approvals and to file any required notices as promptly as
practicable in order to accomplish such repurchase), the Holder or Owner may
revoke its notice of repurchase of the Option or the Option Shares whether in
whole or to the extent of the prohibition, whereupon, in the latter case, IRSB
shall promptly (i) deliver to the Holder and/or the Owner, as appropriate, that
portion of the Option Purchase Price or the Option Share Repurchase Price that
IRSB is not prohibited from delivering, and (ii) deliver, as appropriate,
either (A) to the Holder, a new Agreement evidencing the right of the Holder to
purchase that number of Common Shares obtained by multiplying the number of
Common Shares for which the surrendered Agreement was exercisable at the time
of delivery of the notice of repurchase by a fraction, the numerator of which
is the Option Repurchase Price less the portion thereof theretofore delivered
to the Holder and the denominator of which is the Option

B-6
<PAGE> 159

Repurchase Price, or (B) to the Owner, a certificate for the Option Shares it
is then so prohibited from repurchasing.

8. (a) In the event that, prior to an Exercise Termination Event,
IRSB shall enter into an agreement (i) to consolidate with or merge into any
person, other than FNB or a FNB Subsidiary, and shall not be the continuing or
surviving corporation of such consolidation or merger, (ii) to permit any
person, other than FNB or a FNB Subsidiary, to merge into IRSB and IRSB shall
be the continuing or surviving corporation, but, in connection with such
merger, the then outstanding Common Shares shall be changed into or exchanged
for stock or other securities of any other person or cash or any other property
or the then outstanding Common Shares shall after such merger represent less
than 50% of the outstanding shares and share equivalents of the merged company,
or (iii) to sell or otherwise transfer all or substantially all of its assets
or deposits to any person, other than FNB or a FNB Subsidiary, then, and in
each such case, the agreement governing such transaction shall make proper
provision so that the Option shall, upon the consummation of any such
transaction and upon the terms and conditions set forth herein, be converted
into, or exchanged for, an option (the "Substitute Option"), at the election of
the Holder, of either (A) the Acquiring Corporation (as hereinafter defined) or
(B) any person that controls the Acquiring Corporation.

(b) The following terms have the meanings indicated:

(i) "Acquiring Corporation" shall mean (i) the continuing or
surviving corporation of a consolidation or merger with IRSB (if other than
IRSB), (ii) IRSB in a merger in which IRSB is the continuing or surviving
person, and (iii) the transferee of all or substantially all of IRSB's assets
or deposits.

(ii) "Substitute Common Shares" shall mean the common shares
issued by the issuer of the Substitute Option upon exercise of the Substitute
Option.

(iii) "Assigned Value" shall mean the Market/Offer Price, as
defined in Section 7.

(iv) "Average Price" shall mean the average closing price of
the Substitute Common Shares for the one year immediately preceding the
consolidation, merger, or sale in question, but in no event higher than the
closing price of the Substitute Common Shares on the day preceding such
consolidation, merger, or sale; provided that if IRSB is the issuer of the
Substitute Option, the Average Price shall be computed with respect to common
shares issued by the person merging into IRSB or by any company which controls
or is controlled by such person, as the Holder may elect.

(c) The Substitute Option shall have the same terms as the Option,
provided that if the terms of the Substitute Option cannot, for legal reasons,
be the same as the Option, such terms shall be as similar as possible and in no
event less advantageous to the Holder. The issuer of the Substitute Option
shall also enter into an agreement with the then Holder or Holders of the
Substitute Option in substantially the same form as this Agreement (after
giving effect for such purpose to the provisions of Section 9), which agreement
shall be applicable to the Substitute Option.

(d) The Substitute Option shall be exercisable for such number of
Substitute Common Shares as is equal to the Assigned Value multiplied by the
number of Common Shares for which the Option is then exercisable, divided by
the Average Price. The exercise price of the Substitute Option per Substitute
Common Share shall then be equal to the Option Price multiplied by a fraction,
the numerator of which shall be the number of Common Shares for which the
Option is then exercisable and the denominator of which shall be the number of
Substitute Common Shares for which the Substitute Option is exercisable.

(e) In no event, pursuant to any of the foregoing paragraphs,
shall the Substitute Option be exercisable for a number of shares which
together with shares of the Acquiring Corporation then beneficially owned by
FNB, constitutes more than 19.9% of the shares of Substitute Common Shares
outstanding prior to exercise of the Substitute Option.

B-7
<PAGE> 160

9. (a) At the request of the holder of the Substitute Option (the
"Substitute Option Holder"), the issuer of the Substitute Option (the
"Substitute Option IRSB") shall repurchase the Substitute Option from the
Substitute Option Holder at a price (the "Substitute Option Repurchase Price")
equal to the amount by which (i) the Highest Closing Price (as hereinafter
defined) exceeds (ii) the exercise price of the Substitute Option, multiplied
by the number of Substitute Common Shares for which the Substitute Option may
then be exercised, and at the request of the owner (the "Substitute Share
Owner") of shares of Substitute Common Shares (the "Substitute Shares"), the
Substitute Option IRSB shall repurchase the Substitute Shares at a price (the
"Substitute Share Repurchase Price") equal to the Highest Closing Price
multiplied by the number of Substitute Shares so designated. The term "Highest
Closing Price" shall mean the highest closing price for shares of Substitute
Common Shares within the three-month period immediately preceding the date the
Substitute Option Holder gives notice of the required repurchase of the
Substitute Option or the Substitute Share Owner gives notice of the required
repurchase of the Substitute Shares, as applicable.

(b) The Substitute Option Holder and the Substitute Share Owner,
as the case may be, may exercise its respective right to require the Substitute
Option IRSB to repurchase the Substitute Option and the Substitute Shares
pursuant to this Section 9 by surrendering for such purpose to the Substitute
Option IRSB, at its principal office, the agreement for such Substitute Option
(or, in the absence of such an agreement, a copy of this Agreement) and
certificates for Substitute Shares accompanied by a written notice or notices
stating that the Substitute Option Holder or the Substitute Share Owner, as the
case may be, elects to require the Substitute Option IRSB to repurchase the
Substitute Option and/or the Substitute Shares in accordance with the
provisions of this Section 9. As promptly as practicable, and in any event
within ten (10) business days after the surrender of the Substitute Option
and/or certificates representing Substitute Shares and the receipt of such
notice or notices relating thereto, the Substitute Option IRSB shall deliver or
cause to be delivered to the Substitute Option Holder the Substitute Option
Repurchase Price and/or to the Substitute Share Owner the Substitute Share
Repurchase Price therefor or the portion thereof which the Substitute Option
IRSB is not then prohibited under applicable law and regulation from so
delivering.

(c) To the extent that the Substitute Option IRSB is prohibited
under applicable law or regulation, or as a consequence of administrative
policy, from repurchasing the Substitute Option and/or the Substitute Shares in
part or in full, the Substitute Option IRSB shall immediately so notify the
Substitute Option Holder and/or the Substitute Share Owner and thereafter
deliver or cause to be delivered, from time to time, to the Substitute Option
Holder and/or the Substitute Share Owner, as appropriate, the portion of the
Substitute Share Repurchase Price, respectively, which it is no longer
prohibited from delivering, within ten (10) business days after the date on
which the Substitute Option IRSB is no longer so prohibited; provided, however,
that if the Substitute Option IRSB is at any time after delivery of a notice of
repurchase pursuant to subsection (b) of this Section 9 prohibited under
applicable law or regulation, or as a consequence of administrative policy,
from delivering to the Substitute Option Holder and/or the Substitute Share
Owner, as appropriate, the Substitute Option Repurchase Price and the
Substitute Share Repurchase Price, respectively, in full (and the Substitute
Option IRSB shall use its best efforts to receive all required regulatory and
legal approvals as promptly as practicable in order to accomplish such
repurchase), the Substitute Option Holder or Substitute Share Owner may revoke
its notice of repurchase of the Substitute Option or the Substitute Shares
either in whole or to the extent of the prohibition, whereupon, in the latter
case, the Substitute Option IRSB shall promptly (i) deliver to the Substitute
Option Holder or Substitute Share Owner, as appropriate, that portion of the
Substitute Option Repurchase Price or the Substitute Share Repurchase Price
that the Substitute Option IRSB is not prohibited from delivering; and (ii)
deliver, as appropriate, either (A) to the Substitute Option Holder, a new
Substitute Option evidencing the right of the Substitute Option Holder to
purchase that number of the Substitute Common Shares obtained by multiplying
the number of Substitute Common Shares for which the surrendered Substitute
Option was exercisable at the time of delivery of the notice of repurchase by a
fraction, the numerator of which is the Substitute Option Repurchase Price less
the portion thereof theretofore delivered to the Substitute Option Holder and
the denominator of which is the Substitute Option Repurchase Price, or (B) to
the Substitute Share Owner, a certificate for the Substitute Option Shares it
is then so prohibited from repurchasing.

B-8
<PAGE> 161

10. The periods for exercise of certain rights under Sections 2, 6, 7,
9 and 13 shall be extended: (i) to the extent necessary to obtain all
regulatory approvals for the exercise of such rights (for so long as the Holder
is using commercially reasonable efforts to obtain such regulatory approvals),
and for the expiration of all statutory waiting periods; and (ii) to the extent
necessary to avoid liability under Section 16(b) of the 1934 Act by reason or
such exercise.

11. IRSB hereby represents and warrants to FNB as follows:

(a) IRSB has full corporate power and authority to execute and
deliver this Agreement and, subject to any approvals required by federal or
state banking authorities and any other relevant agency, to consummate the
transactions contemplated hereby. The execution and delivery this Agreement and
the consummation of the transactions contemplated hereby have been duly and
validly authorized by the Board of Directors of IRSB and no other corporate
proceedings on the part of IRSB are necessary to authorize this Agreement or to
consummate the transactions so contemplated. This Agreement has been duly and
validly executed and delivered by IRSB.

(b) IRSB has taken all necessary corporate action to authorize and
reserve and to permit it to issue, and at all times from the date hereof
through the termination of this Agreement in accordance with its terms will
have reserved for issuance upon the exercise of the Option, that number of
Common Shares equal to the maximum number of Common Shares at any time and from
time to time issuable hereunder, and all such shares, upon issuance pursuant
thereto, will be duly authorized, validly issued, fully paid, nonassessable.

12. FNB hereby represents and warrants to IRSB as follows: FNB, its
assigns, or both will acquire the Option (including any Substitute Options) and
Option Shares for investment purposes only and not with any intent or a view to
resell or distribute such Option within the meaning of Section 2(11) of the
1933 Act, and will not sell, distribute, assign, hypothecate, or otherwise
transfer such Option, Substitute Options, or Option Shares except in accordance
with the 1933 Act and all applicable federal and state securities laws.

13. Neither of the parties hereto may assign any of its rights or
obligations under this Agreement or the Option created hereunder to any other
person, without the express written consent of the other party, except that in
the event a Subsequent Triggering Event shall have occurred prior to an
Exercise Termination Event, FNB, subject to the express provisions hereof, may
assign in whole or in part its rights and obligations hereunder following such
Subsequent Triggering Event; provided, however, that until the date thirty (30)
days following the date on which the Federal Reserve Board has approved
applications by FNB to acquire the Common Shares subject to the Option, FNB may
not assign its rights under the Option except in (i) a widely dispersed public
distribution, (ii) a private placement in which no one party acquires the right
to purchase in excess of 2% of the voting shares of issuer, (iii) an assignment
to a single party (i.e., a broker or investment banker) for the purpose of
conducting a widely disbursed public distribution on FNB's behalf, or (iv) any
other manner approved by the Federal Reserve Board.

14. Each of FNB and IRSB will use its best efforts to make all filings
with, and to obtain consents of, all third parties and governmental authorities
necessary to the consummation of the transactions contemplated by this
Agreement, including without limitation applying to the Federal Reserve Board
under the Bank Holding Company Act for approval to acquire the shares issuable
hereunder.

15. The parties hereto acknowledge that damages would be an inadequate
remedy for a breach of this Agreement by either party hereto and that the
obligations of the parties hereto shall be enforceable by either party hereto
through injunctive or other equitable relief.

16. If any term, provision, covenant, or restriction contained in this
Agreement is held by a court or a federal or state regulatory agency of
competent jurisdiction to be invalid, void, or unenforceable, the remainder of
the terms, provisions, and covenants and restrictions contained in this
Agreement shall remain in full force and effect, and shall in no way be
affected, impaired, or invalidated. If for any reason such court or regulatory
agency determines that the Holder is not permitted to acquire, or IRSB is not
permitted to

B-9
<PAGE> 162

repurchase pursuant to Section 7, the full number of Common Shares provided in
Section 1(a) hereof (as adjusted pursuant to Section 5 hereof), it is the
express intention of IRSB to allow the Holder to acquire or to require IRSB to
repurchase such lesser number of shares as may be permissible, without any
amendment or modification hereof.

17. All notices, requests, claims, demands, and other communications
hereunder shall be deemed to have been duly given when delivered in person, by
fax, telecopy, or by registered or certified mail (postage prepaid, return
receipt requested) at the respective addresses of the parties set forth in the
Merger Agreement.

18. This Agreement shall be governed by and construed in accordance
with the laws of the State of Florida, regardless of the laws that might
otherwise govern under applicable principles of conflicts of laws thereof.

19. This Agreement may be executed in two or more counterparts, each
of which shall be deemed to be an original, but all of which shall constitute
one and the same agreement.

20. Except as otherwise expressly provided herein, each of the parties
hereto shall bear and pay all costs and expenses incurred by it or on its
behalf in connection with the transactions contemplated hereunder, including
fees and expenses of its own financial consultants, investment bankers,
accountants, and counsel.

21. Except as otherwise expressly provided herein or in the Merger
Agreement, this Agreement contains the entire agreement between the parties
with respect to the transactions contemplated hereunder and supersedes all
prior arrangements or understandings with respect thereof, written or oral. The
terms and conditions of this Agreement shall inure to the benefit of and be
binding upon the parties hereto and their respective successors and permitted
assignees. Nothing in this Agreement, expressed or implied, is intended to
confer upon any party, other than the parties hereto, and their respective
successors except as assignees, any rights, remedies, obligations, or
liabilities under or by reason of this Agreement, except as expressly provided
herein.

22. Capitalized terms used in this Agreement and not defined herein
shall have the meanings assigned thereto in the Merger Agreement.

B-10
<PAGE> 163

IN WITNESS WHEREOF, each of the parties had caused this Agreement to
be executed on its behalf by their officers thereunto duly authorized, all as
the date first above written.

F.N.B. CORPORATION

By: /s/ Peter Mortensen
------------------------------------
Name: Peter Mortensen
Title: Chairman of the Board and President

INDIAN ROCKS STATE BANK

By: /s/ Robert C. George
------------------------------------
Name: Robert C. George
Title: President

B-11
<PAGE> 164
APPENDIX C

[LETTERHEAD] OF ALLEN C. EWING & CO.

August 8, 1997

The Board of Directors
Indian Rocks State Bank
12360 Indian Rocks Road
Largo, FL 33774

Members of the Board:

Indian Rocks State Bank ("IRSB"), F.N.B. Corporation ("FNB"), and
Southwest Banks, Inc. ("Southwest") have entered into a definitive Agreement
and Plan of Merger (the "Merger Agreement") dated as of May 10, 1997 and as
amended as of August 8, 1997, to be joined in by Southwest Interim Bank, N.A.
("Interim"), providing for IRSB to be acquired by FNB pursuant to the merger of
IRSB with and into Interim (the "Merger"). Upon consummation of the Merger,
Interim will become a wholly-owned subsidiary of Southwest, which is a
wholly-owned subsidiary of FNB.

The Merger Agreement provides, among other things, that each share of
outstanding common stock, par value $4.00 per share, of IRSB ("IRSB Common
Stock") will be converted in the Merger into the right to receive 2.0 shares of
common stock (the "Exchange Ratio"), par value $2.00 per share, of FNB ("FNB
Common Stock"), unless: (i) the average of the closing bid and asked prices per
share of FNB Common Stock for a specified period prior to the Closing of the
Merger ("FNB Average Price") is less than $22.00 or equal to or greater than
$27.00 but less then $30.00, in which event the Exchange Ratio will be adjusted
as described in the Merger Agreement; or (ii) the FNB Average Price is $30.00
or greater, in which event the Exchange Ratio will be 1.8 shares of FNB Common
Stock for each share of IRSB Common Stock. FNB may terminate the Merger
Agreement and abandon the Merger if the FNB Average Price is less than $20.00.
Reference should be made to the Merger Agreement for a more complete
description of the terms and conditions of the Merger.

You have requested our opinion as investment bankers as to the fairness,
from a financial point of view, of the terms of the Merger to the shareholders
of IRSB.

Allen C. Ewing & Co. is a registered broker-dealer under the Securities
Exchange Act of 1934 and a member of the National Association of Securities
Dealers, Inc. As part of its investment banking business, Allen C. Ewing & Co.
is regularly engaged in the valuation of securities of banking and thrift
companies in connection with mergers and acquisitions, underwritings, private
placements, trading and market making activities, and valuations for various
other purposes.

Allen C. Ewing & Co. was engaged on May 5, 1997 as financial advisor to
IRSB for the limited purpose of rendering an opinion to the Board of Directors
of IRSB as to the fairness, from a

C-1
<PAGE> 165

The Board of Directors
Indian Rocks State Bank
Page 2
August 8, 1997

financial point of view, of the terms of the Merger to the shareholders of
IRSB. Consistent with the limited scope of our engagement, we did not
participate in negotiating the terms of the Merger nor did we make any
recommendations to the Board of Directors of IRSB as to the amount of
consideration to be paid to the IRSB shareholders. No limitations were imposed
on the scope of our analysis or the procedures followed by us in rendering this
opinion. We have received compensation from IRSB in connection with this
engagement and will receive additional compensation from IRSB upon delivery of
this opinion.

In the ordinary course of its business as a broker-dealer, Allen C. Ewing
& Co. may, from time to time, purchase securities from, and sell securities to,
banking and thrift companies and as a market maker in securities may from time
to time have a long or short position in, and buy or sell, debt or equity
securities of banking and thrift companies for its own account and for the
accounts of its customers. Allen C. Ewing & Co. has no such position in the
securities of IRSB, Southwest, Interim, or FNB as of the date of this opinion.

In arriving at the opinion expressed in this letter, we have reviewed,
analyzed, and relied upon information and material bearing upon the Merger and
the financial and operating condition of IRSB and FNB, including, among other
things, the following: (i) the Merger Agreement; (ii) audited financial
statements for IRSB for the two years ended December 31, 1996; (iii) Directors'
Examinations for IRSB as of November 30, 1994 and 1993; (iv) certain unaudited
interim financial information for IRSB for various periods during the year
1997; (v) Annual Reports to Shareholders and Annual Reports on Form 10-K for
FNB for the three years ended December 31, 1996; (vi) Quarterly Report on Form
10-Q filed by FNB for the quarter ended March 31, 1997; (vii) other financial
information concerning the business and operations of IRSB furnished by IRSB to
us for purposes of our analysis, including certain internal forecasts for IRSB
prepared by its senior management; (viii) information concerning the limited
market for the shares of IRSB Common Stock; and (ix) certain publicly available
information concerning the trading of, and the trading market for, FNB Common
Stock. We have also held discussions with the management of IRSB concerning
its operations, financial condition, and prospects, as well as the results of
regulatory examinations.

We have also considered such further financial, economic, regulatory, and
other factors as we have deemed relevant and appropriate under the
circumstances, including among others the following: (i) certain publicly
available information concerning the financial terms of certain mergers and
acquisitions of other financial institutions in Florida and the financial
position and operating performance of the institutions acquired in those
transactions; and (ii) certain publicly available information concerning the
trading of, and the trading market for, the publicly-traded common stocks of
certain other financial institutions. We have also taken into account our
assessment of general economic, market, and financial conditions and our
experience in other

C-2
<PAGE> 166

The Board of Directors
Indian Rocks State Bank
Page 3
August 8, 1997

transactions, as well as our experience in securities valuation and our
knowledge of the banking and thrift industry generally.

In conducting our review and arriving at our opinion, we have relied
upon and assumed the accuracy and completeness of all of the financial and other
information provided to us or publicly available, including that referred to
above, and we have not attempted to verify such information independently. We
have relied upon the management of IRSB as to the reasonableness and
achievability of the financial and operational forecasts and projections (and
the assumptions and bases therefor) provided to us, and we have assumed that
such forecasts and projections reflect the best currently available estimates
and judgments of management and that such forecasts and projections will be
realized in the amounts and in the time periods currently estimated by
management. We have also assumed, without independent verification, that the
allowances for loan and other losses of each of IRSB, Southwest, Interim, and
FNB are adequate to cover any such losses. We have not made or obtained any
inspections, evaluations, or appraisals of any of the assets or liabilities of
IRSB, Southwest, Interim, or FNB, nor have we examined any individual loan,
property, or securities files. We were informed by IRSB, and we have assumed
for purposes of our opinion, that the Merger will be recorded as a pooling of
interests under generally accepted accounting principles. We have also assumed
that the conditions to the Merger set forth in the Merger Agreement will be
satisfied and that the Merger will be consummated on a timely basis as
contemplated by the Merger Agreement.

Based upon and subject to the foregoing, we are of the opinion that the
terms of the Merger are fair, from a financial point of view, to the
shareholders of IRSB. This opinion is necessarily based upon conditions as they
exist and can be evaluated on the date of this letter and the information made
available to us through such date.

This letter is directed to the Board of Directors of IRSB and does not
constitute a recommendation as to how any shareholder of IRSB should vote in
connection with the Merger.

Very truly yours,

ALLEN C. EWING & CO.

By: /s/ Charles E. Harris
----------------------------------
Charles E. Harris
President and Chief Executive Officer

C-3

<PAGE> 167
APPENDIX

INDIAN ROCKS STATE BANK

SPECIAL MEETING OF SHAREHOLDERS, OCTOBER 9, 1997

THIS PROXY IS SOLICITED ON BEHALF OF THE BOARD OF DIRECTORS

The undersigned holder of shares of common stock of Indian Rocks State Bank
("IRSB"), a state banking corporation organized under the laws of the state of
Florida, does hereby appoint Dr. Harold M. Ward and Robert C. George, and each
of them, as due and lawful attorneys-in-fact (each of whom shall have full power
of substitution), to represent and vote as designated below all of the shares of
IRSB common stock that the undersigned held of record at 5:00 p.m., Eastern
Time, on August 12, 1997, at the Special Meeting of Shareholders of IRSB, to be
held at the Largo Cultural Center, 105 Central Park Drive, Largo, Florida on
October 9, 1997 at 3:00 p.m. or any adjournment thereof, on the following
matters, and on such other business as may properly come before the meeting:

1. APPROVAL OF ACQUISITION PROPOSAL

Proposal to approve and adopt the Agreement and Plan of Merger dated May
10,1997, as amended as of August 8, 1997, among F.N.B. Corporation,
Southwest Banks, Inc., and IRSB as described in the accompanying Proxy
Statement-Prospectus dated August 11, 1997.

[ ] FOR [ ] AGAINST [ ] ABSTAIN

2. In their discretion, on such other business as may properly come before the
meeting.

(Please Sign and Date on Reverse Side)

(Continued from other side)

PLEASE SIGN AND RETURN PROMPTLY.

THIS PROXY WHEN PROPERLY EXECUTED WILL BE VOTED IN THE MANNER DIRECTED HEREIN
BY THE SHAREHOLDER. IF NO DIRECTION IS GIVEN, THIS PROXY WILL BE VOTED FOR THE
APPROVAL OF THE ACQUISITION PROPOSAL.

PLEASE ENTER THE NUMBER OF SHARES OF IRSB COMMON STOCK YOU OWN: _______

(Please sign, date, and return this proxy form exactly as your name or names
appear below whether or not you plan to attend the meeting.)

[ ] I plan to attend the Special Meeting. [ ] I do not plan to
attend the Special Meeting.

Date: , 1997
----------------------
Signature(s):
--------------------

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

---------------------------------
Title or Authority (if applicable)
Please sign your name here exactly
as it appears hereon. Joint owners
should each sign. When signing as
an Attorney, Executor,
Administrator, Trustee, Guardian,
Corporate Officer or other similar
capacity, so indicate. If the owner
is a corporation, an authorized
officer should sign for the
corporation and state his title.
This proxy shall be deemed valid
for all shares held in all
capacities that they are held by
the signatory.